Shri Ransingh B. Tomar, Gandhinagar V. The Income Tax Officer, (OSD), TDS, Ahmedabad

ITA 2106/AHD/2013

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 0711 (ITAT-AHMEDABAD)
• Duration Of Justice: 3 year(s) 16 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-08-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: D
• Assessment Year: 2012-2013
• Appeal Filed On: 13-08-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: M K PATEL

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD D BENCH (BEFORE SHRI R.P. TOLANI, JUDICIAL MEMBER & SHRI N.K. BILLAIYA, ACCOUNTANT MEMBER) ITA. NOS: 2104 TO 2107/AHD/2013 ITA NOS: 2240 TO 2243/AHD/2013 (ASSESSMENT YEARS: 2010-11 & 2013-14) SHRI RANSINGH B. TOMAR PROP: OF M/S. R.G. SCRAP TRADRS, GODOWN NO. 17/2, OPP: OIL MILL, VILLAGE ZUNDAL, GANDHINAGAR- 382421 PAN NO. AAPPT0278G THE ITO, (OSD), TDS AHMEDABAD V/S V/S THE ITO, (OSD), TDS AHMEDABAD SHRI RANSINGH B. TOMAR PROP: OF M/S. R.G. SCRAP TRADRS, GODOWN NO. 17/2, OPP: OIL MILL, VILLAGE ZUNDAL, GANDHINAGAR- 382421 PAN NO. AAPPT0278G (APPELLANT) (RESPONDENT) ITA. NOS: 2120 TO 2123/AHD/2013 & ITA NOS. 2210 TO 2213/AHD/2013 (ASSESSMENT YEARS: 2011-12 TO 2013-14) SHRI ABHAY JAIN, PROP. OF TARUN STEEL, 36, SIDHHACHAL VATICA, B/H FIRE STATION, DHARAMNAGAR, SABARMATI, AHMEDABAD V/S THE ITO, (TDS)-1, AHMEDABAD ITA NOS. 2104 TO 2109/AHD/2013 & ORS. . A.YS. 201 0-11 TO 2013-2014 2 PAN NO. AHMAO5763C THE ITO, (TDS)-1, AHMEDABAD V/S SHRI ABHAY JAIN, PROP. OF TARUN STEEL, 36, SIDHHACHAL VATICA, B/H FIRE STATION, DHARAMNAGAR, SABARMATI, AHMEDABAD PAN NO. AHMAO5763C (APPELLANT) (RESPONDENT) ITA. NOS: 2108 TO 2111/AHD/2013 ITA NOS: 2236 TO 2239/AHD/2013 (ASSESSMENT YEARS: 2011-12 TO 2013-14) SHRI RAMMOHANSINGH B. TOMAR PROP: OF M/S. GAJENDRA SCRAP SUPPLIERS, GODOWN NO. 17/2, OPP: OIL MILL, VILLAGE ZUNDAL, GANDHINAGAR PAN N. AAPPT0279H THE ITO, (OSD), TDS, AHMEDABAD V/S THE ITO, (OSD), TDS, AHMEDABAD SHRI RAMMOHANSINGH B. TOMAR PROP: OF M/S. GAJENDRA SCRAP SUPPLIERS, GODOWN NO. 17/2, OPP: OIL MILL, VILLAGE ZUNDAL, GANDHINAGAR PAN N. AAPPT0279H (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI M.K. PATEL, AR RESPONDENT BY : SHRI SANJAY KUMAR, SR. D.R. ( )/ ORDER DATE OF HEARING : 30 -08-201 6 DATE OF PRONOUNCEMENT : 30-08-2016 ITA NOS. 2104 TO 2109/AHD/2013 & ORS. . A.YS. 201 0-11 TO 2013-2014 3 PER BENCH: 1. THE ABOVE CAPTIONED CROSS APPEALS ARE BY THREE DIFF ERENT ASSESSEES AND THE REVENUE PREFERRED AGAINST THE ORDER OF THE LD. CIT(A) FOR DIFFERENT ASSESSMENT YEARS AS MENTIONED IN THE CAPT IONED APPEALS. 