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Income Tax Appellate Tribunal, JAIPUR BENCHES, JAIPUR
Before: SHRI VIJAY PAL RAO, JM & SHRI VIKRAM SINGH YADAV, AM vk;dj vihy la-@ITA No. 946/JP/2017
आयकर अपीलीय अधिकरण] जयपुर न्यायपीठ] जयपुर IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHES, JAIPUR Jh fot; iky jko] U;kf;d lnL; ,oa Jh foØe flag ;kno] ys[kk lnL; ds le{k BEFORE: SHRI VIJAY PAL RAO, JM & SHRI VIKRAM SINGH YADAV, AM vk;dj vihy la-@ITA No. 946/JP/2017 fu/kZkj.k o"kZ@Assessment Year :2009-10 cuke Smt. Shehnaj Begum, Income Tax Officer Vs. Prop.- M/s Sonam Steel, (TDS), K-38/39, Near Dakanla Station, Kota. Indraprasth Industrial Area, Kota. TAN/PAN No.: JDHS 08552 F vihykFkhZ@Appellant izR;FkhZ@Respondent fu/kZkfjrh dh vksj ls@ Assessee by : Shri Nikhlesh Kataria (CA) jktLo dh vksj ls@ Revenue by : Shri Rajendra Jha (JCIT) lquokbZ dh rkjh[k@ Date of Hearing : 06/08/2018 mn?kks"k.kk dh rkjh[k@ Date of Pronouncement : 07/08/2018 vkns'k@ ORDER
PER: VIJAY PAL RAO, J.M.
This appeal by the assessee is directed against the order dated
05/09/2017 of ld. CIT (A), Kota arising from the order passed U/s
201(1)/201(1A) of the Income Tax Act, 1961 (in short the Act) for the
A.Y. 2009-10. The assessee has raised following grounds of appeal: “1. The assessment order passed u/s 201(1)/201(1A) is bad in law as well as on facts and hence, the same may please be quashed. 2. The Id. AO erred by not serving on the assessee, show cause notice before framing huge demand of Rs. 1,64,186/- for non-collection of TCS u/s 201(1) and Rs. 1,10,759/- for interest on non-collection of TCS u/s 201(1A) and the Ld. CIT (A) erred in sustaining the same.
ITA 946/JP/2017_ 2 Shehnaj Begum Vs ITO(TDS)
The ld. AO erred in law as well as on the facts of the present case in holding that the assessee is liable for collection of TCS in terms of section 206C of the Act and the ld. CIT(A) erred in confirming the same.
The ld. AO failed to appreciate that the buyers were assessed to tax and as such, in view of decision of Hon’ble Supreme Court in Hindustan Coca-Cola there would be no recovery of the tax on the same sum and hence, he erred in treating the assessee as deemed to be in default and the Ld. CIT (A) erred in sustaining the same.
The appellant prays your Honor’s indulgence to add, amend, modify or delete all or any ground of appeal.”
At the time of hearing, the ld AR of the assessee has stated at bar
that the assessee does not press grounds No. 1, 2 and 3 of the appeal
and the same may be dismissed as not pressed. On the other hand, the ld
DR has raised no objection if grounds No. 1,2 and 3 of the assessee are
being dismissed as not pressed. Accordingly, grounds No. 1,2 and 3 of the
appeal are dismissed being not pressed.,
Ground No. 4 of the appeal is regarding treating the assessee as
assessee in default without considering the contention of the assessee
that the other party has considered the said amount while computing the
income and filed the return U/s 139 of the Act. The assessee is a scrap
dealer and engaged in the business of trading in scrap. During the year
under consideration, the assessee sold scrap to the tune
of Rs. 1,57,86,754/- to various scrap dealers. The Assessing Officer
ITA 946/JP/2017_ 3 Shehnaj Begum Vs ITO(TDS)
was of the view that as per the provisions of Section 206C(1) of the Act,
the assessee was under obligation to collect TCS on sale made to scrap
dealers. The Assessing Officer accordingly passed order U/s
201(1)/201(1A) of the Act dated 28/2/2014 and held the assessee as the
assessee in default for no collection of TCS which comes to Rs. 1,64,186/-
and interest on which is Rs. 1,10,759/- totaling to Rs. 2,74,945/-.
The assessee challenged the action of the Assessing Officer before
the ld. CIT(A) but could not succeed.
Before us, the ld AR of the assessee has submitted that the
assessee raised an issued in ground No. 2 that the Assessing Officer has
grossly erred in ignoring the proviso to Section 201(1) inserted by the
Finance Act, 2012 as well as the provision to Section 206C(6A) whereby if
the purchaser has furnished his return of income U/s 139 of the Act and
has taken into account such amount for computing income in such return
of income and has paid the taxes due on income declared by him then the
assessee cannot be held as the assessee in default. The ld AR has
referred to the ground No. 2 raised before the ld. CIT(A) and submitted
that the assessee raised this specific plea before the ld. CIT(A). However,
the ld. CIT(A) has not adjudicated this issue while passing the impugned
order. He has relied upon the decision of Hon'ble Supreme Court in the
ITA 946/JP/2017_ 4 Shehnaj Begum Vs ITO(TDS)
case of Hindustan Coca Cola Beverages Pvt. Ltd. Vs CIR 293 ITR 226 (SC)
and submitted that the Hon'ble Supreme Court has held that the
amendment made by the Finance Act, 2012 is retrospective in application
and therefore, this proviso to Section 206C(6A) is corresponding to the
amendment made in Section 201 is also having retrospective effect. He
has relied upon the decision of Special Bench of Rajkot Tribunal in the
case of Bharti Auto Products Vs CIT (2013) 145 ITD 0001 as well as
decision of Hon’ble Delhi Benches of Tribunal in the case of Divisional
Forest Officer Vs ITO 57 taxman.com 238 (Delhi). Thus, the ld AR has
submitted that despite a specific issue raised by the assessee, the ld
CIT(A) has failed to adjudicate the same. He has pointed out that the ld.
