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2024 (1) TMI 546 - AT - Income TaxLiability to collect tax at source (TCS) u/s 206C(6A)/206C(7) - Form No.27C filled belatedly - assessee has sold scrap to various dealers without collecting tax at source and has not received Form No.27C as required u/s 206C(1) - assessee submitted that there is no dispute that assessee has belatedly collected the declaration in Form No.27C and has filed the same before ITO(TDS) - if such declaration is not filed to be prescribed authority within the prescribed time, can the liability of TCS can be fastened on the assessee.? - HELD THAT - Even if there is a breach on the part of the assessee in not obtaining the declaration from the buyer, the moment the sale is effected and in filing it before the CCIT or the CIT, such breach is to be considered only technical which is liable to be condoned in as much as the main thrust of sub-section 1A of section 206C is to make a declaration as prescribed, upon which, the liability to collect tax at source under subsection (1) would not apply. When there was no dispute about such a declaration being filed in a prescribed format and there was no dispute about the genuineness of such declaration, mere delay in filing the said declaration would not defeat the very claim. CIT (A) has referred to the decision of Hon ble ITAT Chennai Bench 2023 (6) TMI 166 - ITAT CHENNAI where form No. 27C was not obtained within a reasonable time and form no. 27BA was collected after lapse of 7 years which is not the facts of the present case. In any case, since the decision of Madras High Court 2010 (12) TMI 1084 - MADRAS HIGH COURT and Gujarat High Court 2016 (7) TMI 68 - GUJARAT HIGH COURT and that of ITAT Jaipur Bench 2016 (8) TMI 952 - ITAT JAIPUR is in favour of the assessee, we are inclined to accept the contention of the assessee and thus this ground in all the three years is allowed.
Issues Involved:
1. Dismissal of appeal for AY 2016-17 due to alleged non-submission of written submission. 2. Determination of liability under section 206C r.w.s. 201(1)/201(1A) for AYs 2016-17, 2017-18, and 2018-19 despite submission of Form No. 27C. 3. Imposition of TDS liability and interest for non-deduction of tax at source on interest payments to M/s. Bajaj Finance Ltd. for AYs 2016-17 and 2017-18. Summary: Issue 1: Dismissal of Appeal for AY 2016-17 The CIT(A), NFAC dismissed the appeal for AY 2016-17 by stating that the assessee did not submit any reply in support of the grounds of appeal. The assessee contended that it had filed a written submission on 08.06.2023, which was not considered by the CIT(A). The Tribunal noted that the CIT(A) had decided the appeals for AYs 2017-18 and 2018-19 on the same date after considering the submissions. Therefore, in the interest of justice, the Tribunal decided to proceed with the appeal on merit. Issue 2: Liability under Section 206C r.w.s. 201(1)/201(1A) The CIT(A), NFAC upheld the AO's order determining the liability under section 206C r.w.s. 201(1)/201(1A) for AYs 2016-17, 2017-18, and 2018-19, despite the assessee furnishing declarations in Form No. 27C. The Tribunal found that the assessee had belatedly collected and filed the declarations, and cited various judicial precedents, including decisions by the Madras High Court, Gujarat High Court, and ITAT benches, which held that such procedural lapses should be condoned if the declarations are genuine. The Tribunal directed that the demand raised under section 206C(1)/206C(7) be deleted. Issue 3: Imposition of TDS Liability and Interest The CIT(A), NFAC upheld the AO's order imposing TDS liability and interest for non-deduction of tax at source on interest payments to M/s. Bajaj Finance Ltd. for AYs 2016-17 and 2017-18. The assessee argued that it had given advance cheques for installments, including interest, and thus had no occasion to deduct tax at source. The Tribunal noted that M/s. Bajaj Finance Ltd. is a regular income tax assessee and directed the ITO(TDS) to confirm this fact or allow the assessee to file a certificate from an accountant in Form 26A under the first proviso to section 201(1) of the Act. This ground was allowed for statistical purposes. Conclusion: The appeals were disposed of with directions to the revenue authorities to reconsider the issues based on the Tribunal's findings and judicial precedents. The order was pronounced in the open court on 19/12/2023.
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