The court emphasized the lack of a specified timeline for submitting declarations under Section 206C, allowing relief based on the genuineness of subsequent submissions.

ORDER

PER SIDDHARTHA NAUTIYAL - JUDICIAL MEMBER:

This appeal has been filed by the Assessee against the order passed by the Ld. Commissioner of Income Tax (Appeals)-8, (in short “Ld. CIT(A)”), Ahmedabad vide order dated 06.02.2020 passed for A.Y. 2012-13.

2. The assessee has taken the following grounds of appeal:-

“(1) That on facts, and in law, the learned CIT(A) has grievously erred in holding that the appellant is liable for collection of TCS u/s 206C of the Income-tax Act, 1961 .

(2) That on facts, and in law, it ought to have been held that the appellant’s business is not covered by the definition of “scrap”, as defined in Section 206C of the Act, and hence the appellant is not deemed to be an assessee in default within the meaning of the said Section.

(3) That the learned CIT(A) has grievously erred in law and on facts in confirming the order of ITO- TDS whereby the appellant is treated in default u/s 206C and demand of Rs.3,07,689/- is raised u/s. 206C(1), and Rs. 2,46,151/- is raised u/s 206C(7), totaling to Rs.5,53,840/-.

(4) That the learned CIT(A) has grievously erred in not giving adequate and reasonable opportunity to the appellant to file certificates in Form no. 27C and/or Form no. 27 BA in terms of Section 206C , sub-Sections (1A) and (6A) of the Act.

(5) The appellant craves leave to add, alter, amend any ground of appeal.”

3. The brief facts of the case are that the assessee is a partnership firm and is engaged in the business of trading in ferrous and nonferrous metal scrap. During the year under consideration, the assessee had sold scrap amounting to Rs.3,07,68,942/- to various parties. However, the assessee did not collect TCS on such amounts under Section 206C of the Act on such scrap sale @1% amounting to Rs.3,07,689/-. The Assessing Officer issued a show cause notice, in response to which the assessee did not furnish any reply/submissions. Accordingly, the Assessing Officer was of the view that the assessee had committed fault under Section 206C by neither collecting tax at source@1% and neither submitting declaration in Form-27 BA from the buyers of the scrap to the tune of Rs.3,07,68,942/-. Accordingly, the Tax Officer imposed tax demand of Rs.5,53,840/- under Section 206C of the Act.

4. In appeal, Ld. CIT(Appeals) observed that the assessee submitted Form 27C from 5 parties and the assessee submitted that in view of these Forms 27C, the assessee was not liable to collect TCS from these persons as per law. Further, with respect to 17 parties, the assessee furnished Form 27 BA and submitted that in view of proviso to Section 206C (6A), since the respective parties had filed return of income, the amount of demand with respect to these entities from whom Form 27BA has been obtained, is liable to be reduced. The Ld. CIT(Appeals) held that so far as furnishing of Form 27C from 5 parties is concerned, the transaction which is under consideration had taken place in Financial Year 2011-12, whereas the assessee had furnished Form 27C during the course of appellate proceedings in January 2017, which is almost after a period of 5 years after the sale had taken place, and therefore such late deposit of Form 27C is not acceptable. Further, CIT observed that out of the overall sale of metal scrap to various parties amounting to Rs.3,07,68,942/-, the assessee has furnished copies of Form 27C amounting to Rs.72,65,051/- only. Therefore, in respect of above 5 parties, the CIT(A) was of the view that AO has correctly come to the conclusion that the assessee was in default under Section 206C (6A) and the Ld. Assessing Officer has correctly charged TCS @1% on sale of scrap of relating