ANIL MITTAL,HUDA ELLENABAD V. INCOME TAX OFFICE, SIRSA

ITA 94/CHANDI/2025

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The case involves Shri Anil Mittal, a commission agent trading in agricultural products, who appealed against the order of the Commissioner of Income Tax (Appeals) which had disallowed a significant portion of commission expenses claimed. The AO had initially disallowed the entire commission expenditure of Rs.27,36,600, which was paid as rebates to farmers for facilitating sales. The CIT (Appeals) acknowledged the necessity of such payments but only allowed Rs.10 lakhs on an estimated basis. The Tribunal, after reviewing the detailed records maintained by the assessee, found no specific defects in the details and allowed the full amount claimed. The appeal was initially filed in the wrong forum (ITAT Delhi) but was later transferred to ITAT Chandigarh, which condoned the delay in filing.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 774434 (ITAT-CHANDIGARH)
• Duration Of Justice: 7 month(s) 24 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 10-09-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: Not Allotted
• Assessment Year: 2016-2017
• Appeal Filed On: 17-01-2025
• Laws Referred To: Income-tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: VIVEK VARDHAN
• Assessee Lawyers: RITTUN SAHUWALA
• Keywords: Business income
• Section: 143(3)

Judgement Text

"आयकर अपीलȣय अͬधकरण,चÖडीगढ़ Ûयायपीठ, चÖडीगढ़ IN THE INCOME TAX APPELLATE TRIBUNAL DIVISION BENCH, ‘A’ CHANDIGARH BEFORE SHRI RAJPAL YADAV, VICE PRESIDENT AND SHRI KRINWANT SAHAY, ACCOUNTANT MEMBER आयकर अपील सं./ ITA No. 94/CHD/2025 Ǔनधा[रण वष[ / Assessment Year: 2016-17 Shri Anil Mittal, House No. 139, HUDA, Ellenabad. Vs The ITO, Sirsa. èथायी लेखा सं./PAN NO: APDPM5895F अपीलाथȸ/Appellant Ĥ×यथȸ/Respondent Assessee by : Shri Rittun Sahuwala, CA Revenue by : Shri Vivek Vardhan Addl. CIT, Sr.DR Date of Hearing : 30.07.2025 Date of Pronouncement : 10.09.2025 PHYSICAL HEARING O R D E R PER RAJ PAL YADAV, VP The assessee is in appeal before the Tribunal against the order of the ld.Commissioner of Income Tax [in short ‘the CIT(A)’] dated 30.01.2020 passed for assessment year 2016- 17. 2. The Registry has pointed out that appeal is time barred by 1723 days, however, perusal of the record would reveal that assessee has earlier filed the appeal before ITAT Delhi Benches Printed from counselvise.com ITA No.94/CHD/2025 A.Y.2016-17 2 well in time. The ITAT Delhi has opined that this appeal ought to be filed before Chandigarh Benches. The order of the ITAT read as under : “This assessee’s appeal for assessment year 2016-17 arises against Commissioner of Income Tax (Appeals), Hisar's order dated 31.01.2020, in appeal no. 244/HSR/2018-19, in proceedings u/s 143(3) of the Income-tax Act, 1961. hereinafter referred to as the 'Act'. Heard both the parties at length. Case file perused. 2. It emerges at the outset during the course of hearing that the learned Assessing Officer herein is the \"Income Tax Officer. Ward-1, Sirsa” who had framed the impugned assessment in assessee's case vide order dated 22.12.2018 u/s 143(3) of the Act. It is in view of this clinching fact that 1 am of the considered view, in light of STANDING ORDER UNDER the Income-tax (Appellate Tribunal) Rules. 1963. applicable with effect from 1st October, 1997 that the Delhi benches of the Income Tax Appellate Tribunal have no jurisdiction to entertain (he instant appeal. Even para 4 of the above STANDING ORDHR makes it clear that the decisive factor for the purpose of entertaining such an appeal is that of 'situs' of the Assessing Officer only. I, thus reject the assessee's instant appeal for want of territorial jurisdiction in very terms with liberty to be instituted afresh before the appropriate benches at Chandigarh. It is further clarified that the delay caused, if any, as on date, in institution of the assessee's appeal before the Chandigarh benches of the tribunal, shall be deemed to have been condoned. Ordered accordingly. 3. This assessee's appeal is dismissed in above terms.” 