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TMI Blog2023 (8) TMI 448X X X X Extracts X X X X X X X X Extracts X X X X ..... as assessee in default for not collecting TCS from its buyers from whom assessee had received declaration as per section 206C(1A) - where buyers had paid tax on their income and such income had been assessed after taking into consideration purchases made from assessee, tax could not be again collected from assessee on non-collection or short-collection of TCS. Thus in the instant facts it is noted that the Department has not analysed / verified the requisite forms/evidence to support the contention of the assessee that the sale was made to manufacturing concerns and there was no requirement to collect tax at source in respect of such sales, which constituted almost 95% of such sales. Accordingly, in the interest of justice, the matter is being restored to the file of the assessing officer to verify the request documents / Forms to see if the assessee has obtained the request Forms 27C and 27BA etc. and to allow credit for the same in case the same were available with assessee before the assessment got concluded. Appeal of the assessee is allowed for statistical purposes. - Shri Waseem Ahmed, Accountant Member And Shri Siddhartha Nautiyal, Judicial Member For the Appe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... unjustified on facts as also in law and may kindly be deleted. 4) Your Honour s appellant craves leave to add, to amend, alter, or withdraw any or more grounds of appeal on or before the hearing of appeal. Assessment Year 2015-16 :- 1) The grounds of appeal mentioned hereunder are without prejudice to one another. 2) The ld. Commissioner of Income Tax (Appeals), National Faceless Appeal Centre, Delhi [hereinafter referred to as the CIT(A)] erred in law as also on facts in confirming AO s action of determining tax liability of Rs. 1,53,961/- by alleging that the appellant is liable for making TCS, which he failed to make either TCS or to file Form no. 27C to concerned CIT within prescribed time limit. The tax liability confirmed is totally unjustified on facts as also in law and may kindly be deleted. 3) The ld. CIT(A) erred in law as also on facts in confirming charging of interest u/s. 206C(7) of the Act at Rs. 55,426/-. 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. 4) Your Honour s appellant craves leave to add, to amend, alter, or withdraw any or more g ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , the assessee submitted that the assessing officer did not give sufficient time to produce the necessary certificates since he was required to pass order in a hurried manner. The assessee submitted that the provisions of section 206C are not applicable in the assessee s case for the reason that the goods have been sold to a person who is engaged in manufacturing and therefore, the same is exempted by section 206C(1A) of the Act and assessee has also collected Form 27C in this respect, which he wanted to furnish. 6. However, Ld. CIT(Appeals) observed that assessee has not complied with required under section 206C of the Act. Firstly, the assessee has not collected the tax and secondly, in case tax was not collectable, the assessee has not obtained Form 27C as per requirements under the relevant section. The Ld. CIT(Appeals) observed that Form 27C is required to be filed with the designated authority, CIT (TDS), within 7 days of the end of the month in which the sale of scrap i.e. item liable for TCS is sold by the assessee. However, the assessee has not filed Form 27C within the aforesaid timelines with the designated authority. The assessee could produce Form 27C only subsequ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ere filed much after the due date. It is relevant to mention here that Form 27C has to be filed with the designated authority [CIT(TDS)] within 7 days of end of month in which the sale of scrap (item liable for TCS) is sold by the appellant. Since the appellant has not filed Form 27C within the time and were not submitted before the designated authority and it is additional evidence produced before this office under rule 46A which is reproduced as under:- . 4.6 As the appellant has not complied with the requirements of Sec. 206C(1A) therefore he cannot escape from the responsibility entrusted upon him of collecting tax at source. The appellant on the other hand has contested this issue and has submitted certain case laws wherein it was held that submission of form 27C is a procedural aspect and a minor delay in the submission of the same will not render the appellant ineligible for exemption from TCS as contemplated u/s. 206C(1A). The Government has introduced his TCS Provisions so as to ensure that taxes get collected in a timely manner from the transactions which would otherwise escape the tax net. But while introducing theses provision it has also given room for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . In response, Ld. DR placed reliance on the observations made by Ld. CIT(Appeals) and the AO in their respective orders. 9. We have heard the rival contentions and perused the material on record. In the instant case, the assessee has submitted that the scrap was sold to manufacturers and the sale was not for trading purposes but was made to manufacturers , from whom Form 27C / Form 27BA was duly obtained, though, there was delay in obtaining the same. In the case of Chandmal Sancheti v ITO 72 taxmann.com 237 (Jaipur - Trib.) , the ITAT has held that no time limit has been prescribed for furnishing Form No.27C by the buyer to the seller, hence, delay in filing declaration shall not be a ground to deny benefit of declaration to assessee. In the case of CIT v. Adisankara Spinning Mills (P.) Ltd. [2014] 362 ITR 233/49 taxmann.com 273/226 Taxman 44 (Mag.)(Mad.) , the High Court in Para 2 of the order held as under:- As far as the second question is concerned, the Tribunal has noted in paragraph 3 that the assessee had obtained Form 27C from the buyers of the cotton waste. In the course of the appellate proceedings, the same was also filed before the assessing authority by ap ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... st of sub-section (1A) of section 206C thus is to make a declaration as prescribed, upon which, the liability to collect tax at source under sub-section (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 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 . ' 11. In the case of Karnataka Forest Development Corpn. Ltd. v. ITO, (TDS) [2015] 62 taxmann.com 59/70 SOT 167 (Bang.-Trib) , the ITAT observed as below:- Section 206C(1A) mandates that any person responsible for collecting tax under section 206C(1) need not do so if he obtains a declaration from the buyer that he is purchasing the goods for use in manufacturing, processing or producing articles or things. It does not say that such declaration has to be obtained at the very same moment when a sale is affected. A reading of sub-section (1B) clearly brings out this since obligation of the assessee to file a co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... urposes. 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 furnished by the assessee to the Chief Commissioner or Commissioner as required by the provisions of section 206C(1B) of the Act. 13. In the case of Eid Mohammad Nizamuddin v. ITO 116 taxmann.com 579 (Jaipur - Trib.) , the ITAT held for availing benefit of not collecting tax at time of sale of goods aimed for specified purposes, a verified declaration in prescribed Form should be provided by buyers to seller; however, no time limit is prescribed for furnishing such declaration. Section 206C(7) provides that, if a person responsible for collecting TCS does not collect tax or fails to pay it, he will be liable to pay interest for period till its payment; however ..... X X X X Extracts X X X X X X X X Extracts X X X X
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