9911796707
TMI Blog2020 (5) TMI 455X X X X Extracts X X X X X X X X Extracts X X X X ..... CS is to be determined and it doesn t represent the amount of TCS and therefore, the liability of the assessee is only to the extent of TCS on such sales and not on the whole sale amount. The matter is accordingly set-aside to the file of AO to verify the same and determine the quantum of TCS and consequent interest thereon which is payable by the assessee in relation to the impugned transaction. The ground of appeal is thus allowed for statistical purposes. Charging of interest under section 206C(7) - Short / Non Collection of tax at source under section 206C(6) alleging that assessee has committed a clear default of non-collection of TCS - HELD THAT:- Assessee firm shall be liable to pay interest from the date on which such tax was collectible to the date of furnishing of return of income by the respective buyers excluding the period prior to 1.07.2012 in respect of which no interest shall be leviable. The decision of the Coordinate Bench in case of Chandmal Sancheti [ 2016 (8) TMI 952 - ITAT JAIPUR ] the decision of the Hon ble Karnataka Court in case of Bharat Hotels [ 2015 (12) TMI 1469 - KARNATAKA HIGH COURT ] and Solar Automobiles [ 2011 (9) TMI 637 - KARNATAKA HIGH COURT ] ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... report under Rule 46A and enquiry under Sec 250(4) of the Income Tax Act, 1961 - HELD THAT:- It can t be denied that the assessee submitted the certificates and declarations in Form 27BA exactly in the same manner but the department did not feel aggrieved in that year. Therefore, now filing the appeal on the same issue when the legal and factual position is admittedly the same and without bringing out any material change in the facts of the legal position, the department cannot be permitted to agitate the same issue in later year. This contention is fully supported by the various decisions of the Hon ble Supreme Court and particularly in the case of Berger Paints India Ltd. v. CIT [ 2004 (2) TMI 4 - SUPREME COURT ] As observed by the Assessing Officer that he has gone through the documentation so submitted by the assessee firm and on perusal thereof, he noticed that complete information in the Form/certificate have not been given by the accountant/party as required by the legislature and most of the columns are either not filled up as required or simply mentioned as per details/enclosure - accountant has signed the forms with conditional remarks As certified by the buyer whereas t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of section 206C are analogous and a measure for compliance of collection of tax at source as a similar measure for compliance of deduction of tax at source is provided under section 201 of the Act. Regarding decision of the Hon ble Supreme Court in the case of M/s Hindustan Coca Cola (P) Ltd. [ 2007 (8) TMI 12 - SUPREME COURT ] we find that the ratio so laid down therein has been subsequently brought on the statue books by way of proviso to sub-section (6A) to section 206C of the Act. Therefore, where the specific amendment has been brought in by the legislature accepting the ratio so laid down by the Hon ble Supreme Court, we see no infirmity in the findings of the Id CIT(A) where he has held that the ratio so laid down continues to apply in context of collection of taxes at source. In the result, the ground so taken by the Revenue is hereby dismissed. X X X X Extracts X X X X X X X X Extracts X X X X ..... acturing, processing or producing and hence the provision of s. 206C was not applicable." ITA No. 778/JP/18 (Revenue's appeal): "1. Whether on the facts and in the circumstances of the case, the ld. CIT(A) is justified in allowing relief on the basis of additional evidence without calling for remand report under Rule 46A and enquiry under Sec 250(4) of the Income Tax Act, 1961. 2. Whether on the facts and in the circumstances of the case, the ld. CIT(A) is justified in deleting the demand without appreciating the fact that the assessee deductor has failed to make payment of interest under section 206C(7) and not mentioning details of challans in the prescribed Form 27BA before submission with claim of relief in view proviso to section 206C read with Notification No. 12/2016 dated 8-1-.2016. 3. Whether on the facts and in the law, the ld. CIT(A) is justified in setting aside the issue to the AO for verification and directed to allow relief on verification under section 250(1) as per the ratio of judgment in the case of M/s Hindustan Coca Cola (P) Ltd. where the words "he may set aside" have been omitted after amendment w.e.f. 01.06.2001. 4. Whether o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on the part of the Assessing officer is pre-mature and without valid jurisdiction as the Assessing Officer, before invoking the provisions of section 206C(6) & 206C(7) has to satisfy himself that the concerned buyers to whom subjected sales has been made have already considered the subjected sales and paid tax thereon or not and without having fulfilled this condition or without having made such enquiries, the proceedings under section 206C(7) and 206C(7) of the Act cannot be initiated and in support, reliance was placed on the decision of the Hon'ble Karnataka High Court in case of Shree Manjunatha Wines v. CIT [2011] 202 Taxman 620 (Kar). 