2. THE COMMON GRIEVANCE OF ALL THE ASSESSEE READ AS UN DER:- (1) THAT ON FACTS, AND IN LAW, THE LEARNED CIT(A) HAS G RIEVOUSLY ERRED IN HOLDING THAT THE APPELLANT IS LIABLE FOR COLLECTION OF TCS U/S. 206C OF THE INCOME-TAX ACT, 1961. (2) THAT ON FACTS, AND IN LAW, IT OUGHT TO HAVE BEEN HE LD THAT THE APPELLANTS BUSINESS IS NOT COVERED BY THE DEFINITION OF SCRAP, AS DEFINE D IN SECTION 206C OF THE ACT, AND HENCE THE APPELLANT IS NOT DEEMED TO BE AN ASSESSEE IN DEFAULT WITHIN THE MEANING OF THE SAID SECTION. (3) THAT THE LD. CIT(A) HAS GRIEVOUSLY ERRED IN LAW AND ON FACTS IN TREATING THE APPELLANT IN DEFAULT AND THEREBY CONFIRMING IN PRINCIPLE, THE ORDER PASSED U/S. 206C WHEREBY DEMAND OF RS. 7,81,048/- IS RAISED U/S. 206C(6A), A ND RS. 2,73,367/- IS RAISED U/S. 206C(7), TOTALING TO RS. 10,54,415/-. 3. THE COMMON GRIEVANCE OF THE REVENUE IN ALL THE CROS S APPEALS FOR RESPECTIVE ASSESSMENT YEARS READ AS UNDER:- 7 . THE LD. CIT(A) HAS ERRED ON FACTS AND IN LAW ADMI TTING FRESH EVIDENCE IN VIOLATION OF RULE 46A OF I.T. RULES 1962. 8. THE LD. CIT(A) HAS VIOLATED THE RULE 46A OF THE I.T. RULE BY NOT GIVING OPPORTUNITY TO THE A.O. AFTER ADMITTING FRESH EVIDE NCES FROM THE ASSESSEE IN FORM OF PAN, I.T. RETURNS OF THE BUYER ETC. BY RELYING T HE DECISION IN THE CASE OF HINDUSTAN COCA COLA V/S. CIT 293 ITR 226. 9. THE LD. CIT(A) ERRED IN LAW AS WELL AS ON FACTS OF THE CASE BY IGNORING THE FACTS THAT THE REMAND REPORT HAS TO BE CALLED FOR FROM TH E A.O. FOR THE FRESH EVIDENCES PRODUCE BY THE ASSESSEE BEFORE HIM FOR VERIFICATION . 10. THE LD. CIT(A) IN SUBSTANCE SET ASIDE THE ASSES SMENT AND EXCEEDED THE JURISDICTION AVAILABLE TO HIM U/S. 251(1) OF THE AC T. ITA NOS. 2104 TO 2109/AHD/2013 & ORS. . A.YS. 201 0-11 TO 2013-2014 4 11. IT IS, THEREFORE PRAYED THAT THE ORDER OF THE L D. CIT(A) MAY BE CANCELLED AND THAT OF THE ASSESSING OFFICER MAY BE RESTORED TO TH E ABOVE EFFECT. 12. THE APPELLANT CRAVES LEAVE TO AMEND OR ALTER AN Y GROUND OR ADD A NEW GROUND WHICH MAY BE NECESSARY. 4. THESE BUNCHES OF APPEALS WERE HEARD TOGETHER AND AR E BEING DISPOSED OF BY THIS COMMON ORDER FOR THE SAKE OF CONVENIENCE . NOW WE TAKE UP FIRST ASSESSEES APPEAL. 5. THE ASSESSEES ARE SCRAP MERCHANTS PRINCIPALLY DEALI NG IN RAILWAYS SCRAPS. THE ASSESSEES ARE PURCHASING SCRAP FROM WES TERN RAILWAY. THE NATURE OF BUSINESS IS THAT OF FERROUS AND NON-FERRO US METAL SCRAPS. THE ASSESSEES ARE NOT MANUFACTURERS. THE PURCHASES ARE MADE FROM WESTERN RAILWAY THROUGH AUCTION HELD BY RAILWAY AUT HORITIES FROM TIME TO TIME. THE SCRAPS SO PURCHASED ARE SOLD TO O THER DEALERS OR MANUFACTURERS. 