SMT. SHEHNAJ BEGUM, KOTA V. INCOME TAX OFFICER (TDS), KOTA

ITA 946/JPR/2017

• Counselvise Citation: [2018] 125 COUNSELVISE.COM (IT) 4584 (ITAT-JAIPUR)
• Duration Of Justice: 8 month(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-08-2018
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: SMC
• Assessment Year: 2009-2010
• Appeal Filed On: 06-12-2017
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: RAJENDRA JHA J CIT DHK
• Section: 201(1); 139

Judgement Text

VK;DJ VIHYH; VF/KDJ.K] T;IQJ U;K;IHB] T;IQJ IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHES, JAIPUR JH FOT; IKY JKO] U;KF;D LNL; ,OA JH FOE FLAG ;KNO ] YS[KK LNL; DS LE{K BEFORE: SHRI VIJAY PAL RAO, JM & SHRI VIKRAM SINGH YADAV, AM VK;DJ VIHY LA-@ ITA NO. 946/JP/2017 FU/KZKJ.K O'KZ@ ASSESSMENT YEAR : 2009-10 SMT. SHEHNAJ BEGUM, PROP.- M/S SONAM STEEL, K-38/39, NEAR DAKANLA STATION, INDRAPRASTH INDUSTRIAL AREA, KOTA. CUKE VS. INCOME TAX OFFICER (TDS), KOTA. TAN/PAN NO.: JDHS 08552 F VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT FU/KZKFJRH DH VKSJ LS@ ASSESSEE BY : SHRI NIKHLESH KATARIA (CA) JKTLO DH VKSJ LS@ REVENUE BY : SHRI RAJENDRA JHA (JCIT) LQUOKBZ DH RKJH[K@ DATE OF HEARING : 06/08/2018 MN?KKS'K.KK DH RKJH[K @ DATE OF PRONOUNCEMENT : 07/08/2018 VKNS'K@ ORDER PER: VIJAY PAL RAO, J.M. THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER DATED 05/09/2017 OF LD. CIT (A), KOTA ARISING FROM THE ORD ER PASSED U/S 201(1)/201(1A) OF THE INCOME TAX ACT, 1961 (IN SHORT THE ACT) FOR THE A.Y. 2009-10. THE ASSESSEE HAS RAISED FOLLOWING GROU NDS OF APPEAL: 1. THE ASSESSMENT ORDER PASSED U/S 201(1)/201(1A) IS BAD IN LAW AS WELL AS ON FACTS AND HENCE, THE SAME MAY PLEASE BE QUASHED. 2. THE ID. AO ERRED BY NOT SERVING ON THE ASSESSEE, SHOW CAUSE NOTICE BEFORE FRAMING HUGE DEMAND OF RS. 1,64,186/- FOR NO N-COLLECTION OF TCS U/S 201(1) AND RS. 1,10,759/- FOR INTEREST ON N ON-COLLECTION OF TCS U/S 201(1A) AND THE LD. CIT (A) ERRED IN SUSTAI NING THE SAME. ITA 946/JP/2017_ SHEHNAJ BEGUM VS ITO(TDS) 2 3. THE LD. AO ERRED IN LAW AS WELL AS ON THE FACTS OF THE PRESENT CASE IN HOLDING THAT THE ASSESSEE IS LIABLE FOR COLLECTION OF TCS IN TERMS OF SECTION 206C OF THE ACT AND THE LD. CIT(A) ERRED IN CONFIRMING THE SAME. 4. THE LD. AO FAILED TO APPRECIATE THAT THE BUYERS WERE ASSESSED TO TAX AND AS SUCH, IN VIEW OF DECISION OF HONBLE SUPREME COURT IN HINDUSTAN COCA-COLA THERE WOULD BE NO RECOVERY OF T HE TAX ON THE SAME SUM AND HENCE, HE ERRED IN TREATING THE ASSESS EE AS DEEMED TO BE IN DEFAULT AND THE LD. CIT (A) ERRED IN SUSTA INING THE SAME. 5. THE APPELLANT PRAYS YOUR HONORS INDULGENCE TO A DD, AMEND, MODIFY OR DELETE ALL OR ANY GROUND OF APPEAL. 