6. Further, during the assessment proceedings, the Assessing officer asked the assessee firm to reconcile the figures of turnover along with supporting documentary evidence and asked it to furnish Form No. 27BA/ITR, if any, of all the parties. In response, the assessee firm vide its submission dated 13-2-2017 submitted certificate/Form No. 27BA from the parties/accountant as prescribed in first proviso to section 206(C)(6A) of the Act. 7. The Assessing Officer, thereafter, referring to the statement of the partner of the assessee firm reco ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s under:- "3. Directly covered by the decision of CIT(A) in A. Y 2008-09: Before proceeding further, at the outset it is submitted that all the contentions raised now were also raised in A. Y. 2008-09 wherefrom this controversy arose from the first time and your Id. Predecessor had accepted the contentions and granted substantial relief in appeal no. 46/2015-16 vide her order dated 29-2-2016 (refer PB 102-131 in A.Y. 2010-11). The facts and circumstances being exactly identical in this year also, the same decision has to be applied. More particularly when, the department not having gone in further appeal, the said order had become final. 4. Under this background, the assessee specifically agitated before the ITO, the invoking of section 206C of the Act vide its letter dated 25-1-2017 stating that out of 26 parties, the maximum number of buyers are already (1) assessed to tax, (ii) have already furnished their return of income under section 139(1) of the Act (iii) they have already taken into account the cost of the purchases of tendu leaves made from the assessee firm while computing the total income for the above return of income and (iv) have already paid the income tax ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a vague allegation and without giving specific details of the particular form / certificates lacking details. The ITO has not pointed out specifically which column, details were not filled in. There may be some BSR code w. r. t the payment of tax made by the buyer (tax payee) and other some minor details but the Id. ITO has conveniently ignored the categorical certification given by the buyer payee reading as under: "1. That we have furnished our Return of Income under section 139(1) of the Act for the above year. 2. That we have taken into account the cost of purchase of Tendu Leaves including CST of Rs from M/s Eid Mohammed Nizam uddin Tonk (Raj.) for computing the income in the above return. 3. That we have paid Income Tax due on the income declared by us in the return." ♦ A bare perusal of the said certificate make it clear that the assessee has fully complied with and established requirement of law in substance. When the payee has categorically confirmed the fact of inclusion of the purchases made in its account while preparing ROI and even confirmed having paid the tax thereon there remains nothing. The amendment in the law and the Rule were prescribed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... certificate of an expert and unless contrary evidence is brought on record by the ITO as regards proving the incorrectness of the fact certified by the expert, the ITO was bound to have accepted the certificate of the expert. As stated, ITO chose not to make any inquiry to prove the incorrectness in the certificate of the expert. Hence he is not entitled to make an allegation of this type, which is prayed to be ignored altogether. ♦ There is nothing to show that the Accountant himself has not filed up and certified such certificates. In absence of any contrary evidence such certificate could not have been doubted. 3. The accountant has also ignored the vital facts that some of the parties have not filed return on or before due dates prescribed under section 139 of the IT, Act, 1961. ♦ It is absolutely incorrect allegation that the CA has ignored the vital fact of non-filing of the ROI by some of the parties on / before the due date in as much as, in all the certificates, the fact of filing of ROI in due time has been stated. The Id. ITO has not at all, especially pointed out such cases. But even otherwise, the substantive fact is that the buyer payee assessee hav ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng the compliance of the law to get the benefit. 