TMI Blog2014 (8) TMI 716X X X X Extracts X X X X X X X X Extracts X X X X ..... required by the provisions of section 206C(1B) of the Act. Once the declaration referred to in section 206C(1A) was received by the assessee, then thereafter the assessee could not legally collect the TCS from such buyers and consequently the assessee cannot be treated as an assessee in default for not collecting TCS from such buyers –Relying upon CIT Vs. Valibhai Khanbhai Mankad [2012 (12) TMI 413 - GUJARAT HIGH COURT] - the assessee cannot be treated as assessee in default for not collecting TCS from such buyers from whom the assessee received declaration as per provisions of section 206C(1A) of the Act - The assessee has not filed copy of declaration received by it u/s. 206C (1A) of the Act before the AO for his verification – thus, the matter is to be remitted back to the AO for proper verification - the auditor’s certificate which has been furnished was not furnished before the lower authorities and it could not be verified by them – Decided in favour of Assessee. - ITA No. 2384/Ahd/2012 - - - Dated:- 14-8-2014 - Shri Mukul Kr. Shrawat And Shri N. S. Saini,JJ. For the Petitioner : Shri B. L. Yadav, DR For the Respondent : Shri B. R. Popat with Asha Maniar, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd no. 2 of the appeal. Therefore, this ground of appeal of the assessee is dismissed as not pressed. 7. The issue involved in ground no. 3, 4 5 of the appeal is that the Assessing Officer was not justified in treating the assessee as assessee in default u/s. 201(1) of the Act by holding that the assessee has shortcollected TCS amounting to ₹ 8,41,060/- without appreciation of facts. Further, the Assessing Officer was not justified in charging interest of ₹ 2,25,020/- u/s. 201(1A) of the Act without appreciation of facts in totality. 8. We have heard the rival submission and perused the orders of lower authorities and material available on record. In the instant case, the Assessing Officer treated the assessee as an assessee in default in respect of ₹ 8,41,060/- on the ground of failure of assessee to collect TCS as per provisions of section 206C on sale of scrap by it. The Assessing Officer also levied interest of ₹ 2,25,020/- u/s. 201(1A) of the Act. 9. According to the Assessing Officer, the assessee was required to collect TCS of ₹ 8,56,317/- on the sale of scrap made by it to various parties whereas the assessee actually collected T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uyer furnishes to the person responsible for collecting tax, a declaration in writing in duplicate in the prescribed form and verified in the prescribed manner to the effect that the goods referred to in column (2) of the aforesaid Table are to be utilized for the purposes of manufacturing, processing or producing articles or things [or for the purposes of generation of power] and not for trading purposes. A perusal of the aforesaid provision shows that the assessee is not legally obliged to collect the TCS from a buyer who furnishes a declaration to the assessee to the effect that the purchases made by such buyer are to be utilized for the purposes of manufacturing, processing or producing articles or things or for purposes or generation of power and not for trading purposes. 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Assessing Officer for his verification. Therefore, in our considered view, it shall be just and fair to restore this part of the ground of appeal back to the file of Assessing Officer for proper verification and thereafter readjudication of the issue as per law in the light of the discussion made hereinabove after allowing the assessee a reasonable opportunity of hearing. 19. In respect of the remaining two parties namely M/s Shivam Metacast (Gujarat) Pvt. Ltd. and M/s. S.K. Bansal Co. in respect of whom the assessee was treated as the assessee in default, we find that the assessee has filed a certificate obtained from their chartered accountants in Form No. 27BA wherein it was certified that these two parties filed their return of income and have taken into consideration the purchases made from the assessee in determining their total income and have paid the income tax due on their returned income. Proviso to sub-section (6A) of section 206C which has been inserted by the Finance Act, 2012 with effect from 01.07.2012 reads as under: Provided that any person, other than a person referred to in subsection (1D), responsible for collecting tax in accordance with the provis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... facilitate the collection of tax which is chargeable u/s. 4 of the Act primarily from the recipient of income. In other words, when recipient of income has paid income tax directly on their income, then no loss of revenue took place because of non-collection of TCS or non-deduction of TDS and therefore, for such default the assessee cannot be treated as an assessee in default in respect of amount of TDS or TCS. Hon ble Supreme Court in the case of Hindustan Coca Cola Beverage (P.) Ltd. Vs. Commissioner of Income Tax (2007) 293 ITR 226 (SC) has held as under: Since the assessee had paid the interest under section 201(1A) and there was no dispute that the tax due had been paid by the deductee (Padeep Oil), the Appellate Tribunal came to the right conclusion that the tax could not be recovered once again from the assessee. Thus, in our considered opinion, if the payer has paid tax on their income and such income has been assessed after taking into consideration the purchases made from the assessee, then tax cannot be again collected from the assessee on the ground of non-collection of TCS or short-collection of TCS. 22. In the instant case, we find that the auditor s certific ..... X X X X Extracts X X X X X X X X Extracts X X X X
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