Income Tax Appellate Tribunal - Jodhpur
Bikaner Motors Private Limited, ... vs Cit Appeals, Delhi on 26 April, 2024
IN THE INCOME TAX APPELLATE TRIBUNAL
JODHPUR BENCH, JODHPUR
BEFORE: DR. S. SEETHALAKSHMI, JUDICIAL MEMBER &
SHRI RATHOD KAMLESH JAYANTBHAI, ACCOUNTANT MEMBER
I.T.A. No.295/Jodh/2023
Assessment Year: 2017-18
Bikaner Motors Private Limited Vs. CIT Appeals,
NH-11, Jaipur Road, Bikaner. Delhi
[PAN: AAACB8444L]
(Appellant) (Respondent)
Appellant by Sh. Amit Kothari, C.A.
Respondent by Ms. Nidhi Nair, Sr. DR
Date of Hearing 31.01.2024
Date of Pronouncement 26.04.2024
ORDER
Per:DR. S. Seethalakshmi, JM:
This appeal filed by assessee is arising out of the order of the ld. CIT(A), National Faceless Appeal Centre, Delhi dated 08.06.2023 [here in after "ld.CIT(A)(NFAC)"] for assessment year 2017-18, which in turn arise from the order dated 27.12.2018 passed under section 206C(6)/206C(7) of the Income Tax Act (here in after "Act") by the ITO, TDS, Bikaner.
2.1 At the outset of hearing, the Bench observed that there is delay of 1 days in filing the appeal by the assessee for which the ld. AR submitted that to arrange all the papers concerning the issue in question, the delay took place I.T.A. No. 295/Jodh/2023 Bikaner Motors Pvt. Ltd. 2 which was not intentional and thus the delay of small 1 days may kindly be condoned.
2.2 During the course of hearing, the ld. DR fairly not objected to assessee's application for condonation of delay and prayed that Court may decide the issue as deem fit in the interest of justice.
2.3 We have heard both the parties and perused the materials available on record. The Bench Noted that the assessee for condonation of delay of 01 days has merit and we concur with the submission of the assessee. Thus the delay of 02 days in filing the appeal by the assessee is condoned in view of the decision of Hon'ble Supreme Court in the case of Collector, land Acquisition vs. Mst. Katiji and Others, 167 ITR 471 (SC) as the assessee is prevented by sufficient cause.
3. In this appeal, the assessee has raised following grounds: -
" 1. That the order passed u/s 206C(6)/206C(7) of IT Act 1961 for the AY 17-18 by the ITO TDS Bikaner to the extend uphold by the CIT(A) u/s 250 is bad in Law and on facts.
2. The CIT (A) as wrongly uphold the demand of TCS of Rs. 58,850/- (Dealer to dealer sale amount) u/s 206C(1F) and (cash receipt in excess of Rs. 2 Lac) 206C(ID), in the fact and circumstances of the case. Therefore the demand so upheld is requested to be deleted.
3. That the ITO (TDS) Bikaner has wrongly created demand of Rs. 58,850/- u/s 206C(1F) and 206C(ID) in the facts and circumstances of the case. Therefore demand so created is requested to be deleted.
4. The CIT(A) has erred in holding that sales made on the basis of dealer to dealer are covered u/s 206C(1F) liable for TCS in the facts and circumstances of the case.
I.T.A. No. 295/Jodh/2023 Bikaner Motors Pvt. Ltd. 3
5. The CIT(A) has wrongly upheld sales made by the assessee is not retail sale so as to hit the section 206C(1F) and he also wrongly interpreted the circular issued by the CBDT in this regard in the facts and circumstances of the case.
6. That the CIT(A) has erred in holding in that cash receipt in excess of Rs. 2 Lac on sale of vehicle is hit under the provisions of section 206C(ID) in the facts and circumstances of the case.
7. That appellant prays for justice and may please be allowed to add/ amend/ alter further or any ground/s of appeal on or before hearing on the case.