6.1 It is further pertinent to note that the certificates and declaration are being filed in similar method and manner/ similar type right since beginning however, no such objection was raised in the past. In F. Y. 2007-08, when additional evidences filed, the Id. ITO in the remand report did not raise any such objection and matter stood accepted by the Id. CIT(A) also in appeal no. 46/JPR/ 15-16 dated 29-2-2016 (A. Y. 2013-14)]. Similarly in F.Y. 2008-09 also, the concerned ITO (TDS) also accepted the certificate of chartered accountant which were prepared in the similar manner. Kindly refer order dated in appeal no. 46/2015-16 vide her order dated 29-2-2016 in A. Y 2010-11. But when in the past department it-self has accepted, there appear no reasons as to why they should not accept the certificates in this year in absence of any change in the facts and circumstances of the case. Thus, the allegations of the ITO are nothing but mere suspicion and a pretence not to give the benefit to the assessee to which, it otherwise deserved. 6.2 The ITO (TDS) has completely failed to understand that in the matter of TDS and TCS, it is tax o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 8-09) which has already decided by the Id. Predecessor as submitted in para-3. Therefore, there is no substance in these allegations and hence have to be ignored altogether. 8. The Impugned order was passed without having jurisdiction: It is submitted that the jurisdiction over the assessee under TAN as per section 124(1) rested with the ITO TDS, Kota with whom the TDS returned were being regularly filed by the assessee. This fact is evident from the e-filling website of the income tax department which also shows the ITO(TDS), Kota having territorial jurisdiction over Tonk, District wherein the assessee situated. But surprisingly, the impugned orders for the A Y 2009-10 to AY 2015-16 were passed by the present ITO TDS-3, Jaipur on 22.12.2016 and 06.03.2017 is lacking jurisdiction and hence void ab initio and liable to be quashed. Kindly refer State of Gujarat v. Rajesh Kumar Chian Lal AIR 1996 P.2664 Raza Textiles Ltd, v. ITO 87 ITR 539 (S.C.), Choubey Jagdish Prasad v. Gaya Pal Chaturvedi AIR 1959 492 P. Das Muni Reddy v. Appa RITO AIR 1974 208 Sant Baba Mphan Singh v. CIT 90 ITR 197 77 Taxman 265 - Sitaram Rathore v. CIT Hence the impugned demand so raised kindly be quashed i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... arations and the certification in the prescribed form 27BA. Similarly, first Proviso to section 201(1) provides such immunity on filing of declarations and certification in prescribed form. Further the use of the word 'shall' under section 206C(6) in contrast of section 201(1) does not make much difference in as much as the responsibility of making TDS/TCS is mandatory under both the provisions. Also further differentiation sought by the AO that in case of TDS, the subjected amount becomes the receipt in the hands of the recipient whereas in the case of the TCS, the subject amount of sale become the expenditure in the hands of the buyer, is not a material difference as such. Therefore, it is held that there is no substantive difference at all between the provisions relating to TDS or TCS as contented by the AO for the above reasons. Therefore, her further contentions of the non-applicability of decision of Hindustan Coca Cola (supra) is hereby rejected. Having held that there is no material difference between the provision of TCS and TDS, I now proceed to considered the facts of the case, submission of the appellant filed time to time, finding recorded in the order and th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... /s. Char Bhai Bidi Works Hyderabad AABFC0789P 56132915 ROI filed enclosed 15 M/s. Shaheen Traders Mysore (Karnataka) ADSPB5725E 920315 ROI filed enclosed 16 M/s. Star Traders Tanda (Up) ACCPS9843D 1562616 ROI filed enclosed Total (A) ₹ 25,82,64,467/- B. Declaration in Form 27BA available but Return of Income not filed (only AO details given. 17 M/s. M.P. Traders Bangalore (Karnataka) AFLPP4547H 1194765 A chart showing ROI filling details & copy of website filed. 18 M/s. S.M. Traders Tumkur (Karnataka) ABCPY5783B 914625 A chart showing ROI filling details & copy of website filed. 19 M/s. Babu Bhai Rashid Bhai Karauli (Rajasthan) ACAPA0895P 2390012 A chart showing ROI filling details & of website filed. 20 M/s. Shivam Trading Company Amroha (U.P.) CVKPK2262H 1115200 A chart showing ROI filling details & copy of website filed. 21 M/s Meh boob Bidi Factory Amroha J.P. Nagar(U.P.) AAWFM0254A 5665360 A chart showing ROI filling details & copy of website filed. 22 M/s Hariom Traders Bhiwandi (Mumbai) AGCPY4276C 162142 A chart showing ROI filling details & copy of website 23 M/s. Shankara Traders Amroha (U.P.) AGDPA5730H 622890 A char ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... irm has been allotted TAN no. JDHI01315G and the said TAN comes under the territorial jurisdiction of ITO (TDS), Kota bearing code no. RJN-WT-850-3 as per section 124(1) with whom the TDS returns were being regularly filed. However, the impugned survey under section 133A(2A) was conducted on 23.03.2015 by the ITO, TDS-3, Jaipur and thereafter impugned order for the AY 2013-14 was passed by the ITO TDS-3, Jaipur without having valid jurisdiction. 