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Income Tax Appellate Tribunal, “A” BENCH: KOLKATA
Before: Shri A. T. Varkey, JM & Dr. A. L. Saini, AM]
The appeal filed by the assessee is against the order of Ld. CIT(A)-XIX, Kolkata dated 10.10.2012 for AY 2004-05.
At the outset, it has been brought to our notice that there is a delay of 223 days in filing this appeal. The reason for the delay in not preferring an appeal in time before this Tribunal was because of the serious health issues of the assessee which prevented him from entrusting the case to Ld. AR. The medical certificate has been annexed along with the affidavit filed by the assessee explaining the delay. Taking into consideration the medical history of the assessee, we condone the delay and proceed to hear the appeal.
From the facts discussed by the lower authorities, we note that the assessee is a timber merchant and has sold timber to certain manufacturers. The addition has been made for not deducting TCS u/s. 206C of the Income-tax Act, 1961 (hereinafter referred to as the “Act”). The Ld. AR pleaded that if the purchasers of timber has shown the income in their respective Income Tax returns then assessee should not be treated to be assessee at default and in that case disallowance u/s. 206C should not be made against the assessee. For this proposition, the Ld. AR referred to the decision of this Tribunal in the case of & 507/Kol/2013 for AYs 2005-06 & 2006-07 in Bansilal Leisure Parks Ltd. Vs. ITO dated 19.04.2016 in which the assessee was also a timber merchant and disallowance made u/s. 206C of the Act was remanded back to AO with a direction not to treat the assessee in default with respect to parties who have furnished income tax returns and adjudicate the matters. The case cited, supra, the Tribunal held as under:
“5. We have heard rival submissions of both the parties and perused the materials available on record. Before us the ld. AR submitted that all the parties to whom sales were made by the assessee have duly furnished income tax returns. Therefore the ld. AR contended that the assessee in the present case cannot be treated as assessee in default. The AR also submitted that the Hon’ble Tribunal of Kolkata has already decided the issue in favour of the assessee in its own case in for the AYs 2007- 08 and 2008-09 respectively dated 20-01-2016. On other hand the ld. DR vehemently relied on the orders of authorities below. 5.1 From the aforesaid discussions, we find that the assessee failed to collect the TCS at the time of selling the timber to the parties as per the provisions of law. Accordingly the AO treated the assessee in default and raised the demand of the tax. However we find that the similar issue is already covered in favour of assessee by Hon’ble Tribunal of Kolkata in its own case in ITA No. 573-574/Kol/2013 for the AYs 2007-08 and 2008-09 dated 20-01- 2016. However we find from the order of ld. CIT(A) that the assessee has submitted that the copies of the ITR of the parties to whom goods were sold for a value of Rs. 16,57,64,885.00 as detailed under : Sl.N0. Name of the parties Amount (Rs) Date of filing return for AY 06-07 1. Zenith Timber Products (P) Ltd. 3,73,21,252.60 27.11.2006 2. Timtech India (P) Ltd. 87,73,024.00 27.11.2006 3. Vaishno Timber (P) Ltd. 88,42,500.00 29.11.2006 4. Rajputana General Comm.Corpn (P) Ltd. 3,64,33,527.33 30.11.2006 5. Eastern Timber Commo Trade (P) Ltd. 3,56,99,639.30 29.11.2006 6. Chowdhury Enterprise 1,40,51,426.35 31.10.2006 7. DD Enterprise 2,27,98,516.00 31,10.2006 8. S.R Timber Products (P) Ltd. 18,45,000.00 From the above, we find that all the parties to whom the goods were sold have not furnished their income tax returns. Therefore we are restoring this file to the AO with the direction not to treat the assessee in default with respect to the parties who have furnished income tax returns and adjudicate the matter accordingly as per law. Relying in the own decision of the assessee (supra), we reverse the order of the authorities below and allow this ground of assessee’s appeal for statistical purpose.”
Respectfully following the decision of ITAT, cited supra, we restore this issue to the file of the AO with the direction not to treat the assessee in default with respect to the parties who have furnished income tax returns and adjudicate matter accordingly as per law after giving opportunity to assessee. Appeal of assessee is allowed for statistical purposes.
In the result, appeal of assessee is allowed for statistical purposes.
Order is pronounced in the open court on 14.06.2018