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2015 (5) TMI 538 - AT - Income TaxTCS u/s 206C - sale of forest produce, not being timber or tendu leaves - waiver from collection of TCS - Demand u/s 206C(6) and 206C(7)- Assessee in default for such non-collection of tax at source at the time of sale of the goods - assessee contended that all the buyers had taken into account the purchases made from the assessee for computing income in their respective returns filed u/s 139 after paying tax due thereon - Held that:- the liability of the seller to collect tax at source is waived only on the buyer submitting Form no. 27C to him at the time of debiting the account of buyer or the receipt of payment, whichever is earlier. - Unless these conditions are cumulatively fulfilled, the seller is obliged to collect tax at source at the rates prescribed and deposit the same into the exchequer at the material time. These conditions must be fulfilled in letter and spirit without any sort of distortion or dilution or their substitution with other alike conditions as per the convenience of the parties. Assessee was unable to adduce necessary material before us in the regard that all the buyers had taken into account the purchases made from the assessee for computing income in their respective returns filed u/s 139 after paying tax due thereon. The assertion so made cannot be inferred in the absence of any positive material to prove it. There can be no presumption about the buyers having paid tax on the income by including the transactions of purchases covered u/s 206C. This position needs to be specifically demonstrated by the assessee. Under such circumstances, we are of the considered opinion that the ends of justice would meet adequately if the impugned order is set aside and the matter is restored to the file of ITO (TDS) for considering the details, which the assessee seeks to file for divulging that the buyers had included the income from the instant purchase transactions in their total income and filed returns u/s 139 of the Act after paying tax due thereon. We want to make it clear that if the assessee fails to specifically prove this position, then, the Officer would be fully entitled to treat it as assessee in default in terms of section 206C. Further, the liability of interest u/s 206C(7) would be fastened on the assessee from the date on which the assessee was required to collect tax at source up to the date on which the amount of tax was paid by the buyers - Decided in favour of assessee for statistical purposes.
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