10. It was submitted that the said ground was also taken before the ld CIT(A), However, it appears that this ground has escaped his attention and remain to be decided and therefore, this issue may be restored to the file of ld CIT(A) to be decided after providing opportunity to the assessee. Further, the Id AR reiterated the submissions made before the Id. CIT(A) which read as under: "The Impugned order was passed without having jurisdiction: It is submitted that the jurisdiction over the assessee under TAN as per section 124(1) rested with the ITO TDS, Kota with whom the TDS returned were being regularly filed by the assessee. This fact is evident from the e-filling website of the income tax department which also shows the ITO(TDS) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to be set-aside to the file of the ld CIT(A) to adjudicate the said ground of appeal after providing reasonable opportunity to the assessee. In the result, the ground no. 1 is allowed for statistical purposes. 13. In Ground no. 2, the assessee has challenged the order passed by the Assessing officer as barred by limitation. During the course of hearing, the same was not pressed by the ld AR on behalf of the assessee, hence, the same is dismissed as not pressed. 14. In ground no. 3.1, the assessee has challenged the confirmation of demand towards TCS amounting to ₹ 1,77,360/-. 15. In this regard, the ld AR submitted that the total amount of sale of Tendu leaves worth ₹ 27,19,31,589/- consisted of different categories (A, B & C) of buyers (categorized based on documentation on record) which have been examined by the CIT(A) as stated at pg 14 to 16 of his order and accordingly, feeling satisfied with the contentions of the assessee and submissions/documentation in support thereof, held that the assessee was not in default to the extent of the sales totaling to ₹ 25,82,64,467/- and ₹ 1,34,89,762/- (as per list A & B). However, with regard to the third type of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... only to the extent of TCS on such sales and not on the whole sale amount. The matter is accordingly set-aside to the file of AO to verify the same and determine the quantum of TCS and consequent interest thereon which is payable by the assessee in relation to the impugned transaction. The ground of appeal is thus allowed for statistical purposes. 19. In ground no. 3.2, the assessee has challenged the findings of the ld CIT(A) relating to charging of interest under section 206C(7) of the Act. 20. During the course of hearing, the ld AR submitted that the Assessing officer had charged interest under section 206C(7) of the IT Act, 1961 on the entire amount of Short / Non Collection of tax at source under section 206C(6) alleging that assessee has committed a clear default of non-collection of TCS w.r.t. sale amount of ₹ 25,58,31,594/- (correct Sale amount is ₹ 27,19,31,589/-) and in the first appeal, the ld. CIT(A) has directed the AO as under: "So far as the charging of interest under section 206C(7) is concerned, the AO is directed to calculate the interest for period of starting from the due date of deposit of TCS after collection to the date of filing of the r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... elevant provisions of section 206C(7) which are under consideration reads as under: "(7) Without prejudice to the provisions of sub-section (6), if the person responsible for collecting tax does not collect the tax or after collecting the tax fails to pay it as required under this section, he shall be liable to pay simple interest at the rate of one per cent per month or part thereof on the amount of such tax from the date on which such tax was collectible to the date on which the tax was actually paid and such interest shall be paid before furnishing the quarterly statement for each quarter in accordance with the provisions of subsection (3): Provided that in case any person responsible for collecting tax in accordance with the provisions of this section, fails to collect the whole or any part of the tax on the amount received from a buyer or licensee or lessee or on the amount debited to the account of the buyer or licensee or lessee but is not deemed to be an assessee in default under the first proviso of sub-section (6A), the interest shall be payable from the date on which such tax was collectible to the date of furnishing of return of income by such buyer or licensee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... efit to the extent of ₹ 25,82,64,467/- and no TCS can be recovered on this amount. In nine cases at serial no. 17 to 25 the assessee has filed the certificate in form 27BA but return of income were not furnished. However evidence of filing of return through website was filed. Accordingly the AO is directed to allow the benefit of ₹ 1,34,89,762/-as per the ratio laid down by Hon'ble Apex Court in Hindustan Coca Cola (supra) only after making verification of the return of income filed by the respective parties case the appellant failed to do so, the liability of TCS is on the appellant. Further in case of party at serial no. 26 the assessee neither filed