M/s Digganath Steel Industries & Engineering Works v. The Income-tax Officer, TDS/Ward-1(1), Nagpur
[Citation -2016-LL-0926-61]

Citation 2016-LL-0926-61
Appellant Name M/s Digganath Steel Industries & Engineering Works
Respondent Name The Income-tax Officer, TDS/Ward-1(1), Nagpur
Court ITAT-Nagpur
Relevant Act Income-tax
Date of Order 26/09/2016
Assessment Year 2010-11
Judgment View Judgment
Keyword Tags speaking order • sale of scrap • collection and recovery of tax
Bot Summary: Date of Hearing : 23-09-2016 Date of Pronouncement : 26th Sept., 2016 ORDER These appeals by the assessee are directed against common order of learned CIT(Appeals)-I, Nagpur dated 16-11-2015 for the above five assessment years. Another issue on merits is that the learned CIT(Appeals) erred in affirming the AO s order in treating the assessee as assessee in default u/s 206C(6A) and 206C(7). Upon assessee s appeal, learned CIT(Appeals) noted that the case was fixed for several times. Learned CIT(Appeals) proceeded to hold that the assessee s appeal was liable to be dismissed for non prosecution. As regards the merits of this case it is noted that the assessee has been held to be the assessee in default for not collecting TCS. The assessee has purchased iron/scrap from Indian Railways and subsequently sold the same in the market. Learned counsel pleaded that the items may be scrap for the railways but they were not scrap for the assessee who has traded in those items and sold the same. Learned counsel of the assessee has submitted that the issue may be remitted to the file of the AO as proper opportunity was not granted to the assessee by the AO also.


ITA Nos. 24 to 28/Nag/2016. IN INCOME TAX APPELLATE TRIBUNAL, NAGPUR BENCH, NAGPUR BEFORE SHRI SHAMIM YAHYA, ACCOUNTANT MEMBER. (S.M.C.) S.No. ITA No. Asstt. Year. 1. 24/Nag/2016 2010-11. 2. 25/Nag/2016 2011-12. 3. 26/Nag/2016 2012-13. 4. 27/Nag/2016 2013-14. 5. 28/Nag/2016 2014-15. M/s Digganath Steel Industries Income-tax Officer, & Engineering Works, Vs. TDS/Ward-1(1), Nagpu. Nagpur. PAN AACFM0137A. Appellant. Respondent. Appellant by : Shri Abhay Agrawal. Respondent by : Shri A.R. Ninawe. Date of Hearing : 23-09-2016 Date of Pronouncement : 26th Sept., 2016 ORDER These appeals by assessee are directed against common order of learned CIT(Appeals)-I, Nagpur dated 16-11-2015 for above five assessment years. 2. first common issue raised is that orders have been passed in violation of principles of natural justice. Another issue on merits is that learned CIT(Appeals) erred in affirming AO s order in treating assessee as assessee in default u/s 206C(6A) and 206C(7). 2 ITA Nos. 24 to 28/Nag/2016. 3. In these cases orders were passed u/s 206C(6A)/206C(7) and following tax demands were raised for concerned assessment years : Asstt. Year 2010-11 : Rs. 4,20,155/- Asstt. Year 2011-12 : Rs.21,48,726/- Asstt. Year 2012-13 : Rs. 9,20,574/- Asstt. Year 2013-14 : Rs.11,93,191/- Asstt. Year 2014-15 : Rs. 5,93,527/- 4. Upon assessee s appeal, learned CIT(Appeals) noted that case was fixed for several times. Sometimes assessee attended and sometimes requested for adjournment. Learned CIT(Appeals) proceeded to hold that assessee s appeal was liable to be dismissed for non prosecution. He further laconically held that even on merits appeal deserves to be dismissed. Learned CIT(Appeals) did not pass speaking order on merits. 5. Against above order assessee is in appeal before ITAT. 6. I have heard both counsel and perused records. I find that section 251 of I.T. Act which deals with powers of learned CIT(Appeals) does not provide for any power to dismiss appeal for non prosecution. Hon ble jurisdictional High Court does not even permit ITAT to dismiss appeal for non prosecution. 7. Further more on merits learned CIT(Appeals) has in one line held that even on merits appeal deserves to be dismissed as AO has passed order considering facts of case. In my considered opinion such order cannot be sustained and same is in violation of principles of natural justice. Hon ble Apex Court in case of Sahara India (Firm) vs. CIT 300 ITR 403 has held that not even judicial and quasi judicial but even administrative orders have to be consistent with rules of natural justice. 3 ITA Nos. 24 to 28/Nag/2016. 8. As regards merits of this case it is noted that assessee has been held to be assessee in default for not collecting TCS. assessee has purchased iron/scrap from Indian Railways and subsequently sold same in market. AO was of opinion that this is sale of scrap coming under ambit of provisions of section 206C. However, learned counsel of assessee in this regard has referred to definition of Scrap mentioned in Explanation b of above section that Scrap means waste and scrap from manufacture or mechanical working of materials which is definitely not usable as such because of breakage and cutting up, wear and other reasons. Learned counsel pleaded that items may be scrap for railways but they were not scrap for assessee who has traded in those items and sold same. Learned counsel submitted that items are usable as such in construction and other industries. Hence learned counsel submitted that transaction of assessee does not attract provisions of section 206C. In this regard learned counsel has placed reliance upon decision of Hon ble Gujarat High Court in case of CIT vs. Priya Blue Industries (P) Ltd. in Income Tax Appeal No. 604 of 2015 vide order dated November 3, 2015, 65 taxmann.com.206 (Gujarat). 9. Upon careful consideration I am of considered opinion that since learned CIT(Appeals) has not considered merits of issue, matter needs to be remitted to his file for consideration afresh. However, learned counsel of assessee has submitted that issue may be remitted to file of AO as proper opportunity was not granted to assessee by AO also. 10. Upon careful consideration I am inclined to remit issue to file of AO. AO shall examine assessees submission herein above and decide issue taking into account case law of Hon ble Gujarat High Court cited above. 4 ITA Nos. 24 to 28/Nag/2016. 11. In result, these appeals filed by assessee stand allowed for statistical purposes. Order pronounced in Open Court on this 26th day of Sept., 2016. Sd/- ( SHAMIM YAHYA) ACCOUNTANT MEMBER. Nagpur, Dated: 26th Sept., 2016. Copy forwarded to : 1. Digganath Steel Industries & Engineering Works, Plot No. 7 & 27, Eastern Industrial Area, Kalmana, Nagpur-440008. 2. I.T.O., TDS/Ward-1(1), Nagpur. 3. C.I.T.- (TDS), Nagpur. 4. CIT(Appeals), -II, Nagpur. 5. D.R., ITAT, Nagpur. 6. Guard File True Copy By Order Assistant Registrar, Income Tax Appellate Tribunal, Nagpur Bench, Nagpur. Wakode. M/s Digganath Steel Industries & Engineering Works v. Income-tax Officer, TDS/Ward-1(1), Nagpur
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