ACIT, CIR-10(1), NEW DELHI V. HERO ECOTECH LIMITED , LUDHIANA (PUNJAB)

MA 51/DEL/2023

AI Insights

The case involves the Income Tax Department's application to recall a Tribunal order that had allowed an appeal by Hero Ecotech Limited, which pertained to the disallowance of certain deductions under section 36(1)(va) of the Income Tax Act for the assessment year 2017-18. Initially, the Tribunal had deleted the disallowances based on precedents favoring the assessee. However, following a Supreme Court decision that confirmed the disallowance of expenditures related to delayed deposit of employees' contributions to EPF and ESI, the Department sought to recall the Tribunal's earlier order. The Tribunal dismissed the application, stating that a change in judicial interpretation does not amount to a mistake apparent from the record.

• Counselvise Citation: [2024] 140 COUNSELVISE.COM (IT) 31609 (ITAT-DELHI)
• Duration Of Justice: 1 year(s) 9 month(s) 23 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 20-11-2024
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: C
• Next Hearing Date: 08-11-2024
• Assessment Year: 2017-2018
• Appeal Filed On: 27-01-2023
• Other Referred Cases: CIT Vs. Amil Ltd. (2010) 321 ITR 508 (Del.), Checkmate Services P. Ltd. v. CIT-1 & others, DCIT vs. ANI Integrated Services Ltd., Goslino Mario Case (2000) 242 ITR 312, Reliance Jute and Industries Ltd. V CIT (1981) 2 SCC 585, CIT vs. M/s Vegetable Products Ltd., 88 ITR 192, CIT vs. Reliance Telecom Ltd. (2022) 440 ITR 1 (SC), ACIT vs. Saurashtra Kutch Stock Exchange Ltd. (2008) 305 ITR 227/173 Taxman 322
• Laws Referred To: Income Tax Act
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Section: 143(1); 192; 254(2)

Judgement Text

"IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH “C”: NEW DELHI BEFORE SHRI SHAMIM YAHYA, ACCOUNTANT MEMBER AND SHRI ANUBHAV SHARMA, JUDICIAL MEMBER M.A. No. 51/Del/2023 ( In ITA No. 1469/DEL/2021) Assessment Year: 2017-18 ACIT, Cir.10(1), New Delhi. Vs. Hero Ecotech Limited, Phase-VIII, Chandigarh Road Focal Point, Mangli, Ludhiana – 141010, Punjab. PAN: AACCH1308R. APPLICANT RESPONDENT Assessee represented by None Department represented by Shri Ajay Kumar Arora, Sr. DR Date of hearing 08.11.2024 Date of pronouncement .11.2024 O R D E R PER ANUBHAV SHARMA, JM: Heard and perused the record. 2. The application in hand has been filed on behalf of Revenue for recalling the order dated 15.09.2022 by which the appeal of the assessee was allowed. 3. The brief background of the case is that the assessee had filed its revised return of income for the AY 2017-18 on 07.11.2017 declaring a total income of 2 MA No. 51/Del/2023 Rs.25,94,86,405/-. The return of the assessee was processed u/s 143(1) of the Act determining a total income of Rs.26,04,00,127/- after making an addition of Rs.9,13,722/- on account of belated payment of employees contribution to PF & ESI. Being aggrieved with the order dated 23.04.2019 passed u/s 143(1) of the Act, the assessee filed an appeal before the NFAC which, vide its order dated 18.08.2021 has confirmed the addition made u/s 36(1)(va) of the Act. Being aggrieved with the order of the ld.CIT(A), dated 18.08.2021, the assessee filed an appeal before the ITAT. However, relying on Hon’ble Delhi High Court decision in the case of CIT Vs. Amil Ltd. (2010) 321 ITR 508 (Del.) and other decision of Hon’ble Jurisdictional High Court, the disallowances made u/s 36(1)(va) of the Act were deleted vide order dated 15.09.2022 in ITA No.1469/Del/2021. 4. The application in hand has been moved by the Departmernt with request to recall the said order on the basis that decision of Hon’ble Supreme Court in Civil Appeal no. 2833 of 2016 in the case of Checkmate Services P. Ltd. v. CIT-1 & others dated 12.10.2022 is not considered as that judgment has confirmed the disallowance of expenditure on account of delay in deposit of employees’ contribution related to EPF and ESI. 5. The ld. AR has relied the decision of the Mumbai Tribunal in the case of DCIT vs. ANI Integrated Services Ltd., MA No.167/Mum/2023, order dated 3 MA No. 51/Del/2023 29.05.2024, to contend that Mumbai Bench has taken a view on this contentious aspect holding that the scope of section 254 (2) of the Act is limited and review of an order is not possible. 6. We have given thoughtful consideration to the matter on record and on facts of the present case. It is the settled proposition of law that in fiscal litigation, each assessment year is separate and independent. It has been affirmed by the Hon’ble Delhi Court in Goslino Mario Case (2000) 242 ITR 312 that a cardinal principle of the Tax law is that the law to be applied is that which is in force in the relevant assessment year unless otherwise provided expressly or by necessary implication. In Reliance Jute and Industries Ltd. V CIT (1981) 2 SCC 585 also this proposition law is recognized. 7. We can observe that the coordinate Bench while passing the order has taken into consideration the judgments in favour of assessee. Hon’ble Supreme Court in the case of CIT vs. M/s Vegetable Products Ltd., 88 ITR 192 has held for that if two reasonable constructions of a taxing provision are possible, the construction which favours the assessee must be adopted. The coordinate Bench has, thus, given the assessee the benefit of the view of various Hon’ble High Courts favouring the assessee. Thus, where assessee is benefited due to one favorable view then, due to 4 MA No. 51/Del/2023 subsequent judgment reversing that view, cannot be said to be a mistake apparent from record, requiring exercise of powers u/s 254(2) of the Act. 8. Even otherwise, after the judgement of the Hon’ble Supreme Court in the case of CIT vs. Reliance Telecom Ltd. (2022) 440 ITR 1 (SC), the powers u/s 254(2) being recognized as akin to power of Review under order XLVII, Rule 1 CPC, the same restricts the scope of review as it is only mistake apparent from record which can be rectified and, according to the requirement of the nature of rectification, the order may be recalled or re-heard. The Explanation attached to the order XLVII Rule 1 CPC specifically provides that merely because of reversal or modification of a judgment of a court which has been relied in a decision, that alone will not be a ground for review of the judgment. Thus for the reason that assessee was given benefit by following the law, as stood then, as laid by Hon’ble High Court, the same cannot be termed as “mistake apparent from record”. 9. The judgment relied by the Revenue of the Hon’ble Supreme Court in the case of ACIT vs. Saurashtra Kutch Stock Exchange Ltd. (2008) 305 ITR 227/173 Taxman 322 is not applicable, as that was not a case where one of the possible views in favour of the assessee was accepted by the Bench but in that case the attention of the Bench was not drawn to certain decisions in favour of the assessee which then existed and, subsequently, when the assessee came to know 5 MA No. 51/Del/2023 about the judgement an application u/s 254(2) of the Act was filed bringing it to the notice of the Tribunal. 10. Consequently the application has no merit and is dismissed. Order pronounced in open court on 20.11.2024. Sd/- Sd/- (SHAMIM YAHYA) (ANUBHAV SHARMA) ACCOUNTANT MEMBER JUDICIAL MEMBER dk Copy forwarded to: 1. Appellant 2. Respondent 3. CIT 4. CIT(Appeals) 5. DR: ITAT ASSISTANT REGISTRAR ITAT, NEW DELHI "