2. AT THE TIME OF HEARING, THE LD AR OF THE ASSESSE E HAS STATED AT BAR THAT THE ASSESSEE DOES NOT PRESS GROUNDS NO. 1, 2 A ND 3 OF THE APPEAL AND THE SAME MAY BE DISMISSED AS NOT PRESSED. ON TH E OTHER HAND, THE LD DR HAS RAISED NO OBJECTION IF GROUNDS NO. 1,2 AND 3 OF THE ASSESSEE ARE BEING DISMISSED AS NOT PRESSED. ACCORDINGLY, GROUND S NO. 1,2 AND 3 OF THE APPEAL ARE DISMISSED BEING NOT PRESSED., 3. GROUND NO. 4 OF THE APPEAL IS REGARDING TREATING THE ASSESSEE AS ASSESSEE IN DEFAULT WITHOUT CONSIDERING THE CONTENTI ON OF THE ASSESSEE THAT THE OTHER PARTY HAS CONSIDERED THE SAID AMOUNT WHILE COMPUTING THE INCOME AND FILED THE RETURN U/S 139 OF THE ACT. THE ASSESSEE IS A SCRAP DEALER AND ENGAGED IN THE BUSINESS OF TRADING IN SC RAP. DURING THE YEAR UNDER CONSIDERATION, THE ASSESSEE SOLD SCRAP TO THE TUNE OF RS. 1,57,86,754/- TO VARIOUS SCRAP DEALERS. THE A SSESSING OFFICER ITA 946/JP/2017_ SHEHNAJ BEGUM VS ITO(TDS) 3 WAS OF THE VIEW THAT AS PER THE PROVISIONS OF SECTION 206C(1) OF THE ACT, THE ASSESSEE WAS UNDER OBLIGATION TO COLLECT TCS ON S ALE MADE TO SCRAP DEALERS. THE ASSESSING OFFICER ACCORDINGLY PASSED OR DER U/S 201(1)/201(1A) OF THE ACT DATED 28/2/2014 AND HELD THE ASSESSEE AS THE ASSESSEE IN DEFAULT FOR NO COLLECTION OF TCS WHICH C OMES TO RS. 1,64,186/- AND INTEREST ON WHICH IS RS. 1,10,759/- TOTALING TO RS. 2,74,945/-. 4. THE ASSESSEE CHALLENGED THE ACTION OF THE ASSESSI NG OFFICER BEFORE THE LD. CIT(A) BUT COULD NOT SUCCEED. 5. BEFORE US, THE LD AR OF THE ASSESSEE HAS SUBMITT ED THAT THE ASSESSEE RAISED AN ISSUED IN GROUND NO. 2 THAT THE ASSESSING OFFICER HAS GROSSLY ERRED IN IGNORING THE PROVISO TO SECTION 20 1(1) INSERTED BY THE FINANCE ACT, 2012 AS WELL AS THE PROVISION TO SECTIO N 206C(6A) WHEREBY IF THE PURCHASER HAS FURNISHED HIS RETURN OF INCOME U/ S 139 OF THE ACT AND HAS TAKEN INTO ACCOUNT SUCH AMOUNT FOR COMPUTING IN COME IN SUCH RETURN OF INCOME AND HAS PAID THE TAXES DUE ON INCOME DECL ARED BY HIM THEN THE ASSESSEE CANNOT BE HELD AS THE ASSESSEE IN DEFAULT. THE LD AR HAS REFERRED TO THE GROUND NO. 2 RAISED BEFORE THE LD. CIT(A) AND SUBMITTED THAT THE ASSESSEE RAISED THIS SPECIFIC PLEA BEFORE THE LD. CIT(A). HOWEVER, THE LD. CIT(A) HAS NOT ADJUDICATED THIS ISSUE WHILE P ASSING THE IMPUGNED ORDER. HE HAS RELIED UPON THE DECISION OF HON'BLE S UPREME COURT IN THE ITA 946/JP/2017_ SHEHNAJ BEGUM VS ITO(TDS) 4 CASE OF HINDUSTAN COCA COLA BEVERAGES PVT. LTD. VS CIR 293 ITR 226 (SC) AND SUBMITTED THAT THE HON'BLE SUPREME COURT HAS HE LD THAT THE AMENDMENT MADE BY THE FINANCE ACT, 2012 IS RETROSPE CTIVE IN