6. WHEN THE A.O. INVOKED THE PROVISIONS OF SECTION 206 C(1) OF THE ACT, THE MAIN CONTENTIONS OF THE ASSESSEES WERE THAT THE Y ARE NOT SELLER OF SCRAP WITHIN THE MEANING OF SECTION 206C(1) OF THE ACT AND, THEREFORE, NOT LIABLE TO COLLECT TCS @ 1% FROM THEIR PURCHASER S. IT WAS BROUGHT TO THE NOTICE OF THE ASSESSING OFFICER THAT THE ASSESS EES ARE DOING THE SAME BUSINESS SINCE PAST MANY YEARS AND HAVE NEVER COLLECTED SUCH TCS AND THE DEPARTMENT HAS ALSO NEVER INITIATED ANY PROCEEDINGS FOR THE SAME IN THE PAST. THIS CONTENTION OF THE ASSESS EES WAS DISMISSED BY THE A.O. WHO WAS OF THE FIRM BELIEF THAT THE PRO VISIONS OF SECTION 206C(1) SQUARELY APPLY ON THE FACTS OF THE CASE. TH EREFORE, THE ASSESSEES WERE LIABLE FOR COLLECTING TCS @ 1% ON TH E SALES MADE BY THEM DURING THE FINANCIAL YEARS UNDER CONSIDERATION . THE A.O. ITA NOS. 2104 TO 2109/AHD/2013 & ORS. . A.YS. 201 0-11 TO 2013-2014 5 ACCORDINGLY HELD THE ASSESSEES LIABLE FOR COLLECTIN G TCS AND THE LIABILITIES OF THE ASSESSEE INCLUDING INTEREST WAS WORKED OUT. 7. AGGRIEVED BY THIS, THE MATTER WAS TAKEN BEFORE THE LD. CIT(A) AND IT WAS STRONGLY CONTENDED THAT THE PROVISIONS OF SECTI ON 206C DO NOT APPLY ON THE ASSESSEES. IN THE ALTERNATE, IT WAS PL EADED THAT THE ASSESSEES HAVE COLLECTED FORM NO. 27C AND ALSO FORM NO. 27BA IN TERMS OF SECTION 206C, SUB-SECTION (1A) AND (6A) OF THE ACT AND, THEREFORE, NOT LIABLE FOR TCS/INTEREST. AFTER CONSI DERING THE FACTS AND THE SUBMISSIONS, THE LD. CIT(A) WAS CONVINCED THAT EVEN IF THE ASSESSEE HAS PURCHASED SCRAP THROUGH AUCTION STILL THEY ARE LIABLE FOR TCS UNDER THE PROVISIONS OF SECTION 206C OF THE ACT . HOWEVER, THE LD. CIT(A) WAS ALSO CONVINCED THAT THE PROVISO INSERTED WITH EFFECT FROM 01.07.2012 WAS CLARIFICATORY IN NATURE AND WAS INTE NDED TO REMOVE HARDSHIP CAUSED TO THE ASSESSEES AND ACCORDINGLY IT SHOULD APPLY RETROSPECTIVELY. THE LD. CIT(A) DREW SUPPORT FROM T HE DECISION OF THE HONBLE SUPREME COURT GIVEN IN THE CASE OF ALLIED MOTORS PVT. LTD. 224 ITD 677. THE LD. CIT(A) FURTHER DREW SUPPORT FROM T HE DECISION OF THE HONBLE SUPREME COURT GIVEN IN THE CASE OF ALOM EXT RUSIONS LTD. 319 ITR 306 AND HELD AS UNDER:- 23. I FIND FORCE IN THE APPELLANTS ARGUMENT, AS FO R THE SAME SET OF FACTUAL ARGUMENTS, THE APPELLANT WOULD BE TREATED AS ASSESS EE IN DEFAULT FOR THE ASST. YEAR 2010-2011 AND SHALL NOT BE TREATED AS ASSESSEE IN D EFAULT FOR ASST. YEAR 2012-13 AND THEREFORE. IF THE SUBMISSIONS OF THE APPELLANT IN THIS RESPECT ARE REJECTED, THEN JUDGMENT OF HONBLE APEX COURT IN THE CASE OF HINDU STAN COCA COLA VS. CIT 293 ITR 226 WHICH PRESENTLY IS THE LAW OF LAND AND WOUL D GIVE THE SAME BENEFICIAL EFFECT FOR ALL THE ASST. YEARS WHICH PROVISO HAS IN TENDED TO GIVE. ACCORDINGLY, I AM OF THE VIEW THAT THE CONTENTION OF THE APPELLANT IS ACCEPTABLE IN SO FAR AS IT RELATES TO APPLICABILITY OF THIS PROVISO FOR ALL THE ASST. YEARS IN THE INSTANT CASES DESPITE ITA NOS. 2104 TO 2109/AHD/2013 & ORS. . A.YS. 201 0-11 TO 2013-2014 6 THE FACT IT HAS COME INTO EFFECT WITH EFFECT FROM 0 1.07.2012. THE ARGUMENT OF THE APPELLANT IS THUS ACCEPTED. 