any declaration & certificate nor any return of Income. Therefore, the assessee cannot be allowed the benefit of the decision Hindustan Coca Cola (supra) in these cases. The demand of TCS and the interest thereon, raised by the ITO to the extent of₹ 1,77,360/- is upheld being justified. So far as the charging of interest under section 206C(7) is concerned, the AO is directed to calculate the interest for period of starting from the due date of deposit of TCS after collection to the date of filing of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of Bharat Hotels (supra) and Solar Automobiles (supra) were rendered for the period prior to the amendment brought in by the Finance Act, 2012 whereby proviso to section 206C(7) has been inserted with effect from 1.7.2012, have not considered the said provisions as amended and are therefore, distinguishable and doesn't support the case of the assessee firm. Therefore, the findings of the ld CIT(A) which are in consonance with the proviso to section 206C(7) are hereby confirmed subject to the modification that no interest shall be leviable for the period prior to 1.07.2012 and to that extent, the assessee shall be eligible for relief. The ground of appeal is thus partly allowed. 29. In Ground no. 4, the assessee firm has challenged the action of ld CIT(A) in not considering that the case fall under under section 206C(1A) r/w Rule 37C in as much as the entire subjected sales of Tendu leaves was made to the ultimate consumers for use in manufacturing, processing or producing of Beedies and hence the provision of section 206C was not applicable and have been wrongly invoked by the AO. 30. In this regard, it was submitted that the provision contained under section 206C (1A), in a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ration is a mere procedural requirement and therefore even if, such declaration are furnished at the appellate stage, the same deserves acceptance. This contention is also for the reason that the appeal is the continuation of the assessment proceedings only and therefore, even if a plea taken before the appellate court or the declarations are filed, the Courts may admit the same in the larger interest of justice. 34. It was submitted that under similar circumstances, the Tribunal in the case of Chandmal Sancheti v. ITO, TDS-2, Jaipur [2016] 181 TTJ 0906 have remitted the matter back to the ITO to consider the declaration filed in Form 27C belatedly by the assessee. Reliance was also placed on the Tribunal decision in case of Karnataka Forest Development Corporation Ltd. v. ITO, TDS [2015] ITL 1007 (Bang.) (Trib.) wherein the Tribunal has remanded the matter back to the AO for proper verification and thereafter re-adjudication of the issues involved in accordance with law. Further, reliance was placed on the Hon'ble Gujarat High Court decision in case of CIT (TDS) v. Siyaram Metal Udyog (P.) Ltd. 2016 ITL 4028 (Guj.) and Hon'ble Madras High Court decision in case of CIT v. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... urther holding that it did not appear to be a fabricated document. -Kali Charan Ram Chander v. CIT [1978] 112 ITR 405 (Cal) : TC8R.1090 relied on; Ram Prasad Sharma v. CIT [1979] 119 ITR 867 (All) : TC8R.1096 distinguished. (Paras 6 to 9)" 36. Further, reliance was placed on the Tribunal decision in case of Rajmoti Industries v. ITO [1995] 52 ITD 0286 (Ahd) wherein it was held as under: "The Tribunal, under the scheme of the IT Act, 1961, is a final fact finding authority and in order to enable it to decide disputes brought before it by way of second appeal in a lawful, fair and judicious manner it has necessarily to look into and consider such evidence and other material having a nexus and bearing on the subject-matter of the appeal viz., the dispute involved. Even according to the provisions of rule 29 of the ITAT Rules, the Tribunal is empowered to receive and admit additional evidence for any other substantial cause. It is amply settled and clear that this Tribunal can admit additional evidence in terms of rule 29 if the receipt or admission of additional evidence is vital and essential for the purpose of consideration of the subject-matter of the appeal and arrive ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... had quashed the orders passed under section 206C(6)/(7) on ground of limitation, he did not decide the said ground of appeal. 39. It was further submitted that it is a consistent factual position and submission of the assessee right from the beginning when the statement of the partner of the assessee's firm was recorded during the TDS survey on 23.03.2015 and reproduced in the assessment orders passed under section 206C(6)/(7) for all these years that sale of Tendu leaves have been made to the manufacturers of Beedies and although no declaration u/r 37C in form 27C was received from such buyers, however, the assessee had written/ requested to the concerned buyers to send the declaration/certificates and the office of the ITO was also been duly informed on this subject along with the address of such buyers. It was accordingly submitted that the provisions of section 206C (1A) are clearly attracted, declarations in Form 27C may be admitted as prayed in application filed under Rule 29 and the assessee firm may be granted the necessary relief and the matter may be remanded to the file of the AO for necessary verification. 