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2017 (1) TMI 1039 - HC - Income TaxSeeking recovery of the tax, interest and penalty under the provisions of Section 206C - Held that:- A finding of fact is recorded by the Commissioner of Income Tax, that the tribals are engaged only as labourers to collect the forest produce that is secured by the Corporation. In any case, since a tribal individual cannot be included within the meaning of the term “seller”, the case of the petitioner that the tribal individual was the first seller and the petitioner-Corporation is the second seller and was, therefore, not liable to collect the tax at source is liable to be rejected. If the petitioner-Corporation was of the view that the provisions of Section 206C of the Income Tax Act were not applicable to the petitioner-Corporation, the Corporation should not have collected the tax at source at 5%. Admittedly, the petitioner-Corporation had collected the tax at source from the buyers at the auction but the same was collected at a lesser percentage than that is specified in the entry in column (3) of the table. Though the petitioner-Corporation was liable to collect tax at source at 15%, the petitioner-Corporation had collected the same at 5% only and that resulted in the imposition of interest and penalty on the petitioner-Corporation. We do not find any illegality in the action on the part of the Assistant Commissioner of Income Tax in directing the petitioner-Corporation to pay the interest and penalty on the short fall in the collection of tax at source.
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