Income Tax Appellate Tribunal - Rajkot
Income Tax Officer, Tds-3,, ... vs Vishal Enterprise,, Jamnagar on 24 April, 2017
IN THE INCOME TAX APPELLATE TRIBUNAL
RAJKOT BENCH, RAJKOT
[Conducted through E-Court at Ahmedabad]
BEFORE SHRI MAHAVIR PRASAD, JUDICIAL MEMBER And
SHRI, MANISH BORAD, ACCOUNTANT MEMBER
आयकर अपील सं./I.T.A.
No.418/Rjt/2015
( नधा रण वष / Assessment Year : 2011-12)
Income-tax Officer बनाम/ Vishal Enterprise
TDS-3 Vs. Plot No.3010-3012,
Jamnagar. GIDC, Phase-II
Dared, Jamnagar
थायी ले खा सं . /जीआइआर सं . / PAN/GIR No. : AAGFV 6139 H
(अपीलाथ /Appellant) .. ( यथ / Respondent)
अपीलाथ ओर से /Appellant by : Shri Avinash Kumar, Sr. DR
यथ क ओर से/Respondent by : Shri Chetan L. Agarwal, AR
ु वाई क तार ख /
सन Date of Hearing 19/04/2017
घोषणा क तार ख /Date of Pronounce ment 24/04/2017
आदे श / O R D E R
PER SHRI MAHAVIR PRASAD, JUDICIAL MEMBER :
This appeal filed by the Department is directed against the order of the Commissioner of Income Tax(Appeals)-Jamnagar, dated 03/07/2015 for the Assessment Year (AY) 2011-12.
2. Department has been taken following Grounds of appeal:
(i). The learned CIT(A) has erred in law as well as on facts in law in deleting the additions made u/s.206C(1) of the IT Act on account ITA No.418/Rjt/2015 ITO vs. Vishal Enterprise Asst.Year -2011-12 -2- of non collection of TCS on sale of scrap in spite of the fact that the assessee is a trader of scrap and the provision of section 206C(1) apply to the assessee.
(ii) The learned CIT(A) has erred in law as well as on facts in issue of direction in violation of proviso to sub Section (7) of Section 206C of IT Act to the AO that interest should be calculated only in respect of those buyers who have not paid tax due on the returned income whereas "Interest should be calculated in case of all buyers, who have filed Form No.27BA" as provided in the above section.
(iii) The learned CIT(A) has erred in law as well as on facts in directing not to treat the assessee in default for non collection of TCS on sale of scrap to manufacturer where Form No.27C have been filed with the department even though the same were filed inordinately late and after the detection of default by the Department.
(iv) The learned CIT(A) has erred in law as well as on facts in directing not to charge interest on sales where Form No.27C are filed belatedly and after detection of default by the department.
(v) On the facts and in the circumstances of the case, the learned CIT(A) ought to have upheld the order of the AO passed u/s.
206C(6A) and 206C(7) of the Act.
3. The relevant facts as culled out from the materials on record are as under:-
The appellant company is engaged in the trading business of recycled Non Ferrous metals such as brass scrap, copper scrap, zinc scrap, lead scrap and other metal scrap. The appellant import the brass metal scrap from various foreign countries which contains used discarded tapes, other ITA No.418/Rjt/2015 ITO vs. Vishal Enterprise Asst.Year -2011-12 -3- sanitary parts, articles or things which contains copper, zinc or brass metal and sold the same in the local market.
4. The AO passed his order dated 18/02/2015 stating that the appellant is liable to pay TCS on sale of scrap and raised demand stating that the assessee had made sale of scrap to the tune of Rs.44,97,07,571/-. Thus, TCS @1% worked out at Rs.44,97,075/- plus interest w.e.f 1/10/2011 to 22/01/2015 @1% per month worked out to Rs.26,08,303/- thus the total default comes to Rs.71,05,378/- for which assessee is liable to pay the TCS to the Government account in view of Section 206C(1) & 206C(7) of the IT Act.
5. Against the said order appellant preferred first statutory appeal before the learned CIT(A), who dismissed the appeal of the assessee.
6. On the other hand, in compliance with proviso of Section 206(6A), has submitted certificates from the chartered accountant, certifying the fact that whatever sale made by the appellant was duly accounted for all buyers and requested not to treat the assessee in default.
7. Learned AR further stated that AO has preceded u/s. 206C without considering submission and evidence in form of certificate from chartered accountant and rest demand for tax note collection at source.
ITA No.418/Rjt/2015ITO vs. Vishal Enterprise Asst.Year -2011-12 -4-
8. At the time of hearing learned AR draw our attention to urge the Jurisdictional High Court Judgment in the matter of Commissioner of Income-tax (TDS) vs. Siyaram Metal Udyog (P.) Ltd. [2016] 71 taxmann.com 204 (Gujarat):
Section 206C of the Income-tax Act, 1961, read with rule 37C of the Income-tax Rules, 1962 - Collection of tax at source (Time limit of furnishing Form 27) - Whether section 206C(1A) itself does not provide for any time limit within which declaration of buyers in prescribed Form 27 for non-collection of TCS is to be made - Held, yes - Whether main thrust of sub-section (1A) of Section 206C is to made a declaration as prescribed, upon which liability to collect tax at source under sub-section (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 genuineness of such declaration, mere minor delay in filing said declaration would not make assessee liable for non- collection of TCS - Held, yes [Para 8] [In favour of assessee]
9. Respectfully following the decision of the Jurisdictional Hon'ble High Court, we dismissed the appeal of the Department.
10. In the result, appeal filed by the department is dismissed.
This Order pronounced in Open Court on 24/04/2017
Sd/- Sd/-
(MANISH BORAD) (MAHAVIR PRASAD)
ACCOUNTANT MEMBER JUDICIAL MEMBER
Ahmedabad; Dated 24/04/2017
Priti Yadav, Sr. PS
ITA No.418/Rjt/2015
ITO vs. Vishal Enterprise
Asst.Year -2011-12
-5-
आदे श क त ल प अ े षत/Copy of the Order forwarded to :
1. अपीलाथ / The Appellant
2. यथ / The Respondent.
3. संबं'धत आयकर आयु)त / Concerned CIT
4. आयकर आय)
ु त(अपील) / The CIT(A)-Jamnagar.
5. ,वभागीय /त/न'ध, आयकर अपील य अ'धकरण, अहमदाबाद / DR, ITAT, Ahmedabad
6. गाड4 फाईल / Guard file.
आदे शानुसार/ BY ORDER, उप/सहायक पंजीकार (Dy./Asstt.Registrar) आयकर अपील$य अ%धकरण, अहमदाबाद / ITAT, Ahmedabad True Copy