MK COMMODITY BROKERS LIMITED,MUMBAI vs. INCOME TAX OFFICER (TDS)- 1(3)(4), MUMBAI

IN THE INCOME TAX APPELLATE TRIBUNAL “B” BENCH MUMBAI BEFORE SHRI SAKTIJIT DEY, VICE PRESIDENT & SHRI MAKARAND VASANT MAHADEOKAR, ACCOUNTANT MEMBER ITA No. 1652/Mum/2026 (Assessment Year: 2010-11) MK Commodity ITO (TDS) 1(3)(4) Brokers Limited Room No. 405, MTNL 501, Heritage Plaza, J. Vs. Building, Cumballa P. Road, Andheri West, Hill, Grant Road, Mumbai-400 053 Mumbai-400 026 PAN/GIR No. AADCM6390H (Applicant) (Respondent) Assessee by Ms. Vaidehi Singrodia, Ld. AR Revenue by Shree Kumar C., Ld. DR Date of Hearing 24.06.2026 Date of Pronouncement 08.07.2026 आदेश / ORDER PER MAKARAND VASANT MAHADEOKAR, AM: This appeal by the assessee is directed against the order dated 25.12.2025 passed by the learned Addl./JCIT(A), Ranchi [hereinafter referred to as "the CIT(A)"], under section 250 of the Income Tax Act, 1961 [hereinafter referred to as "the Act"], for assessment year 2010-11. The learned CIT(A) dismissed the

2 ITA No. 1652/Mum/2026 MK Commodity Brokers Limited appeal preferred by the assessee against the order dated 09.03.2012 passed by the Income Tax Officer (TDS)-2(3), Mumbai, under section 201(1)/201(1A) of the Act.

3 ITA No. 1652/Mum/2026 MK Commodity Brokers Limited Commodity Exchange of India Ltd., NCEX, the Assessing Officer noticed that the assessee had paid transaction charges to the said exchanges. For assessment year 2010-11, the Assessing Officer recorded that the assessee had paid transaction charges of Rs.30,17,469/- to MCX and Rs.1,76,465/- to NCEX, aggregating to Rs.31,93,934/-. The Assessing Officer was of the view that these transaction charges were paid in respect of transactions carried out through the BOLT/NEAT system provided by the exchanges to their members. The Assessing Officer observed that the BOLT/NEAT system was a screen-based system through which the trading operations were made interactive by connecting various stock brokers to the stock exchange through VSAT and lease-line connections. According to the Assessing Officer, the said system provided all data necessary for intending buyers and intending sellers, displayed orders entered by members till matching thereof, and provided a mechanism for concluding transactions between the parties. The Assessing Officer further observed that the exchange managed and monitored the trading activity from the stage of providing the platform till final settlement of the deals. On this basis, the Assessing Officer held that the exchanges were rendering managerial services to their members and that the transaction charges had a direct linkage with such managerial services. 4. The Assessing Officer further referred to section 194J read with Explanation 2 to section 9(1)(vii) of the Act and held that the expression “fees for technical services” included rendering of

4 ITA No. 1652/Mum/2026 MK Commodity Brokers Limited managerial services. The Assessing Officer also relied upon the decision of the Hon’ble jurisdictional High Court in the case of CIT v. Kotak Securities Ltd. [2011] 15 taxmann.com 77 (Bom), and held that the transaction charges paid by the assessee to the stock exchanges constituted fees for technical services covered under section 194J of the Act. Accordingly, the Assessing Officer held that the assessee was liable to deduct tax at source under section 194J while crediting or making payment of transaction charges to the stock exchanges. 5. The Assessing Officer recorded that a show cause notice dated 27.01.2012 was issued to the assessee requiring it to explain why it should not be treated as an assessee-in-default under section 201(1) of the Act for non-deduction or short deduction of tax at source. The assessee was also required to produce details regarding the date of payment of the transaction charges, copies of e-TDS returns filed for assessment years 2010- 11 and 2011-12, and other supporting documents. The Assessing Officer recorded that the assessee did not respond to the show cause notice. The proceedings were therefore concluded on the basis of material available on record. 6. Consequently, the Assessing Officer treated the assessee as an assessee deemed to be in default within the meaning of section 201(1) of the Act for non-deduction or short deduction of tax at source from the payment of transaction charges. For assessment year 2010-11, the Assessing Officer computed the default amount at Rs.3,28,975/-, interest under section 201(1A)

