Tax collected at source liability applies to dealer sales under specific sections of the Income Tax Act despite assertions of exemption.

ORDER

Per:DR. S. Seethalakshmi, JM:

This appeal filed by assessee is arising out of the order of the ld. CIT(A), National Faceless Appeal Centre, Delhi dated 08.06.2023 [here in after “ld.CIT(A)(NFAC)”] for assessment year 2017-18, which in turn arise from the order dated 27.12.2018 passed under section 206C(6)/206C(7) of the Income Tax Act (here in after “Act”) by the ITO, TDS, Bikaner.

2.1 At the outset of hearing, the Bench observed that there is delay of 1 days in filing the appeal by the assessee for which the ld. AR submitted that to arrange all the papers concerning the issue in question, the delay took place which was not intentional and thus the delay of small 1 days may kindly be condoned.

2.2 During the course of hearing, the ld. DR fairly not objected to assessee’s application for condonation of delay and prayed that Court may decide the issue as deem fit in the interest of justice.

2.3 We have heard both the parties and perused the materials available on record. The Bench Noted that the assessee for condonation of delay of 01 days has merit and we concur with the submission of the assessee. Thus the delay of 02 days in filing the appeal by the assessee is condoned in view of the decision of Hon’ble Supreme Court in the case of Collector, Land Acquisition vs. Mst. Katiji and Others , 167 ITR 471 (SC) as the assessee is prevented by sufficient cause.

3. In this appeal, the assessee has raised following grounds: -

“ 1. That the order passed u/s 206C(6)/206C(7) of IT Act 1961 for the AY 17-18 by the ITO TDS Bikaner to the extend uphold by the CIT(A) u/s 250 is bad in Law and on facts.

2. The CIT (A) as wrongly uphold the demand of TCS of Rs. 58,850/- (Dealer to dealer sale amount) u/s 206C(1F) and (cash receipt in excess of Rs. 2 Lac) 206C(ID), in the fact and circumstances of the case. Therefore the demand so upheld is requested to be deleted.

3. That the ITO (TDS) Bikaner has wrongly created demand of Rs. 58,850/- u/s 206C(1F) and 206C(ID) in the facts and circumstances of the case. Therefore demand so created is requested to be deleted.

4. The CIT(A) has erred in holding that sales made on the basis of dealer to dealer are covered u/s 206C(1F) liable for TCS in the facts and circumstances of the case.

5. The CIT(A) has wrongly upheld sales made by the assessee is not retail sale so as to hit the section 206C(1F) and he also wrongly interpreted the circular issued by the CBDT in this regard in the facts and circumstances of the case.

6. That the CIT(A) has erred in holding in that cash receipt in excess of Rs. 2 Lac on sale of vehicle is hit under the provisions of section 206C(ID) in the facts and circumstances of the case.

7. That appellant prays for justice and may please be allowed to add/ amend/ alter further or any ground/s of appeal on or before hearing on the case.

4. Brief fact of the case is that the assessee is an authorized dealer of Mahindra and Mahindra car in Bikaner. A survey u/s 133A(2A) was conducted on 19.09.2018 at the business premises of the assessee deductor for verification of compliance of provisions of Chapter XVII of the Act. During the survey proceedings, it was found that the deductor has failed to collect TCS from certain persons where sale consideration exceeds Rs. 10 lacs as per the provisions of section 206C(1F) of the Act. The assessee deductor has made sale amounting to Rs. 89,40,100/- on which no TCS was collected, details of these sale are as under:-