2019 (5) TMI 734

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....) and Rs. 10,18,010/- under section 206C(7) of the Income Tax Act, 1961. In other words, the grievance of the Revenue is that the assessee was required to collect tax at source while selling scrap. Since it failed to collect such taxes on sale of Rs. 37,46,06,052/- a demand under section 206C along with interest deserves to be raised against the assessee. The AO has raised such demand which has been quashed by the ld.CIT(A). 3. With the assistance of the ld.representatives, we have gone through the record carefully. The assessee at the relevant time was engaged in the business of ship breaking. A survey under section 133A of the Act was carried out at the business of premises of the assesseecompany on 17.9.2013. According to the AO, the a....

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....ted both fold of contentions and deleted the demand. 4. For adjudication of this issue, we deem it pertinent to take note of section 206C(1A) of the Act, which reads as under: "..... (1A) Notwithstanding anything contained in sub-section (1), no collection of tax shall be made in the case of a buyer, who is resident in India, if such buyer furnishes to the person responsible for collecting tax, a declaration in writing in duplicate in the prescribed form and verified in the prescribed manner to the effect that the goods referred to in column (2) of the aforesaid Table are to be utilised for the purposes of manufacturing, processing or producing articles or things or for the purposes of generation of power and not for trading purpose....

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....ect of items sold to them. If the appellant has received declarations in form no. 27C/27BA, he is clearly under no obligation to collect tax at source and to pay the same to the credit of government. The AO has raised the objection in his order as to whether at the time of collecting the sale receipt from the scrap sales made whether the declaration in Form 27C/27BA were available with the appellant or not. As mentioned by the AR of the appellant above, this issue is directly covered by the ratio of the judgment of Hon'ble Gujarat High Court in the case of CIT vs. Valibhai Khanbhai Mankad, as reported at (2013) 216 Taxman 18. After considering all details provided by the appellant and the judicial pronouncements on the subject, it is....

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....would enable the Revenue authorities to, as and when the need so arises make proper verifications. This subsection itself does not provide for any time limit within which such declaration is to be made........... " After considering all the facts of the case and the judicial pronouncement by the Higher Authorities including jurisdictional High Court of Gujarat, it is concluded that there is no dispute that the delay in filing such forms with the office of the Department [cannot revive the liability of collection of tax at source with retrospective effect and the 27C produced by the appellant may be considered. 6. In his order itself , the ITO TDS-1 himself has pointed out the judgment of special Bench of IT AT in the case of Bharti Au....