TMI Blog2015 (7) TMI 908X X X X Extracts X X X X X X X X Extracts X X X X ..... , a similar breach was considered to be only technical and one that could be condoned by Hon'ble Madras High Court in the case of Adisankar Spinning Mills (P) Ltd., (2010 (12) TMI 1084 - MADRAS HIGH COURT ). In the said case, assessee had filed Form 27C subsequent to the proceedings, through a rectification petition under section 154, but still considered to be sufficient compliance, which view of the Tribunal was confirmed by Hon'ble Madras High Court. Proceedings on the assessee for the alleged default here were initiated on 10/10/2011 and assessee had before 31/10/2012 filed the Forms. Assessment years involved were assessment year 2009-10 to 2011-12 and there was much time left with the Revenue to verify whether the buyers were indeed using the wood pulp for manufacturing, processing or producing article or thing and not for trading and to proceed against them if they had furnished false declaration. We are therefore of the opinion assessee could not have been deemed as one in default under section 206C (6D) of the Act or liable for interest under section 206(7). - Decided in favour of assessee. - Stay Petn. Nos. 27 to 29/Bang/2015, ITA Nos.1144 to 1146/Bang/2014, ITA Nos. 114 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... relating to forestry including tissue culture and allied activities. 9. To conduct tours in relation to Wildlife Sanctuaries and other places of interest. 3. The Assessing Officer (AO) was of the opinion that assessee, when it affected the sale of wood pulp, was obliged to collect tax at source under section 206C, but had failed to do. He put the assessee on notice. Reply of the assessee was that: i. The buyers were manufacturers and not traders and the wood pulp was used for manufacture. ii. Wood pulp sold by it was not a forest produce. iii. Wood used for pulping was not spontaneous growth, but cultivated by the assessee on leased forest land. Along with the above reply assessee also filed a declaration from the buyer in Form 27C in which they affirmed that the wood pulp was being used for their manufacturing activity only. 4. However, the AO was not impressed by the above reply. According to him: i. Wood pulp was a type of goods falling under item (v) of the Table given in section 206C(1), viz., forest produce ii. Declaration in Form 27C filed by the assessee was not complete since part II was missing. iii. Copy of the declaration was not delivere ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... urt in the case of Andhra Pradesh Forest Development Corporation Ltd. vs. ACIT (2005) 272 ITR 245. 7. Per contra, learned Departmental Representative submitted that Form No.27C was filed by the assessee late, only when proceedings were initiated for the default. This, as per the ld.DR, was done only to circumvent the consequence of the default. As per the ld. DR, if the Form was not filed in time, Revenue lost a valuable right of proceeding against the buyer and section 206C(1B) stood violated. As per the ld. DR, assessee, having sold forest produce without collecting tax at source and without obtaining Form No.27C, was rightly held to be one in default. Ld. DR stressed that the said declaration was to be obtained at the time of sale and not later. 8. We have perused the orders and heard the rival contentions. It is not disputed that assessee had filed the declaration from the buyer, as mandated in section 206C(1A) only when show cause notices were issued by the AO, pointing out failure to collect tax at source. However, it remains a fact that assessee had produced Form No.27C obtained from both the parties. Copies of these Forms have been placed on record at paper book pages ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ay of June, 2003. (1A) Notwithstanding anything contained in sub-section (1), no collection of tax shall be made in the case of a buyer, who is resident in India, if such buyer furnishes to the person responsible for collecting tax, a declaration in writing in duplicate in the prescribed form2 and verified in the prescribed manner 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 and not for trading purposes. (1B) The person responsible for collecting tax under this section shall deliver or cause to be delivered to the Chief Commissioner or Commissioner one copy of the declaration referred to in sub-section (1A) on or before the seventh day of the month next following the month in which the declaration is furnished to him. Declaration by a buyer for no collection of tax at source under section 206C(1A). 37C. (1) A declaration under sub-section (1A) of section 206C to the effect that any of the goods referred to in the Table in sub-section (1) of that section are to be utilised for the purposes of manufacturing, processing or producing article ..... X X X X Extracts X X X X X X X X Extracts X X X X
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