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PER: VIJAY PAL RAO, J.M. This appeal by the assessee is directed against the order dated 13.05.2019 of ld. CIT(A), Ajmer arising from the order of the Assessing Officer passed U/s 206C(6A)/206C(7) of the IT Act for the assessment year 2017-18. The assessee has raised the following ground:-

"1. The Commissioner of Income Tax (Appeals) grossly erred in law and on facts in confirming the order passed U/s 206C(6A)/206C(7) by Income Tax Officer TDS, Ajmer.
Shri Pramod Kumar Jain vs. ITO ,TDS
2. None appeared on behalf of the assessee however, the assessee has submitted a letter dated 22.01.2020 which is on record along with written submission and requested that the appeal of the assessee may be decided by considering the written submission of the assessee.
3. The hearing of this appeal was concluded through video conference in view of the prevailing situation of COVId-19 pandemic. The assessee is dealing in scraped material and has purchased railway scrap in auction which was subjected to TCS U/s 206C(1) of the Act. The Railway while receiving the payment from the assessee has also collected tax at source. The assessee sold the scrap to various buyers without collecting tax at source as required U/s 206C of the Income Tax Act. The Assessing Officer initiated the proceedings for holding the assessee as default in respect of non collection of tax in terms of Section 206C(6A)/(7) of the Act. Accordingly, the AO passed the impugned order dated 23.03.2018 whereby the assessee was hold as assessee in default and liability U/s 206C(6A) of the Act was determined at Rs. 2,55,540/- and interest as per Section 206C(7) of the Act of Rs 97,651/- was also charged. The assessee challenged the action of the AO before the ld. CIT(A) and contended that the provisions of Section 206C are not applicable in the case of the assessee as the material Shri Pramod Kumar Jain vs. ITO ,TDS purchased by the assessee from the railways in auction which was subsequently sold to various parties does not fall in the ambit of definition of scrap as provided in clause-(b) of Explanation to Section 206C of the Act. The assessee also disputed the correct amount of old material sold by the assessee during the year under consideration and contended that a some of the goods sold by the assessee which was considered by the AO as scrap were not the old iron goods but it is new iron goods. The ld. CIT(A) confirmed the order of the Assessing Officer passed U/s 206C(6A)/( 7) of the Act holding the assessee in default for not collect tax at source.
4. Before us, the assessee in the written submission as reiterated its contentions that the assessee is a trader of old iron goods as well as new iron goods. The trading in all iron goods mainly consist of old material purchased from the railway. The sales have been made by the assessee to other traders and sellers. The assessee has contended that since the material purchased by the assessee from the railway in the auction is not generated in the manufacturer or mechanical working process and therefore, does not fall in the definition of scrape as in provided clause-(b) of explanation to Section 206C of the Act. Hence, the assessee has contended that the provisions of Section 206C are not Shri Pramod Kumar Jain vs. ITO ,TDS applicable. In support of his contention, he has relied upon the decision of Hon'ble Gujarat High Court in case of Priya Blue Industries (P) Ltd 381 ITR 210 as well as decision of Ahmedabad Bench of the Tribunal in case of Navine Fluorine International Limit vs. ACIT, TDS in ITA No. 1213 and 1214/Ahd/2010 . Reliance was also placed on the decision of Rajkot Bench of the Tribunal in case of Nathulal P. Lavati vs ITO 65 DTR 133. Alternatively, the assessee has submitted that the AO while passing the impugned order has not excluded the sale of new iron goods to the extent of Rs. 1,88,60,145/- and therefore, to that extent the liability of the assessee is not justified. The assessee has filed certain sales bills in support of the contention that some of the sales which were considered by the AO as scrap sale in fact is sale of new goods.
6. We have considered the written submissions as submitted by the assessee and arguments of ld. DR. We have also carefully perused the order passed U/s 206C(6A)/(7) of the IT Act. There is no dispute that the assessee purchased scrap material from the railways which was subjected to TCS and the said material was again sold by the assessee to various parties who were stated to be traders as well as consumers of the scraped without collecting the tax at source by the assessee. Therefore, the AO initiated the proceedings for holding the assessee in default U/s 206C(6A)/(7) of the Act. The First contention of the assessee is that the material sold by the assessee which was purchased from the railways in the auction does not fall in the definition of scrap Shri Pramod Kumar Jain vs. ITO ,TDS as provided in clause (b) of Section 206C of the Act. For ready reference we quote clause (b) of explanation to Section 206C as under:-