TMI Blog2013 (9) TMI 268X X X X Extracts X X X X X X X X Extracts X X X X ..... alty. Whatever name is given in the agreement of mining, the same is payable by the licensee to the District Magistrate and upon that the District Magistrate is required to collect TCS as per above provisions. Whether dead rent was to be paid in advance or royalty was to be paid after start of business are not relevant criteria to deal with the provisions of section 206C(1C) of the IT Act. - Decided against the assessee. The assessee is also liable to pay interest u/s 206(6A) of the Income Tax Act, which has been brought on the statute w.e.f. 01.04.2007 - Since the assessee was responsible for collecting tax and failed to do so in accordance with the provisions of law, therefore, for the failure of assessee to collect the tax, the assessee would be liable to pay tax to the credit of the Central Government in accordance with law. Therefore, quoting a wrong provision would not be relevant for the purpose of deciding the issue. Same view is taken by ITAT, Agra Bench in the case of Agra Development Authority v. ACIT [2012 (10) TMI 887 - ITAT AGRA] – Decided against the Assessee. Double deduction of TCS from the assessee, when the leasee/lincencee has already paid tax - Held tha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Ld. Commissioner of Income Tax (Appeals)-II, Agra, grossly erred both in law and facts in erroneously adjudicating ground no. 3 of the appeal. Ld. CIT(A) failed to appreciate that Section 206C(6A) was brought on the statute w.e.f. 01.04.2007, and that there were no circumstances or facts available on record for holding the appellant as "assessee in default". The Ld. Commissioner of the Income Tax (Appeals)-II, Agra further erred in applying the provisions of section 206C(1) which relates to the seller and not to the appellant. 5. Because the Ld. Commissioner of Income Tax (Appeals)-II, Agra, grossly erred both in law and facts in erroneously adjudicating ground no. 4 of the appeal. Ld. CIT(A) failed to appreciate that the provisions of section 206C(7) or 201(1A) are not at all applicable in the case of the appellant." 4. Briefly, the facts of the case are that the District Magistrate, Jhansi on behalf of the State Government has granted license and lease for mines and quarries in his territorial jurisdiction and collected the amount as royalty etc. from the licensees and lessees against use of such mines and quarries for the purpose of business like extracting Gitti, bal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n the above grounds of appeal and held that the assessee is liable to collect TCS and it is immaterial whether the licensees or lessees have filed their return of income or not. The provisions of section 206C(6A) enacted w.e.f. 01.04.2007 was considered for the purpose of levy of penalty and has no effect on the liability to collect tax u/s. 206C(6) of the IT Act. The ld. CIT(A) also held that the assessee is also liable for interest u/s. 206C(7) of the IT Act. The assessee is in appeals on the above grounds of appeals in all the appeals filed for separate assessment years. The points raised by the ld. counsel for the assessee are taken up for the purpose of disposal separately as under : [I]. The ld. counsel for the assessee submitted that the District Magistrate is not the Head of the Department of Mining and TAN Number is issued in the name of District Mining Officer, Jhansi. Therefore, District Magistrate is not liable for TCS and relied upon the decision of Hon'ble Supreme Court in the case of ITO v. Ch. Atchaiah 84 Taxman 639 (218 ITR 239, in which it was held that the AO is not precluded from taxing right person with respect to that income. On the other hand, the ld. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... District Magistrate, Jhansi is liable to collect TCS in the facts and circumstances of the case. This point is accordingly decided against the assessee. [II]. The ld. counsel for the assessee submitted with regard to TCS liability for dead rent/royalty that there is no provision u/s. 206C for collection of TCS and these provisions are not applicable against the assessee. Dead rent was on account of grant of lease/license for mining and dead rent is dependent on extraction. The royalty depends on collection on the extraction. The dead rent is fixed to be paid in advance and it has no connection with the start of business and when the business is started the royalty is payable. Therefore, on the dead rent and royalty, it is not mentioned in the above provision that the assessee is liable for collection of TCS in the matter. [II] (i). On the other hand, the ld. DR relied upon the orders of the authorities below and submitted that any name may be given to anything in the agreement, but the provisions of section 206C are applicable on the amount received and collected for grant of license and lease for mining and quarry against consideration. The dead rent or royalty is t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... incur, be deemed to be an assessee in default in respect of the tax: Provided that no penalty shall be charged under section 221 from such person unless the Assessing Officer is satisfied that the person has without good and sufficient reasons failed to collect and pay the tax. (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 sub-section (3). The above provisions provided that every person who grants a lease or license or enters into a contract or otherwise transfers any right or interest either in whole or in part in any parking lot or toll plaza or mine or quarry, to another person, other than a public sector company (licensee or lessee) for the use of such park ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f assessee to collect the tax, the assessee would be liable to pay tax to the credit of the Central Government in accordance with law. Therefore, quoting a wrong provision would not be relevant for the purpose of deciding the issue. Same view is taken by ITAT, Agra Bench in the case of Agra Development Authority v. ACIT,138 ITD 127. The assessee has since failed to comply with the provisions of law and was therefore, liable to pay interest also. Accordingly, ground No. 2 to 5 of appeal of the assessee are dismissed. [III]. The ld. counsel for the assessee further submitted that all the licensees/lessees are assessees of Income Tax Department and paid Income-tax, therefore, there should not be a double deduction of TCS from the assessee and submitted that no proper opportunity was given at the time of considering the issue and the ld. CIT(A) has wrongly noted in the appellate order that it is immaterial whether the licensees/lessees have filed their return of income or not because the assessee is required to collect TCS in accordance with the above provisions. He has submitted that since all the licensees/lessees have paid due taxes, therefore, there should not be further rec ..... X X X X Extracts X X X X X X X X Extracts X X X X
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