TaxTMI 
TaxTMI 
2021 (10) TMI 776
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....rned CIT(A) erred in confirming penalty levied uls 271 CA of the Income Tax Act without considering the fact that the appellant has complied with all the conditions specified in proviso to Sec 206C(6A). That on the facts and in the circumstances of the case, the penalty levied is wrong, bad in law and is prayed to be deleted. 3.That the Ld CIT(A) erred in confirming the penalty levied uls 271 CA of the Income Tax Act even when there was a reasonable cause on the part of the assessee for non collection of tax at source and even when most of the payees have provided Form 27BA as also evident from the order passed uls 206C(6A) I 206C(7) dated 31.03.2017. 4.The Ld CIT(A) erred in confirming the penalty levied uls 271 CA of the Income Tax Act even when the penalty order passed uls 271 CA was barred by limitation. 5.The appellant craves leave to add, to alter, amend, modify, substitute, delete and I or rescind all or any of the grounds of appeal on or before final hearing, if necessity so arises. The Assessee has raised following grounds of appeal in ITANos.195/Ind/2020: 1. That the Learned CIT(A) erred in confirming penalty levied uls 271 CA of the....
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.... any favour from both the lower authorities. 4. Aggrieved assessee is in appeal before this Tribunal against the alleged levy of penalty u/s 271CA of the Act confirmed by ld. CIT(A). Ld. counsel for the assessee vehemently argued referring to following written submissions:- 7.It is pertinent to reproduce the provisions of proviso of sub- section 6A of section 206C as under: «Provided that any person responsible for collecting tax [in. accordance with the provisions of sub-section (1) and sub- section (1 C)j, who fails to collect the whole or any part of the tax on the amount received from a buyer or licensee or lessee or on the amount debited to the account of the buyer or licensee or lessee shall not be deemed to be an assessee in default in respect of such tax if such buyer or licensee or lessee- (i) has furnished his return of income under section 139; (ii) has taken into account such amount for computing Income In such return of income; and (iii) has paid the tax due on the income declared by him in such return of income, and the person furnishes a certificate to this effect from an accountant in such form as may be....
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....re the AO therefore the contention of Ld. CIT(A) is wrong and uncalled for. In view of the above, it is clear that the mere filing of Form 27BA is sufficient compliance of proviso of sub section 6A of section 206C of the Act. Also, the appellant not only filed the Form 27BA but also filed the copy of acknowledgement of return of income to prove that the buyer has filed the return of income and paid the due taxes therefore there is no loss to the revenue and the assessee should not be considered as assessee in default. Therefore, question of levying penalty does not arise in the present case. 5. Per contra ld. Departmental Representative (DR) supporting the orders of both lower authorities. 6. We have heard rival contentions and perused the records placed before us and carefully gone through the decisions referred and relied by the ld. counsel for the assessee, in the instant of two appeals assessee has challenged the levy of penalty u/s 271CA of the Act for the violation of provisions of section 206C of the Act. 7. We find that the assessee has furnished copy of form 27BA along with copy of Income Tax return of the parties in these cases where the assessee failed ....
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....e 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 assessee- company on 17.9.2013. According to the AO, the assessee was required to collect taxes on the sale of scrap at the rate of 1% from the buyer at the time of sale as per section 206 of the Act. According to him, the assessee failed to collect such taxes, and therefore, he raised a demand under section 206C(6A) r.w.s 206C(7) and 206C(7) of the Income Tax Act. Dissatisfied with the demand, the assessee carried the matter in appeal before the ldCIT(A). It has raised two fold submissions. In the first fold of contention, it submitted that the sales made by the assessee were not considered as scrap material, rather these were identifiable useful products, which have been extracted from the ship. On those sales, the assessee was not required to collect tax. It relied upon the decision of Hon'ble Gujarat High Court in the case of CIT Vs. Priya Blue Industries Ltd., (2016) 65 taxmann.com 206 (Guj). In the second fold of contentions, it was submitted that section 206C(1A) mandates that any person responsible for collectin....
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....iled by the appellant and also the remand report obtained during the course of the appellate proceedings. The appellant has submitted that the buyers of such goods have furnished declaration that the goods shall be used for the purpose of manufacturing / processing / producing articles or things and not for trading and they have given a declaration u/s,206CC(IA) of the I. T. Act, 1961 & therefore, the provisions of Sec.206C are not applicable in respect 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 subj....