APPLICATION AND THEREFORE, THIS PROVISO TO SECTION 206C(6A) IS CORRESPONDING TO THE AMENDMENT MADE IN SECTION 201 IS ALSO HAVING RETROS PECTIVE EFFECT. HE HAS RELIED UPON THE DECISION OF SPECIAL BENCH OF RA JKOT TRIBUNAL IN THE CASE OF BHARTI AUTO PRODUCTS VS CIT (2013) 145 ITD 0 001 AS WELL AS DECISION OF HONBLE DELHI BENCHES OF TRIBUNAL IN THE CASE OF DIVISIONAL FOREST OFFICER VS ITO 57 TAXMAN.COM 238 (DELHI). TH US, THE LD AR HAS SUBMITTED THAT DESPITE A SPECIFIC ISSUE RAISED BY T HE ASSESSEE, THE LD CIT(A) HAS FAILED TO ADJUDICATE THE SAME. HE HAS POI NTED OUT THAT THE LD. CIT(A) HAS FOLLOWED THE DECISION OF THIS TRIBUNAL IN THE CASE OF CHANDMAL SANCHETI VS ITO (2016) 160 ITD 0313. HOWEVER, EVEN I N THE SAID DECISION, THE RELIEF WAS GRANTED TO THE EXTENT OF TH E AMOUNT WHICH WAS CONSIDERED BY THE PURCHASING PARTY WHILE COMPUTING THE INCOME AND PAID DUE TAX BY FOLLOWING THE DECISION OF HON'BLE SUPREME COURT IN THE CASE OF HINDUSTAN COCA COLA BEVERAGES PVT. LTD. VS. CIT (SUP RA). HENCE HE HAS PLEADED THAT THIS MAY BE REMITTED BACK OF THE RECOR D OF THE ASSESSING OFFICER/CIT(A) FOR ADJUDICATION ON MERITS. ITA 946/JP/2017_ SHEHNAJ BEGUM VS ITO(TDS) 5 6. ON THE OTHER HAND, THE LD DR HAS RELIED UPON THE ORDERS OF THE AUTHORITIES BELOW AND SUBMITTED THAT THE LD. CIT(A) HAS FOLLOWED THE DECISION OF THIS TRIBUNAL ON THE MERITS OF THE CASE WHEREIN IT WAS HELD THAT THE SALE OF SCRAP TO A DEALER FALLS IN THE AMBIT OF SECTION 206C OF THE ACT. 7. HAVING CONSIDERED THE RIVAL SUBMISSIONS AS WELL A S RELEVANT MATERIAL ON RECORD AT THE OUTSET, WE NOTE THAT THE ASSESSEE R AISED THIS ISSUE THAT THE PURCHASER HAVE CONSIDERED THESE AMOUNTS IN THEI R BOOKS OF ACCOUNT AND ALSO PAID DUE TAXES IN GROUND NO. 2, WHICH IS RE PRODUCED BY THE LD. CIT(A) AT PAGE NO.2 IN PARA 4.2 AS UNDER: LEARNED A.O. ALSO GROSSLY ERRED IN IGNORING THE PRO VISO TO SECTION 201(1) INSERTED BY FINANCE ACT 2012 W.E.F. 01/07/2012 WHIC H MAY HELP ASSESSEE IN ASSESSEE NOT IN DEFAULT. THE LD. CIT(A), DECIDED THE ISSUE ON MERITS BY FOLLO WING THE DECISION OF THE COORDINATE BENCH OF THIS TRIBUNAL IN THE CASE OF CHANDMAL SANCHETI VS. ITO (SUPRA). HOWEVER, THIS PARTICULAR PLEA RAISE D BY THE ASSESSEE IN GROUND NO. 2 HAS NOT BEEN ADJUDICATED BY THE LD. CI T(A). THE LD. CIT(A) HAS ADJUDICATED THE MATTER BY CONSOLIDATING ALL THE GROUNDS RAISED BY THE ASSESSEE AND GIVEN CONCLUDING FINDING AT PAGE 14 AN D 15 OF HIS ORDER AS UNDER: THUS, IN VIEW OF THE OPINION OF THE JURISDICTIONAL ITAT, AND THE FACTS INVOLVED, I AM OF THE OPINION THAT THE APPELLANT WAS LIABLE F OR DEDUCTION OF THE TAX AT SOURCE FROM THE BUYERS TO WHOM HE SOLD THE