2021 (11) TMI 42 - AT - Income Tax

Tribunal grants appeal, sends back to AO for review of Form 27C & evidence.

M.G.M. Minerals Ltd. Versus ACIT (TDS-1), Bhubaneswar

The Tribunal allowed the appeal for statistical purposes, remitting the matter back to the Assessing Officer (AO) for verification of Form 27C and ... Assessee in default u/s 206C - assessee has not collected tax at source (TCS) from buyers on sale of iron ore for the period July 2012 to March 2013 and the tax levied - HELD THAT:- It is not dispute that the assessee has already paid the tax due on it. However, there was a confusion prevailing regarding the appropriate Form 27C. Accordingly, the assessee did not collect any TCS from the buyer who were using the goods for the purpose of manufacturing, processing or producing articles of things or for the purpose of generation of power and not for trading purposes and also collected such declaration in old Form 27C and also submitted the same to the appropriate authorities and thus complied with the spirit of the law, details including copies of Form 27C as well as copy of the Income Tax Returns and taxes paid therein for the Assessment Year 2013-14 were filed by the Buyers. The same were not considered by the AO as well as the CIT(A). CIT(A) dismissed the appeal of the assessee by observing that the buyers did not submit Form 27C at the purchase of iron ore and confirmed the order of the AO. It was amended later on and Form 27C placed before us - as agreed by both the parties, we set aside the order of the authorities below and remit the matter back to the file of the AO to verify the documents as submitted by the assessee i.e. Form 27C required for considering the case of the assessee and pass order as per law after giving due opportunity to the assessee. Hence, the issue is remitted for limited purposes i.e. verification of Form 27C - Appeal of the assessee is allowed for statistical purposes. Issues:Appeal against CIT(A) order for assessment year 2013-14 - Non-collection of tax at source (TCS) from buyers on sale of iron ore - Demand of tax and interest u/s. 206C(6) and 206C(7) of the IT Act - Compliance with Form 27C requirements - Burden of tax demand on the assessee.Analysis:The appeal was filed against the CIT(A) order for the assessment year 2013-14. The assessee contended that the order was against natural justice, arbitrary, and erroneous. The main issue revolved around the non-collection of tax at source (TCS) from buyers on the sale of iron ore. The assessee argued that the tax demand of Rs. 55,12,849 was unjustified and legally untenable. The CIT(A) upheld the ACIT (TDS) order, stating that the buyers had not filed returns and paid taxes, which the assessee disputed by providing evidence. The assessee claimed to have collected TCS where necessary and deposited it with the Central Government.The assessee's representative highlighted the confusion regarding Form 27C requirements post the IT Act amendment in 2012. The assessee maintained that they did not collect TCS from buyers who used the goods for specific purposes and had submitted declarations accordingly. Despite the explanation provided to the Assessing Officer, the ACIT (TDS) deemed the assessee in default and demanded tax and interest. The assessee argued that they had complied with the law and cited relevant case laws to support their position, emphasizing that no tax should be demanded twice.During the hearing, the Department did not oppose remitting the matter back to the AO for verification. The Tribunal noted that the assessee had already paid the tax due and had submitted relevant documents, including Form 27C and buyers' tax returns. The AO and CIT(A) had not considered these documents. The Tribunal set aside the lower authorities' order and remitted the matter back to the AO for verification of Form 27C. The AO was directed to consider the documents and judicial pronouncements cited by the assessee before passing a new order. The appeal was allowed for statistical purposes.In conclusion, the judgment focused on the confusion surrounding Form 27C compliance, the assessee's adherence to TCS requirements, and the need for proper verification of documents before tax demands are imposed. The Tribunal emphasized the importance of considering all relevant evidence and legal precedents in tax assessment cases.