Commissioner of Income Tax vs Mohan Singh and Sons

Applicant by Shri P. K. Saxena.

He is heard on admission.

This application has been filed u/s 250(2) of the Income Tax Act, 1961, seeking a direction that the Income Tax Tribunal, Indore, be directed to refer the case to the High Court. The question of law raised by the Department is :"whether, on the facts and in the circumstances of the case, the Tribunal was justified in law in treating the mandi fee and Nirashrit Shulk not as a tax or duty u/s 43B ?".

This point has been dealt with by the Income Tax Tribunal and the Commissioner of Income Tax also. Mandi fee is paid by the trader and person who enjoys the facility of mandi because some services are rendered by the mandi and, therefore, merely because there is a compulsion for payment of fee, that cannot be taken to be a lax as the same is being collected for the services rendered to the traders and persons taking the benefit of the mandi.

Even otherwise, this point was never raised before the Income Tax Tribunal and, therefore, the Income-lax Department cannot he allowed to raise this point for the purpose of seeking a reference to the High Court.

The Commissioner (Appeals) and the Income Tax Appellate Tribunal both have held that the mandi fee is a fee and not a tax. It is a mere question of fact rather than law. In our opinion, there is no question of law which arises in this case. As such the application for directing the Tribunal to refer the case to the High Court is dismissed.