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Facts
The assessee, a commission agent (Kaccha Arahita), claimed TDS credit of Rs. 96,596, but CPC allowed only Rs. 27,584 due to non-reflection of gross receipts in the Profit & Loss Account. The assessee's rectification request u/s 154 was rejected, and the CIT(A) dismissed the subsequent appeal on the technical ground that the appeal against rectification should not address issues related to the original 143(1) order.
Held
The Tribunal found the CIT(A)'s technical rejection incorrect, as the core grievance was consistently the denial of full TDS credit. Recognizing the assessee's role as a Kaccha Arhtia where only commission income is taxable, the Tribunal directed CPC to grant full TDS credit as per Form 26AS, concluding that the full gross receipts need not be offered to tax.
Key Issues
Whether the denial of full TDS credit to a commission agent (Kaccha Arhtia) where gross receipts are not fully offered to tax is justified, and the correctness of the CIT(A) rejecting an appeal on technical grounds.
Sections Cited
154, 143(1), 194A, 194C, 194H, 194Q
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Income Tax Appellate Tribunal, “A” BENCH, CHANDIGARH
Before: HON’BLE SHRI RAJPAL YADAV & HON’BLE SHRI MANOJ KUMAR AGGARWAL, AM
O R D E R Manoj Kumar Aggarwal (Accountant Member) 1. Aforesaid appeal by assessee for Assessment Year (AY) 2023- 24 arises out of an order of learned Addl. / Joint Commissioner of Income Tax (Appeals), Mysore dated 26-09-2025 in the matter of a rectification intimation as issued by CPC u/s 154 on 21-06-2024. The sole grievance of the assessee is denial of tax credit for Rs.69,012/-. Having heard rival submissions, the appeal is disposed-off as under.
The assessee is engaged as commission agent for food grains mainly as a Kaccha Arahita. In the return of income, the assessee claimed credit of TDS for Rs.96,596 as deducted by various parties u/s 194A, 194C, 194H and 194Q. However, CPC, in an intimation u/s 143(1), denied full TDS credit on the ground that the gross receipts against which TDS was deducted was not reflected fully in the Profit & Loss Account. Hence, only proportionate credit of Rs.27,584/- was allowed out of Rs.96,596/- as claimed by the assessee. The assessee filed rectification u/s 154 which stood rejected by CPC against which the assessee preferred further appeal. The Ld. CIT(A) rejected the appeal on the technical ground that though the appeal was filed against rectification intimation u/s 154, the grounds of appeal
related to passing of an order u/s 143(1). Separate appeals must be filed for different orders. Aggrieved, the assessee is in further appeal before us.
1. 3. It clearly emerges that the sole grievance of the assessee is denial of full TDS credit as reflected in Form 26AS. The CPC, while processing the return of income u/s 143(1), allowed only proportionate credit on the ground that gross receipts on which TDS was deducted was not fully offered to Tax. The assessee sought rectification of the same u/s 154 which also rejected. The sole grievance of the assessee, in both the intimations, is common i.e., denial of full TDS credit. Therefore, the approach of Ld. CIT(A) in rejecting the appeal on technical ground was not a correct approach.
From the pleadings of Ld. AR, it emerges that the assessee has acted as a Kaccha Arhtia only. The assessee receives payment on behalf of the others and offer commission from such activity. Thus, the full gross receipts as reflected in Form 26AS may not be offered to tax since only commission income would constitute revenue for the assessee. The differential receipts would never be offered to tax as revenue receipts. Nevertheless, TDS has been deducted against assessee’s payment and it is the assessee’s money which has been deducted by the payers. Therefore, the credit of the same would certainly be available to the assessee. The turnover or other financial results are not in dispute. The provisions under which TDS has been deducted would not hold much relevance in such a case. Therefore, CPC is directed to grant full TDS credit to the assessee as available in Form 26AS.