CORPORATION OF CALICUT,CALICUT vs. DCIT(TDS), CALICUT

Coming to the assessee’s identical sole substantive ground challenging both the lower authorities action raising & 110/Coch/2024. Corporation of Calicut. sec.206C(6) TCS demands in both these assessment years, Learned DR invited our attention to CIT(A)/NFAC identical lower appellate discussion leading as under:-

“6. Observation & Decision: I have considered the grounds of appeal, submission of the appellant and the order of the DCIT(TDS). In the grounds of appeal no. 3, appellant states that it is true that the appellant was under obligation to collect tax at source on the bid amount under section 206C(6) of the IT Act. It is further stated that licencee has filed its return of income for the F.Y. 2011-12 showing the full amount of bus stand fee collected and tender amount paid and a copy of the same alongwith duly certified copy of the relevant extract of the P & L account for year ended on 31.03.2012 is submitted. In their submission under para-8, it is stated that the person furnishes a certificate to this effect from an accountant in such form as may be prescribed. And in para no. 12 of the submission it is confirmed that the Auditor's certificate which has been now furnished before the CIT(A), Kozhikod was not furnished before the lower authority and therefore, same could not be verified by them while passing the impugned order. In para-13 appellant states that the appellant corrected the remaining default and remitted an amount of Rs. 33,045/- to the account of the revenue on 13.07.2014, when the penalty order was passed by the DCIT(TDS) on 16.06.2014. In the submission in para-4, the appellant states that the DCIT(DS) after making a spot enquiry has proceeded to levy of tax under 206C(6) of the IT Act and imposed interest u/s 206C(7) of the IT Act, on the premise that appellant had failed to collect tax at source from auction collection of the bus stand fee and parking lots from bidders during F.Y. 2010-11 on considering that the appellant was in default for not properly collecting TCS. The order of the AO is very clear about the fact and stand of the officer. In para-4 & 5 of the order he discussed the relevant provisions of the Act before imposing tax and interest on the appellant. From the submission of the appellant it is quite clear that, the appellant corrected the anomaly after passing the order of & 110/Coch/2024. Corporation of Calicut. DCIT(TDS) and paid further tax and during the course of examination of the issue had not filed any certificate or, any evidence regarding filing of return by the person concerned from whom appellant is supposed to collect TCS. Now appellant is coming forward with fresh evidences without any proper explanation as to why same could not be furnished before the officer concerned earlier. Appellant refers to proviso under sub-section 6A to section 206C of the IT Act. The 1st proviso states the conditions on fulfillment of which a person should not be considered as an assessee in default. On fulfillment of those conditions only that the licencee has furnished his return u/s 139, has taken into account such amount in computing income and pay tax due on the income declared, and at the same time the person fumishes a certificate from the Accountant in the prescribed manner and all the formalities should have been done and certificates should have been given in the prescribed manner in form-27BA, and such form need to be submitted to the officer concerned in order to escape the obligations of the deductor. In this case, the appellant failed to comply all the conditions to avail such benefit. Neither appellant could furnish a certificate in the prescribed form to the concerned officer in due time nor during the course of examination of this issue, and it is the fact that appellant rectify their mistake later on after passing of the order and paid tax thereafter. In view of the given fact and circumstances of the case as discussed, I don't find any reason to accept the new evident furnished by the appellant and not to accept their explanation as reasonable cause for modification of the order already passed. Therefore all the grounds of appeal of the appellant is dismissed by upholding the order of the AO. In result, appeal of the appellant is dismissed.”

3. Learned DR vehemently submits that it is in this peculiar facts and both the lower authorities have rightly treated the assessee as liable for having not collected the TCS amount in the twin impugned assessment years. She fails to & 110/Coch/2024. Corporation of Calicut. dispute that even the CIT(A)/NFAC herein has been fair enough in recording the clinching fact that the assessee had filed its fresh evidence in the course of lower appellate proceedings, which have been simply brushed aside. There is no indication in CIT(A)’s identical lower appellate discussion as to whether the assessee’s said additional evidence was as per Rule 46A of the Income-tax Rules or not. Faced with this situation, we deem it appropriate to restore assessee’s instant twin appeals back to the Assessing Officer for his afresh appropriate examination as per law subject to a rider that the taxpayer itself shall plead and prove its case within three effective opportunities only; at its own risk and responsibility, in consequential proceedings. Ordered accordingly.

These assessee’s twin appeals & are allowed for statistical purposes in above terms. A copy of the common order be placed in the respective case files.