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 ITA No.614-618/Kol/2017        A.Ys. 10-11 to14-15
Dist. Land & Land Reforms Officer BWD Vs. ITO Wd-4(2), BWD                   Page 2

Case(s) called twice. None appears at the assessee's behest. Case file(s) suggest that the registry has already sent intimation to the assessee / appellant who has seeking adjournments in the past on one pretext or the other. We accordingly proceed ex parte against the assessee. All these appeals are taken up for adjudication on merits.

3. We find that the assessee has challenged correctness of the lower authorities action raising the impugned Tax Collection at Source demands of ₹35,75,160/- ,₹39,50,890/-, ₹53,65,680/-, ₹54,69,100/- & ₹37,30,050/-; (assessment year-wise) respectively. There are does not appear in dispute between the parties that this assessee; the District Land & Land Reforms Office, is the tax collector since functioning as the administrative District Magistrate collecting royalty and cess against short term quarry permit (licence) for extracting minor minerals like sand, morum, clay, stones and such other minerals during the relevant five previous year(s) ITA No.614-618/Kol/2017 A.Ys. 10-11 to14-15 Dist. Land & Land Reforms Officer BWD Vs. ITO Wd-4(2), BWD Page 3 is TCS collector within the meaning of sec. 206C(1C) of the Act defining tax collection at source as recipient of minor royalty and licences fee from the mining companies. And also that although he had received the aforesaid varying head(s) of royalties and other payments from various payers, he failed to collect the TCS in the capacity of specified collector under the provision of the Act. The appellant / assessee had also not filed any return in the Form 27EQ. We find from the Assessing Officer's order dated 22.01.2015 in the "lead" assessment year 2010-11 that the losses of revenue from non collection of TCS @ 2% as prescribed in sec. 206(1C) from April 2009 to March 2010 came to be ₹21,91,571/- qua total receipts of ₹10,98,78,646/-. The assessee pleaded ignorance of the TCS provision prescribed under Chapter-XVII of the Act envisaging TCS collection of recipient in case of the specified payments received from the payer / licencer holders. The Assessing Officer rejected the said explanation in his order to conclude that assessee's failure in ensuring necessary compliance to provision of the Act could not be held to be justifiable. And also that the mere fact of non-issuance of state government's instructions to this effect would not absolve him from collecting TCS u/s. 206(1C) of the Act. He therefore raised the impugned TCS as well as interest payable thereupon demands coming to ₹35,75,157/- in the said "lead" assessment year 2010-11 and similar amounts in remaining four assessment year(s) (supra).

(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 form an accountant in such form as may be prescribed.]

7. Learned departmental representative fails to rebut the basic fact that neither the Assessing Officer nor the CIT(A) have examined the effect of above inserted proviso in case of non compliance of the impugned statutory provision requiring TCS collection. It is strongly argued that the aforesaid proviso stood inserted in the Act with effect from 01.07.2012 relevant to assessment year 2013-14 having prospective ITA No.614-618/Kol/2017 A.Ys. 10-11 to14-15 Dist. Land & Land Reforms Officer BWD Vs. ITO Wd-4(2), BWD Page 7 effect only than covering the assessee's former three assessment year(s) i.e. 2010-11 to 2012-13. We find no substance in Revenue's technical argument contesting retrospectively operation of the aforesaid proviso to sec. 206(6A) inserted by the Finance Act, 2012 with effect from 01.07.2012. The legislature had inserted a similar proviso in sec. 201(1) of the Act by the very Finance Act, 2012 with effect from 01.07.2012 that an assessee shall not be treated as a prayer assessee in default for not deducting TDS in case the other party / payee has furnished in return of income u/s. 139 taking into account the sum in question for computing income followed by payment of taxes dues thereupon as accompanied by certificate to this effect from the accountant concerned. We wish to observe here that sec. 201 applies in case of TDS deduction as against the impugned reverse mechanism of TCS collection. The above former limb applies in case of payer / assessee acting as TDS deductor and latter one comes into play in an instance of a specified recipient receiving the specified payments from the payer. In other words, the purpose of both these mechanism is to ensure compliance of the provision at the time of payment of the specified sums.

8. The legislature had instituted the aforesaid proviso in the Act vide Finance Act, 2012 with effect from 01.07.2012 in sec. 201(1) of the Act to be applicable in case of TDS deductor at the time of his assessment u/s. 40(a)(ia) vide second proviso inserted by the Finance Act, 2012 with effect from 01.04.2013. And also that various recent judicial precedents (2016) 279 CTR 384 Commissioner of Income-tax vs. Ansal Landmark Township hon'ble Bombay high court's decision in PCIT vs. Perfect Circle India Pvt. Ltd. in Tax Appeal No.707 of 2016 dated 07.01.2019 and tribunal's co- ordinate bench's orders hold that the aforesaid proviso carries retrospective effect being curative in nature. We observe that the very line of reasoning also deserves to be adopted qua application of sec. 206A (first proviso) as well inserted by the Finance Act, 2012 with effect from 01.07.2012 to this effect as applicable in case of TCS collection than TDS deduction. We therefore decline the Revenue's instant technical argument that the foregoing proviso to sec. 206C(6A) does not carry any retrospective operation and leave it open for the Assessing Officer to verify all necessary facts about the assessee's payers to have been assessed qua the very income under the ITA No.614-618/Kol/2017 A.Ys. 10-11 to14-15 Dist. Land & Land Reforms Officer BWD Vs. ITO Wd-4(2), BWD Page 8 provision of the Act. The assessee is directed to place on record all necessary documents in consequential proceedings within three effective opportunities of hearing the assessee's "lead" case ITA No.614/Kol/2017 as well as remaining four appeal(s) ITA No.615 to 618/Kol/2017 raising the above material issue are partly allowed for statistical purposes.