TMI Blog2021 (10) TMI 776X X X X Extracts X X X X X X X X Extracts X X X X ..... tails as required in the proviso to section 206C(6A) of the Act have been fulfilled. We therefore find no justification in the action taken by the Ld. AO of levying penalty u/s 271CA of the Act by treating the assessee in default. Accordingly, the penalty levied are deleted. Effective grounds raised by the assessee on the issue of levy of penalty u/s 271CA of the Act are allowed. - ITA No.194 & 195/Ind/2020 (Assessment Years: 2011-12 & 2015-16) - - - Dated:- 23-8-2021 - HON BLE RAJPAL YADAV, VICE PRESIDENT AND SHRI MANISH BORAD, ACCOUNTANT MEMBER Appellant by Ms. Shalini Mehta, AR Respondent by Shri Harshit Bari, Sr. DR ORDER PER MANISH BORAD, A.M The above captioned appeals filed at the instance of the Assessee for Assessment Years 2011-12 2015-16 are directed against the orders of Ld. Commissioner of Income Tax(Appeals)-I (in short Ld. CIT], Indore dated 27.12.2019 27.01.2020 which are arising out of the order u/s 271CA of the Income Tax Act 1961(In short the Act ) dated 30.08.2018 framed by ACIT-(TDS), Indore. The Assessee has raised following grounds of appeal in ITANos.194/Ind/2020: 1.That the Learned CIT(A) erred in confirming pe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssed uls 271 CA was barred by limitation. 5. The appellant craves leave to add, to alter, amend, modify, substitute, delete and I or rescind all or any of the grounds of appeal on or before final hearing, if necessity so arises. 2. Though the assessee has raised various grounds of appeal for both the years but the effective grounds relates to levy of penalty u/s 271CA of the Act at ₹ 15,88,428/- and ₹ 2,09,800/- for A.Ys. 2011-12 2015-16 respectively, confirmed by Ld. CIT(A) which was levied by the Ld. AO for violation of provisions of section 206C of the Act. 3. Brief facts of the case commonly applicable for both years under appeal are that the assessee is an individual running business namely M/s. Jain Spat. Assessee is liable to collect tax at source on the purchase of Iron and Steel scrap. Assessee failed to collect tax and deposited on due date. Subsequently, assessee has deposited tax collected at source and also paid the interest levied of such late deposit. To this extent there is no dispute at the end of revenue. Assessee has also provided form No. 27BA duly certified by a Chartered Accountant in support of its contention that the parties from ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the certificates issued by the Chartered Accountant in Form 27BA makes it clear that the assessee has fully complied with and established requirement of law in substance. In the certificate, it is categorically mentioned that the buyer has filed the return u/s139, included purchases into its account while preparing ROT and paid the due taxes. Also, the Ld. AO in the entire order passed u/s 206C (6A)/206C(7) has not at all denied that the appellant has not complied with the requirement prescribed in proviso to S.206C(6A) whereas on the contrary the AO after considering the Form 27BA Wed by the appellant give the benefit of the proviso to S.206C(6A). 10.It is also submitted that the Chartered Accountant who signed the certificate is all expert upon which even the legislature has reposed confidence. If the expert has certified certain facts in a particular manner then the same is objected only when there is cogent evidence to negate the claimed state of affairs. In the present case, neither the Ld. CIT(A) nor the Addl. CIT (TDS) brought on record any evidence which proves any contrary facts. 11.The ld. CIT also erred in holding that the appellant has failed to make any eff ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... me declared by him in such return of income, and the person furnishes a certificate to this effect from an accountant in such form as may be prescribed.) 8. With reference to the above proviso in case an assessee files the details in form 27BA certified by Chartered Accountant stating that the buyer or licensee or lessee has furnished the return of income u/s 139 of the Act, after taking into account such amount for computing income in such return of income and has paid the tax due on income declared by him in such return of income and once assessee fulfills this condition it will not be treated as the assessee is in default and thus would be precluded from the levy of penalty u/s 271CA of the Act. 9. Though in the instant case the assessee has deposited TCS and interest thereon subsequently but even in cases where tax is not collected but the assessee furnishes the form 27BA of the Income Tax Rules, then also assessee is not held liable to have violated the provisions of section 206C. Our this view is supported by finding of Coordinate Bench Ahmedabad in the case of ACIT vs. Bansal Ship Breakers P. Ltd. in ITANo.1945/Ahd/2017 dated 20.03.2019. The relevant extract of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to the effect that the goods referred to in column (2) of the aforesaid Table are to be utilised for the purposes of manufacturing, processing or producing articles or things or for the purposes of generation of power and not for trading purposes. 5. A perusal of the above would indicate that it mandates any person responsible for collecting taxes under section 206(1) need not to do so if he obtains a declaration from the buyer that he is purchasing the goods for re-use in manufacturing process or producing article or things. It does not say that such declaration has to be obtained at the very same moment when sale is effected. In the present case, the assessee has submitted declaration before the AO in requisite forms. The ld.First Appellate Authority has appreciated this aspect and the finding recorded by the ld.CIT(A) reads as under: 5.5 The appellant has also argued that as the buyers of such goods have furnished declaration that the goods shall be used for the purpose of manufacturing / processing / producing articles or things and not for trading and they have given a declaration u/s.206C(IA) of the I. T. Act, ITA No.1945/Ahd/2017 1961 therefore, the pr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dated 27/06/2016 concluded as under: ITA No.1945/Ahd/2017 ....................... if the buyer furnishes to the person responsible for the tax a declaration in writing in prescribed form declaring that the goods in question are to b e utilized for the purposes of manufacturing processor producing articles or things or for the purpose of generation of power and not for trading purposes. The declaration to be made in subsection (IA) of section 206C thus would enable the Revenue authorities to, as and when the need so arises make proper verifications. This subsection itself does not provide for any time limit within which such declaration is to be made........... After considering all the facts of the case and the judicial pronouncement by the Higher Authorities including jurisdictional High Court of Gujarat, it is concluded that there is no dispute that the delay in filing such forms with the office of the Department [cannot revive the liability of collection of tax at source with retrospective effect and the 27C produced by the appellant may be considered. 6. In his order itself , the ITO TDS-1 himself has pointed out the judgment of special Bench of IT AT in th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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