Income Tax Appellate Tribunal - Amritsar
The Director Geology And Mining, ... vs The Income Tax Officer,, Srinagar on 3 August, 2017
IN THE INCOME TAX APPELLATE TRIBUNAL
AMRITSAR BENCH; AMRITSAR.
BEFORE SH. T. S. KAPOOR, ACCOUNTANT MEMBER
AND SH. N.K. CHOUDHRY, JUDICIAL MEMBER
I.T.A Nos.131 & 132/(Asr)/2015
Assessment Years: 2011-12 & 2012-13
PAN: AMRD10886B
The Director Geology and Vs. Income Tax Officer,
Mining, Basera Home Trust Ward-3(A), Aayakar Bhawan,
Mahjoor Nagar, Rajbagh Srinagar.
Srinagar.
(Appellant) (Respondent)
Appellant by: Sh. M. R. Bhagat
Respondent by: Sh. Rahul Dhawan (D.R.)
Date of Hearing: 01.08.2017
Date of Pronouncement: 03.08.2017
ORDER
PER T. S. KAPOOR (AM):
These are two appeals filed by assessee against the consolidated order of Ld. CIT(A), Jammu dated 15.02.2013 for Asst. Years: 2011-12 & 2012-13.
2. The assessee has taken similar grounds in respect of these two appeals. For the sake of convenience, the grounds of appeal in ITA No. 131 are reproduced below.
"1. The order passed under section 250(6) is perverse illegal and not based on proper appreciation of the facts of the case and the law.
2. The learned CIT (A) erred in not appreciating that no tax was required to be collected on royalty U/s 276C(1C) read with section 206AA of the Income Tax Act. The order may be cancelled.2 ITA Nos. 131&132(Asr)/2015
Assessment Years: 2011-12&2012-13
3. Without prejudice to ground No.2, the Ld. CIT(A) failed to appreciate that provisions of section of 206AA were applicable to persons to who were to deduct tax and not on the persons who were to collect tax and the CIT(A) erred in confirming rate of 20% in respect of person from whom tax was collectable @ 2% of the amount.
4. The appellant craves leave to emend ground(s) before the appeal is heard".
3. At the outset, the Ld. AR invited our attention to application along with affidavit for condonation of delay in filing these appeals. It was submitted that appellate order was collected from the office of Ld. CIT(A) by an official of the appellant department on 15.01.2015 and appeal was filed within 60 days of the receipt of appellate order. It was submitted that since the assessee had not received the appellate orders before 15.01.2015, it was prayed that the delay in filing the appeals may be condoned.
4. The Ld. DR had no objection in condonation of the delay. Finding the reason for delay in filing the appeals reasonable and in view of substantial justice the delay was condoned and assessee was directed to proceed with his arguments.
5 The Ld. AR, submitted that the assessee is a Government Department and had transferred its right or interest on account of Sand, Bajri, Stones etc. to various persons. The assessee was required to collect a sum equal to 2% of the amount collected from such contractors whereas the Assessing Officer and Ld. CIT(A) has held that tax was required to be deducted at 20% of such payments. The Ld. AR, in this respect invited our 3 ITA Nos. 131&132(Asr)/2015 Assessment Years: 2011-12&2012-13 attention to the provisions of section 206C(1C) of the Act which pertain to collection of Income Tax from persons who are granted lease or license. It was submitted that section 206AA is applicable to persons who are entitled to receive a sum of rupees on which tax is deductible under chapter XVIIB of the act, whereas the case of the appellant was covered under chapter XVIIBB of the Act, and therefore, the provisions of section 206AA were not applicable to the facts of the case. The Ld. AR submitted that Ld. CIT(A) erred to confirm illegal order of the Assessing Officer and therefore the assessment order as well as the appellate order may kindly be cancelled.
6. The Ld. AR further argued that the provisions of section 206AA are applicable to the persons who are entitled to receive any income or sum on which tax is deductible under chapter XVIIB of the Act, wherein he has required to furnish permanent account no. to the persons responsible for deducting such tax and failing which tax is required to be deducted @ 20%. The Ld. AR further submitted that provisions of section 206C(1C) were applicable to the assessee which falls under chapter XVIIBB of the Act, and in this respect our attention was invited to the said provisions, therefore, it was argued that the illegal order sustained by Ld. CIT(A) may be cancelled.
7. Without prejudice it was submitted that in the alternative the Assessing Officer should be directed to apply the correct provisions of law 4 ITA Nos. 131&132(Asr)/2015 Assessment Years: 2011-12&2012-13 which are contained in section 206C(1C) of the Act and whereby the assessee was liable for collection of tax @ 2%.
8. The Ld. AR further invited our attention to the provisions of section 206C(1C)/6A of the Act and submitted that in case of non-collection of such tax, the assessee is deemed to be an assessee in default in respect of that tax. The Ld. AR further invited our attention to the proviso to section 206C(9C)6A wherein it has been said that such assessee shall not be deemed to be an assessee in default in respect of such tax if the licensee or contractors had furnished his return of income u/s 139 and has taken into account such amount for computing income in such return of income and had paid the tax due on the income declared in such return of income and therefore it was requested that Assessing Officer can be directed to verify as to whether such contractors had completed under the proviso to section 206C(9C)6A.
