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TMI Blog2022 (11) TMI 978X X X X Extracts X X X X X X X X Extracts X X X X ..... e very old with almost 15 years have been elapsed since financial year to which the issue relates , we are of the view that the assessee be given benefit of declaration filed by it, and be not held as assessee-in-default for the tax not collected at source. Accordingly, interest charged on the same, is also directed to be deleted. Appeal of the assessee is allowed. - ITA No.262/RJT/2019 - - - Dated:- 16-11-2022 - Smt. Annapurna Gupta, Accountant Member And Shri T.R. Senthil Kumar, Judicial Member For the Assessee : Shri Mehul Ranpura, ld.AR For the Revenue : Shri B.D. Gupta, Ld.DR ORDER PER ANNAPURNA GUPTA, ACCOUNTANT MEMBER The present appeal has been filed by the assessee against order passed by the Commissioner of Income Tax(Appeals)-2, Rajkot (in short referred to as ld.CIT(A) under section 250(6) of the Income Tax Act, 1961 ( the Act for short), dated 26.9.2019 pertaining to the Asst.Year 2007-08. 2. The grounds of the appeal raised by the assessee are as under: 1. The grounds of appeal mentioned hereunder are without prejudice to one another. 2. The Id. Commissioner of Income Tax (Appeals) - 2, Rajkot [hereinafter referred to as th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... TCS, the assessee could not be treated as assessee-in-default for not collecting tax at source on the scrap sold during the year. The ld.CIT(A) noted that the assessee had filed required declaration to the TDS, Range-1 only in January, 2019, while in the case of the assessee, assessment had been finalized in 2012. The ld.CIT(A) held that the said declarations therefore were in the nature of additional evidences and did not merit admission under Rule 46A of the IT Rules. He further noted that they were only in respect of part of the sales. Accordingly, he held that no cognizance could be taken of the said declaration. Rejecting both the contentions of the assessee, the ld.CIT(A) thereafter upheld the order of the AO holding the assessee to be assessee-in-default with respect to TCS liability amounting Rs.2,19,556/- and interest liability amounting to Rs.1,58,080/- as per section 206C(6)/206C(7) of the Act. The relevant finding of the ld.CIT(A) at para 7 of his order is as under: The brief facts of the case are that the assessee has sold scrap of Rs.2.19 crores without making the TCS. As per the Assessing Officer the assessee was required to make TCS at 1% as per provisions ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for non-collection of TCS, was passed after lapse of 5 years from the end of the financial year on 28.3.2012. He thereafter pointed out that the ld.CIT(A) thereafter took another seven years to pass the appellate order which was passed on 26.9.2019. The ld.counsel for the assessee contended that the order passed in the present case, in any case, was barred by limitation, having been passed five years after the end of the relevant financial year. His other contention before us was that the assessee having filed requisite declaration for exemption from tax collection at source, the ld.CIT(A) ought to have considered the same, and allowed the appeal of the assessee. He stated that the ld.CIT(A) s contention that the assessee has delayed the filing of the requisite declaration of buyers had no bearing on the merits of the case, particularly, when it had been pointed out to the ld.CIT(A) that declaration had earlier not been filed by the assessee since he harboured a belief that scrap sold by it did not qualify for TCS as per section 206C of the Act, and it was only after the decision of the Special Bench in the case of Bharti Auto (supra) ruling otherwise, the assessee sought recours ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the assessee as assessee-in-default for default in collecting TCS @ 1% on scrap sold during the year amounting to Rs. 2,19,55,691/- and the consequent appellate proceedings, has taken considerable period of time, the initial order holding the assessee as assessee-in-default being passed after lapse of five years from the end of the relevant financial year and the appellate order being passed after a lapse of 12 years thereafter. These facts, we find, are relevant for deciding the issue on hand. The position of law that on filing of necessary declaration from the buyers of scrap in the prescribed form declaring that scrap purchased by them is to be used for manufacturing purpose, the seller is exempt from the liability to collect TCS, is not disputed. The provision of section 206C(1A) brings out this position very clearly as under: (1A) Notwithstanding anything contained in sub-section (1), no collection of tax shall be made in the case of a buyer, who is resident in India, if such buyer furnishes to the person responsible for collecting tax, a declaration in writing in duplicate in the prescribed form and verified in the prescribed manner to the effect that the goods re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the assessee to be an assessee in default in the present case u/s 206C(6)/(7), in the year 2012, the assessees belief that it was entitled to exemption from TCS on scrap sold, was a valid belief in view of the various decisions of the ITAT on the definition of scrap including only scrap as generated by assesses during manufacturing process and not that dealt with as trader of scrap. During the course of appellate proceedings before the ld.CIT(A), the assessee became aware of the decision of Special Bench of the ITAT holding otherwise. The order of the ld.CIT(A) reveals that the matter itself came up for hearing before him in the year 2019. By then the assessee had collected various declarations from the buyers u/s 206C(1A) for the purposes of claiming exemption from TCS ,and filed it to the concerned TDS officers which was acknowledged as receipt by them also. 9. In view of the above facts that no limitation is prescribed in the Act for filing of declaration as required under section 206C(1A) of the Act, and the assessee having filed delayed declaration under a bona fide belief, we are not in agreement with the ld.CIT(A) that these declarations could not have been entertained ..... X X X X Extracts X X X X X X X X Extracts X X X X
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