MUKESH,SIRSA V. INCOME TAX OFFICER, WARD-1, SIRSA

ITA 44/CHANDI/2025

AI Insights

The case involves an appeal by Shri Mukesh against an order from the CIT(A) which confirmed an intimation by the CPC restricting the TDS credit claimed by the assessee. The assessee, acting as a commission agent, argued that the TDS should be credited fully as per the amounts reflected in Form 26AS. The CIT(A) had viewed the assessee as a trader rather than a commission agent, leading to the restriction of the TDS credit. The Tribunal, however, recognized the assessee's role as a commission agent and directed the full credit of TDS as claimed.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 706913 (ITAT-CHANDIGARH)
• Duration Of Justice: 6 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-07-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2022-2023
• Appeal Filed On: 08-01-2025
• Laws Referred To: Income Tax Act
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RANJIT KAUR LD.
• Assessee Lawyers: SUDHIR SEH GAL LD
• Keywords: TDS; FORM 26AS

Judgement Text

"1 IN THE INCOME TAX APPELLATE TRIBUNAL “B” BENCH, CHANDIGARH PHYSICAL HEARING BEFORE HON’BLE SHRI RAJPAL YADAV, VICE PRESIDENT AND HON’BLE SHRI MANOJ KUMAR AGGARWAL, AM आयकर अपील सं./ ITA No.44/CHANDI/2025 (िनधाŊरणवषŊ / Assessment Year: 2022-23) Shri Mukesh C/o M/s Mukesh Kumar Naresh Kumar Shop No. 48, KAPS Mandi Sirsa-125 055 बनाम/ Vs. Income Tax Officer Ward-1 Sirsa, Haryana 125055 ̾थायीलेखासं./जीआइआरसं./PAN/GIR No.BBMPM-3641-R (अपीलाथŎ/Appellant) : (ŮȑथŎ / Respondent) अपीलाथŎकीओरसे/ Appellant by : Shri Sudhir Sehgal (Advocate) – Ld. AR ŮȑथŎकीओरसे/Respondent by : Dr. Ranjit Kaur (Addl. CIT) – Ld. Sr. DR सुनवाईकीतारीख/Date of Hearing : 07-07-2025 घोषणाकीतारीख /Date of Pronouncement : 09-07-2025 आदेश / O R D E R Manoj Kumar Aggarwal (Accountant Member) 1. Aforesaid appeal by assessee for Assessment Year (AY) 2022-23 arises out of an order of learned Addl. / Joint Commissioner of Income Tax (Appeals)-1, Chennai [CIT(A)] dated 26-11-2024 in the matter of an intimation issued by CPC u/s 143(1) of the Act on 17-02-2023. Having heard rival submissions and upon perusal of case records, the appeal is disposed-off as under. 2 2. The assessee filed return of income and claimed TDS credit of Rs.1,55,581/-. It was the submission of the assessee that it acted as a commission agent. However, CPC, invoking Rule 37B, restricted TDS credit to the extent of Rs.15,852/- only against which the assessee preferred further appeal. The returned income was duly accepted by CPC. The Ld. CIT(A) confirmed the intimation on the ground that trade debtors were not confined to unrealized commission and therefore, the assessee acted as trader and not as a commission agent. The buyer should have deducted TDS u/s 194J and not u/s 194Q. Aggrieved, the assessee is in further appeal before us. 3. A perusal of copy of assessee’s financial statements as placed on Page Nos. 10 to 11 of the paper-book would show that the assessee is engaged in trading activities as well as it has earned commission income. The assessee act as a commission agent and it is duly registered with Haryana State Agricultural Marketing Committee / Board. As per assessee’s submissions to Ld. CIT(A), it could be seen that the assessee act as a Kacha Arhtia and he do not indulge in trading of its own but receives commission from the buyer. The sale proceeds are distributed to the farmers on whose behalf the assessee sells the goods. The assessee has sold the goods on behalf of the farmers to the buyers against I-form and the buyers have deducted TDS u/s 194Q. As per normal accounting practices, the assessee is liable to record commission income in its books of accounts instead of total value of goods sold as the assessee is not the owner of sold 3 goods. In such a case, there would be no direct co-relation between the quantum of debtors and sales turnover. 4. In our considered opinion, the provisions of Sec.194Q do not determine the taxability of income in the hands of the recipient assessee. These provisions merely put on obligation on payer to deduct TDS on high value purchases. The said provisions target buyers with a specific turnover threshold, requiring them to withhold a portion of their payments as TDS. The purpose of the provisions is to improve the process of tax collection and ensure clear financial transactions. The specified buyers having turnover of more than Rs.10 Crores are required to deduct TDS while making purchases of more than Rs.50 Lacs from a single buyer. However, the gross turnover may not constitute real income of the assessee. The assessee, in the present case, act as a commission agent and sells agricultural produce on behalf of the farmers. The purchasers have deducted TDS while making purchases from the assessee. The assessee, as per statutory mandate, has offered commission income on these transactions. No case has been set up by Ld. CIT(A) that the assessee has concealed the gross sales / turnover or the same do not form part of assessee’s books of accounts. The assessee has reimbursed the sale proceeds to the farmers and earned commission out of the same. The Rule 37BA would have no applicability at all since it is not the case that the income arising out of these transactions would be offered to tax in multiple years. There is no dispute that these transactions form part of assessee’s books for this year. The TDS has been deducted qua the 4 assessee and the same has duly been reflected in Form 26AS. In the absence of any allegation that any of the transactions as reflected in Form 26AS do not form part of assessee’s books for this year, full TDS credit could not be denied to the assessee. The Ld. AO is accordingly directed to allow full TDS credit to the assessee as available as per Form 26AS. We order so. 5. The appeal stand allowed in terms of our above order. Order pronounced on 09-07-2025. Sd/- Sd/- (RAJPAL YADAV) (MANOJ KUMAR AGGARWAL) VICE PRESIDENT ACCOUNTANT MEMBER Dated: 09-07-2025. आदेश की Ůितिलिप अŤेिषत /Copy of the Order forwarded to : 1. अपीलाथŎ/Appellant 2. ŮȑथŎ/Respondent 3. आयकरआयुƅ/CIT 4. िवभागीयŮितिनिध/DR 5. गाडŊफाईल/GF ASSISTANT REGISTRAR ITAT CHANDIGARH "