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No time limit is prescribed u/s 206C(1A) to make declaration in Form 27C collected from buyers

May 20, 2020[2020] 116 579 (Jaipur - Trib.)

INCOME TAX : For availing benefit of not collecting tax at time of sale of goods aimed for specified purposes, a verified declaration in prescribed Form should be provided by buyers to seller; however, no time limit is prescribed for furnishing such declarations

• Sub-section (1A) of section 206C is a substantive provision which refers to a situation under which collection of tax under sub-section (1) would not have to be made and though main thrusts of sub-section (1A) are that buyers should provide to seller, a declaration in prescribed Form duly verified, sub-section (1A) does not refer to any time limit for furnishing such declarations as legislative intent was not to make time limit mandatory or a pre-condition for availing benefit of not collecting tax at time of sale of goods aimed for specified purposes.

• Section 206C(7) provides that, if a person responsible for collecting TCS does not collect tax or fails to pay it, he will be liable to pay interest for period till its payment; however, where his buyer has furnished return of income and paid tax, he will not be deemed to be an assessee in default and interest shall be payable for period till filing of return by such buyer.

• There is no mandatory requirement to pay any interest under section 206C(7) as part of certification in Form 27BA and where assessee has already paid, he has to specify that he has paid and where he has not paid, he has to specify accordingly; it is only an information seeking requirement and not a requirement in absence thereof which will makes certification in Form 27BA invalid where there is substantial compliance as to mandatory requirements of certification.
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