4. Brief fact of the case is that the assessee is an authorized dealer of Mahindra and Mahindra car in Bikaner. A survey u/s 133A(2A) was conducted on 19.09.2018 at the business premises of the assessee deductor for verification of compliance of provisions of Chapter XVII of the Act. During the survey proceedings, it was found that the deductor has failed to collect TCS from certain persons where sale consideration exceeds Rs. 10 lacs as per the provisions of section 206C(1F) of the Act. The assessee deductor has made sale amounting to Rs. 89,40,100/- on which no TCS was collected, details of these sale are as under:-
S. No. Date of sale Name of purchaser Sale consideration
1. 08.09.2016 K.S. Motors Pvt. Ltd. 1482888
2. 25.11.2016 Cantten (Shri Chand S/o Tiku Singh) 1378993
3. 28.10.2016 CSD (Om Prakash S/0 Jagan Singh) 1125738
4. 17.11.2016 CSD (Col. Booty Jasoritia) 1308993
5. 31.12.2016 K.S. Automobiles Pvt. Ltd. 1297500
6. 24.02.2017 CSD ( Maj. Mahtab Singh) 1305963
7. 27.02.2017 CSD (Col. D.S. Shekhawat) 1040025 Total 8940100 I.T.A. No. 295/Jodh/2023 Bikaner Motors Pvt. Ltd. 4 Further, it is also observed that during the year under consideration the assessee company has accepted cash above Rs. 2,00,000/- in certain cases where sale consideration is below Rs. 10 lakh and no TCS was collected as per the provisions of section 206C(1D) of the Act. The assessee company has failed to collect TCS from the following persons:-
S. Date of sale Name of purchaser Invoice Cash No. amount received 1. 21.09.2016 Madan Lal Goyal 400811 200000 2. 21.10.2016 Sindhu Dayal 689363 203048 3. 23.10.2016 Sahi Ram 610701 310701 4. 25.10.2016 Panmal 906647 226647 5. 26.10.2016 Rahuveer Singh 888860 243694 6. 27.10.2016 Mangi Lal 689363 200361 7. 27.10.2016 Vedpal S/o Deepa Ram 616202 306202 8. 20.02.2017 Ranjeet Kumar 694911 213662
The provisions of section 206C(1F) of the Act, every person, being a seller, shall collect TCS @1% on the sale consideration if the value of motor vehicle exceeding ten lakh rupees and as per provisions of section 206C(1D), every person being seller who receive any amount exceeding Rs.2,00,000/- in cash as consideration shall collect TCS @1% on such cash component. Thus the assessee deductor, vide this office letter No.1984 dated 29.11.2018, was requested to submit its explanation as to why you should not be deemed to be an assessee in default in respect of the tax which is required to be collected.
I.T.A. No. 295/Jodh/2023 Bikaner Motors Pvt. Ltd. 5 4.1 The assessee deductor submitted that the CBDT in its circular clarifying that applicability and scope of provision of tax collection at source (TCS) on sale of motor vehicle in excess of Rs.10 lacs. The CBDT has clarified that TCS provisions will apply on retail sale and not apply on sale of motor vehicle by manufactures to dealer or distributors. Further, in respect of failure to collect TCS on cash exceeding Rs. 2,00,000/-, it is submitted that these provisions are came into force w.e.f. 01.06.2016 and being a relatively new provisions certain laps are inevitable. There is no intension to evade tax as the PAN No. of buyers are already collected. The submission of the assessee deductor has been carefully examined but the same is not acceptable.
4.2 Thus, as per the provision of section 206C(1F) and 206C(ID) of the Act, the deductor has required to collect TCS @ 1% on vehicle sales in certain circumstances, however the deductor company failed to do so, therefore, the assessee is hereby deemed to be 'an assessee in default' u/s 206C(6) of the Act and also liable to pay interest u/s 206C(7) of the Act and accordingly, the default amount of TCS u/s 206C(6)/206C(7) is worked at Rs.1,35,251/- for the F.Y. 2016-17 relevant to assessment year 2017-18.
5. Aggrieved from the order of the ITO, TDS, assessee preferred an appeal before the ld. CIT(A). Apropos to the grounds of the appeal so raised by the assessee, the relevant finding of the ld. CIT(A) is reiterated here in below:-
I.T.A. No. 295/Jodh/2023 Bikaner Motors Pvt. Ltd. 6 "5.2 Ground No. 3,4, & 5: These grounds are pertain to computation u/s 206C(6)/206C(7)of the Act made by the Assessing Officer. This computation has been made on two issues of not collecting tax on sale of vehicles of more than 10 lacs each as required u/s 206V(IF) of the Act and not collecting of tax on receipt of cash more than 2 lacs as required u/s 206C(1D) of the Act.
