TMI Blog2024 (1) TMI 546X X X X Extracts X X X X X X X X Extracts X X X X ..... ity to collect tax at source under subsection (1) would not apply. When there was no dispute about such a declaration being filed in a prescribed format and there was no dispute about the genuineness of such declaration, mere delay in filing the said declaration would not defeat the very claim. CIT (A) has referred to the decision of Hon ble ITAT Chennai Bench [ 2023 (6) TMI 166 - ITAT CHENNAI] where form No. 27C was not obtained within a reasonable time and form no. 27BA was collected after lapse of 7 years which is not the facts of the present case. In any case, since the decision of Madras High Court [ 2010 (12) TMI 1084 - MADRAS HIGH COURT] and Gujarat High Court [ 2016 (7) TMI 68 - GUJARAT HIGH COURT] and that of ITAT Jaipur Bench [ 2016 (8) TMI 952 - ITAT JAIPUR] is in favour of the assessee, we are inclined to accept the contention of the assessee and thus this ground in all the three years is allowed. - Hon ble Shri Sandeep Gosain, JM And Hon ble Shri Rathod Kamlesh Jayantbhai, AM For the Assessee : Shri P.C. Parwal, CA For the Revenue : Shri A.S. Nehra (Addl. CIT) ORDER PER BENCH : These appeals by the assessee are directed against t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ITA NO. 593/JP/2023 AY 2018-19 : 1. The ld. CIT (A), NFAC has erred on facts and in law in upholding the order of AO determining the liability of Rs. 1,30,679/- u/s 206C r.w.s. 201(1)/201(1A) even when assessee has furnished declaration in Form No. 27C. He has further erred in not providing opportunity to submit certificate from accountant in Form No. 27BA while upholding the order of AO. 2. The applicant craves to alter, amend and modify any ground of appeal. 3. Necessary cost be awarded to the assessee. Ground No. 1 for the A.Y. 2016-17 The Ld. CIT(A), NFAC has erred on facts and in law in dismissing the appeal by holding that assessee is not interested in pursuing the appeal as no reply is submitted in support of grounds of appeal filed ignoring that assessee in response to notice dt. 02.06.2023 has filed written submission in support of its grounds of appeal on 08.06.2023 which is not considered by Ld. CIT(A). 2. The brief facts of the case are that the assessee is a scrap dealer. A spot verification was conducted at the business premises of assessee on 04.09.2018 where it was found that assessee has sold scrap to various dealers without collecting ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 01(1)/201(1A) even when assessee has furnished declaration in Form No.27C. He has further erred in not providing opportunity to submit certificate from accountant in Form No.27BA while upholding the order of AO. AY Amount 2016-17 Rs. 3,17,777/- 2017-18 Rs. 1,30,679/- 2018-19 Rs. 2,46,209/- 6. The brief facts of the case are that the ITO(TDS) at Page 6 7 of his order held that assessee sold scrap to various parties but has not collected tax at source. Further, he has not obtained prescribed Form No.27C from the buyer as same were not found during spot verification nor submitted such form during spot verification. He accordingly raised demand u/s 201(1) 201(1A) of the Act r.w.s. 206C 206C(7) of the Act. In appeal, the Ld. CIT(A) in all the orders at Para 4 to 4.5 particularly at Para 4.3 4.4 held that assessee has not produced Form No.27C at the time of spot verification though the same was submitted during the proceedings before ITO(TDS) but the same is not submitted before ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Commissioner of Income-tax in time. The Tribunal held that there is no dispute about the fact that the assessee has belatedly submitted relevant Form No.27C collected from its buyers. The same were placed on record before the assessing officer itself who declined to accept the same in view of delay in submission thereof. There is no issue qua genuineness of these forms. The co-ordinate bench decision of Tribunal in case of Bharti Metals already holds that such a belated submission of relevant form is a procedural lapse only. The revenue is unable to point any distinction on facts or law therein. Thus, addition with the aid of section 206C could not be made. The High Court held as under:- In terms of the explanation clause (aa) any person who purchases the goods in retail sale for personal consumption would not be included within the definition of term 'buyer'. It is therefore, that under sub section (1A) of section 206C, calculation of tax under sub-section 1 would not be made, if the buyer furnishes to the person responsible for the tax a declaration in writing in prescribed form declaring that the goods in question are to be utilized for the purposes of manufactur ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ur) (Trib.) The relevant Para 10 of the order reads as under:- 10. We have heard the rival contentions of both the parties and perused the material available on the record. In our view, the appeal is continuation of the assessment proceedings and even if the declaration is filed by the assessee at the appellate stage in the prescribed format by disclosing all information as contemplated under Form 27C r/w r. 37 of the Rules, the benefit of declaration should be given to the assessee. The learned AO/CIT(A) should extend the benefit of declaration to the assessee. Rule 37 though is couched in the mandatory language by using the word shall but r. 37 has not given the consequences of not filing the declaration within time. In our view, the consequences of failure to file the declaration in the requisite format as mentioned in the Rules should be provided by the IT Act and not by the Rules. The Rules, in our opinion, cannot extend or restrict the provisions of the Parent Act. The Rules are framed by the legislature by exercising its power under the Act and therefore, any penalty provision by way of the exclusion of declaration benefit and submission of the declaration belatedl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... only. The Revenue is unable to point any distinction on facts or law therein. Thus, the Gujarat High Court held that addition with the aid of section 206C could not be made. In the case of CIT vs. Chhaganbhai K Sanghani, [2018] 94 taxmann.com 459 (Gujarat High Court) held that where in case of assessee, a dealer in scrap, AO levied interest and tax in terms of section 206C(7) on account of non-collection of tax source, in view of fact that assessee had submitted certificates provided by buyers under sub-section (1A) if section 206C before appellate authorities, impugned order passed by A.O. was to be set aside. Further, Jaipur ITAT in the case of ChandmalSancheti [2016] 72 taxmann.com 237 (Jaipur-Trib.) held that no time limit is provided in section 206C(1A) to make a declaration in Form 27 collected from buyers; hence delay in filing declaration shall not be ground to deny benefit of declaration to assessee. In light of the above judicial precedents on the subject, in the interests of justice, we are restoring the matter to the file of the Ld. Assessing Officer to decide the issue de novo after giving due opportunity of hearing to the assessee to present his case on merits. Th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f TCS can be fastened on the assessee. This issue is no more res integra. In the various cases relied on by the assessee, supra, we find that Hon ble Madras High Court, Hon ble Gujarat High Court and ITAT Bangalore Bench, Jaipur Bench and Rajkot Bench have held that even if there is a breach on the part of the assessee in not obtaining the declaration from the buyer, the moment the sale is effected and in filing it before the CCIT or the CIT, such breach is to be considered only technical which is liable to be condoned in as much as the main thrust of sub-section 1A of section 206C is to make a declaration as prescribed, upon which, the liability to collect tax at source under subsection (1) would not apply. When there was no dispute about such a declaration being filed in a prescribed format and there was no dispute about the genuineness of such declaration, mere delay in filing the said declaration would not defeat the very claim. The ld. CIT (A) has referred to the decision of Hon ble ITAT Chennai Bench where form No. 27C was not obtained within a reasonable time and form no. 27BA was collected after lapse of 7 years which is not the facts of the present case. In any case, since ..... X X X X Extracts X X X X X X X X Extracts X X X X
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