9911796707
|
Home
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2015 (5) TMI 538 - AT - Income TaxTCS u/s 206C - sale of forest produce, not being timber or tendu leaves - waiver from collection of TCS - Demand u/s 206C(6) and 206C(7)- Assessee in default for such non-collection of tax at source at the time of sale of the goods - assessee contended that all the buyers had taken into account the purchases made from the assessee for computing income in their respective returns filed u/s 139 after paying tax due thereon - Held that - the liability of the seller to collect tax at source is waived only on the buyer submitting Form no. 27C to him at the time of debiting the account of buyer or the receipt of payment, whichever is earlier. - Unless these conditions are cumulatively fulfilled, the seller is obliged to collect tax at source at the rates prescribed and deposit the same into the exchequer at the material time. These conditions must be fulfilled in letter and spirit without any sort of distortion or dilution or their substitution with other alike conditions as per the convenience of the parties. Assessee was unable to adduce necessary material before us in the regard that all the buyers had taken into account the purchases made from the assessee for computing income in their respective returns filed u/s 139 after paying tax due thereon. The assertion so made cannot be inferred in the absence of any positive material to prove it. There can be no presumption about the buyers having paid tax on the income by including the transactions of purchases covered u/s 206C. This position needs to be specifically demonstrated by the assessee. Under such circumstances, we are of the considered opinion that the ends of justice would meet adequately if the impugned order is set aside and the matter is restored to the file of ITO (TDS) for considering the details, which the assessee seeks to file for divulging that the buyers had included the income from the instant purchase transactions in their total income and filed returns u/s 139 of the Act after paying tax due thereon. We want to make it clear that if the assessee fails to specifically prove this position, then, the Officer would be fully entitled to treat it as assessee in default in terms of section 206C. Further, the liability of interest u/s 206C(7) would be fastened on the assessee from the date on which the assessee was required to collect tax at source up to the date on which the amount of tax was paid by the buyers - Decided in favour of assessee for statistical purposes.
Issues Involved:
1. Sustenance of demand against the assessee under sections 206C(6) and 206C(7) of the Income-tax Act, 1961. 2. Non-collection of tax at source (TCS) by the assessee. 3. Submission and timing of Form No. 27C by buyers. 4. Consequences of late submission of Form No. 27C. 5. Double collection of tax and its implications. 6. Retrospective application of the first proviso to section 206C(6A). Issue-wise Detailed Analysis: 1. Sustenance of Demand under Sections 206C(6) and 206C(7): The appeal by the assessee is against the order passed by the CIT(A) concerning the assessment year 2008-09. The primary issue is the sustenance of demand against the assessee under sections 206C(6) and 206C(7) of the Income-tax Act, 1961. 2. Non-collection of Tax at Source (TCS): The assessee, a Government undertaking, sold forest produce (Lisa) amounting to Rs. 7,66,82,453 during the financial year 2007-08 without collecting tax at source as required under section 206C(1). The Income-tax Officer (TDS) determined a short collection of tax at source amounting to Rs. 19,17,061 and consequential interest of Rs. 11,50,236, raising a total demand of Rs. 30,67,297. 3. Submission and Timing of Form No. 27C: The assessee claimed that all Lisa purchasers were manufacturers and had provided Form No. 27C. However, these forms were not collected at the time of receipt of sale consideration or debiting their accounts. According to section 206C(1A), the requirement to collect tax at source is waived if the buyer furnishes Form No. 27C at the time of debiting the account or receipt of payment, whichever is earlier. The failure to submit Form No. 27C at the specified time led to the assessee being treated as in default. 4. Consequences of Late Submission of Form No. 27C: The assessee argued that since Form No. 27Cs were filed with the ITO (TDS) during the proceedings, the requirement should be deemed to be complied with. However, the tribunal held that the submission of Form No. 27C at the time of collection of tax at source is mandatory. Late submission does not negate the initial requirement, and the seller is obliged to collect tax at source if the form is not available at the material time. 5. Double Collection of Tax and Its Implications: The assessee contended that collecting tax at source at this stage would amount to double collection since the buyers had already paid tax on the income from the purchase of Lisa. The tribunal referred to the Supreme Court judgment in Hindustan Coca Cola Beverage (P) Ltd. vs. CIT, which held that no recovery should be made from the tax deductor if the payee has already paid tax on the income. The tribunal noted that this principle applies to TCS provisions as well. 6. Retrospective Application of the First Proviso to Section 206C(6A): The tribunal discussed the first proviso to section 206C(6A), inserted by the Finance Act, 2012, which states that the seller shall not be deemed to be in default if the buyer has furnished a return of income, taken into account the transaction, and paid the tax due. This proviso, reflecting the law laid down by the Supreme Court, was considered retrospective. The tribunal remanded the case to the ITO (TDS) to verify if the buyers had included the purchases in their returns and paid the due tax. If proven, the assessee would not be treated as in default; otherwise, the default and interest liability would be upheld. Conclusion: The appeal was allowed for statistical purposes, with the matter remanded to the ITO (TDS) for further verification. The tribunal emphasized the mandatory nature of timely submission of Form No. 27C and the retrospective application of the first proviso to section 206C(6A), aligning with the Supreme Court's judgment to avoid double collection of tax. The order was pronounced in the open court on 13.04.2015.
|