40. The ld DR is heard who has submitted that the provisio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1 in case of sale of scrap, on the ground that the assessee had not submitted Form-27C comprising of the buyer's declaration to the Commissioner of Income-tax in time. The assessee on the other hand had contended that he was not a trader of scrap and therefore, the provisions of section 206C did not apply at all. The Assessing Officer turned down his contention and proceed to make the additions. Eventually, when the issue reached the Tribunal, the Tribunal relying on earlier decision in case of Bharti Metals held that the items in question were scrap. However, in view of the fact that the assessee had admittedly filed a declaration in form 27-C collected from the buyers and given that there was no dispute about the genuineness of the contents thereof ruled in favour of the assessee. In that factual background, the Hon'ble High Court has held as under: "6. Section 206C of the Act pertains to profits and gains from the business of trading in alcoholic liquor, forest produce, scrap etc. Sub-section 1 of section 206C provides that every person being a seller shall at the time of debiting of the amount payable by the buyer collect from the buyer of any of the goods specif ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 minor delay in filing the said declaration would not defeat the very claim. The Tribunal therefore, viewed such delay liberally and in essence held that there was substantial compliance with the requirement of filing the declaration." 43. Sub-sequently, the Hon'ble Gujarat High Court had an occasion to examine the aforesaid provisions again in case of Commissioner of Income-tax (TDS) v. Chhaganbhai K Sanghani [2018] 94 taxmann.com 459 (Guj). In that case, the respondent-assessee was a dealer in scrap. During the period relevant to the assessment year 2011-12, he had sold scrap of ₹ 12.72 Crores on which he was required to collect tax at source in terms of section 206C(1) of the Income-tax Act, 1961 unless the buyers had provided him necessary certificates referred to in sub-section (1A) thereof. Before Assessing Officer, the assessee produced no such certificates. The Assessing Officer therefore, in terms of sub-section (7) of section 206C, levied tax and interest. In appeal before the Commissioner, assessee produced nec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he tax and that such person would deliver a copy thereof to the Commissioner within the time prescribed. Sub-section [1] of section 206C does not refer to any such time limit. Clearly therefore, the legislative intent was not to make this time limit mandatory or a pre-condition for availing the benefit of not deducting tax at the time of sale of goods aimed for specified purpose. This Court in case of CIT [TDS] v. Siyaram Metal Udyog (P.) Ltd. [2016] 71 taxmann.com 204/240 Taxman 578 [Gujarat] had dealt with somewhat similar situation, wherein following observations have been made.." 44. The legal position which is thus laid down by the Courts as per the aforesaid decisions is that sub-section (1) of section 206C is a substantive provision for collection of tax at source and depositing of the same with the Revenue. Sub-section (1A) is again a substantive provision which refers to a situation under which collection under sub-section (1) would not have to be made at first place. The requirements of sub-section (1A) are that the buyers should provide to the seller, a declaration in prescribed form, verified in the prescribed manner. The main thrust of sub-section (1A) of section ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d., Damoh (M.P.) ₹ 3,22,13,394/- 9-10 6. Star Traders, tanda (U.P.) ₹ 15,62,616/- 11 7. Mangalore Ganesh Beedi Works, Mysore(Kar) ₹ 6,84,21,238/- 12-13 On a prima facie perusal of these certificates, we find that all these parties are involved in manufacturing of Beedies and uses Tendu leaves for manufacturing such Beedies. The sales amount mentioned in these certificates matches with the sales amount as reflected and examined by the ld CIT(A) as apparent from findings in his order (para 5.3, page 14-15): S. No. Name of Buyer PAN Amount in F.Y. 2012-13 A Cases where Declaration & Certificate in form 27BA and Return of Income filed. 