TaxTMI 
TaxTMI 
TaxTMI 
2013 (9) TMI 268
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....ts and circumstances of the case, the Ld. Commissioner of Income Tax (Appeals)-II, Agra, erred both in law and facts while holding the appellant statutorily required to collect tax at source from the amount received from private lessee/licensee appreciating the facts, circumstances and the provisions of Statute in this regard. 4. Because the Ld. Commissioner of Income Tax (Appeals)-II, Agra, grossly erred both in law and facts in erroneously adjudicating ground no. 3 of the appeal. Ld. CIT(A) failed to appreciate that Section 206C(6A) was brought on the statute w.e.f. 01.04.2007, and that there were no circumstances or facts available on record for holding the appellant as "assessee in default". The Ld. Commissioner of the Income Tax (Appeals)-II, Agra further erred in applying the provisions of section 206C(1) which relates to the seller and not to the appellant. 5. Because the Ld. Commissioner of Income Tax (Appeals)-II, Agra, grossly erred both in law and facts in erroneously adjudicating ground no. 4 of the appeal. Ld. CIT(A) failed to appreciate that the provisions of section 206C(7) or 201(1A) are not at all applicable in th....
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....mines and quarries. Therefore, the word 'royalty' is not relevant. Accordingly, the assessee was held to be in default of not collecting TCS and payment to Government Department. The assessee was held liable to interest as well. The common order of the AO for all the assessment years under appeals was challenged before the ld. CIT(A) and the ld. CIT(A) confirmed the order of the AO on the above grounds of appeal and held that the assessee is liable to collect TCS and it is immaterial whether the licensees or lessees have filed their return of income or not. The provisions of section 206C(6A) enacted w.e.f. 01.04.2007 was considered for the purpose of levy of penalty and has no effect on the liability to collect tax u/s. 206C(6) of the IT Act. The ld. CIT(A) also held that the assessee is also liable for interest u/s. 206C(7) of the IT Act. The assessee is in appeals on the above grounds of appeals in all the appeals filed for separate assessment years. The points raised by the ld. counsel for the assessee are taken up for the purpose of disposal separately as under : [I]. The ld. counsel for the assessee submitted that the District Magistrate is not the He....
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.... on behalf of the State Government for mines and quarries against consideration. May be the TAN is issued in the name of District Mining Officer, is not relevant to avoid liability to collect TCS by the District Magistrate. Considering the above facts, noted by the assessing officer and confirmed by the District Mining Officer that leases/licenses have been granted by the District Magistrate, would clearly prove that the District Magistrate, Jhansi is liable to collect TCS in the facts and circumstances of the case. This point is accordingly decided against the assessee. [II]. The ld. counsel for the assessee submitted with regard to TCS liability for dead rent/royalty that there is no provision u/s. 206C for collection of TCS and these provisions are not applicable against the assessee. Dead rent was on account of grant of lease/license for mining and dead rent is dependent on extraction. The royalty depends on collection on the extraction. The dead rent is fixed to be paid in advance and it has no connection with the start of business and when the business is started the royalty is payable. Therefore, on the dead rent and royalty, it is not mentioned in ....
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.... who fails to collect the tax in accordance with the provisions of this section, shall, notwithstanding such failure, be liable to pay the tax to the credit of the Central Government in accordance with the provisions of sub-section (3). [(6A) If any person responsible for collecting tax in accordance with the provisions of this section does not collect the whole or any part of the tax or after collecting, fails to pay the tax as required by or under this Act, he shall, without prejudice to any other consequences which he may incur, be deemed to be an assessee in default in respect of the tax: Provided that no penalty shall be charged under section 221 from such person unless the Assessing Officer is satisfied that the person has without good and sufficient reasons failed to collect and pay the tax. (7) Without prejudice to the provisions of sub-section (6), if the person responsible for collecting tax] does not collect the tax or after collecting the tax fails to pay it as required under this section, he shall be liable to pay simple ....
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.... same is payable by the licensee to the District Magistrate and upon that the District Magistrate is required to collect TCS as per above provisions. Whether dead rent was to be paid in advance or royalty was to be paid after start of business are not relevant criteria to deal with the provisions of section 206C(1C) of the IT Act. Further, on ground No. 4, it is stated that section 206(6A) has been brought on the statute w.e.f. 01.04.2007 and therefore, the assessee cannot be treated as assessee in default. Since the assessee was responsible for collecting tax and failed to do so in accordance with the provisions of law, therefore, for the failure of assessee to collect the tax, the assessee would be liable to pay tax to the credit of the Central Government in accordance with law. Therefore, quoting a wrong provision would not be relevant for the purpose of deciding the issue. Same view is taken by ITAT, Agra Bench in the case of Agra Development Authority v. ACIT,138 ITD 127. The assessee has since failed to comply with the provisions of law and was therefore, liable to pay interest also. Accordingly, ground No. 2 to 5 of appeal of the assessee are dismissed. &n....