CHAGANLAL SURESHKUMAR,NEW ANAJ MANDI vs. INCOME TAX OFFICER, WARD-1(2), RANI BAZAR

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ITA 258/JODH/2026Status: DisposedITAT Jodhpur27 October 2026AY 2023-245 pages
AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that the assessee's appeal deserved to be allowed. The decision was based on the submissions advanced by the assessee, the factual matrix of the case, and following a Coordinate Bench decision in similar cases, as well as CBDT Circular No. 452 dated March 17, 1986. The Tribunal directed the Learned Assessing Officer (AO) to examine and verify the contents of Form 26AS at the time of giving appeal effect and grant credit for any TDS mismatch to the appellant assessee. The reasoning was that the assessee, acting as a 'Kaccha Arhatia' (a middleman), sells crops on behalf of farmers, and according to the circular, such transactions are not to be treated as the agent's turnover. Therefore, the TDS credit should be allowed if the corresponding income has been offered for taxation by the assessee, the Kaccha Adatiya, or its principal. The Tribunal noted that the issue had been decided by a coordinate bench in the case of Rajender Kumar Legha (ITA No. 1038/Jodh/2025) and other similar cases.

What were the facts?

The assessee, Chaganlal Suresh Kumar, filed an appeal against the order dated January 16, 2026, passed by the Commissioner of Income Tax (Appeals). The assessment year in question is 2023-24. The primary grievance of the assessee is that the Income Tax Department's Central Processing Centre (CPC) and the Additional Commissioner of Income Tax (Appeals) erroneously disallowed the credit for Tax Deducted at Source (TDS) amounting to ₹1,79,098, which the assessee claims is reflected in Form 26AS. The assessee also argued that the impugned order was passed without a specific show cause notice. The revenue relied on the orders of the lower authorities.

What were the issues?

1. Whether the Tribunal had to decide if the assessee was eligible for the credit of TDS amounting to ₹1,79,098, which was reflected in Form 26AS, despite disallowance by the CPC and CIT(A)? (Question of law and fact, concerning the eligibility for TDS credit). Assessee's Contentions: - The CPC and CIT(A) erroneously disallowed the TDS credit of ₹1,79,098, which is available in Form 26AS. - Relying on CBDT Circular No. 452 dated March 17, 1986, sales made on behalf of a principal should not be treated as the agent's turnover, making the declared turnover correct and the TDS eligible. - The impugned order is illegal as it was passed without a specific show cause notice. - The issue has been decided by a Coordinate Bench in similar cases. Revenue's Contentions: - The Learned DR relied upon the orders passed by both lower authorities.

Which sections of the Income-tax Act were involved?

Section 199

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, JODHPUR BENCH, JODHPUR

For Appellant: Shri Shafi Mohammad Chouhan
For Respondent: Ms. Prerna Choudhary, Addl. CIT-DR

IN THE INCOME TAX APPELLATE TRIBUNAL JODHPUR BENCH, JODHPUR BEFORE SMT ANNAPURNA GUPTA, HON’BLE ACCOUNTANT MEMBER AND SHRI SUDHIR PAREEK, HON’BLE JUDICIAL MEMBER ITA No. 258/Jodh/2026 (Assessment Year – 2023-24) CHAGANLAL SURESH KUMAR INCOME TAX OFFICER, Ward No B-20, New Anaj Mandi, 1(2), Bikaner Bikaner - 334001 PAN No. AALFC 1524 C Assessee by Shri Shafi Mohammad Chouhan, Advocate (Physically) Revenue by Ms. Prerna Choudhary, Addl. CIT-DR (Through V.C.) Date of Hearing 14 / 09 / 2026. Date of Pronouncement 27 / 10 / 2026. ORDER PER SUDHIR PAREEK, JUDICIAL MEMBER The aforetitled appeal has been preferred by the appellant against the order dated 16th January 2026 passed by Officer of Commissioner of Income Tax Appeal, Addl/JCIT (A)-2 Panaji [for the sake of convenience, hereinafter referred to as CIT(A)].

2.

The assessee has raised various grounds of appeal, primarily challenging the action of the Ld. CPC as well as the Ld. JCIT(A) in not allowing the credit of TDS

2 ITA No. 258/Jodh/2026 Asst. Year: 2023-24 amounting to ₹1,79,098/-, which, according to the assessee, is duly reflected in Form No. 26AS.

3.

Reiterating the grounds of appeal, the Ld. AR expressed grievance that the Ld. CPC as well as Ld. JCIT(A) erroneously disallowed the claim of TDS of Rs. 1,79,098/- deducted, which is available in form 26AS and denied the eligibility of the assessee. It is also submitted that as per circular no. 452 dated 17.03.1986 the sales made for and on behalf of his principle is not to be treated as the turnover of the agent, hence the turnover declared by the assessee is correct and he is also eligible for the benefit of TDS as available in form 26AS, therefore, the act of the Ld. CPC and Ld. JCIT(A) is unjustified and against the circular of CBDT and also submitted that impugned order is otherwise illegal as it is without any specific show cause notice.

