2023 (5) TMI 912

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....15 respectively. And ITA. No.927/Coch/2022 & 930/Coch/2022 dated 05.09.2022 for AY. 2011-12 and AY. 2014-15. First of all, we will deal with ITA. No. 889 to 891/Coch/2022 since the issues are common, we will take up appeal for AY. 2010-11 as the lead case and the result of which will be followed for other two appeals ie. ITA No. 890/Coch/2022 for AY. 2011-12 and ITA. No.891/Coch/2022 for AY. 2014-15. 2. Brief facts of the case as noted by the Ld. CIT(A) is that the assessee is a private limited company engaged in the business of wholesale import and sale of timbers. The AO on spot verification of the business premises of the company, noted that the assessee had failed to collect tax under section 206C of the Income Tax Act, 1961 (hereina....

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....on of the Ld. CIT(A) does not want us to interfere with the order of the Ld. CIT(A). 5. We have heard both the parties and perused the records. We note that the assessee claims to be an importer of timber from overseas and was found to be not collecting (TCS) while selling the timber in retail. As per section 206C of the Act, the assessee being the seller of certain items of goods [viz Alcoholic Liquor, forest produce, scrap etc.] specified in the Table given u/s 206C of the Act, ought to have collected the prescribed percentage of Tax from the buyers; and since timber also figures as an item in the Table [viz forest timbers obtained in forest lease as well as obtained by any mode], and AO on spot verification was able to find out that a....

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.... writing in the prescribed form (i.e. Form 27C of the Act as per Rule 37C) stating that the goods are being utilized for the purpose of manufacturing, processing or producing article or things and not for trading purposes. After collecting the Form 27C (Declaration form) from the buyers, the seller has to deliver it to the Ld. PCIT or Commissioner specified in section 206C(1B) of the Act "on or before the 7th day of the month next following the month in which the declaration is furnished to him". In this context, it would be gainful to reproduce the relevant provision i.e. to section 206C of the Act which reads as under: - "Profits and gains from the business of trading in alcoholic liquor, forest produce, scrap, etc. 206C....

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....arlier, collect from the buyer of any goods of the nature specified in column (2) of the Table as it stood immediately before the 1st day of June, 2003, a sum equal to the percentage, specified in the corresponding entry in column (3) of the said Table, of such amount as income-tax in accordance with the provisions of this section as they stood immediately before the 1st day of June, 2003. (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 refer....

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.... of section 206C of the Act. Before us, the assessee claims to have filed Form 27 as prescribed under sub-section (1A) of section 206C of the Act, which exempts him from collecting the tax at source and his grievance is that the Ld. CIT(A) has not considered it. We do not countenance this action of Ld. CIT(A). It is true that assessee did not collect tax at source (TCS) while effecting sales of timber. But he has provided the Form 27 given by the buyers which is as per sub-section (1A) of section 206C of the Act. Therefore, it need to be examined as per law by Ld CIT(A). The only aspect which needs to be seen is whether there is any period of limitation/time given in the statute for filing of Form 27 as the law stood at the relevant period ....

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....rations, needs first to be examined by the AO and he shall forward the same to Principal CIT or CIT as the case may be. The AO to examine the declaration which has been verified and countersigned by the Chartered Accountant stating that the buyers of timber from the assessee had duly paid the taxes on the same. The AO after examining Form 27C declarations and declarations countersigned by the Chartered Accountant, shall take a decision in accordance with law after affording a reasonable opportunity of hearing to the assessee. It is ordered accordingly. Therefore appeals of the assessee are allowed for statistical purposes." 7. Therefore, in the light of the aforesaid discussion and following the decision of the Co-ordinate Bench in the c....