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TMI Blog2014 (8) TMI 716X X X X Extracts X X X X X X X X Extracts X X X X ..... he concise grounds of appeal read as under: 1. The Ld. CIT(A) erred in law and on facts in upholding the AO's order u/s 201(1) & 201(1A) by overlooking the legal position that the liability under the said section is not applicable to the cases of failure to collect tax u/s 206C of the Act. 2. The Ld. CIT(A) erred in law and on facts in not appreciating that the products and the customers were not "scrap" and "buyers' respectively, within the definition of the terms as contained in Explanation(b) and Explanation (aa) to section 206C of the Act. 3. The Ld. CIT(A) erred in law and on facts in concluding that non submission of Form No. 27C to the CCIT/ CIT within the prescribed time was a mandatory requirement of law ignoring/ overlooking the jurisdictional High Court decision in the case of CIT vs. Valibhai Khanbhai Mankad in Tax Appeal No. 1182 of 2011. 4. The Ld. CIT(A) erred in law and on facts in not appreciating that consignment dispatches only result in stock transfer and could not have thus been subjected to the provisions of section 206C of the Act. 5. The learned Commissioner of Income tax (Appeals)-XXI, Ahmedabad, has erred in holding that the Appellant was an a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n 206C of the Act. 13. In respect of remaining two parties to whom scrap sales amounting to Rs. 6,29,25,342/- were made, the assessee placed at page nos. 108 to 115 of the paper book auditor's certificate in form no. 27BA which evidences that these parties have filed their return of income and in such return of income they have mentioned the purchases made from the assessee and they have paid income tax due on their returned income. In the above facts, the Authorized Representative of the assessee contended that the assessee cannot be treated as "assessee in default" for default of collection of TCS from these two parties also. For the above submissions, he placed reliance on proviso to sub-section (1A) of the section 206C, the decision of the Rajkot Special Bench of the Tribunal in the case of Bharti Auto Products Vs. CIT (2013) 27 ITR 611 (Trib.)(Rajkot)(SB) and the decision of the Hon'ble Supreme Court in the case of Hindustan Coca Cola Beverage (P.) Ltd. Vs. CIT (2007) 293 ITR 226(SC). He also contended that as the assessee cannot be treated as an assessee in default, consequentially no interest u/s. 201(1A) becomes leviable against the assessee. 14. On the other hand, the De ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... details to the income tax authority in the prescribed form within prescribed time would arise later and any infraction in such a requirement would not make the requirement of deduction at source applicable." Our view also finds support from the decision of Mumbai Bench of the Tribunal in the case of Karwat Steel Traders Vs. ITO (2013) 37 taxmann.com 190(Mum.) wherein it was held that, "Where declaration in Form 15G/15H were received by the person responsible to deduct tax, there was no liability on him to deduct TDS. Since separate provisions were prescribed on default for non-filing or delayed filing of Form 15G/15H to Commissioner, non-filing of such form would not invoke disallowance u/s. 40(a)(ia) of the Act." We also find support from the decision of the Mumbai Bench of the Tribunal in the case of Vipin P. Mehta Vs. ITO (2011) 46 SOT 71 (Mum.) wherein it was held that, "Sub-section (1A) of section 197A of the Act merely requires the declaration to be filed by payee of interest and once it is filed, the payer of interest has no choice except to desist from deducting tax on interest." 17. In our considered view, the assessee cannot be treated as assessee in default for not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n of income under section 139, (ii) the buyer has taken into account such sum on which tax was required to be collected at source under section 206C for computing income in such return of income, (iii) the buyer has paid the fax due on the income declared by him in such return of income, (iv) the i.e., the person responsible for collecting the tax at source under section 206C, has furnished a certificate inform 27BA confirming the aforesaid;(2) rationalise the provisions relating to collection of tax at source; (3) provide relief to the collector of tax at source from the consequences of non/short deduction collection of tax at source and to that extent it is a beneficial provision. Keeping in view the fact that the first proviso to sub-section (6A) of section 206C not only seeks to rationalise the provisions relating to collection of tax at source but is also beneficial in nature in that it seeks to provide relief to collectors of tax at source from the consequences flowing from non/short collection of tax at source after ensuring that the interest of the Revenue is well protected, the proviso would apply retrospectively." 21. Further, we find that under the scheme of Income Tax ..... X X X X Extracts X X X X X X X X Extracts X X X X
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