TaxTMI 
TaxTMI 
2025 (8) TMI 826
X X X X Extracts X X X X
X X X X Extracts X X X X
....he circumstances of the case, the impugned order passed by the Ld. CIT (A), sustaining the order of ITO (TDS) u/s 206C (6A) of the Income Tax Act is unsustainable and bad in law since the authorities have not considered the proviso contained under sub section (6A) of Section 206C of the Income Tax Act. 3. BECAUSE, on the facts and in the circumstances of the case, the impugned order passed by the Ld. CIT (A), sustaining the order of ITO (TDS) u/s 206C (6A) of the Income Tax Act is unsustainable and bad in law since being voilative of principles of natural justice as no Notice have been issued by the Assessing Officer before passing the impugned order. 4. BECAUSE, on the facts and in the circumstances of the case, the impugned order passes by the Ld. CIT (A), is bad in law as the order passed by the Assessing Officer has been issued, ex-party, even prior to the date fixed for hearing. 5. BECAUSE, on the facts and in the circumstances of the case, the impugned order passed by the Ld. CIT (A), sustaining the order of ITO (TDS) u/s 206C (6A) of the Income Tax Act is unsustainable and bad in law since the demand raised is based on wrong calculation made by the....
X X X X Extracts X X X X
X X X X Extracts X X X X
....hat there are sufficient grounds to condone the delay. Therefore, the appeal is admitted for hearing. 3. The facts of the case are that a survey under section 133A was conducted at the office premises of the Director of the Geology and Mining at Khaniz Bhawan in Lucknow on 4.03.2015. During the said survey, it was discovered that lease or licenses or contracts for mining or quarrying had been granted to persons other than public sector companies by the District Magistrates and Mining Officers and though certain amounts had been received from the lessees, licensees or right holders in the form of royalties and related compensatory amounts, no amount had been collected and deposited by way of tax, as mandated by the provisions of section 206C (1C) of the Income Tax Act, by those District Magistrates and Mining Officers. The ld. AO, therefore, worked out the TCS payable on the total royalty amount received of Rs. 1,77,03,099/- at Rs. 3,54,062/- and after levying interest of Rs. 3,39,899.5/- determined total non / short collection of tax for the F.Y. 2007-08 at Rs. 6,93,961.5/- inclusive of interest. The assessee was therefore informed that he was being deemed to be an assessee in d....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ssee in the context of the orders passed by ITO, TDS. He observed that during the survey at the office premises of Director of Geology and Mining, it had been discovered that lease or licenses had been granted or contracts had otherwise been entered into, or otherwise rights or interest had been transferred, either in whole or in part, in mine or quarry to persons other than a public sector company, for the use of such mine or quarry for the purpose of their business, without the collection of tax at source, by persons responsible as mandated by the provisions of section 206C (1C) of the Income Tax Act. The ld. CIT(A) held, that in the instant case, the assessee had not collected the tax from the buyer and also not made out a case that the buyer had paid the due taxes to the account of the Central Government. He pointed out that the word, "Mining" in general means the extraction of valuable minerals or other geological materials from the earth or from ore body. He also observed that even the process of making brickkiln began with excavating the sand and thus even that was liable to TCS. Since, the assessee had failed to comply with the requirements of the provisions of section 206C....
X X X X Extracts X X X X
X X X X Extracts X X X X
....f the case. We observe that even though the issue of limitation has not formally been raised as an additional ground, it forms the basis of the arguments of the ld. AR. Since, the issue of limitation goes to the very root of the matter, we therefore, propose to treat it as additional ground raised by the assessee and decide this issue before proceeding to consider the remaining issues raised in appeal. 8. We find that the Hon'ble ITAT Lucknow Bench in ITA Nos. 243 to 246/LKW/2019 for the A.Ys. 2009-10 to 2012-13 in the case of the same assessee, has followed the orders of the ITAT Jaipur Bench in the case of M/s Eid Mohd Nizam Uddin in ITA No. 316 and 248/JP/2018 wherein, vide their orders dated 29.08.2018, the Hon'ble Tribunal has held that when a limitation had not been provided for in the statute for a specific purpose, then the limitation provided for the purpose of completing the assessment would be a proper guidance for taking the reasonable time period within which an order has to be passed by the taxing authority. The Hon'ble ITAT had observed in those cases that an identical situation was prevailing in respect of orders passed under section 201(1) (201)(1A) of the Act p....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... 147, should be made applicable for exercising power under section 201(1) and 201(A), we find it difficult to subscribe inasmuch as we do not impose a fixed time and prescribe a period of limitation, which has not been prescribed by Legislature in its wisdom. Such legislative action, by way of judicial precedent, in our view, would not be appropriate exercise of judicial review under Article 226 of Constitution. As we have already discussed above, even Supreme Court says that if time period is not prescribed for exercise of power, a reasonable time would depend upon the facts of each case and cannot be quantified or prescribed like a period of limitation". While passing such orders, the Hon'ble High Court placed reliance on the judgment of the Hon'ble Supreme Court in the case of Uttam Namdeo Mahale vs Vithal Deo and others AIR 1992 SC 26 95, wherein a three judge bench of the Hon'ble Supreme Court had held, "Mr Bhasme, learned counsel for the appellant, contends that in the absence of fixation of the rule of limitation, the power can be exercised within a reasonable time and in the absence of such prescription of limitation, the power to enforce the order is vitiated by error of l....
X X X X Extracts X X X X
X X X X Extracts X X X X
....der the said statute unless there was any contrary intention expressed in the said statute. After considering all these judgements, the Hon'ble Allahabad High Court held that while exercising the power of judicial review, it would be appropriate to consider whether the power had been exercised by the competent authority within a reasonable period and whether the delay was unjust arbitrary, whimsical or it was for valid reason. If the courts were to find that the delay in exercise of power was for valid and bonafide reasons, the alleged delayed exercise of power cannot be held to be invalid and therefore it held that the proceedings initiated by the Revenue authorities u/s 201(1)/201(1A) of the Act could not be held to be barred by limitation. In view of the fact that the said judgment of the jurisdictional High Court is binding upon all Tribunals functioning under its jurisdiction, we are unable to accept the precedents cited of the Jaipur Bench of the ITAT or the 'A' Bench, to hold that the proceedings undertaken by the Assessing Officer u/s 206C(6A) of the Act are barred by limitation. Furthermore, we observe that survey under 133A of the Act was conducted at the office premises ....