24. CONSIDERING THE ABOVE, I AM OF THE VIEW THAT IN THE A.O. SHALL EXAMINE THE EVIDENCES FILED BY THE APPELLANT IN RESPECT TO PAN, EVIDENCE RELATING TO FILING OF INCOME-TAX RETURN FOR THE RESPECTIVE ASST. YEAR AND THE CERTIFICATE OF THE ACCOUNTANT FOR EACH OF THE BUYER FOR EACH OF THE AS ST. YEAR. IF THE AFORESAID DETAILS ARE IN ORDER, THEN TO THAT EXTENT OF SALES EFFECTED BY THE APPELLANT, THE APPELLANT SHALL NOT BE TREATED AS ASSESSEE IN DEFAU LT. 8. AGGRIEVED BY THIS, THE ASSESSEES AND THE REVENUE AR E APPEAL BEFORE US. THE LD. COUNSEL FOR THE ASSESSEE FAIRLY CONCEDE D THAT THE DIRECTIONS OF THE LD. CIT(A) HAVE BEEN CARRIED OUT BY THE ASSE SSING OFFICER WHILE MAKING THE ORDERS PURSUANT TO THE DIRECTIONS OF THE LD. CIT(A). THE LD. COUNSEL PLACED THE COPIES OF THE ASSESSMENT ORDER B EFORE US. THE MAIN GRIEVANCE OF THE REVENUE IS THAT THE LD. CIT(A) HAV E ACCEPTED CERTAIN DOCUMENTS IN VIOLATION OF RULE 46A OF THE I.T. RULE S. THE REVENUE IS FURTHER AGGRIEVED BY THE DIRECTIONS OF THE LD. CIT( A) CLAIMING THAT THE LD. CIT(A) DOES NOT HAVE ANY POWER TO SET ASIDE THE ASSESSMENT. 9. WE HAVE GIVEN A THOUGHTFUL CONSIDERATION TO THE GRI EVANCE RAISED BY THE REVENUE. IN OUR CONSIDERED OPINION, THE LD. CIT (A) HAS NOT VIOLATED RULE 46A OF THE I.T. RULES BECAUSE THE FIRST APPELL ANT AUTHORITY HAS GIVEN DIRECTIONS RELYING UPON THE DECISION OF THE H ONBLE SUPREME COURT IN THE CASE OF HINDUSTAN COCA COLA 293 ITR 22 6. INSOFAR AS THE QUESTION RELATING TO THE JURISDICTION OF THE LD. CI T(A) TO SET ASIDE THE ASSESSMENT, WE FIND THAT THE ANSWER IS GIVEN BY THE CO-ORDINATE BENCH OF THE TRIBUNAL, DELHI IN THE CASE OF AMITY INTERNA TIONAL SCHOOL 150 ITD 704 WHEREIN THE CO-ORDINATE BENCH HAS HELD AS UNDER :- ITA NOS. 2104 TO 2109/AHD/2013 & ORS. . A.YS. 201 0-11 TO 2013-2014 7 A PERUSAL OF THE PROVISION OF SECTION 251(1) REVEAL S THAT COMMISSIONED APPEALS) HAS THE FOLLOWING POWERS WHILE DISPOSING OF AN APPE AL. AS PER SECTION 251(1)(A) WHILE DECIDING AN APPEAL AGAINST AN ASSESSMENT ORDE R, HE MAY CONFIRM, REDUCE, ENHANCE OR ANNUL THE ASSESSMENT; AS PER SECTION 251 (1)(AA) WHILE DECIDING AN APPEAL AGAINST AN ORDER OF ASSESSMENT IN RESPECT OF WHICH THE PROCEEDING BEFORE THE SETTLEMENT COMMISSION ABATES UNDER SECTION 245 HA. HE MAY CONFIRM, REDUCE, ENHANCE OR ANNUL THE ASSESSMENT: AND AS PER SECTION 251(L)(B) WHILE DECIDING AN APPEAL AGAINST IMPOSITION OF PENALTY, HE MAY CONFIR M OR CANCEL SUCH ORDER OR VARY IT SO AS EITHER TO ENHANCE OR TO REDUCE THE PE NALTY; AND AS PER SECTION 251(1)(C), WHILE