5 ITA No. 1652/Mum/2026 MK Commodity Brokers Limited at Rs.1,18,431/-, and determined total demand at Rs.4,47,406/-. The Assessing Officer also recorded initiation of penalty proceedings under section 271-C of the Act separately for non- deduction of tax at source. 7. Aggrieved by the aforesaid order of the Assessing Officer, the assessee preferred an appeal before the learned CIT(A). The appeal was instituted on 23.11.2022 against the order dated 09.03.2012 passed under section 201 of the Act. The learned CIT(A) noted that there was substantial delay in filing the appeal. As recorded in the appellate order, the date of the order and the date of service of the order were both 09.03.2012; the due date for filing the appeal was 08.04.2012; whereas the appeal was filed on 23.11.2022. The learned CIT(A), therefore, recorded the delay at approximately 10 years and 7 months, i.e., approximately 3,881 days. 8. Before the learned CIT(A), the assessee sought condonation of delay. The assessee submitted that it was engaged in the business of commodity broking and that the relevant proceedings had been concluded on 09.03.2012. It was explained that during the relevant period there was a change in the accounts staff in the assessee’s office and proper handover could not take place. It was further submitted that no further notice was received intimating the said demand and that only recently a notice was received from the Department regarding the outstanding demand for the years under consideration. On receipt of such notice, the assessee preferred the appeal. It was thus pleaded that due to the

6 ITA No. 1652/Mum/2026 MK Commodity Brokers Limited said circumstances, the appeal could not be filed within the prescribed time limit. 9. The learned CIT(A), however, did not accept the explanation of the assessee. The learned CIT(A) observed that under section 249(2) of the Act, an appeal is required to be filed within 30 days from the date of service of the notice of demand relating to the assessment or order. The learned CIT(A) further observed that though section 249(3) empowers the Commissioner (Appeals) to admit an appeal after expiry of the prescribed period if sufficient cause is shown, such power has to be exercised within the framework of administrative guidelines and settled legal principles. The learned CIT(A) also referred to CBDT Circular No. 11 of 2024 and observed that the guidelines emphasized that applications for condonation should not be entertained where delay exceeds five years from the due date of filing, unless exceptional circumstances or specific statutory relaxations exist. 10. The learned CIT(A) held that the assessee’s explanation of change in accounts staff and lack of proper handover did not constitute sufficient cause for a decade-long delay. The learned CIT(A) observed that a corporate entity is expected to have systems in place to manage its statutory obligations and litigations irrespective of individual staff turnover. The learned CIT(A) accordingly rejected the application for condonation of delay and, as a consequence, did not admit the appeal for adjudication on merits. In the result, the appeal was dismissed as barred by limitation.

7 ITA No. 1652/Mum/2026 MK Commodity Brokers Limited 11. Before us, the learned Authorised Representative (AR) for the assessee submitted, in substance, that the learned CIT(A) was not justified in dismissing the appeal only on the ground of delay, particularly after issuing notices under section 250 of the Act. It was submitted that the learned CIT(A) merely placed reliance on CBDT Circular No. 11 of 2024 and failed to appreciate the facts explaining the delay. 12. The learned AR invited our attention to the appellate order passed by the learned Addl./JCIT(A), Bhopal, for the immediately succeeding assessment year 2011-12 in the case of the same assessee, wherein the appeal had also arisen from the very same order dated 09.03.2012 passed by the ITO(TDS)-2(3), Mumbai, under section 201 of the Act. It was pointed out that in the said subsequent year, the appeal was instituted on 23.11.2022 and, as recorded by the learned CIT(A), there was delay of 3880 days in filing the appeal. However, after considering the reasons furnished by the assessee, the learned CIT(A) condoned the delay and proceeded to dispose of the appeal on merits. The learned AR submitted that the facts relating to the delay were identical, the order appealed against was the same composite order dated 09.03.2012 passed under section 201 of the Act, and the issue involved was also identical, namely, whether transaction charges paid to MCX and NCEX could be treated as fees for technical services within the meaning of section 194J read with Explanation 2 to section 9(1)(vii) of the Act. It was, therefore, submitted that there was no justification for taking a contrary

8 ITA No. 1652/Mum/2026 MK Commodity Brokers Limited view in the present assessment year 2010-11 by refusing to condone the delay. 13. He further submitted that in the order for assessment year 2011-12, the learned CIT(A) not only condoned the delay but also adjudicated the issue in favour of the assessee. According to the learned AR, once on the same set of facts and in relation to the same section 201 order, the delay stood condoned in the immediately succeeding assessment year, the rejection of condonation in the present year was inconsistent and unsustainable. He thus submitted that the order of the learned CIT(A) dismissing the appeal as barred by limitation deserves to be set aside and the delay in filing the appeal deserves to be condoned. He also submitted that since the issue on merits already stood decided in favour of the assessee in the subsequent year on identical facts, the assessee’s grounds on merits also deserve to be allowed. 14. The learned Departmental Representative, on the other hand, considering the said factual position, and having regard to the fact that the controversy in the present year also arises from the same order and involves identical issue, did not raise any serious objection if the matter is restored to the file of the learned CIT(A) for adjudication on merits, after condoning the delay in filing the appeal. 15. We have heard the rival submissions and perused the material available on record. The assessee’s appeal before the

