TMI Blog2024 (2) TMI 1167X X X X Extracts X X X X X X X X Extracts X X X X ..... (A) has wrongly observed that the provisions of Section 206C of the Act were applicable to the assessee even though the assessee has made sale at second stage and the entity involved in the first stage was public sector undertaking. In the present case we also find that the assessee has collected Form no. 27BA as per Rule 37J and form 27C as per rule 37C from all the six parties copies of which are placed stating that they were engaged in business of manufacturing of Bidies and the tendu leaves were to be used for the purpose of manufacturing units and not for the purpose of trading. In the case of Karnataka Forest Development vs. ITO [ 2015 (7) TMI 908 - ITAT BANGALORE] the coordinate bench has held that where the assessee has obtained ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ating to Rs. 41,63,024/-. Accordingly a show cause notice was issued as to why the assessee should not be treated as assessee in default for non-collection of tax u/s 206C of the Act. Besides, he was asked to furnish the evidences of filing of the copies of declarations in Form 27C in any received from the puyers before the prescribed authority. The assessee in response of the said letter dated 6.12.2008 submitted that the assessee is not first seller of the goods and as per Circular No. 660 dated 15.09.1993 of CBDT para no. 5, the assessee was not liable to collect tax at source on the sales of Tendu leaves and therefore the assessee should not be treated as a defaulter. However the plea of the assessee did not find favour with the AO and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ons of Section 206C of the Act were applicable to the assessee even though the assessee has made sale at second stage and the entity involved in the first stage was public sector undertaking. In the present case we also find that the assessee has collected Form no. 27BA as per Rule 37J and form 27C as per rule 37C from all the six parties copies of which are placed at page 31 to 48 of PB stating that they were engaged in business of manufacturing of Bidies and the tendu leaves were to be used for the purpose of manufacturing units and not for the purpose of trading. The case of the assessee is also covered by the following decisions: i) Karnataka Forest Development vs. ITO in ITA Nos. 1144 to 1146/Bng/2014 dated 17.04.2015. ii) CIT ..... X X X X Extracts X X X X X X X X Extracts X X X X
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