TaxTMI 
TaxTMI 
2026 (8) TMI 1762
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....iled the belated return of income u/s. 139(4) of the Act on 31.12.2023 for declaring total income of Rs. 5,28,530/-. The case was selected for scrutiny and the statutory notices were duly served on the assessee. The A.O noticed certain difference in the commission income as reflected in Form 26AS from BSNL/India 1 ATM and the commission income as reflected in the profit and loss account of the assessee. The assessee in response submitted the reconciliation statement and stated that the assessee has received a discount from BSNL which is netted of against the income declared by the assessee whereas Form-26AS contains the gross amount. The AO however did not accept the submissions of the assessee and held that: "4. Conclusion drawn: In view of the above facts of the case and discussion in foregoing paras the following conclusion is hereby drawn. The explanation furnished by the assessee has been perused but not found satisfactory. As per 26AS, the assessee has received commission of Rs. 60,90,096/- from BSNL of and contractual/commission receipts of Rs. 15,48,731/- from Indian 1 ATM, aggregating to Rs. 76,38,827/-. This fact is very clear from 26AS wherein ....
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....o be initiated for under reporting of income. Further, in this case the under reporting of income is in consequence of misreporting thereof as per the provisions of Section 270A(8) of the IT Act. This is because, the assessee has misrepresented the facts of his case as enumerated in provisions of Section 270A(9)(a) of the IT Act. Therefore, penalty proceedings u/s. 270A of the Income Tax Act is hereby initiated for under reporting in consequence of misreporting of his income." 3. Aggrieved, the assessee filed further appeal before the CIT(A). The CIT(A) confirmed the addition made by the AO by holding that: 7.2 The submissions made by the appellant, documentary evidence furnished by the appellant, impugned assessment order and material available on the record have been perused. The appellant has mainly averred that the Assessing Officer erred in treating the receipts from BSNL and India 1 Payments Ltd. as commission income solely on the basis of Form 26AS and failed to consider that a portion of the receipts represents trade discounts. However, on examination of the records, it is observed that the appellant has not furnished any conclusive evidence to demonstrate that ....
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....39;ble Supreme Court in Bharti Cellular Ltd. vs. ACIT to contend that discounts allowed by telecom operators cannot be treated as commission income. On careful examination, it is observed that the facts of the said decision are clearly distinguishable from the facts of the present case. In Bharti Cellular Ltd., the issue before the Hon'ble Supreme Court was whether the telecom service provider was liable to deduct tax at source under section 194H on the margin earned by distributors. The Hon'ble Court held that the telecom operator neither paid nor credited any income to the distributors and that the distributors earned their margin independently from third-party customers, and therefore, the provisions of section 194H were not attracted. In the present case. however, the issue under consideration is not the liability of BSNL to deduct tax at source, but the taxability and nature of receipts in the hands of the appellant. Here, the receipts from BSNL are admittedly reflected in Form 26AS as commission income subjected to TDS, and the appellant has failed to produce any revised TDS certificates, confirmations from BSNL, or rectification of Form 26AS to establish that such cl....
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....ued that the lower authorities have not considered the reconciliation statement by the assessee but has proceeded to make an addition stating that the assessee has not furnished any documentary evidences. 6. The Ld. Departmental Representative (DR), on the other hand, relied on the orders of the lower authorities. 7. We heard the rival submissions and perused the material available on record. The issue before us is whether the difference between the receipts reflected in Form 26AS and the commission income offered by the assessee represents trade discount earned by the assessee on purchase and sale of BSNL recharge vouchers or whether the entire amount reflected in Form 26AS is liable to be assessed as commission income. In this regard we notice that the assessee has furnished a detailed reconciliation statement explaining the receipts reflected in Form 26AS and the commission income credited in its books of account. The assessee has also produced invoice-wise details of recharge vouchers purchased from BSNL indicating the face value of the vouchers, the discounted purchase price and the corresponding margin retained by the assessee. On verification of the reconciliation and ....