1 M/s. Mangalore Ganesh Beedi Works Mysore (Karnataka) AAAAM1342G 68421238 ROI filed enclosed 2 M/s. Gujarath Tobacco Company Mysore (Karnataka) AFJPP1330G 1588890 ROI filed enclosed 3 M/s. Pannalal Premrai Khatri Sawai Modhopur(Raj.) AADFP3174F 4538765 ROI filed enclosed 4 M/s. Anand Tobacco Products Mangalore (Karnataka) AAFFA4744G 967200 ROI filed enclosed 5 M/s. Prakash Bidies Limited Mangalore (Karnataka) AABCP9885E 9503876 ROI filed enclosed 6 M/s. P& J Tobacco Products Company Gopal Nag ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... verification, the Assessing officer is satisfied about the genuineness of such certificates, necessary relief under section 206C(IA) can be granted and bestowed on the assessee firm. 46. Having said that, the fact remains that there has been a delay in obtaining such certificates which have now being filed for the first time by way of additional evidence under Rule 29. The question therefore is whether there is a reasonable cause for such delay in furnishing such certificates and the delay can be condoned and such certificates can be taken on record and admitted under Rule 29. In its application filed under Rule 29, the assessee has submitted that its tax affairs were handled by Shri Sitaram Agarwal, Advocate who was an aged person and was suffering from various ailments at the relevant point in time and subsequently, he had expired. The assessee firm acted on his advice and assistance from time to time. Late Shri Sitaram Agarwal was of the belief and understanding that collection of tax from the buyers would amount to double taxation as the assessee firm has already paid the taxes to the forest department while purchasing the Tendu leaves. Similarly, he was also of the belief and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... urts, where substantial justice and technical considerations are pitted against each other, the cause of substantial justice deserves to be preferred for the other side cannot claim to have vested right in injustice being done because of a non-deliberate delay. The delay in filing such declarations being a technical breach is thus condoned and the same are being admitted as there is substantial compliance with the requirement of filing the declarations. We find that similar view has been taken by the Coordinate Bench in case of Chandmal Sancheti v. ITO (supra) where it was held as under: "10. We have heard the rival contentions of both the parties and perused the material available on the record. In our view, the appeal is continuation of the assessment proceedings and even if the declaration is filed by the assessee at the appellate stage in the prescribed format by disclosing all information as contemplated under Form 27 read with Rule 37 of the Rules, the benefit of declaration should be given to the assessee. The ld. Assessing Officer/CIT (A) should extend the benefit of declaration to the assessee. Rule 27 though is couched in the mandatory language by using the word &q ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... form and verified in the prescribed manner to the effect that the goods referred to in column (2) of the aforesaid Table are to be utilized for the purposes of manufacturing, processing or producing articles or things [or for the purposes of generation of power] and not for trading purposes." A perusal of the aforesaid provision shows that the assessee is not legally obliged to collect the TCS from a buyer who furnishes a declaration to the assessee to the effect that the purchases made by such buyer are to be utilized for the purposes of manufacturing, processing or producing articles or things or for purposes or generation of power and not for trading purposes. Thus, in a case where such a declaration is furnished by the buyer to the seller, the seller is not obliged to collect TCS from such buyer and consequently the seller assessee cannot be treated as an assessee in default in respect of not collecting TCS from such buyer. We find that the Commissioner of Income Tax (Appeals) upheld the treatment of assessee as assessee in default in respect of those parties from whom the assessee already received declaration in Form 27C on the ground that such declaration was not furn ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... w, it shall be just and fair to restore this part of the ground of appeal back to the file of Assessing Officer for proper verification and thereafter read judication of the issue as per law in the light of the discussion made hereinabove after allowing the assessee a reasonable opportunity of hearing." 48. In light of aforesaid discussions, in the entirety of facts and circumstances of the case and respectfully following the decisions of Hon'ble Gujarat High Court (supra) as well as of the Coordinate Benches (supra), the matter is set-aside to the file of the Assessing officer for verification of declarations so filed by the assessee in Form 27C and examination of claim of the assessee under section 206C(IA) afresh in accordance with law. The ground of appeal is thus allowed for statistical purposes. 