The ITO, TDS-3, JAMNAGAR V. Shri Anil Amarnath Agarwal, JAMNAGAR

ITA 54/RJT/2016

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 6641 (ITAT-RAJKOT)
• Duration Of Justice: 1 year(s) 1 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 24-03-2017
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: 2009-2010
• Appeal Filed On: 17-02-2016
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: AVINASH KUMAR

Judgement Text

: : IN THE INCOME TAX APPELLATE TRIBUNAL: RAJKOT BENCH: RAJKOT BEFORE SHRI S.V. MEHROTRA, ACCOUNTANT MEMBER AND SHRI K. NAR ASIMHA CHA RY , JUDICIAL MEMBER ./ ITA NO . 54 /R JT /201 6 / ASSESSMENT YEAR : 20 09 - 10 IT O TDS - 3 , JAMNAGAR VS SHRI ANIL AMARNATH AGARWAL PROP. OF HITANSHI ENTERPRISE, PLOT NO.E - 146, GIDC PHASE - II PAN : A A WPA5466G / (APPELLANT) / (RESPONDENT) REVENUE BY : SHRI AVINASH KUMAR , D.R ASS ESSEE BY : NONE / DATE OF HEARING : 22 / 03/2017 / DATE OF PRONOUNCEMENT: 24 /03/2017 / O R D E R PER SHRI S.V. MEHROTRA , ACCOUNTANT MEMBER : THE DEPARTMENT HAS FILED THE ABOVE APPEAL AGAINST THE ORDER OF LD.CIT(A) , JAMNAGAR DATED 15 / 04 / 201 4 F OR ASSESSMENT YEAR 2009 - 10 . 2 . INSPITE OF THE NOTICE , NONE APPEAR ED ON BEHALF OF ASSESSEE ON THE DATE OF HEARING , THEREFORE, WE PROCEED TO DECIDE THE ISSUE ON MERITS EX - PARTE QUA THE ASSESSEE AFTER HEARING T HE LD.DR. 3 . BRIEF FACTS OF THE CASE ARE THAT ASSESSEE IN THE RELEVANT ASSESSMENT YEAR WAS ENGAGED IN THE BUSINESS OF SCRAPS IN THE NAME AND STYLE OF M/S.HITESH ENTERPRISE. HE HAD FILED ITS RETURN OF INCOME DECLARING TOTAL INCOME OF RS.1,64,570/ - ON 26/10 /2009. ON SCRUTINY OF RECORDS THE ASSESSING OFFICER NOTICED THAT ASSESSEE HAD SOLD SCRAP ITEM OF RS.14,46,32,963/ - ON WHICH TAX WAS REQUIRED TO BE COLLECTED AT SOURCE AS PER THE PROVISION OF THE SECTION 206C(1), HOWEVER, NO TCS ITA NO.54/RJT/2016 A.Y.20 0 9 - 10 - 2 - WAS COLLECTED ON THE SAID SA LE. HE CONCLUDED THAT ASSESSEE FIRM HAS VIOLATED THE PROVISION OF SECTION 206C(1) AND, THEREFORE, HE CONCLUDED THAT PENALTY OF RS. 14,46,329/ - (EQUAL TO THE AMOUNT OF TCS) WAS REQUIRED TO BE LEVIED UNDER THE PROVISION OF SECTION271CA(1) ALONGWITH INTEREST U /S.206C(7). HE ACCORDINGLY, ISSUED SHOW CAUSE NOTICE TO THE ASSESSEE. THE ASSESSEE IN ITS REPLY POINTED AS UNDER: - WE ARE DEALER OF RECYCLED FERROUS METALS MAINLY IRON AND BID USEFUL FOR MANUFACTURING RE ROLLED BARD AND PLATED AS WELL AS BILLETS. THIS P RODUCT IS TRADITIONALLY TERMED AS SCRAP. WE ARE NOT MANUFACTURING ANY PRODUCT NOR WE CONDUCTING ANY MECHANICAL WORKING OF MATERIALS