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Income Tax Appellate Tribunal, DELHI BENCH: ‘B’ NEW DELHI
Before: SHRI O.P. KANT & MS. SUCHITRA KAMBLE
ORDER PER O.P. KANT, AM:
These appeals by the assessee are directed against a common order dated 28/03/2018 passed by the Learned CIT(Appeals)- Muzaffarnagar [in short the Learned CIT(A)] for Assessment Year 2013-14 to 2016-17 in relation to demand raised by the assessing officer under section 206C of Income-tax Act,1961( in short the Act). Being common issue in dispute involved in these appeals, same were heard together and disposed off by way of this consolidated order for convenience and avoid repetition of facts.
The grounds of appeal raised in these appeals being identical, for brevity, the grounds of appeal for assessment year 2013-14 are only reproduced as under:
1.That having regard to the factsand circumstances of the case, the Learned CIT (A)has erred in holding that the AO was justified in treatingthe Appellant as an “assessee in default” and determining the liability under Section 206C(6A) & (7) of the Income Tax Act, 1961.
2. That having regard to the facts and circumstances of the case, the Learned CIT (A)has erred in holding that the Activities of the Appellant are in the nature of requiring the collection of Tax at Source as per the provisions of Section 206C of the Income Tax Act, 1961.
3. That having regard to the facts and circumstances of the case, the Learned CIT (A) has erred in holding/confirming the imposition of Penal Interest under Section 206C(7) of the Income Tax Act, 1961, in a situation which is beyond the control of the Appellant and is arbitrary in nature and is against the principles of natural justice and ignores the law of presumption.
4. That the Learned CIT (A) has failed to properly appreciate the various submissions made in Written Submissions Dated 23.03.2018 and has erred in rejecting each of the Points raised therein.
5. That the Appellant prays to be allowed the permission to submit further evidence/judgments/written submissions at the time of hearing before the Hon’ble Bench of ITAT.
Briefly stated facts of the case are that assessee, the District Mining Officer, District ‘Shamli’ (UP) was required to collect tax at the rate of the 2% in terms of section 206C(1C) of the Act on royalty collected in lieu of grant of permission or license from each such licensee for permission of excavation granted and deposit the same to the account of the Union Government. However, no compliance was made by the assessee during the period from financial year 2012-13 to 2016-17 (upto 30/06/2016). In response to the show cause notice issued by the Assessing Officer, the assessee in reply dated 06/09/2016 accepted the default and submitted that efforts were being made for recovery of the said tax from relevant contractors persons. In view of the submission of the assessee, the Learned Assessing Officer held the assessee as ‘assessee in default’ and levied tax collected at source (TCS) at the rate of the 2% and interest thereon in terms of section 206C(7) of the Act for the period of default. The Learned Assessing Officer in the order under section 206 C(6A) passed on 29/12/2016 has mentioned details of financial year wise of name of contractors, from whom tax was to be collected at source. On page 8 of the said order, he has also tabulated financial year wise amount of tax to be collected, period of default and amount of interest. On further appeal, the Ld. CIT(A) upheld the liability raised by the Assessing Officer observing as under:
“7. The facts of the case as discussed in the assessment order are as under :-
In this case the appellant was required to collect the TCS from royalty from different licensees/lessees u/s 206C(1C) of the Act at the prescribed rates. It has been noted by the AO in the order dated 29-12-2016 u/s 206C(6A) of the Act that though the appellant has collected royalties during FY 2012-13 to 2016-17, with details as per the order, in lieu of grant of permission of excavation of mud/earth/sand but has failed to collect TCS. The AO has required the appellant to explain why he should not be treated as an assessee in default. In this regard it was stated that the work of excavation has already closed and recovery of the same should be made from the concerned licensees. The AO after considering the reply of the appellant, has computed the sum payable including the TCS and interest u/s 206C(6A) and 206C(7) read with section 206C(lC)of the Act for different financial years. The appellant through the AR has stated that the appellant could, not be held as an assessee in default as the deductees have discharged their liabilities. The AR furnished Annexure-A as per 1st proviso to section 206C(6A) of the Act signed by an Accountant for different financial years except 2016-17.
From the facts of the case and material on record it is noted that the appellant has failed to collect TCS from different licensees as required u/s 206C(1C) of-the Act for different financial years 2012-13 to 2016-17. The reliance of the AR on Annexure-A for different financial years furnished under the 1st proviso to section 206C(6A) has been considered. The said proviso has to be read with Rule 37J wherein Form No.27BA has to be signed by the appellant certifying certain details and its Annexure-A has to be certified by an Accountant. Though the AR has furnished Annexure-A signed by an Accountant, but has failed to furnish Form No.27BA in complete shape. Further, it has not been furnished the said form to the Competent Authority as mentioned in Rule 37J of the IT Rules. Therefore, the case of the appellant is not covered by the 1st proviso to section 206C(6A) of the Act. In the circumstances it is held that the AO was justified in treating the appellant as an ‘assessee in default’ and determining the liability u/s 206C(6A) & (7) of the Act for FYs.2012-13 to 2016-17. The same are hereby confirmed Grounds of appeal for different financial years are dismissed.
Before us none represented on behalf of the assessee nor any application for adjournment was received despite service of notice for hearing of the appeal. Therefore, the appeal was heard ex parte qua the assessee, after hearing the arguments of the Ld. Department representative.
On perusal of the order of the Ld. CIT(A), we find that liability raised by the Assessing Officer has been upheld in view of non- furnishing of form No. 27BA in terms of first provision to section 206C(6A) of the Act by the assessee, though certificate from the chartered accountant that licensees had already deposited their respective tax liability was filed. We find that assessee is a Government Authority and has partly complied with the requirement of law, and therefore, one more opportunity may be granted to him for complying for filing of form No. 27BA as required in terms of first provision to section 206C(6A) of the Act . In the interest of substantial justice, we restore this issue back to the file of the Learned Assessing Officer for providing one more opportunity for making compliance of first provision to section 206C(6A) of the Act. It is needless to mention that the assessee shall be provided adequate opportunity of being heard. The grounds of the appeal of the assessee are accordingly allowed for statistical purposes.
In the result, the appeals filed by the assessee are allowed for the statistical purposes.
Order pronounced in the open court on 18.11.2021.