The meaning of agency under section 35B of the Income Tax Act is not defined in the act itself. But we can take guidance from decisions by various high courts. Here are excerpts of courts orders in which the Hon’ble High Court tried to explain the meaning of agency.
Meaning of agency defined by court
The phrase ‘agency’ used in section 35B of the Income Tax Act came up before hon’ble Allahabad High Court in Kothari carpets vs. ITO  9 ITD 357/19 TTJ 572 (All. – Trib.) and it explained.
Meaning : The word ‘agency’ occurring in sub-clause (iv) can only mean an agency as defined in the indian contract act. It is a relationship between the principal and an agent. An agent is a person employed to do any act for the principal or to represent the latter in dealings with third persons. As per section 185 of the indian contract act, no consideration is necessary to create an agency.
Section 35B of Income Tax Act
Export markets development allowance.
35B. [Omitted by the Direct Tax Laws (Amendment) Act, 1987, as amended by the Direct Tax Laws (Amendment) Act, 1989, w.e.f. 1-4-1989. Original section 35B was inserted by the Finance Act, 1968, w.e.f. 1-4-1968.]
In this article, you can get guidance from high courts on the meaning of agency under section 35B of the Income Tax Act.
Updated up to Finance Act 2021