Section 206, 206A, 206C of Income Tax Act, 1961—TCS collection in case of receipts from mining companies.

Held that— Our attention has been invited to the assessee’s categorical explanation in the lower proceedings that the state government had not issued any instructions regarding TCS collection in case of receipts coming from mining companies. We find merit in learned departmental representative’s argument in principle. There is hardly any dispute that legislature has prescribed TCS collection u/s. 206(1C) @ 2% regarding mining and quarry lincence or lease etc., at the time of receipt of the specified sums. We therefore observe that the mere fact that the state government had not issued any instructions to the field authorities regarding compliance of the impugned statutory provision does not carry any merit since ignorance of law by either the government or its agency is exercising various statutory functions cannot be accepted as a justifiable reason. We therefore concur with the Revenue’s argument supporting the Assessing Officer as well as CIT(A)’s action raising the impugned demands in assessee’s case since he had not collected TCS from the mining companies.

Next comes yet another equally important aspect as to whether the assessee deserves the benefit of sec. 206C(6A) first proviso inserted by the Finance Act, 2012 with effect from 01.07.2012.

Held that— We observe that the very line of reasoning also deserves to be adopted qua application of sec. 206A (first proviso) as well inserted by the Finance Act, 2012 with effect from 01.07.2012 to this effect as applicable in case of TCS collection than TDS deduction. We therefore decline the Revenue’s instant technical argument that the foregoing proviso to sec. 206C(6A) does not carry any retrospective operation and leave it open for the Assessing Officer to verify all necessary facts about the assessee’s payers to have been assessed qua the very income under the provision of the Act. The assessee is directed to place on record all necessary documents in consequential proceedings within three effective opportunities of hearing the assessee’s “lead” case ITA No.614/Kol/2017 as well as remaining four appeal(s) ITA No.615 to 618/Kol/2017 raising the above material issue are partly allowed for statistical purposes.[DISTRICT LAND & LAND REFORMS OFFICER VERSUS INCOME TAX OFFICER WARD-4 (2) , TDS, BURDWAN] [2019] 18 ITCD Online (5) [ITAT KOLKATA]