TaxTMI 
TaxTMI 
2015 (5) TMI 538
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.... at source in terms of section 206C(6A), the assessee stated that all the Lisa purchasers were manufacturers and Form no. 27Cs were obtained from them. The assessee furnished such forms, which were admittedly not collected by the assessee from the buyers at the time of receipt of sale consideration or debiting their accounts, whichever is earlier. The ITO (TDS) held that in view of the assessee not collecting tax at source, in the absence of receipt of such forms from the respective buyers, at the time of sale of the goods, it committed default as per section 206C, for which it was liable to be treated as assessee in default. The amount of short collection of tax at source was determined at Rs. 19,17,061/- and the consequential interest at Rs. 11,50,236/-, thereby raising total demand of Rs. 30,67,297/- for the year under consideration. The ld. CIT(A) upheld the order passed by the ITO (TDS). 3. We have heard the rival submissions and perused the relevant material on record. It is an admitted position that the assessee sold forest produce, not being timber or tendu leaves, in the terms as described in clause (v) of the Table given in section 206C(1) of the Act without collecting....
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....Commissioner one copy of such Form no. 27C on or before the seventh day of the month next following the month in which the declaration is furnished to him. 4. Thus, sub-section (1A) of section 206C saves the seller from collecting tax at source at the time of receiving the amount or debiting the account of the buyer, whichever is earlier, on the latter furnishing a declaration in Form No. 27C in duplicate, before or at the time when the liability for collection of tax at source has arisen. It, therefore, transpires that the liability of the seller to collect tax at source is waived only on the buyer submitting Form no. 27C to him at the time of debiting the account of buyer or the receipt of payment, whichever is earlier. This shows that, firstly, there should be submission of Form No. 27C by the buyer and secondly, such Form should be submitted at the earliest of the occasion of the debiting of his account by the seller or the receipt of payment. Unless these conditions are cumulatively fulfilled, the seller is obliged to collect tax at source at the rates prescribed and deposit the same into the exchequer at the material time. These conditions must be fulfilled in letter and s....
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....ount of buyer or receipt of payment. The liability of the person responsible to collect or not to collect tax at source is wholly and solely dependent on the availability or otherwise of Form no. 27C at the time when collection of tax at source is mandated. If such declaration is not available at the earliest of the receipt of payment or debiting the account of buyer, the relevant part of the provisions of sub-section (1) of section 206C becomes operative, making it obligatory for the person responsible to collect tax at source so as to avoid it from being treated as an assessee in default. It is vivid that once the dictate of sub-section (1) has operated and tax is collected at source due to the non-availability of Form no. 27C at the time as aforesaid, the late furnishing of such declaration by the buyer will not bring the arms of the clock back, so as to entitle the buyer to claim that no tax ought to have been collected earlier and resultantly, the amount so collected be now refunded on his furnishing the declaration to the seller after the relevant time. Thus, it is evident that by no stretch of imagination, the furnishing of Form no. 27C by the buyer at the time when collecti....
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.... to the Commissioner by the seller cannot be satisfied by merely giving it to the ITO (TDS). The assessee in the instant case submitted copies of Form No. 27Cs only to the ITO (TDS) and, that too, during the course of current proceedings before him without submitting the same to the Commissioner. 9. Since the assessee failed to collect tax at source from the buyers without receipt of Form no. 27Cs at the time of debiting their accounts or receiving the amounts, whichever is earlier, there can be no escape from the consequences flowing from such default. 10. The next line of the argument of ld. AR was that all the buyers were assessed to tax and the income from the purchase of Lisa and the sale of the manufactured goods with the use of such material was properly offered for taxation. In the backdrop of this fact, it was put forth that the collection of tax at source at this stage from the assessee would amount to double collection of tax on the same amount of income, which is impermissible. On the other hand, the ld. DR opposed the said contention. 11. Section 206C is not a charging provision but a provision for collection of tax. Any tax collected under this provision is a....
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....uctor inasmuch as said amount, if now collected, would remain unadjusted because the deductee would not be able to avail the benefit of such tax against his income, which has already been assessed to tax. A person responsible becomes assessee in default in case of TDS provisions, when he makes the payment without deduction of tax at source at the point of making payment or crediting the account of the payee, as the case may be under the relevant provision; and in case of TCS provisions, when he receives the payment without collecting tax at source at the point of receiving the payment or debiting the account of the payer, whichever is earlier. Ergo, the provisions for treating the assessee in default in view of the non-deduction of tax at source are analogous on this aspect to the provisions of non-collection of tax at source. The above decisions rendered in the context of TDS provisions apply with full force to the TCS provisions as well. 13. At this juncture, it is relevant to mention that considering the ratio decidendi of the judgment of the Hon'ble Supreme Court in the case of Hindustan Coca Cola Beverage (P) Ltd. (supra) and other judgments rendered by various Hon'ble High....