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2016 (4) TMI 244 - ITAT AHMEDABAD

2016 (4) TMI 244 - ITAT AHMEDABAD - TMI - Default u/s 206C(6A) - Tax Collection at Source (TCS) - whether ld. CIT(A) was correct in denying the benefit referred in section 206C(1C) for the sales of ₹ 1,57,60,687/- even when assessee has submitted form no.27C from respective buyers - Held that:- Assessee has duly obtained form 27C for the sales of ₹ 1,57,60,687/- and there is a list of 24 parties shown in the order of ld. CIT(A) at para 5.3 and out of 24 parties in 19 cases column of .....

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and parcel of the audited financial statements and not a single mistake in the above facts have been noticed by the lower authorities. Accordingly, in view of the above discussion and relying on the decision of the co-ordinate bench in the case of Karnataka Forest Dev. Corpn. Ltd. vs. ITO (2015 (7) TMI 908 - ITAT BANGALORE ), we are of the view that the moment assessee has received form no.27C from the buyers his liability to collect TCS @ 1% gets away and the assessee should not be deemed to be .....

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Member. This appeal of the assessee is directed against the order of ld. CIT(A)-4, Ahmedabad, dated 12.05.2015 passed pursuant to the order of ITO (TDS)-1, Ahmedabad framed u/s 206C(7) of the I.T. Act, 1961 (in short the Act) dated 7.5.2013. Assessee has raised three grounds of appeal revolving round solitary issue against action of ld. CIT(A) for not accepting form No.27C for the sale of scrap amounting to ₹ 1,57,60,687/- and treating the assessee in default u/s 206C(6A) of the Act by not .....

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unt of the buyer or at the time of receipt of such amount in the said buyer in cash or by the issue of a cheque or draft or by any other mode whichever earlier, collect from the buyer of any goods, for e.g. scraps, a sum equal to one percent of such amount as income tax and if the assessee fails to collect the tax in accordance with the provisions of section 206C(6) of the Act then assessee will be liable to pay tax to the credit of Central Government in accordance with the provisions of section .....

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g goods without collection of tax. The Assessing Officer observed that assessee has furnished photocopy of form no.27C rather than furnishing second copy of form no.27C and further it was observed that in some forms date was not mentioned in part -I or part -II of the form and for this reason ld. Assessing Officer treated assessee in default and levied 1% TCS of the sale of scrape at ₹ 3,10,81,253/- along with surcharge and education cess and raised a demand u/s 206C(1) at ₹ 3,48,732 .....

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or denying the claim of the assessee that out of the total 24 forms relevant to sales of ₹ 1,57,60,687/- in 19 cases no date was mentioned in part-I and in two cases there was some over writing and in one case each there was no data and wrong date mentioned. 5. Aggrieved, assessee is now in appeal before the Tribunal. 6. The ld. AR of the assessee submitted that form no.27C are being prepared by the buyers of goods and the same were submitted to the assessee. Ld. representative submitted t .....

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port of his contentions he has referred and relief on the decision of ITAT, Bangalore Bench dated 17.4.2015 in the case of Karnataka Forest Dev. Corpn. Ltd. vs. ITO in ITA No.1144 to 1146/Bang/2014 for asst. year 2009-10 to 2011-12. 7. On the other hand, ld. DR relied on the orders of lower authorities. 8. We have heard the rival contentions and perused the material on record. The only issue before us to examine as to whether ld. CIT(A) was correct in denying the benefit referred in section 206C .....

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/2014 Dr.Hajjaji Krishnamurthy Anand Page 6 of 9 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 1 to 66. Both Part I and Part II of the Forms have been filled up. At this juncture, it is necessary to have a reading of section 206C(1A), 206(1B) and rule 37C which prescribed Form 27C. 20 .....

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e, specified in the corresponding entry in column (3) of the said Table, of such amount as income-tax: TABLE Sl.No. Nature of goods Percentage i) Alcoholic Liquor for human consumption One per cent ii) Tendu leaves Five per cent iii) Timber obtained under a forest lease Two and onehalf per cent iv) Timber obtained by any mode other than under a forest lease Two and onehalf per cent v) Any other forest produce not being timber or tendu leaves Two and onehalf per cent vi) Scrap One per cent: Provi .....

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is earlier, collect from the buyer of any goods of the nature specified in column (2) of the Table as it stood immediately before the 1st day of June, 2003, a sum equal to the percentage, specified in the corresponding entry in column (3) of the said Table, of such amount as income-tax in accordance with the provisions of this section as they stood immediately before the 1st day of June, 2003. (1A) Notwithstanding anything contained in sub-section (1), no collection of tax shall be made in the c .....

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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 .....

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re the seventh day of the month next following the month in which the declaration is furnished to him. Explanation.-For the purposes of sub-rule (3), the Chief Commissioner or Commissioner means the Chief Commissioner or Commissioner to whom the Assessing Officer, having jurisdiction to assess the person referred to in sub-rule (2), is subordinate 9. Section 206C(1A) mandates that any person responsible for collecting tax under section 206C(1) need not do so if he obtains a declaration from the .....

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h sale is affected by the assessee. Even if we consider that there is a breach on the part of the assessee in not obtaining the declaration from the buyer the moment a sale was affected, and in filing it before the CCIT or CIT, as the case may be, 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., (supra). In the said case, assessee had filed Form 27C subsequent to the proceedings, thr .....

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er 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). Orders of the lower authorities were set aside. 10. Appeals of the assessee are allowed. 9. Applying the facts of the case on the above refe .....

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