Pawan Kumar Agrawal vs ITO TDS-2, Jaipur

Parties Involved

Facts Summary

The Assessee, Pawan Kumar Agrawal, is the proprietor of M/s Raghav Steel and deals in the purchase and sale of scrap. A spot verification of tax deduction and collection at source was conducted at his business premises on 12.08.2014. The Assessing Officer (AO) noticed that the Assessee had not filed any statement of tax collected at source and had neither collected tax on the sale of scrap nor obtained declarations in Form No. 27C from the buyers. The AO issued the first notice on 14.11.2019, a further notice on 13.01.2021 and a show cause notice on 28.01.2021. The Assessee replied that he was only a trader and that the scrap sold by him was not generated from any manufacture or mechanical working of materials, so that section 206C of the Act did not apply to him. He further stated that the declarations in Form No. 27C taken from the buyers could not be produced since his records had been seized by the Directorate of Revenue Intelligence on 04.01.2016. The AO did not accept the reply and, by the order dated 15.03.2021, treated the Assessee as an assessee in default and raised the following demand: Sale of scrap (Rs) 9,13,23,333, Tax collectible at 1% under section 206C(6A) (Rs) 9,13,233, Interest under section 206C(7) (Rs) 7,12,382, Total demand (Rs) 16,25,615.…

Legal Issues

• 1. Whether the order passed by the AO under section 206C(6A) read with section 206C(7) of the Act is barred by limitation.
• 2. Whether the learned CIT(A) was justified in leaving the plea of limitation undecided.

Judgment Outcome

Decided in favour of Assessee.

Precedents Relied Upon

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