THE MAHARASHTRA STATE CO-OPERATIVE MARKETING FEDERATION LIMITED,MUMBAI vs. COMMISSIONER OF INCOME TAX (APPEAL), INCOME TAX DEPARTMENT, BANDRA (EAST)

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ITA 4508/MUM/2026Status: DisposedITAT Mumbai19 August 2026AY 2021-226 pages

In favour of the assessee: the assessee's appeal was allowed. From the AI summary of this appeal.

AI SummaryAllowed

What did the Tribunal hold?

The Tribunal restored the issues related to the disallowance under section 80P(2)(d) and the addition of commission income to the file of the Assessing Officer for fresh assessment.

What were the facts?

The assessee appealed against the CIT(A)'s order confirming disallowance under section 80P(2)(d) and addition of commission income. The assessee argued that previous assessment years were ex-parte and sought restoration of issues to the Assessing Officer.

What were the issues?

Whether the disallowance under section 80P(2)(d) and the addition of commission income were correctly made, and if the matter should be remanded for fresh assessment due to ex-parte proceedings in prior years.

Which sections of the Income-tax Act were involved?

Section 80P(2)(d),Section 270A

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, MUMBAI

Before: SHRI CHALLA NAGENDRA PRASAD & SHRI MAKARAND VASANT MAHADEOKAR

Pronounced: 19/08/2026

PER SHRI CHALLA NAGENDRA PRASAD, JUDICIAL MEMBER: This appeal is filed by the assessee against the order of the learned CIT(A)-NFAC, Delhi, dated 23.02.2026 for the assessment year 2021-22.

2.

The assessee has raised the following grounds of appeal.

ITA 4508/MUM/2026 THE MAHARASHTRA STATE CO-OPERATIVE MARKETING FEDERATION LIMITED “1. The Learned CIT Income Tax Department erred in passing “X” Party Order against the Applicant. 2. Learned CIT erred confirmation the disallowance of INR Rs. 27,85,710/- made under section 80P(2)(d) by the assessing officer. 3. Learned CIT erred in addition commission income not accounted INR Rs. 5,79,65,376/- on account confirmed addition by learned AO. Commission 1% of sub agent commission booked trading charges to state government. Which is altogether more than commission shown 26 AS. 4. Learned CIT erred to be imposed penalty u/s 270A of IT Act.”

3.

Ld. Counsel for the assessee, at the outset, submitted that for the assessment years 2011-12 to 2020-21, the Tribunal restored the issue in respect of 80P(2)(d) of the Act to the file of the Assessing Officer on the ground that the assessments were made ex-parte and the appeals were disposed off ex-parte by the learned CIT(A). Since the assessments of the issue for the earlier assessment years by the AO has a bearing on this appeal, Ld. Counsel submitted that the issues in this appeal be restored to the file of the Assessing Officer for fresh assessment.

4.

Ld. Counsel submitted that the issue in respect of the commission also be restored to the file of the Assessing Officer for making assessment afresh, as there was a mismatch regarding commission income and TDS income in Form 26AS as this was explained to the Ld. CIT(A), but the learned CIT(A)

ITA 4508/MUM/2026 THE MAHARASHTRA STATE CO-OPERATIVE MARKETING FEDERATION LIMITED did not appreciate and without much finding, sustained the addition. Ld. Counsel further in respect of commission disallowance, made the following submission.

“Summary of Submission - Regarding Commission Income and TDS Income Mismatch Case Background: As per the agreements entered into between National Agricultural Cooperative Marketing Federation of India (NAFED), Food Corporation of India (FCI) and the Marketing Federation, the Marketing Federation is appointed for procurement of food grains such as Toor, Moong, Chana, Urid, etc. under various schemes of the Government of India. For the procurement activities carried out, the Marketing Federation is entitled to receive a commission @ 2% on the total procurement value. The bifurcation of the said commission is as under: Particulars Percentage Accounting Treatment Commission retained 1% Recognised as commission income by Marketing Federation in Profit & Loss Account

Commission payable to 1% Directly credited to respective Co- operative Societies Society Ledger Accounts as pass-through amount Accounting Treatment: The 1% commission payable to the Co-operative Societies represents reimbursement/payment for procurement activities carried out by the societies at district level across Maharashtra. Since the said amount does not belong to the Marketing Federation, the same is not routed through the Trading Account or Profit & Loss

ITA 4508/MUM/2026 THE MAHARASHTRA STATE CO-OPERATIVE MARKETING FEDERATION LIMITED Account. It is directly accounted by crediting the respective Society Ledger Accounts. Therefore, the actual income of the Marketing Federation is restricted to 1% commission only, which has been duly offered and accounted for in the Financial Statements. Reason for Difference in Form 26AS: While making payment of commission, NAFED and FCI report the entire 2% commission amount paid to the Marketing Federation and deduct TDS on the full amount. Consequently, Form 26AS reflects the full 2% commission amount along with TDS credit, whereas only 1% represents the actual income of the Marketing Federation. The remaining 1% is merely a pass- through amount payable to the respective Co-operative Societies. Hence, the difference between Form 26AS and the income recognised in the books is only due to the reporting mechanism adopted by NAFED/FCI and does not represent any undisclosed income. Submission before CIT(A): The detailed reply was submitted before the Commissioner of Income Tax (Appeals) on 04-07-2025 through online appeal proceedings explaining the above facts and accounting treatment. Documents Enclosed: 1. Copy of reply/submission submitted before the Assessing Officer. 2. Copy of NAFED Agreement (Refer Point No. 30). 3. Summary of NAFED and FCI Commission along with relevant DMO Ledger details. 4. Financial Statements for FY 2020-21. 5. Acknowledgement of submission made before CIT(A).”

ITA 4508/MUM/2026 THE MAHARASHTRA STATE CO-OPERATIVE MARKETING FEDERATION LIMITED 5. Considering the rival submissions, perusing the materials available on record and the decision of the Tribunal in assessee's own case in ITA Nos. 4331/MUM/2026, 4361/MUM/2026, 4362/MUM/2026, 4363/MUM/2026 and 4395/MUM/2026 for the assessment years 2011-12, 2013-14, 2017-18, 2018-19 and 2020-21 dated 23.06.2026 and also the submissions regarding mismatch of commission income and TDS income, we deem it appropriate to restore the issues in this appeal to the file of the Assessing Officer for fresh assessment in accordance with law after providing adequate opportunity to the assessee.

6.

Accordingly, we restore this appeal to the file of the Assessing Officer for making assessment afresh after providing adequate opportunity to the assessee.

7.

In the result, the appeal of the assessee is allowed for statistical purposes. Order pronounced in the open court on 19/08/2026

2.

Sd/- Sd/- MAKARAND VASANT MAHADEOKAR CHALLA NAGENDRA PRASAD ACCOUNTANT MEMBER JUDICIAL MEMBER Mumbai, Dated: 19/08/2026 Prabhat

ITA 4508/MUM/2026 THE MAHARASHTRA STATE CO-OPERATIVE MARKETING FEDERATION LIMITED

Copy to: THE MAHARASHTRA STATE CO- OPERATIVE MARKETING FEDERATION LIMITED, 1 4, KANMOOR HOUSE, NARSI NATH, STREET, MASJID BUNDER, MUMBAI-400009, MAHARASHTRA COMMISSIONER OF INCOME TAX (APPEAL), 2 KAUTILYA BHAWAN, BANDRA-KURLA COMPLEX, MUMBAI-400051, MAHARASHTRA 3 THE PCIT / CIT, 4 THE D.R., ITAT, MUMBAI BENCH 5 GUARD FILE

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