2023 (2) TMI 746 - AT - Income Tax

Appeal Granted for Late Form 27C: Tax Compliance Relief

The Appellate Tribunal allowed the appeal for statistical purposes, emphasizing the importance of considering Form 27C submissions even if delayed, to ... Collection of tax at source - Tax Collected at Source (TCS) - Form 27C - delay in furnishing buyer's declaration - assessee default - remand for fresh considerationForm 27C - collection of tax at source - delay in furnishing buyer's declaration - remand for fresh consideration - The case is restored to the file of ITO (TDS) for consideration of Form 27C furnished by the assessee and for passing of fresh orders in accordance with law. - HELD THAT: - The assessee had obtained buyer declarations in Form 27C and sought to place them on record before the ITO (TDS), and subsequently submitted them to the designated authority CIT (TDS)-Jamnagar albeit belatedly. The ITO (TDS) proceeded to determine TCS liability and interest without considering those documents. The Tribunal noted jurisdictional precedents including GK Traders v. ITO and CIT (TDS) v. Siyaram Metal Udyog which held that section 206C/206C(1A) contains no prescribed time-limit for filing Form 27C and that mere delay in furnishing buyer declarations is not by itself a ground to deny the benefit of declarations. In view of these authorities and the fact that the assessee had furnished Form 27C before the designated authority and attempted to place them before the ITO (TDS), the Tribunal concluded that the ITO (TDS) ought to have considered the Form 27C before passing order. In the interests of justice the matter is therefore remitted to the ITO (TDS) to take into account the Form 27C and pass appropriate orders afresh in accordance with law.The appeal is restored to the file of ITO (TDS) for fresh consideration of Form 27C and for passing of consequential orders in accordance with law; appeal allowed for statistical purposes.Final Conclusion: The Tribunal has remanded the matter to the ITO (TDS) directing him to consider the Form 27C furnished by the assessee and to pass fresh orders in accordance with law; the appeal is restored and allowed for statistical purposes. Issues involved: Appeal against tax liability determination and interest imposition under section 206C of the Income Tax Act, 1961 based on TCS non-compliance.Analysis:1. Tax Liability Determination: The appeal arose from the National Faceless Appeal Centre's order regarding the assessee's tax liability for A.Y. 2012-13 under section 250 of the Income Tax Act, 1961. The assessee was held liable for TCS on non-ferrous metal scrap sales but failed to collect TCS as per section 206C. The ITO determined the TCS liability and interest amount, leading to the appeal.2. Grounds of Appeal: The assessee challenged the tax liability determination and interest imposition by the AO and CIT(A). The primary contention was that the items sold were not scrap as defined under section 206C, as they were usable and not a byproduct of manufacturing. Additionally, the assessee argued that Form 27C was submitted before the CIT(TDS) within the prescribed time, which was not considered by the authorities.3. CIT(A) Decision: The CIT(A) rejected the assessee's arguments based on the decision in Bharti Auto Products, holding the assessee liable for TCS collection on scrap sales. The CIT(A) also dismissed the Form 27C submission as it was not filed within the specified time frame, as required by law.4. Appellate Tribunal Decision: The Tribunal considered the submissions of the assessee, noting that Form 27C was obtained from buyers and submitted to the CIT(TDS) and ITO-TDS, albeit belatedly. Citing precedents like GK Traders vs. ITO and CIT (TDS) vs. Siyaram Metal Udyog, the Tribunal emphasized that minor delays in submitting Form 27C should not lead to non-compliance penalties. Therefore, the Tribunal restored the matter to the ITO (TDS) to consider the Form 27C and pass an order accordingly, allowing the appeal for statistical purposes.5. Conclusion: The Tribunal's decision focused on the importance of considering Form 27C submissions, even if delayed, to avoid unjust penalties for non-compliance with TCS provisions. By referencing relevant case law and emphasizing procedural fairness, the Tribunal provided relief to the assessee, highlighting the need for a balanced approach in tax liability determinations.