5.3 The submission of the appellant on the first issue is that out of 7 sales of more than Rs. 10 lacs given below:
S. No. Date of sale Name of purchaser Sale consideration
1. 08.09.2016 K.S. Motors Pvt. Ltd. 1482888
2. 25.11.2016 Cantten (Shri Chand S/o Tiku Singh) 1378993
3. 28.10.2016 CSD (Om Prakash S/0 Jagan Singh) 1125738
4. 17.11.2016 CSD (Col. Booty Jasoritia) 1308993
5. 31.12.2016 K.S. Automobiles Pvt. Ltd. 1297500
6. 24.02.2017 CSD ( Maj. Mahtab Singh) 1305963
7. 27.02.2017 CSD (Col. D.S. Shekhawat) 1040025 Total 8940100 two were to dealers namely M/s K.S Motors Pvt Ltd. and K.S Automobiles Pvt. Ltd.
(Serial No. 1 and 5) which can not be termed as retail sales. Further, it was submitted that as per Circular No. 22/2016 of CBDT the TCS provision on sale of vehicle is only with respect to retail trades. Further, it was submitted that the other 5 sales (serial No. 2, 3, 4, 6 and 7) were on the basis of order given by CSD of Department of Defence and the appellant was told to deliver vehicles to a particular person and the payments were received from CSD and therefore the provisions of TCS were not applicable in these cases. I find that the Assessing Officer and examined these facts and has found that the appellant deductor has raised sale Invoice in the name of the dealers Le. M/s K.S Motors Pvt Ltd, and K.S. Automobiles Pvt. Ltd, and charged GST and the sales have been recorded in P&L account and in view of these facts the Assessing Officer held that these cannot be treated as stock transfer and once the deductor has raised invoice and booked the sales in P&L account it was required to collect TCS as provisions of section 206C(1F) of the Act. I find that the Circular No.
22.//2016 is not applicable in this case as sale of one vehicle to another party though another party may be a dealer cannot be said to be a wholesale trade. As regard sales to another 5 persons (serial No. 2, 3, 4, 6 and 7) who were army personals, the Assessing Officer has found that they got registered the vehicles in their name and the Military Canteen was merely working an agent for payment of on behalf of these personals and invoices contain names of the purchaser and therefore, the appellant was required to collect TCS as per provisions of 206C(1F) of the Act as these sales cannot be treated as sales to CSD. However, the documents submitted by I.T.A. No. 295/Jodh/2023 Bikaner Motors Pvt. Ltd. 7 the appellant show that the payment has been received from Canteen Stores Department, Govt. of India and as the payments have been received from Canteen Stock Department, though the vehicle has been delivered to some individual as per directions of the Canteen Store Department, the sales can not be treated to those persons and therefore, I hold that the appellant was not required to collect TCS on these sales. Thus, the grounds of appeal are partly allowed to this extent. 5-4 The other issue is relating to cash receipt of more than 2 lacs on which provisions of section 206C(1D) of the Act were applicable. The submission of the appellant is that since there was specific provisions for collection of tax at source in the case of sale of vehicle u/s 206C(1F) of the Act, the general provision of collection of Tax at source in case of sale of any goods as referred u/s 206C(1D) are not applicable. The appellant has cited various case laws including CIT Vs Shahzada Nand & Sons (1966) 60 ITR 392 (SC) and Union of India Vs. Fisheries (P) Ltd AIR 1966 SC 35. It was also submitted that the provisions were withdrawn w.e.f. 01.04.2017 and lived for a short period. The contention of the appellant is not tenable as the provisions 206C(1D) and 206C(1F) of the Act are clearly distinct and no one can be said to the general provision and the other specific. The provision of 206C(1D) was on the statute during the period when the receipts were made by the appellant and therefore it was required to deduct TCS @ 1% of sale consideration received in cash whether this amount was part of total sale consideration on which TCS was deducted u/s 206C(1F) is not material for this section as if this had been the intention of the legislature some proviso to this effect may have been put below the sub-section. The only proviso below this sub-section is as under;
"Provided that no tax shall be collected at source under this sub-section on any amount of which tax has been deducted by the payer under Chapter XVII-B."
The Chapter XVII-B does not cover the provisions of Section 206C(1F) of the Act. In view of these facts the reply of the appellant is not tenable. In view of these facts, ground numbers 2, 3, 4 and 5 are decided accordingly and the appellant gets part relief as discussed above.
In the result, the appeal is partly allowed."
6. As the appeal of the assessee was not considered in full, by the ld. CIT(A), the assessee has preferred the present appeal before this Tribunal on the ground as reproduced hereinabove. To support the various grounds so raised by the ld. AR of the assessee and he has relied upon the following evidences in support of the contentions so raised:-
I.T.A. No. 295/Jodh/2023 Bikaner Motors Pvt. Ltd. 8 s. No. Particulars Pages
1. Written submissions filed before CIT(A), NFAC, Deldi 1-4
2. Details of vehicles sold on which TCS was not deducted. 5
3. Account statement of dealers on which liability of TCS was 6-7 upheld by CIT(A).
4. Guidelines issued by CBDT issued by CBDT dated 29th 8-11 September, 2020 on the basis of which it is clear that TCS is not required in case of sale to dealer.