DECIDING ANY OTHER APPEAL WHICH DO ES NOT FALL U/S 251(L)(A), AA, AND B, THE COMMISSIONER (APPEALS) HAS BEEN EMPOWERE D BY LAW TO PASS SUCH ORDERS AS HE THINKS FIT. IN THE INSTANT CASE THE ORDER APPEALED BEFORE THE C OMMISSIONER (APPEALS) WAS PASSED BY THE AO UNDER SECTION 201 AND THAT THE COM MISSIONER (APPEALS) HAS BEEN EMPOWERED BY SECTION 251 (L)(C) TO PASS SUCH O RDERS AS HE THINKS FIT WHILE DECIDING THE SUCH AN APPEAL. IN THE INSTANT CASE TH E COMMISSIONER (APPEALS) HAS OBSERVED THAT THE APPELLANT HAD FILED CORRECTION ST ATEMENT AND FURNISHED RELEVANT DOCUMENTS OF TDS TO PROVE ITS CLAIM BEFORE HIM AND HE ALSO TAKEN NOTE OF THE FACT THAT THE AO HAS NOT ACCEPTED THE SAID DOCUMENT BECA USE THE APPELLANT'S CORRECTION STATEMENT WERE NOT ACCEPTED BY THE NSDL. WHEN THE COMMISSIONER (APPEALS) ADJUDICATES AN APPE AL PREFERRED AGAINST AN ORDER PASSED UNDER SECTION 201, HE DRAWS HIS POWER FROM SUB-SECTION (1)(C) OF SECTION 251, WHICH ENTAILS HIM TO PASS ANY ORDER AS HE THINKS FIT AND THERE IS NO RESTRICTION IN THE SAID POWER AND THEREFORE EVEN HE HAS POWERS TO EVEN SET ASIDE THE SAID ORDER IMPUGNED BEFORE HIM. HOWEVER, IT IS FOUND THAT IN THE INSTANT CASE, THE COMMISSIONER (APPEALS) HAS NOT SET ASIDE THE AS SESSING OFFICERS ORDER AND THE IMPUGNED ORDER OF THE ASSESSING OFFICER WHICH I S PASSED UNDER SECTION 201/ 201A, WHEREAS HE HAS REMITTED THE CASE BACK TO THE FILE OF ASSESSING OFFICER TO VERIFY DOCUMENTS PRODUCED BEFORE HIM WHICH WAS FILE D BY THE ASSESSEE TO SUBSTANTIATE ITS CLAIM AND TO ALLOW THE CREDIT AS P ER LAW. THEREFORE, THERE IS NO INFIRMITY WHATSOEVER IN THE DIRECTION PASSED BY THE COMMISSIONER (APPEALS) AND THEREFORE THERE IS NO MERIT IN THE SAID APPEAL PREF ERRED BY THE REVENUE, SO THE ORDER OF THE COMMISSIONER (APPEALS) IS UPHELD AND T HE APPEAL OF THE REVENUE IS DISMISSED. ITA NOS. 2104 TO 2109/AHD/2013 & ORS. . A.YS. 201 0-11 TO 2013-2014 8 10. RESPECTFULLY FOLLOWING THE FINDINGS OF THE CO-ORDIN ATE BENCH (SUPRA), ALL THE APPEALS BY THE REVENUE ARE DISMISS ED. SINCE, THE ASSESSEES HAVE NO GRIEVANCE WITH THE DIRECTIONS OF THE FIRST APPELLATE AUTHORITY; WE RESTORE THIS MATTER TO THE FILES OF T HE A.O. TO DECIDE THE ISSUES AFRESH IN THE LIGHT OF THE DIRECTIONS GIVEN BY THE FIRST APPELLATE AUTHORITY. APPEALS FILED BY THE ASSESSEE ARE TREATE D AS ALLOWED FOR STATISTICAL PURPOSE. ORDER PRONOUNCED IN OPEN COURT ON 30 - 08- 20 16. SD/- SD/- (R.P. TOLANI) (N. K. BILLAIYA) JUDICIAL MEMBER ACCOUNTANT MEMBER AHMEDABAD: TRUE COPY RAJESH COPY OF THE ORDER FORWARDED TO: - 1. THE APPELLANT. 2. THE RESPONDENT. 3. THE CIT (APPEALS) 4. THE CIT CONCERNED. 5. THE DR., ITAT, AHMEDABAD. 6. GUARD FILE. BY ORDER DEPUTY/ASSTT.REGISTRAR ITAT,AHME DABAD