CIT(A) has followed the decision of this Tribunal in the case of Chandmal
Sancheti Vs ITO (2016) 160 ITD 0313. However, even in the said
decision, the relief was granted to the extent of the amount which was
considered by the purchasing party while computing the income and paid
due tax by following the decision of Hon'ble Supreme Court in the case of
Hindustan Coca Cola Beverages Pvt. Ltd. Vs. CIT (supra). Hence he has
pleaded that this may be remitted back of the record of the Assessing
Officer/CIT(A) for adjudication on merits.
ITA 946/JP/2017_ 5 Shehnaj Begum Vs ITO(TDS)
On the other hand, the ld DR has relied upon the orders of the
authorities below and submitted that the ld. CIT(A) has followed the
decision of this Tribunal on the merits of the case wherein it was held that
the sale of scrap to a dealer falls in the ambit of Section 206C of the Act.
Having considered the rival submissions as well as relevant material
on record at the outset, we note that the assessee raised this issue that
the purchaser have considered these amounts in their books of account
and also paid due taxes in ground No. 2, which is reproduced by the ld.
CIT(A) at page No.2 in para 4.2 as under:
“Learned A.O. also grossly erred in ignoring the proviso to Section 201(1) inserted by Finance Act 2012 w.e.f. 01/07/2012 which may help assessee in “assessee not in default.”
The ld. CIT(A), decided the issue on merits by following the decision of
the Coordinate Bench of this Tribunal in the case of Chandmal Sancheti
Vs. ITO (supra). However, this particular plea raised by the assessee in
ground No. 2 has not been adjudicated by the ld. CIT(A). The ld. CIT(A)
has adjudicated the matter by consolidating all the grounds raised by the
assessee and given concluding finding at page 14 and 15 of his order as
under:
“Thus, in view of the opinion of the Jurisdictional ITAT, and the facts involved, I am of the opinion that the appellant was liable for deduction of the Tax at Source from the buyers to whom he sold the scrap worth Rs. 1,64,18,624/-/-.
ITA 946/JP/2017_ 6 Shehnaj Begum Vs ITO(TDS)
The liability of a seller to collect tax at source in terms of section 206C is absolute unless requisite declaration from the buyer is obtained and a copy thereof is delivered to the Chief Commissioner or Commissioner in terms of the provisions of sub-section (1A) and (1B) of Section 206C. The default in doing so and non filing of Form No. 27 made him liable for the TCS and interest as calculated by the A.O.
Thus the appellant assessee has been rightly held by the A.O. to be a defaulter for non collection of tax on the above scrap sales to various dealers, and therefore, the calculation of the TCS u/s 206C(1) read with section 201(1)/201(1A) of the Income Tax Act, 1961 at Rs. 2,74,945/- as the addition in this case to his income is accordingly liable to be upheld.”
Thus, it is apparent that this plea raised by the assessee in ground No. 2
before the ld. CIT(A) was not adjudicated by the ld. CIT(A). Further the
issue regarding applicability of proviso to Section 206C(6A) as well as the
proviso to Section 201(1) of the Act which were brought into statute by
amendment brought vide Finance Bill 2012 is settled by the various courts
including the Hon'ble Supreme Court as well as the various Benches of
the Tribunal that the said proviso is retrospective in nature. Since the
factum of the purchaser have shown these purchases in their books of
account and have paid due taxes while filing of return of income, has not
been examined either by the Assessing Officer or by the ld. CIT(A).
Accordingly, in the facts and circumstances of the case, we remit this
issue to the record of the ld. CIT(A) for adjudication of the same after
ITA 946/JP/2017_ 7 Shehnaj Begum Vs ITO(TDS) getting the relevant facts verified through the Assessing Officer. The
assessee is directed to furnish relevant details and documents.
In the result, appeal of the assessee is partly allowed for statistical
purposes. Order pronounced in the open court on 07/08/2018.
Sd/- Sd/- ¼foØe flag ;kno½ ¼fot; iky jko½ (VIKRAM SINGH YADAV) (VIJAY PAL RAO) ys[kk lnL;@Accountant Member U;kf;d lnL;@Judicial Member Tk;iqj@Jaipur fnukad@Dated:- 07th August, 2018 *Ranjan आदेश की प्रतिलिपि अग्रेf’ात@ब्वचल वf जीम वतकमत वितूंतकमक जवरू vihykFkhZ@The Appellant- Smt. Shehnaj Begum, Kota. 1. izR;FkhZ@ The Respondent- The ITO (TDS), Kota. 2. vk;dj vk;qDr@ CIT 3. vk;dj vk;qDr¼vihy½@The CIT(A) 4. विभागीय प्रतिनिधि] आयकर अपीलीय अधिकरण] जयपुर@क्त्ए प्ज्Aज्ए Jंपचनत 5. xkMZ QkbZy@ Guard File (ITA No. 946/JP/2017) 6. vkns'kkuqlkj@ By order,
सहायक पंजीकार@Aेेज. त्महपेजतंत