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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 ..... lly unjustified on facts as also in law and may kindly be deleted. 3. The Id. CIT(A) erred in law as also on facts in confirming charging of interest u/s.206C(7) of the Act at Rs.1,58,080/-. The interest levied on tax liability determined u/s.206C(6) is totally unjustified on facts as also in law and may kindly be deleted." 3. Brief facts of the case are that the assessee had sold scrap for Rs.2,19,55,691/- without making tax collection at source (TCS). As per the assessing officer (AO), the assessee was required to make TCS @ 1% of the scrap sold as per provisions of section 206C(1) of the Act. The AO accordingly treated the assessee as 'assessee-in-default' for not making TCS and determined liability of the assessee for non-collection of TCS under section 206C(6) of Rs.2,19,556/- and interest liability for late collection under section 206C(7) of the Act at Rs.1,58,080/-. Before the ld.CIT(A), the assessee contended that the scrap sold by the assessee, not being generated during any manufacturing activities of the assessee, did not qualify as scrap for the purpose of TCS under section 206C of the Act. The assessee contended that he was a trader in scrap which was obtained from ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 58,0807- ). The contention of assessee is that the said scrap is not generated during any manufacturing activities of the assessee. It is contended that the assessee is trader in scrap obtained from ship breakers. It is noteworthy that the Honable ITAT, Rajkot (special bench) in the case of M/s Bharti Auto Product (supra) has held that the provisions of section 206C were applicable to sellers of scrap whether it was generated from manufacturing process or whether it was purchased. I thus find that the liability of assessee to make TCS has been upheld by ITAT, Rajkot. Therefore the contention of assessee that the assessee was not liable to make TCS is not tenable. The assessee has also contended that pursuant to order Honable ITAT in case of M/s Bharti Auto Product he obtained declaration u/s 206C(1A) from 21 buyers seeking exemption from TCS involving sales of Rs.1.9 crores and furnished to TDS, Range-1, Rajkot I find that in the case of assessee the impugned assessment has been finalized on 28/03/2012 and the assessee has statedly filed the declaration in January 2019, that too only for part sales. In my considered opinion the said declaration obtained after of assessment ar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... out that all these declarations had been accepted by the Department and in view of the same, the assessee was entitled to exemption from the provision of TCS on the scrap sold to the buyers. He pointed out that while total sale of scarp amounted to Rs.2.19 crores,declarations had been collected by the assessee from 21 buyers including the sale of 1.90 crores which substantially covered most of the sales made by the assessee during the year. 5. The ld.DR on the other hand vehemently supported the order of the ld.CIT(A) stating that there was no limitation prescribed under the Act for passing of order under section 206C(6)/(7) of the Act holding the assessee to be in default. That therefore, there is no merit in the contention of the Ld.Counsel for the assessee that the impugned order passed was barred by limitation. As for the assessee's contentions that requisite declaration from the buyers had been filed by the assessee for claiming exemption from the TCS on sales made to these buyers, the ld.DR contended that it is not denied that these declarations were filed after lapse of considerable period of time ,that scrap sales were made in financial year 2006-07 pertaining to the Asst ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t the assessee did file the requisite declaration as per section 206C(1A) from buyers of scrap amounting to Rs.1,90,18,687/- out of total such sale of Rs.2,19,55,691/-. It is also a fact on record that these declarations were filed only in the year 2019 while the financial year to which the impugned transaction of sale of scrap related, is financial year 2006- 07. 8. The plain reading of the provision of law as provided in section 206C(1A) of the Act would bring out there is no time line prescribed for filing of such declaration. Nothing to this effect has been brought to our notice by the ld.DR; nor is it his contention that these declarations have been filed beyond the time prescribed by law. Having said so, we find that the assessee has given a reasonable cause for delay in filing these declaration, pointing out that till the order passed by the Special Bench of the ITAT in case of Bharti Auto in 2013, the view of the ITAT in various decisions was that it is only in respect of the scrap generated by the assessee during their manufacturing activities, which are sold to other parties, on which TCS is required to be collected; that not all scrap would qualify for TCS but only scra ..... X X X X Extracts X X X X X X X X Extracts X X X X
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