6.1 The ld. AR of the assessee vehemently argued that the assessee made sales to canteen BSF of Rs. 61,59,712/- KS Motors P. Ltd. Rs. 14,82,828/- and KS Automobiles P. Ltd. Rs. 12,97,500/- and they are dealers of vehicles not the retail customers. The ITO, TDS has mentioned in his order that Circular No. 22/2016 issued by CBDT nowhere mentions that sales made by dealer to dealer is exempt the assessee from TCS. This contention the ld. AO has not appreciated the contention of the assessee, even though there is clear cut instruction on the issueby the CBDT andtherefore, the contention of the Assessing Officer and that of the ld. CIT(A) are in correct. The assessee should not be fastenthe liability to pay the tax of dealer sales, collection of tax. As regards the receipt of cash, the assessee has submitted all details such as address, PAN No. of vehicle purchaser and the amount collected by them. In light of these information even the assessee is not liable to pay TCS as these persons are assessed to tax and alternatively if given a chance the assessee will I.T.A. No. 295/Jodh/2023 Bikaner Motors Pvt. Ltd. 9 file the requisite form so as to establish those persons are compliant to the tax and there is no loss to the revenue.
7. Per contra, the ld. DR relied upon the orders of the lower authorities and vehemently argued that the assessee knowingly violated the provisions of TCS and has not complied with the provisions of and therefore, the assessee's liability should be confirmed.
8. We have heard the rival contentions, perused the material placed on record. Ground No. 1 raised by the assessee is general in nature and therefore, the same is not required to be adjudicated.
8.1 Ground Nos. 2 to 5 are in relation to sale of vehicle and collection of TCS thereupon which is not sale to the customers but the same is sale of dealer to dealerin respect of these TCS liability of Rs. 58,850/- to fasten on the assessee.
The ld. AR of the assessee relied upon the CBDT Circular No. 17 of 2020 dated 29.09.2020 wherein CBDT clarified the scope of TCS when the sale is made to dealer, therefore, the assessee is excluded from the compliance of provisions of Section 206C(1F) in respect of that sales made to dealers. Considering that specific aspect of the matter the liability of TCS for an amount of Rs. 58,850/- is incorrectly charged against the assessee and the same is directed to be I.T.A. No. 295/Jodh/2023 Bikaner Motors Pvt. Ltd. 10 deleted. In terms of these observations the ground no. 2 to 5 raised by the assessee is allowed.
8.2 Ground No. 6 is in relation to the TCS liability in respect of cash receipt in excess of Rs. 2,00,000/-, the ld. AR of the assessee before us submitted that since the provision being new the assessee was not aware and he has submitted details showing name, address and PAN of these parties and therefore, the liability cannot be fastened. Alternatively he prayed to remand this issue to establish whether the assessee can be considered as assessee in default or not. He further submitted that the assessee will submit the requisite form so as to aspect that the liability of the assessee cannot be fastened as they have disclosed these transactions in respective income tax return and for that there is specific form No. 26AS, being form of furnishing of certificate of anaccountant under the first proviso to sub-section(1) of Section 201 of the I.T. Act. Based on the specific prayer of the assessee we set aside the issue raised in this ground before the ld. AO(ITO-TDS) who will verify the contention of the assessee and requisite liability of the assessee after giving the assessee opportunity of hearing and after collecting the relevant evidences on record from the assessee. Based on these discussion ground No. 6 raised by the assessee is allowed for statistical purposes.
I.T.A. No. 295/Jodh/2023
Bikaner Motors Pvt. Ltd. 11
8.3 Ground No. 7 raised by the assessee is general in nature and the same is not required to be adjudicated.
In the result, the appeal of the assessee is partly allowed. Order pronounced under Rule 34(4) of the Income Tax (Appellate Tribunal) Rules, 1963 by placing the details on the notice board.
Sd/- Sd/-
(Rathod Kamlesh Jayantbhai) (DR. S. Seethalakshmi)
Accountant Member Judicial Member
Dated 26/04/2024
Santosh
Copy of the order forwarded to:
(1)The Appellant
(2) The Respondent
(3) The CIT
(4) The CIT (Appeals)
(5) The DR, I.T.A.T.
True Copy
By order