The ITO, TDS-3, RAJKOT-GUJARAT V. Vishal Enterprise, JAMNAGAR

ITA 418/RJT/2015

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 9064 (ITAT-RAJKOT)
• Duration Of Justice: 1 year(s) 7 month(s) 10 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 24-04-2017
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Assessment Year: 2011-2012
• Appeal Filed On: 14-09-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: AVINASH KUMAR
• Assessee Lawyers: CHETAN L AGARWAL

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL RAJKOT BENCH, RAJKOT [CONDUCTED THROUGH E-COURT AT AH MEDABAD] BEFORE SHRI MAHAVIR PRASAD, JUDICIAL MEMBER AND SHRI, MANISH BORAD, ACCOUNTANT MEMBER ./ I.T.A. NO.418/RJT/2015 ( / ASSESSMENT YEAR : 2011-12) INCOME-TAX OFFICER TDS-3 JAMNAGAR. / VS. VISHAL ENTERPRISE PLOT NO.3010-3012, GIDC, PHASE-II DARED, JAMNAGAR ./ ./ PAN/GIR NO. : AAGFV 6139 H ( / APPELLANT ) .. ( / RESPONDENT ) / APPELLANT BY : SHRI AVINASH KUMAR, SR. DR / RESPONDENT BY : SHRI CHETAN L. AGARWAL, AR / DATE OF HEARING 19/04/2017 !'# / DATE OF PRONOUNCEMENT 24/04/2017 $% / O R D E R PER SHRI MAHAVIR PRASAD, JUDICIAL MEMBER : THIS APPEAL FILED BY THE DEPARTMENT IS DIRECTED AGAINST THE ORDER OF THE COMMISSIONER OF INCOME TAX(APPEALS)-JAMNAGAR , DATED 03/07/2015 FOR THE ASSESSMENT YEAR (AY) 2011-12. 2. DEPARTMENT HAS BEEN TAKEN FOLLOWING GROUNDS OF A PPEAL: (I). THE LEARNED CIT(A) HAS ERRED IN LAW AS WELL AS ON FACTS IN LAW IN DELETING THE ADDITIONS MADE U/S.206C(1) OF THE IT A CT ON ACCOUNT ITA NO.418/RJT/ 2015 ITO VS. VISHAL ENTERPRISE ASST.YEAR 2011-12 - 2 - OF NON COLLECTION OF TCS ON SALE OF SCRAP IN SPITE OF THE FACT THAT THE ASSESSEE IS A TRADER OF SCRAP AND THE PROVISION OF SECTION 206C(1) APPLY TO THE ASSESSEE. (II) THE LEARNED CIT(A) HAS ERRED IN LAW AS WELL AS ON FACTS IN ISSUE OF DIRECTION IN VIOLATION OF PROVISO TO SUB SECTION (7) OF SECTION 206C OF IT ACT TO THE AO THAT INTEREST SHOULD BE CA LCULATED ONLY IN RESPECT OF THOSE BUYERS WHO HAVE NOT PAID TAX DU E ON THE RETURNED INCOME WHEREAS INTEREST SHOULD BE CALCULA TED IN CASE OF ALL BUYERS, WHO HAVE FILED FORM NO.27BA AS PROV IDED IN THE ABOVE SECTION. (III) THE LEARNED CIT(A) HAS ERRED IN LAW AS WELL A S ON FACTS IN DIRECTING NOT TO TREAT THE ASSESSEE IN DEFAULT FOR NON COLLECTION OF TCS ON SALE OF SCRAP TO MANUFACTURER WHERE FORM NO. 27C HAVE BEEN FILED WITH THE DEPARTMENT EVEN THOUGH THE SAME WERE FILED INORDINATELY LATE AND AFTER THE DETECTION OF DEFAUL T BY THE DEPARTMENT. (IV) THE LEARNED CIT(A) HAS ERRED IN LAW AS WELL AS ON FACTS IN DIRECTING NOT TO CHARGE INTEREST ON SALES WHERE FOR M NO.27C ARE FILED BELATEDLY AND AFTER DETECTION OF DEFAULT BY T HE DEPARTMENT. (V) ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE, THE LEARNED CIT(A) OUGHT TO HAVE UPHELD THE ORDER OF THE AO PAS SED U/S. 206C(6A) AND 206C(7) OF THE ACT. 3. THE RELEVANT FACTS AS CULLED OUT FROM THE MATERI ALS ON RECORD ARE AS UNDER:- THE APPELLANT COMPANY IS ENGAGED IN THE TRADING BUS INESS OF RECYCLED NON FERROUS METALS SUCH AS BRASS SCRAP, COPPER SCRA P, ZINC SCRAP, LEAD SCRAP AND OTHER METAL SCRAP. THE APPELLANT IMPORT T HE BRASS METAL SCRAP FROM VARIOUS FOREIGN COUNTRIES WHICH CONTAINS USED DISCARDED TAPES, OTHER ITA NO.418/RJT/ 2015 ITO VS. VISHAL ENTERPRISE ASST.YEAR 2011-12 - 3 - SANITARY PARTS, ARTICLES OR THINGS WHICH CONTAINS C OPPER, ZINC OR BRASS METAL AND SOLD THE SAME IN THE LOCAL MARKET. 