9. The Ld. DR, on the other hand, submitted that the assessee had not taken this ground of appeal before Ld. CIT(A) and therefore, he should be asked to first file additional ground of appeal if any, to which the Ld. AR invited our attention to ground no. 2 of appeal taken by assessee before Ld. CIT(A) and submitted that assessee had taken the ground that the order of Assessing Officer was against facts and law which covered the grievance of the assessee and therefore, it cannot be said that assessee had not taken the ground before Ld. CIT(A). The Ld. DR submitted that 5 ITA Nos. 131&132(Asr)/2015 Assessment Years: 2011-12&2012-13 assessment order may not be cancelled and suitable directions can be issued to Assessing Officer to apply correct provisions of law.
10. The Ld. AR agreed with the proposal of Ld. DR.
11. We have heard the rival parties and have gone though the material placed on record. We find that assessee is a Government Department and had allotted certain contracts to various persons from whom the assessee was required to collect to 2% tax as tax collected at source as per provisions of section 206C(1C) of the Act. The assessee was required to collect tax @ 2% of the payments received from such contractors. For the sake of convenience the provisions of section 206C and (1C) are reproduced below:
"206C. 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 cheques 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.
206(1C) Every person, who grants a lease or a license or enter into a contract or otherwise transfers any right or interest either in whole or in part in any parking lot or toll plaza or mine or quarry, to another persons, other than a public sector company (hereinafter in this section referred to as "licensee or lessee") for the use of such parking lot or toll plaza or mine or quarry for the purpose of business shall, at the time of debiting of the amount payable by the licensee or lessee to the account of the licensee or lessee or at the time of receipt of such amount from the licensee or lessee in cash or by the issue of a cheques or draft or by any other mode, whichever is earlier, collect from the licensee or lessee of any such license, contract or lease of the nature specified inn 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".6 ITA Nos. 131&132(Asr)/2015
Assessment Years: 2011-12&2012-13 Table SI. No. Name of contract or Percentage license or lease, etc (1) (2) (3)
(i) Parking lot Two Per cent
(ii) Toll plaza Two per cent
(iii) Mining and quarrying Two per cent The Assessing Officer and Ld. CIT(A) applied the provisions of section 206AA of the Act which mandates requirement to furnish permanent account number by persons who are entitled to receive any sum or income or amount, on which tax is deductible u/s XVIIB of the Act. For the sake of convenience, the provisions of section 206AA are also reproduced:
"206AA. (1) Notwithstanding anything contained in any other provisions of this Act, any person entitled to receive any sum or income or amount, on which tax is deductible under Chapter XVIIB (hereinafter referred to as deductee) shall furnish his Permanent Account Number to the person responsible for deducting such tax (hereafter referred to as deductory), failing which tax shall be deducted at the higher of the following rates, namely:-
(i) at the rate specified in the relevant provision of this Act; or
(ii) at the rate or rates in force;or
(iii) at the rate of twenty per cent."
From the above provisions of section 206AA, we find that these provisions are applicable for persons who are entitled to receive any income whereas the provisions of section 206C are applicable where the assessee receives amounts from the contractors to whom contracts are awarded. The assessee was liable to collect tax as per provisions of section 206(C) of the Act at the rates mentioned in the table contained u/s (IC) of 7 ITA Nos. 131&132(Asr)/2015 Assessment Years: 2011-12&2012-13 the Act. Therefore, we direct the Assessing Officer to apply the correct provisions of law. We further find that as per provisions contained in section 206C(9C)6A for non deduction of such tax collected at source the person responsible for collection of such tax is deemed to be assessee in default. The proviso to section 6A further clarifies that the licensee shall not be deemed to be an assessee in default in respect of such tax, if the licensee had paid the tax and had filed the return of income, for the sake of convenience and completeness the provisions of section 206C(1C) (6A) along with its proviso are also made part of this order.
"[(6A) If any person responsible for collecting tax in accordance with the provisions of this section does not collect the whole or any part of the tax or after collecting, fails to pay the tax as required by or under this Act, he shall, without prejudice to any other consequences which he may incur, be deemed to be an assessee in default in respect of the tax:
[Provided that any person, other than a person referred to in sub-section (1D), responsible for collecting tax in accordance with the provisions of this section, who fails to collect the whole or any part of the tax on the amount received from a buyer or licensee or lessee or on the amount debited to the account of the buyer or licensee or lessee shall not be deemed to be an assessee in default in respect of such tax if such buyer or licensee or lessee-
(i) has furnished his return of income under section 139;
(ii) has taken into account such amount for computing income in such [[[ return of income; and
(iii) has paid the tax due on the income declared by him in such return of income, and the person furnishes a certificate to this effect from an accountant in such form as may be prescribed:]"
Therefore, we direct the Assessing Officer to keep in view the above provisions also so that in case where the assessee had not collected tax at source even then tax can not be collected from him, if the above conditions are fulfilled by such contractors.
8 ITA Nos. 131&132(Asr)/2015
Assessment Years: 2011-12&2012-13
12. In view of the above, facts and circumstances, we deem it appropriate to remit the issue back to the office of the Assessing Officer who should apply correct provisions of law as applicable to the issue and will also apply the provisions as conferred in section 206C(9C)6A and its proviso.
13. Needless to say that Assessee will be provided sufficient opportunity of being heard.
14. In view of the above, the appeals filed by assessee are allowed for statistical purposes.
Order pronounced in the open Court on 03.08.2017.
Sd/- Sd/-
(N.K. CHOUDHRY) (T. S. KAPOOR)
JUDICIAL MEMBER ACCOUNTANT MEMBER
Dated: 03.08.2017.
/GP/Sr. Ps.
Copy of the order forwarded to:
(1) The Assessee:
(2) The
(3) The CIT(A),
(4) The CIT,
(5) The SR DR, I.T.A.T.,
True copy
By Order