4.

Per Contra, the Learned DR relied upon orders passes by both lower authorities.

5.

The Learned AR submitted that impugned order deserves to be set aside as issue involved in this appeal has already been decided by Coordinate Bench in the

3 ITA No. 258/Jodh/2026 Asst. Year: 2023-24 case of Rajender Kumar Legha ITA No. 1038/Jodh/2025, of which relevant extract as under:

“The Ld. AR also submitted that the order passed by the Ld. CIT(A) deserves to be set aside as issue involved in this appeal has already been decided by coordinate bench in the case of Brijesh Kumar Agni (HUF) Vs. ITA in ITA No. 534/Jodh/2024 vide order dated 07.01.2026 in which coordinate observed as under:- On an identical issue and parity of fact, in the case of Amrit Lal Jain Vs. ITO in ITA No. 627/Jodh/2024 for Assessment Year 2023-24 the bench has pronounced an order in Sept. 2025 by following its own judgement delivered in the case of Ratnesh Garg Vs. ITO, in ITA No. 589/Jodh/2024 for the Assessment Year 2022-23 wherein the coordinate bench has observed as under: Having heard both the sides and perusal of record, we find that AO/CPC has not allowed the full claim of the TDS due to the mismatch of total receipt in ITR and Form-26AS. In this respect, appellant in his submission before Ld. CIT(A) and before us has submitted that he is a "Kaccha Arhatia" registered with Rajasthan Krishi Upaj Mandi and works as a middleman. As per the Circular No. 452(F.No. 201/3/85-/T(A- //)], dated 17.03.1986) the aforesaid Kaccha Arhatia acts only as an agent of his constituent and never acts as a principal. The JCIT(A) has not appreciated the facts of the case in right perspective. Considering the peculiar facts of the present cases, the matter is required to be restored to the AO for limited purpose with the direction to examine the contents of the Form 26AS at the time of giving appeal effect and give credit of TDS mismatch claimed subject to provision of section 199 of the I. T. Act and rule 37BA of the I. T. Rules. Thus, the AO has to verify the total receipts shown in 26AS and ITR and give credit of TDS to the appellant if the corresponding income has been offered either by the assessee, the Kachha Adatiya or its principle by for taxation in his income tax return in the relevant year after due verification. Without prejuaice to above, it is pertinent to mention that appellant is being a kachha arahtia involved in selling crops on behalf of farmers and therefore, only gross commission has to be considered for the purpose of computing the turnover in the light of aforementioned CBDT Circular 452 of 1986 dated 17.03.1986 while computing tax

4 ITA No. 258/Jodh/2026 Asst. Year: 2023-24 liability. It is clarified that the short credit of TDS granted in respect of TDS deducted against his own is dependent upon the filing of TDS statement by the deductor as mandated u/s 19 and rule 37BA(1). If there is any mismatch in the TDS claim as per the return vis-a-vis the TDS statement filed by the deductor. The assessee has been allowed due liberty by the LD. JCIT(A) that the TDS statement can be rectified by getting appropriate corrected TDS statement issued filed by the deductor. Considering the factual matrix of the case and the CBDT Circular 452 of 1986 dated 17.03.1986, we direct the AO to examine and verify the contents of the Form 26AS at the time of giving appeal effect and give credit of TDS mismatch if any, to the appellant assesses.” 6. On the basis of submissions advanced on behalf of appellant/assessee fact situation of the case and following the coordinate bench decision as well as the CBDT circular 452 of 1986 dated 17.03.1986, we direct the Learned AO to examine and verify the contents of the Form 26AS at the time of giving appeal effect and give credit of TDS mismatch if any, to the appellant assessee and accordingly the appeal of the assessee deserves to be allowed.

7.

Consequently, the appeal of the assessee is allowed as indicated above.

Order pronounced in Open Court on 27/10/2026

Sd/- Sd/- (ANNAPURNA GUPTA) (SUDHIR PAREEK) ACCOUNTANT MEMBER JUDICIAL MEMBER Dated : 27/10/ 2026. Nimisha, Sr. PS

5 ITA No. 258/Jodh/2026 Asst. Year: 2023-24 True Copy

Copies to : (1) The appellant. (2) The respondent. (3) CIT (4) CIT(A) (5) Departmental Representative (6) Guard File

BY ORDER, Digitally signed NIMISHA by NIMISHA ARORA ARORA Date: 2026.10.27 17:17:13 +05'30' Sr. Private Secretary ITAT Jodhpur Bench

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