3. We further find that this appeal was decided by the CIT (Appeals) on 31.01.2020. Thereafter, Covid pandemic came in the month of March and the delay from March, 2020 upto May, 2022 was condoned by the Hon'ble Supreme Court by exercising its inherent powers. Thereafter, assessee has invoked his remedy in a wrong Forum i.e. ITAT Delhi Benches. This appeal could have been transferred to ITAT Printed from counselvise.com ITA No.94/CHD/2025 A.Y.2016-17 3 Chandigarh Bench but the Delhi Bench has dismissed the appeal with an opportunity to approach the appropriate jurisdiction. 4. Considering all these facts, we are of the view that there is no deliberate delay at the end of the assessee in filing his appeal and accordingly, we condone the delay, if any and proceed to decide the appeal on merit. 5. The grounds of appeal taken by the assessee are not in consonance to Rule 8 of ITAT Rules. They are descriptive and argumentative in nature. Though assessee has taken two grounds of appeal but under Ground No.1, he has taken 9 sub-grounds which are in the nature of arguments. The solitary grievance of the assessee is whether he is entitled for the expenses incurred in payment of commission. 6. With the assistance of ld. Representative, we have gone through the record carefully. The assessee is a Commission Agent and trading in agricultural products. In other words, he facilitates the sale of agriculture products in the Grain Market. He has been receiving the commission @ 2.5% of the total sales taken place at his premises. Thus, he has Printed from counselvise.com ITA No.94/CHD/2025 A.Y.2016-17 4 filed return of income on 17.10.2016 electronically declaring total income at Rs.4,59,450/-. The case of the assessee was selected for scrutiny assessment and necessary notice u/s 143(2) was issued and served upon the assessee. A perusal of the account revealed that assessee has earned total commission of Rs.48,69,349/- but for earning this commission, he has given a rebate to the ultimate grower of the agriculture produce and paid a sum of Rs.27,36,600/-. In other words, whosoever came to his shop for availing his facility as a Commission Agent, the assessee gives them incentive in the range of 1 to 1.5% of the sale proceeds upon whom he has earned commission @ 2.50%. Thus, net commission retained by the assessee is between 1 to 1.50% instead of 2.50% charged from the farmers. 7. The AO did not allow this commission expenditure. Accordingly, he made a disallowance of Rs.27,36,600/-. 8. On appeal, ld. CIT (Appeals) accepted the necessity of making commission payments or incentives to the farmers, so that more business could be attracted by the assessee Printed from counselvise.com ITA No.94/CHD/2025 A.Y.2016-17 5 but on estimate basis allowed Rs.10 lacs only. We find that assessee has prepared a complete detail of all the recipients and filed a Paper Book running into 165 pages. He has maintained the details meticulously and we do not see logic in the finding of the CIT (Appeals) as to why allowance of expenditure is to be restricted at Rs.10 lacs only. He has not pointed out any specific defect in the details maintained by the assessee nor any notice was issued to any of the recipient of incentive from the assessee for facilitating him to sell his crop. 9. It is pertinent to observe that at the end, assessee has earned something we fail the logic of the AO for disbelieving the version of the assessee. Accordingly, we allow this appeal of the assessee and delete the disallowance made by the AO. In other words, actual expenses of Rs.27,36,600/- are allowed to the assessee. 10. In the result, appeal of the assessee is allowed. Order pronounced on 10.09.2025. Sd/- Sd/- (KRINWANT SAHAY) (RAJPAL YADAV) ACCOUNTANT MEMBER VICE PRESIDENT Printed from counselvise.com ITA No.94/CHD/2025 A.Y.2016-17 6 “Poonam” आदेश कȧ ĤǓतͧलͪप अĒेͪषत/ Copy of the order forwarded to : 1. अपीलाथȸ/ The Appellant 2. Ĥ×यथȸ/ The Respondent 3. आयकर आयुÈत/ CIT 4. ͪवभागीय ĤǓतǓनͬध, आयकर अपीलȣय आͬधकरण, चÖडीगढ़/ DR, ITAT, CHANDIGARH 5. गाड[ फाईल/ Guard File आदेशानुसार/ By order, सहायक पंजीकार/ Assistant Registrar Printed from counselvise.com "