Girishkumar Ramnarayan Shah Vs ITO (ITAT Ahmedabad)
In the case Girishkumar Ramnarayan Shah vs. ITO, the ITAT Ahmedabad addressed the applicability of Tax Collected at Source (TCS) under Section 206C of the Income Tax Act on scrap sales made by the appellant, a trader in ferrous and nonferrous metal scrap. The main dispute involved whether the appellant was liable to collect TCS on scrap sales totaling approximately INR 3.07 crore for the financial year 2011-12. The Assessing Officer (AO) had imposed a tax demand of INR 5.53 lakh, as the appellant did not collect TCS or submit timely declarations (Form 27C) from buyers. The appellant argued that Form 27C submissions, even when delayed, were valid as Section 206C lacks a strict timeline for such filings, and cited case law supporting procedural flexibility in such matters.
The Commissioner of Income Tax (Appeals) [CIT(A)] partially accepted the appellant’s arguments, recognizing Forms 27C from five buyers but dismissing their late filing as acceptable evidence due to a delay of nearly five years. For the remaining 17 buyers, where Form 27BA declarations were provided to indicate tax compliance, the CIT(A) directed the AO to verify these forms and adjust the tax demand accordingly. The ITAT upheld the CIT(A)’s approach, noting that the absence of a prescribed timeline in Section 206C supports the appellant’s stance on delayed Form 27C filings, provided there was no question of their authenticity. The ITAT’s decision highlights the procedural considerations in TCS collection and offers clarity on the treatment of delayed compliance for declarations under Section 206C.