4. THE AO PASSED HIS ORDER DATED 18/02/2015 STATING THAT THE APPELLANT IS LIABLE TO PAY TCS ON SALE OF SCRAP AND RAISED DEMAND STATING THAT THE ASSESSEE HAD MADE SALE OF SCRAP TO THE TUN E OF RS.44,97,07,571/-. THUS, TCS @1% WORKED OUT AT RS.44,97,075/- PLUS INT EREST W.E.F 1/10/2011 TO 22/01/2015 @1% PER MONTH WORKED OUT TO RS.26,08,303/- THUS THE TOTAL DEFAULT COMES TO RS.71,05,378/- FOR WHICH ASSESSEE IS LIABLE TO PAY THE TCS TO THE GOVERNMENT ACCOUNT IN VIEW OF SECTION 206C(1) & 206C(7) OF THE IT ACT. 5. AGAINST THE SAID ORDER APPELLANT PREFERRED FIRST STATUTORY APPEAL BEFORE THE LEARNED CIT(A), WHO DISMISSED THE APPEAL OF THE ASSESSEE. 6. ON THE OTHER HAND, IN COMPLIANCE WITH PROVISO OF SECTION 206(6A), HAS SUBMITTED CERTIFICATES FROM THE CHARTERED ACCOU NTANT, CERTIFYING THE FACT THAT WHATEVER SALE MADE BY THE APPELLANT WAS D ULY ACCOUNTED FOR ALL BUYERS AND REQUESTED NOT TO TREAT THE ASSESSEE IN D EFAULT. 7. LEARNED AR FURTHER STATED THAT AO HAS PRECEDED U /S. 206C WITHOUT CONSIDERING SUBMISSION AND EVIDENCE IN FORM OF CERT IFICATE FROM CHARTERED ACCOUNTANT AND REST DEMAND FOR TAX NOTE C OLLECTION AT SOURCE. ITA NO.418/RJT/ 2015 ITO VS. VISHAL ENTERPRISE ASST.YEAR 2011-12 - 4 - 8. AT THE TIME OF HEARING LEARNED AR DRAW OUR ATTEN TION TO URGE THE JURISDICTIONAL HIGH COURT JUDGMENT IN THE MATTER OF COMMISSIONER OF INCOME-TAX (TDS) VS. SIYARAM METAL UDYOG (P.) LTD. [2016] 71 TAXMANN.COM 204 (GUJARAT): SECTION 206C OF THE INCOME-TAX ACT, 1961, READ WITH RULE 37C OF THE INCOME-TAX RULES, 1962 COLLECTION OF TAX AT SOURC E (TIME LIMIT OF FURNISHING FORM 27) WHETHER SECTION 206C(1A) ITSE LF DOES NOT PROVIDE FOR ANY TIME LIMIT WITHIN WHICH DECLARATION OF BUYE RS IN PRESCRIBED FORM 27 FOR NON-COLLECTION OF TCS IS TO BE MADE H ELD, YES WHETHER MAIN THRUST OF SUB-SECTION (1A) OF SECTION 206C IS TO MADE A DECLARATION AS PRESCRIBED, UPON WHICH LIABILITY TO COLLECT TAX AT SOURCE UNDER SUB-SECTION (1) WOULD NOT APPLY; WHEN THERE W AS NO DISPUTE ABOUT SUCH A DECLARATION BEING FILED IN A PRESCRIBED FORM AT AND THERE WAS NO DISPUTE ABOUT GENUINENESS OF SUCH DECLARATION, MERE MINOR DELAY IN FILING SAID DECLARATION WOULD NOT MAKE ASSESSEE LIA BLE FOR NON- COLLECTION OF TCS HELD, YES [PARA 8] [IN FAVOUR O F ASSESSEE] 9. RESPECTFULLY FOLLOWING THE DECISION OF THE JURIS DICTIONAL HONBLE HIGH COURT, WE DISMISSED THE APPEAL OF THE DEPARTME NT. 10. IN THE RESULT, APPEAL FILED BY THE DEPARTMENT I S DISMISSED. THIS ORDER PRONOUNCED IN OPEN COURT ON 24/04/2017 SD/- SD/- (MANISH BORAD) (MAHAVIR PRASAD) ACCOUNTANT MEMBER JUDICIA L MEMBER AHMEDABAD; DATED 24/04/2017 PRITI YADAV, SR. PS ITA NO.418/RJT/ 2015 ITO VS. VISHAL ENTERPRISE ASST.YEAR 2011-12 - 5 - / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. & '( ) / CONCERNED CIT 4. ) () / THE CIT(A)-JAMNAGAR. 5. ,-. //'( , '(# , 12$&$ / DR, ITAT, AHMEDABAD 6. .34 5 / GUARD FILE. / BY ORDER, / !'# ( DY./ASSTT.REGISTRAR) #$ %, / ITAT, AHMEDABAD TRUE COPY