SCRAP WO RTH RS. 1,64,18,624/-/-. ITA 946/JP/2017_ SHEHNAJ BEGUM VS ITO(TDS) 6 THE LIABILITY OF A SELLER TO COLLECT TAX AT SOURCE IN TERMS OF SECTION 206C IS ABSOLUTE UNLESS REQUISITE DECLARATION FROM THE BUYE R IS OBTAINED AND A COPY THEREOF IS DELIVERED TO THE CHIEF COMMISSIONER OR C OMMISSIONER IN TERMS OF THE PROVISIONS OF SUB-SECTION (1A) AND (1B) OF SECTION 206C. THE DEFAULT IN DOING SO AND NON FILING OF FORM NO. 27 MADE HIM LIABLE FO R THE TCS AND INTEREST AS CALCULATED BY THE A.O. THUS THE APPELLANT ASSESSEE HAS BEEN RIGHTLY HELD B Y THE A.O. TO BE A DEFAULTER FOR NON COLLECTION OF TAX ON THE ABOVE SCRAP SALES TO VARIOUS DEALERS, AND THEREFORE, THE CALCULATION OF THE TCS U/S 206C(1) R EAD WITH SECTION 201(1)/201(1A) OF THE INCOME TAX ACT, 1961 AT RS. 2 ,74,945/- AS THE ADDITION IN THIS CASE TO HIS INCOME IS ACCORDINGLY LIABLE TO BE UPHELD. THUS, IT IS APPARENT THAT THIS PLEA RAISED BY THE AS SESSEE IN GROUND NO. 2 BEFORE THE LD. CIT(A) WAS NOT ADJUDICATED BY THE LD. CIT(A). FURTHER THE ISSUE REGARDING APPLICABILITY OF PROVISO TO SECTION 206C(6A) AS WELL AS THE PROVISO TO SECTION 201(1) OF THE ACT WHICH WERE BROUG HT INTO STATUTE BY AMENDMENT BROUGHT VIDE FINANCE BILL 2012 IS SETTLED BY THE VARIOUS COURTS INCLUDING THE HON'BLE SUPREME COURT AS WELL AS THE V ARIOUS BENCHES OF THE TRIBUNAL THAT THE SAID PROVISO IS RETROSPECTIVE IN NATURE. SINCE THE FACTUM OF THE PURCHASER HAVE SHOWN THESE PURCHASES I N THEIR BOOKS OF ACCOUNT AND HAVE PAID DUE TAXES WHILE FILING OF RETU RN OF INCOME, HAS NOT BEEN EXAMINED EITHER BY THE ASSESSING OFFICER OR BY THE LD. CIT(A). ACCORDINGLY, IN THE FACTS AND CIRCUMSTANCES OF THE CASE, WE REMIT THIS ISSUE TO THE RECORD OF THE LD. CIT(A) FOR ADJUDICAT ION OF THE SAME AFTER ITA 946/JP/2017_ SHEHNAJ BEGUM VS ITO(TDS) 7 GETTING THE RELEVANT FACTS VERIFIED THROUGH THE ASS ESSING OFFICER. THE ASSESSEE IS DIRECTED TO FURNISH RELEVANT DETAILS AN D DOCUMENTS. 8. IN THE RESULT, APPEAL OF THE ASSESSEE IS PARTLY ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 07/08/2018. SD/- SD/- FOE FLAG ;KNO FOT; IKY JKO (VIKRAM SINGH YADAV) (VIJAY PAL RAO) YS[KK LNL;@ ACCOUNTANT MEMBER U;KF;D LNL;@ JUDICIAL MEMBER TK;IQJ@ JAIPUR FNUKAD@ DATED:- 07 TH AUGUST, 2018 *RANJAN VKNS'K DH IZFRFYFI VXZSFKR @ COPY OF THE ORDER FORWARDED TO: 1. VIHYKFKHZ @ THE APPELLANT- SMT. SHEHNAJ BEGUM, KOTA. 2. IZR;FKHZ @ THE RESPONDENT- THE ITO (TDS), KOTA. 3. VK;DJ VK;QDR @ CIT 4. VK;DJ VK;QDRVIHY @ THE CIT(A) 5. FOHKKXH; IZFRFUF/K] VK;DJ VIHYH; VF/KDJ.K] T;IQJ @ DR, ITAT, JAIPUR 6. XKMZ QKBZY @ GUARD FILE (ITA NO. 946/JP/2017) VKNS'KKUQLKJ @ BY ORDER, LGK;D IATHDKJ @ ASST. REGISTRAR