SMT. SHEHNAJ BEGUM,KOTA vs. INCOME TAX OFFICER (TDS), KOTA

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)

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.,

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 ld. CIT(A) but could not succeed.

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)

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.

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.

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