TaxTMI 
TaxTMI 
2017 (1) TMI 1039
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....n 206C of the Income Tax Act, 1961. 2. Demand notices were served on the petitioner-Corporation demanding interest and penalty for short payment of the tax collection at source under the provisions of Section 206C of the Income Tax Act. For the relevant assessment years, the tax collection at source returns were filed by the petitioner-Corporation and it was noticed by the Assistant Commissioner of Income Tax, (Tax Deduction at Source Circle), Nagpur that the petitioner had not collected the tax at source at the rate prescribed under Section 206C of the Income Tax Act. It was noticed by the Assistant Commissioner of Income Tax that the tax was collected by the petitioner-Corporation at the rate of 5% instead of 15%. In view of the short ....
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....mitted that since the petitioner-Corporation as a second seller was not liable to collect the tax at source, from the buyer to whom the forest produce was sold by auction, the provisions of Section 206C of the Income Tax Act, could not have been applied to the petitioner by the Assistant Commissioner of Income Tax. It is submitted that a similar issue came up for consideration before the Punjab and Haryana High Court and the said High Court in the case of Commissioner of Income tax versus Virsa Singh and Co. reported in (2008) 307 ITR 30, has held that the assessee therein was not liable to collect tax at source under Section 206C of the Income Tax Act. 4. Shri Bhushan Mohta, the learned Counsel for the department supported the order of ....
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.... of the Table below, a sum equal to the percentage, specified in the corresponding entry in column (3) of the said Table, of such amount as income tax. TABLE Sl.No. Nature of goods Percentage (1) (2) (3) (i) Alcoholic liquor for human consumption (other than Indianmade foreign liquor) and tendu leaves Ten per cent (ii) Timber obtained under a forest lease Fifteen per cent (iii) Timber obtained by any mode other than under a forest lease Five per cent. (iv) Any other forest produce not being timer or Tendu leaves. Fifteen per cent. ................ ................ ................ ................ Explanation. For the purposes of this section....
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....of the word "seller" under the explanation. Clause (b) of the explanation would define "seller" to mean the Central Government, a State Government, any local authority or corporation or authority established by or under a Central, State or Provincial Act, or any company or firm or cooperative society. As referred to, in the impugned order by the Commissioner of Income Tax, "seller" would not mean and include an individual or a HUF. The case of the petitioner-Corporation is that the Corporation is the second "seller" wheres the tribal individual from whom the petitioner-Corporation has secured the goods specified in column (2) of the table under Section 206C of the Income Tax Act is the first seller. In view of clause (b) of the explanation ....
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....to be rejected. If the petitioner-Corporation was of the view that the provisions of Section 206C of the Income Tax Act were not applicable to the petitioner-Corporation, the Corporation should not have collected the tax at source at 5%. Admittedly, the petitioner-Corporation had collected the tax at source from the buyers at the auction but the same was collected at a lesser percentage than that is specified in the entry in column (3) of the table. Though the petitioner-Corporation was liable to collect tax at source at 15%, the petitioner-Corporation had collected the same at 5% only and that resulted in the imposition of interest and penalty on the petitioner-Corporation. We do not find any illegality in the action on the part of the Ass....