49. In the result, the appeal of the assessee is disposed off in light of aforesaid directions. ITA No. 778/JP/2018 50. We now refer to the Revenue's appeal. In Ground no. 1, the Revenue has challenged the action of ld. CIT(A) in allowing relief to the assessee firm on the basis of additional evidence without calling for remand report under Rule 46A and enquiry under ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is notably admitted by ITO himself at Pg 7, 11 & 12 of the assessment order. Further, evidently, the ld. CIT(A) has made his own enquiry from the website of the department for his satisfaction, which he is empowered to make under section 250(4) r.w. Rule 46(A)(4) without even confronting the ITO. Reliance was placed on the decision in case of DDIT v. Thoresen Chartering Singapore (PTE) Ltd. [2008] 15 DTR 0395 (Mum) wherein it was held that "where assessee under direction of commissioner (Appeals) files additional evidence before him, there is no requirement for confronting assessing officer documents/evidence entertained by commissioner (Appeals) at first appellate stage under rule 46(a) (4)." Thus there was no requirement u/r 46A. It was further submitted that it only appears because of a typographical inadvertent mistake of the ld. CIT(A)-III that the word "remand report" was mentioned in his order. Therefore, the ld. CIT(A)-III has recently passed a corrigendum order (Pg 13 Line 27), copy of which has already been filed with the Registry and with the ld. D/R vide letter dated 5-9-2018, wherein the appellate order line no. 27g now reads "impugned order&qu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ead with Notification No.12/2016 dated 8-12-2016. 56. The Id DR is heard who has taken us through the certificates in Form 27BA filed by the assessee and submitted that while filing such certificates, the assessee has not paid interest under section 206C(7) and has not provided the challan details and which has not been appreciated by the ld CIT(A) and the relief has wrongly been allowed to the assessee. 57. Per contra, the ld AR submitted that the revenue's ground appears to be misconceived so far as it alleges the deficiency in Form 27BA in as much as to avail the benefit of the Proviso to section 206C(6A), there is no mandatory precondition to make the payment of interest under section 206C(7) and hence the benefit cannot be denied. Moreover, giving the details of interest and details of challans in Form 27BA is optional. Thus, where the assessee has paid the interest, the relevant details may be filled in Form 27BA, but not required otherwise. What all is required is that the assessee should furnish a certificate from the CA in the prescribed form to the effect that they are (i) assessed to tax, (ii) have already furnished their return of income under section 139(1) of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... paid, he has to specify that he has paid and where he has not paid, he has to specify accordingly. It is only an information seeking requirement and not a requirement in absence thereof which will makes the certification in Form 27BA invalid where there is substantial compliance as to the mandatory requirements of certification. In the result, the ground so taken by the Revenue is dismissed. 59. In Ground no. 3, the Revenue has challenged the action of the Id CIT(A) where he has set aside the issue to the AO for verification and directed to allow relief on verification under section 250(1) as per the ratio of judgment in the case of M/s Hindustan Coca Cola (P) Ltd. where the words "he may set aside" have been omitted after amendment w.e.f. 1-6-2001. 60. The ld DR referred to the findings of the ld CIT(A) at page 17 of his order where he has directed the AO to allow the benefit after making verification of return of income filed by the respective assessees and submitted that the ld CIT(A) has erred by setting aside the matter to the AO where he has so such powers to set-aside the matter to the AO. 61. Per contra, the ld AR submitted that there appears to be a complete m ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ld that there is no material difference in the provisions of tax deduction at source (TDS) under Chapter-XVIIB and tax collection at Source (TCS) under Chapter-XVIIBB of the Income Tax Act, 1961 and the facts & the judgment held in assessment proceedings under section 201(1)/201(1A) for default in the case of M/s Hindustan Coca Cola (P) Ltd are squarely applicable in the case of the assessee for assessment proceedings under section 206C(6)/206C(7) of the Act for TCS defaults. 65. The ld DR relied on the findings of the Assessing officer and submitted that there are specific provisions contained in section 206C in respect of tax collection at source and the liability of assessee should therefore be governed by such provisions and not in terms of the decision of Hon'ble Supreme Court in the case of M/s Hindustan Coca Cola (P) Ltd. rendered in context of tax deduction at source. 66. Per contra, the ld AR supported the findings of the ld CIT(A) and submitted that the issue involved is directly covered in as much as in A.Y. 2008- 09 and onwards till A.Y. 2012-13, the CIT(A) had already held that TDS and TCS provision are principally the same and against which the department not ha ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
