During the year, the assessee sold ‘scarp’ to various parties on which tax was not collected at source as contemplated u/s.206C(1). The AO treated the assessee as in default u/s. 206C(6A) in respect of failure to collect tax.

Tribunal held that, the limitation prescribed under one provision of the Act cannot be applied straightway to some other provisions of the Act. The legislature, in its wisdom, inserted sub-section (3) under section 201 by the Finance (No. 2) Act, 2009 w.e.f.2001 proposing time limit for passing orders u/s.201 with reference to tax deduction at source. However, no limitation provision has been enacted with regard to tax collection at source as provided in s.206C and in the absence of statutory time limit prescribed for passing order with reference to collection of tax, the reasonable time limit is followed to be four years from the end of the financial year for passing the order u/s. 206C. order of the AO is quashed. (AY. 2009-10)