The ITO, TDS-3, JAMNAGAR V. Shri Lokesh Babulal Shah, JAMNAGAR

ITA 377/RJT/2015

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 1300 (ITAT-RAJKOT)
• Duration Of Justice: 7 month(s) 26 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-04-2016
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Next Hearing Date: 05-04-2016
• Assessment Year: 2010-2011
• Appeal Filed On: 27-08-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: M J CHARANIA
• Keywords: Business income; Procedural lapse

Judgement Text

ITA NO. 377 / RJT/201 5 ASSE SSMENT YEAR: 20 10 - 11 PAGE 1 OF 3 IN THE INCOME TAX APPELLATE TRIBUNAL RAJKOT BENCH, RAJKOT (CONDUCTED THROUGH E - COURT AT AHMEDABAD) BEFORE SHRI ANIL CHATURVEDI, ACCOUNTANT MEMBER AND SHRI S.S. GODARA, JUDICIAL MEMBER ITA NO. 377 /RJT/201 5 ASSESSMENT YEAR: 20 10 - 11 INCOME TAX OFFIC ER TDS 3, VS. SHRI LOKESH BABULAL SHAH, JAMNAGAR . PROP. RATNADE E P METALS, 348/4, SHANKER TEKRI, GIDC, JAMNAGAR. [PAN: A GNPS 8711 R ] (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI M.J. CHARANIA, D.R. RESPONDENT BY : SHRI CHET AN AGARWAL, C.A. DATE OF HEARING : 0 5 .04.2016 DATE OF PRONOUNCEMENT : 22 .04.2016 O R D E R PER S.S. GODARA, J.M. TH IS REVENUE S APPEAL FOR A SSESSMENT Y EAR 2010 - 11 , ARISE S FROM ORDER OF THE CIT(A), JAMNAGAR DATED 26.06. 201 5 , PASSED IN CASE NO.CIT( A) /JAM/242/14 - 15/259 , IN PROCEEDINGS UNDER SECTION 206C(6)/206C(7) OF THE INCOME TAX ACT, 1961; IN SHORT THE ACT . 2. THE REVENUE S GROUNDS RAISED IN THE INSTANT APPEAL PLEAD AS UNDER : - 1. THE LD. CIT (A) HAS ERRED IN LAW AS WELL AS FACTS IN LAW IN DELE TING THE ADDITION MADE U/S 206C(L) OF THE I.T. ACT ON ACCOUNT OF NON COLLECTION OF TCS ON SALE OF SCRAP IN SPITE OF THE FACT THAT THE ASSESSES IS A TRADER OF SCRAP AND THE PROVISION SECTION 206C (1) APPLY TO THE ASSESSEE . 2. THE LD. CIT(A) ERRED IN LAW A S WELL AS ON FACTS IN ISSUE OF DIRECTION IN VIOLATION OF PROVISO TO SUB SEC. (7) OF SECTION 206C OF I.T. ACT TO THE A.O. THAT INTEREST SHOULD BE CALCULATED ONLY IN RESPECT OF THOSE BUYERS WHO HAVE NOT PAID TAX DUE ON THE RETURNED INCOME WHEREAS INTEREST S HOULD BE CALCULATED IN CASE OF AIL BUYERS, WHO HAVE FILED FORM NO.27BA' AS PROVIDED IN THE ABOVE SECTION. ITA NO. 377 / RJT/201 5 ASSE SSMENT YEAR: 20 10 - 11 PAGE 2 OF 3 3. THE LD. C I T(A) HAS ERRED IN LAW AS WELL AS ON FACTS IN DIRECTING NOT TO TREAT THE ASSESSES IN DEFAULT FOR NON COLLECTION OF TCS ON SALE OF SCRAP T O MANUFACTURE WHERE FORM N O. 27C HAVE BEEN FILED WITH THE DEPARTMENT EVEN THOUGH THE SAME WERE FILED INORDINATELY LATE AND AFTER THE DETECTION OF DEFAULT BY THE DEPARTMENT . 4. THE LD. CIT(A) HAS ERRED IN LAW AS WELL AS ON FACTS IN DIRECTING NOT TO CHARGE INTEREST ON SALES WHERE FORM NO . 27C ARE FILED BELATEDLY AND AFTER DETECTION OF DEFAULT BY THE DEPARTMENT. 5. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) OUGHT TO HAVE UPHELD THE ORDER OF THE ASSESSING OFFICER PASSED U/S 206C(6A) & 206C(7) OF THE ACT. 3 . WE COME TO RELEVANT FACTS FIRST. THE ASSESSEE AN INDIVIDUAL TRADES IN NON FER ROUS METAL SCRAP IN BULK THROUGH ITS PROPRIETARY CONCERN M/S. R ATNADEEP M ETALS. HIS TOTAL SALES ARE OF RS.11,05,00,222/ - . THERE IS NO DISPUTE THAT THE ASSESSEE DID NOT MAKE TCS ON THESE SCRAP SALES UNDER SECTION 206 C (1). IT IS TO BE SEEN THAT THE ASSESSEE FILED THE RELEVANT FORMS 27C FROM IT S SCRAP BUYERS IN CIT S OFFICE ON 08.10.2014. THE ASSESSING OFFICER IN HIS ORDER DATED 18.02.2015 OBSERVED THAT THAT SAME WERE MADE BY 52 MONTHS. HE DOUBTED ASSESSEE S BONAFIDE THEREBY RAISING THE DEMAND IN QUESTION OF RS.11,05,002./ - @ 1% OF THE GROSS SALES ALONG WITH THE STATUTORY INTEREST AMOUNT COMING TO RS.4,42,000/ - . 4 . THE ASSESSEE FILED APPEAL. HE RAISED TWO FOLDED SUBMISSIONS. THE FIRST ONE CHALLENGED APPLICATION OF 206C(1) IN CASE OF A TRADER. THE CIT(A) CITES S PECIAL B ENCH DECISION OF JURISDICTIONAL T RIBUNAL IN M/S. BHARTI AUTO PRODUCTS VS. CIT - ITA NOS.391 AND 392/RJT/2011 DATED 06.09.2013 TO REJECT THIS CONTENTION. THE ASSESSEE S LATTER PLEA WAS THAT MERE LATE SUBMISSION OF FORM 21 - C AND 21 - BA IS ONLY A PROCEDURAL LAPSE WHICH DOES NOT MAKE HIM AS AN ASSESSEE IN DEFAULT. THE CIT(A) REVERSES ASSESSING OFFICER S ACTION ON THIS LATTER PLEA LEADING THE REVENUE AGGRIEVED. 5 . WE HAVE HEARD BOTH THE PARTIES. THE REVENUE STRONGLY SEEKS TO REVIVE THE IMPUGNED TCS DEMAND OF RS.15,47,002/ - ON ACCOUNT OF ASSESSEE S FAILURE IN COMPLYING ITA NO. 377 / RJT/201 5 ASSE SSMENT YEAR: 20 10 - 11 PAGE 3 OF 3 PROVISION. THERE IS NO DISPUTE THAT THE ASSESSEE HAS IN ANY CASE FILED TH E RELEVANT FORMS HEREINABOVE WHILE BEFORE THE ASSESSING OFFICER S ORDER (SUPRA). THE REVENUE IS FAIR ENOUGH IN NOT RAISING ANY ISSUE OF CORRECTNESS THEREOF. WE FIND FROM THE CASE FILE THAT A CO - ORDINATE BENCH IN KPG ENTERPRISE VS. ITO IN ITA NO.2384/AHD/ 2012 DECIDED ON 14.08.2014 VIEWS SUCH A DELAYED ACTION TO BE ONLY A PROCEDURAL LAPSE AND NOT A SUBSTANTIVE ONE. WE OBSERVE IN THESE FACTS AND CIRCUMSTANCES THAT THE CIT(A) HAS RIGHTLY REVERSED ASSESSING OFFICER S ACTION IN RAISING THE IMPUGNED TCS AND INT EREST THEREUPON. THE REVENUE S SOLE SUBSTANTIVE GROUND ACCORDINGLY FAILS. 6 . THIS REVENUE S APPEAL IS DISMISSED. PRONOUNCED IN THE OPEN C OURT TODAY ON TH E 22 ND DAY OF APRIL, 2016. SD/ - SD/ - ANIL CHATURVEDI S.S. GODARA (ACCOUNTANT MEMBER) (JUDICIAL MEMBER) AHMEDABAD, THE 22 ND DAY OF APRIL , 2016 PBN/ * COPIES TO: (1) THE APPELLANT (2) THE RESPONDENT (3) COMMISSIONER (4) CIT(A) (5) DEPARTMENTAL REPRESENTATIVE (6) GUARD F ILE BY ORDER ASSISTANT REGISTRAR INCOME TAX APPELLATE TRIBUNAL RAJKOT BENCH, RAJKOT