9 ITA No. 1652/Mum/2026 MK Commodity Brokers Limited learned CIT(A) arose from the order dated 09.03.2012 passed by the ITO(TDS)-2(3), Mumbai, under section 201(1)/201(1A) of the Act. The learned CIT(A), in the impugned order for assessment year 2010-11, refused to condone the delay and dismissed the appeal as barred by limitation without adjudicating the grounds raised by the assessee on merits. The assessee has challenged the said action, inter alia, on the ground that the learned CIT(A) erred in dismissing the appeal solely on the ground of delay and in placing reliance on CBDT Circular No. 11 of 2024. The assessee has also raised grounds on merits challenging the treatment of transaction charges paid to MCX and NCEX as fees for technical services under section 194J read with Explanation 2 to section 9(1)(vii) of the Act, consequential treatment as an assessee-in- default under section 201(1), and levy of interest of Rs.4,47,406/- under section 201(1A) of the Act. 16. The learned AR has brought to our notice that for the immediately succeeding assessment year 2011-12, the appeal of the same assessee also emanated from the very same order dated 09.03.2012 passed under section 201 of the Act by the ITO(TDS)- 2(3), Mumbai. In the said year also, the appeal was instituted on 23.11.2022 and the delay was recorded at 3880 days. However, the learned CIT(A), after considering the reasons furnished by the assessee, condoned the delay and proceeded to decide the appeal on merits. It was, therefore, submitted that when both years arise from the same composite order, involve the same assessee, the

10 ITA No. 1652/Mum/2026 MK Commodity Brokers Limited same issue, and substantially identical delay, the approach of the appellate authority ought to be consistent. 17. We find merit in the aforesaid submission. It is settled in principle that consistency in approach is an important facet of judicial discipline, particularly when the facts, parties and controversy are identical. Though the principle of res judicata may not strictly apply to income-tax proceedings, a coordinate or appellate authority dealing with identical facts should not ordinarily take a different view in another year of the same assessee unless there exists a distinguishing feature or a change in facts or law. In the present case, no distinguishing fact has been brought on record to justify why delay arising in relation to the same order dated 09.03.2012 should be condoned for assessment year 2011-12 but not for assessment year 2010-11. 18. We also note that the learned Departmental Representative, considering the order passed by the learned CIT(A) for the subsequent assessment year 2011-12, has fairly raised no objection if the matter is restored to the file of the learned CIT(A) for adjudication on merits. In these peculiar facts, and having regard to the requirement of consistency, fairness and substantial justice, we are of the considered view that the delay in filing the appeal before the learned CIT(A) deserves to be condoned. 19. Since the learned CIT(A) has not adjudicated the grounds raised by the assessee on merits in the impugned order, we do not consider it appropriate to record any finding on the merits of

11 ITA No. 1652/Mum/2026 MK Commodity Brokers Limited the issue at this stage. The proper course would be to restore the matter to the file of the learned CIT(A) so that the first appellate authority may decide the grounds raised by the assessee on merits by passing a speaking order. Accordingly, the impugned order is set aside and the matter is restored to the file of the learned CIT(A) with a direction to admit the appeal and decide the same on merits in accordance with law, after affording reasonable opportunity of being heard to the assessee.

Order pronounced in the open court on 08.07.2026.

Sd/- Sd/- (SAKTIJIT DEY) (MAKARAND VASANT MAHADEOKAR) VICE PRESIDENT ACCOUNTANT MEMBER Mumbai, Dated 08/07/2026 Dhananjay, Sr.PS आदेश की प्रतितिति अग्रेतिि/Copy of the Order forwarded to : 1. अपीलार्थी / The Appellant 2. प्रत्यर्थी / The Respondent. संबंधित आयकर आयुक्त / The CIT(A) 3. 4. आयकर आयुक्त(अपील) / Concerned CIT

12 ITA No. 1652/Mum/2026 MK Commodity Brokers Limited धिभागीय प्रधतधिधि, आयकर अपीलीय अधिकरण, मुम्बई / DR, ITAT, Mumbai 5. गार्ड फाईल / Guard file. 6. आदेशानुसार/ BY ORDER, सत्याधपत प्रधत //True Copy// 1. उि/सहायक िंजीकार ( Asst. Registrar) आयकर अिीिीय अतिकरण, मुम्बई / ITAT, Mumbai