TMI Blog2023 (5) TMI 912X X X X Extracts X X X X X X X X Extracts X X X X ..... orm 27 as the law stood at the relevant period in these appeals? - We note that sub-section (1B) of section 206C of the Act, is not properly worded/drafted and in this regard we note that the time limit mentioned in section 206C(1B) of the Act is on or before the 7th day of the month next following the month in which the declaration is furnished to him . The impugned order is set-aside and issue restored to AO, who shall examine the Form No. 27C declaration filed by the assessee as to the correctness of the same; and meanwhile the declaration Form No. 27C to be forwarded to the Ld. PCIT/Ld. CIT in accordance to law and examined as to whether it fulfill the condition given in Rule 37C [declaration verified and countersigned by the Chartered Accountant stating that the buyers of timber from the assessee had duly paid the taxes on the same - Decided in favour of assessee for statistical purposes. Penalty levied u/s 221 - default on the part of assessee or deeming the assessee to be an assessee on default in making payment of tax collected as TCS u/s 206C - HELD THAT:- Since we have already set aside the orders passed u/s 206C(1)/206C(7) of the Act pertaining to the assessee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 06C(1A) of the Act) despite the assessee pointing out the decision of the Tribunal in the case of M/s. Hill Wood Timbers Vs. ITO (TDS), Kozhikode in ITA No. 118 to 120/Coch/2017 dated 11.09.2017 and ITAT Bengaluru Bench in the case of Lekshmi Saw Mills Vs. ITO, Bengaluru in ITA. No. 685 to 690/Beng/2013 dated 21.05.2014. According to Ld. AR, the Ld. CIT(A) erred in not admitting and considering the additional evidence i.e. declaration Form No. 27C [refer Rule 37C of the Income Tax Rules, 1962 (hereinafter the Rules )]. Therefore, he pleads that since the assessee has filed the declaration Form, the same has to be examined by the authorities to resolve the issue. 4. Per contra, the Ld. DR supporting the action of the Ld. CIT(A) does not want us to interfere with the order of the Ld. CIT(A). 5. We have heard both the parties and perused the records. We note that the assessee claims to be an importer of timber from overseas and was found to be not collecting (TCS) while selling the timber in retail. As per section 206C of the Act, the assessee being the seller of certain items of goods [viz Alcoholic Liquor, forest produce, scrap etc.] specified in the Table given u/s 206C of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Profits and gains from the business of trading in alcoholic liquor, forest produce, scrap, etc. 206C. (1) Every person, being a seller shall, at the time of debiting of the amount payable by the buyer to the account of the buyer or at the time of receipt of such amount from the said buyer in cash or by the issue of a cheque or draft or by any other mode, whichever is earlier, collect from the buyer of any goods of the nature specified in column (2) of the Table below, a sum equal to the percentage, specified in the corresponding entry in column (3) of the said Table, of such amount as income-tax: Sr. No. Name of goods Percentage 1 2 3 (i) Alcoholic Liquor for human consumption One per cent (ii) Tendu Leaves Five per cent (iii) Timber obtained under a forest lease Two and one-half per cent (iv) Timber obtained by any mode other than under a forest lease Two and one- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hat since it has produced the Form 27, the assessee is not liable for deducting TCS as per section 206C(1) of the Act and resultantly cannot be treated as an assessee in default as per section 206C(6A) of the Act. We find that as per section 206C of the Act a seller of goods (specified in the Table of that section) has to collect tax (as specified in the Table in that section) while making the sale. The seller need not collect the tax, if the buyer is able to furnish Form 27 r.w. Rule 37C to the seller (i.e. assessee in this case) and the seller need to submit it before the Ld. PCIT/Commissioner as specified therein as per sub-section (1B) of section 206C of the Act. Before us, the assessee claims to have filed Form 27 as prescribed under sub-section (1A) of section 206C of the Act, which exempts him from collecting the tax at source and his grievance is that the Ld. CIT(A) has not considered it. We do not countenance this action of Ld. CIT(A). It is true that assessee did not collect tax at source (TCS) while effecting sales of timber. But he has provided the Form 27 given by the buyers which is as per sub-section (1A) of section 206C of the Act. Therefore, it need to be examined ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ecision of the Co-ordinate Bench in the case of M/s. Hill Wood Timber (supra), the impugned order is set-aside and issue restored to AO, who shall examine the Form No. 27C declaration filed by the assessee as to the correctness of the same; and meanwhile the declaration Form No. 27C to be forwarded to the Ld. PCIT/Ld. CIT in accordance to law and examined as to whether it fulfill the condition given in Rule 37C [declaration verified and countersigned by the Chartered Accountant stating that the buyers of timber from the assessee had duly paid the taxes on the same]. The AO after examining Form No. 27C to pass an order to accordance with law after affording a reasonable opportunity of hearing to the assessee. It is ordered accordingly. Therefore, for statistical purposes, ITA. No.889 to 891/Coch/2022 are allowed. Coming to next ITA Nos.927 930/Coch/2022 8. At the outset, the Ld. AR pointed out that these appeals are preferred by assessee against the penalty levied u/s 221 of the Act by the AO and confirmed by the Ld. CIT(A), taking note of the default on the part of assessee or deeming the assessee to be an asessee on default in making payment of tax collected as TCS u/s ..... X X X X Extracts X X X X X X X X Extracts X X X X
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