WHICH IS DEFINITELY NOT USABLE AS SUCH. 4 . THE ASSESSING OFFICER DID NOT ACCEPT ASSESSEE S CONTENTION FOR THE DETAILED R EASONS GIVEN AT PAGE 2 OF HIS ORDER AND DETERMINED THE LIABILITY OF RS.24,73,233/ - . BEFORE LD.CIT(A), THE ASSESSEE HAS ASSAILED INITIATION OF ACTION U/S.206C(6) AND ACCORDINGLY SUBMITTED THAT THE ORDER PASSED U/S.206 C(6)/206C(7) REQUIRES TO BE QUASHED. DET AILED SUBMISSION WERE ADVANCED BEFORE LD.CIT(A), ON WHICH REMAND REPORT WAS ALSO CALLED FOR BY LD.CIT(A) AND AFTER CONSIDERING THE SAME LD.CIT(A), HAS PASSED THE FOLLOWING ORDER. 6.1 THE LAW IS VERY CLEAR ON THIS ISSUE: (I) IF THE FORM NO.27BA & 27C HA VE BEEN FILED IN TIME, THE QUESTION OF TREATING THE ASSESSEE IN DEFAULT DOES NOT ARISE. (II) IF THE FORM NO.27BA & 27C HAVE BEEN FILED AFTER DUE DATE OF FILING THEN ALSO THE ASSESSEE WILL NOT BE TREATED IN DEFAULT, BUT THE INTEREST APPLICABLE WILL BE CHAR GED FROM THE DUE DATE OF DEDUCTION TILL THE DATE OF FILLING OF RETURN OF INCOME BY THE BUYERS IN CASE OF FORM NO.27BA. ACCORDINGLY THE AO IS DIRECTED TO VERIFY THE DATE OF SUBMISSION FOR 27BA & 27C AND TAKE ACTION AS ENVISAGES IN THE ABOVE TWO PARA. 5 . NOW, THE DEPARTMENT HAS , IN T ER - ALIA , RAISED FOLLOWING GROUND OF APPEAL. THE LD.CIT(A) HAS ERRED IN LAW AS WELL AS FACTS IN LAW IN DELETING THE ADDITIONS MADE U/S.206C(1) OF THE I.I. ACT ON ACCOUNT ON NO COLLECTION ITA NO.54/RJT/2016 A.Y.20 0 9 - 10 - 3 - OF TCS ON SALE OF SCRAP INSPECT OF TH E FACT THAT THE ASSESSEE IS A TRADER AND THE PROVISION OF SECTION 206C(1) APPLY TO THE ASSESSEE. 6 . WE HAVE CONSIDERED THE SUBMISSION OF LD.DR AND PERUSED THE RECORD OF THE CASE. FROM THE ORDER OF LD.CIT(A), REPROD UCED ABOVE IT IS EVIDENT THAT HE HAS NO T CONSIDERED THE MAIN PLEA OF ASSESEE BEING NOT COVERED BY THE PROVISION OF SECTION 206C, THEREFORE, THE GROUND RAISED BY THE DEPARTMENT REPRODUCED ABOVE IS MISCONCEIVED. UNDER SUCH CIRCUMSTANCES, IN OUR OPINION, PROPER COURSE WOULD BE TO REFER THE MATTER BACK TO THE FILE OF LD.CIT(A) TO DECIDE THE ISSUE DE - NOVO AFTER AFFORDING OPPORTUNITY TO ASSESSEE. 7 . IN THE RESULT APPEAL OF THE REVENUE IS ALLOWED FOR STATISTICAL PURPOSE. ORDER PRONOUNCED IN THE COURT ON 24 TH MARCH, 2017. SD/ - SD/ - ( K. NAR ASIMHA CHA RY ) JUDICIAL MEMBER ( S.V. MEHROTRA ) ACCOUNTANT MEMBER RAJKOT , DATED 24 / 03 /20 17 * MANISH / COPY OF ORDER F ORWARDED TO: - 1 . / APPELLANT - 2 . / RESPONDENT - 3 . / CONCERNED CIT /DIT 4 . - / CIT (A) - IV, RAJKOT 5 . , , / DR, ITAT, RAJKOT 6 . / GUARD FILE. / BY ORDER, / ( DY./ASSTT.REGISTRAR) / ITAT, RAJKOT