ACIT, CIRCLE- 19(1), NEW DELHI V. OXIGEN SERVICES INDIA PVT. LTD., NEW DELHI

MA 441/DEL/2022

AI Insights

The case involves Miscellaneous Applications filed by the Revenue seeking to recall the Tribunal's earlier order which favored the Assessee, Oxigen Services India Pvt. Ltd., regarding the late deposit of ESI & PF contributions for the Assessment Years 2013-14 and 2014-15. The Revenue argued that a subsequent Supreme Court decision in Checkmate Services Pvt. Ltd. vs. CIT-1, which decided the issue in favor of the Revenue, should lead to a recall of the Tribunal's order. However, the Tribunal, referencing a Bombay High Court decision, held that the change in law post the Tribunal's decision does not constitute a mistake apparent on the record, and thus, the Tribunal's jurisdiction under Section 254(2) does not extend to revising its decisions based on subsequent legal developments.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 47292 (ITAT-DELHI)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 09-04-2025
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: E
• Assessment Year: 2013-2014
• Other Referred Cases: Checkmate Services Pvt. Ltd. vs. CIT-1, Income Tax Officer Vs. Infantry Security and Facilities, Reliance Telecom Ltd., Beghar Foundation vs. K. S. Puttaswamy (Aadhaar Review - 5 J.), Sanjay Kumar Agrawal vs. State Tax Officer (1) and Another, ANI Integrated Services Ltd
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: PRAVEEN KUMAR
• Assessee Lawyers: SANJAY KUMAR
• Keywords: Set aside; Opportunity of being heard; Extension of stay
• Section: 254(2); 139(1)

Judgement Text

" 1 MA Nos. 441 & 442/Del/2022 Oxigen Services India Pvt. Ltd. IN THE INCOME TAX APPELLATE TRIBUNAL [ DELHI BENCH: ‘E’ NEW DELHI ] BEFORE SHRI SHAMIM YAHYA, ACCOUNTANT MEMBER AND SHRI YOGESH KUMAR U.S., JUDICIAL MEMBER MA Nos.441 & 442/Del/2022 (In I.T.A. Nos. 4843 & 4844/DEL/2018 (A.Ys. 2013-14 &2014-15) ACIT, Circle-19(1), Room No.199C, 1st Floor, C.R. Building, New Delhi. बनाम Vs. Oxigen Services India P. Ltd., G-4, Community Centre, C-Block, NarainaVihar, New Delhi. PAN No.AABCI1405K अपीलाथ Appellant यथ /Respondent Revenue by Shri Praveen Kumar, CA Assessee by Shri Sanjay Kumar, Sr. DR सुनवाईक\bतार ख/ Date of hearing: 21.03.2025 उ\u000eघोषणाक\bतार ख/Pronouncement on 09.04.2025 ORDER PER YOGESH KUMAR U.S., JM The above Miscellaneous applications are filed by the Revenue with a prayer to recall the order of the Tribunal dated 28/07/2022 in ITA No. 4843-44/Del/2018 for the Assessment Year 2013-14 and 2014-15. 2. The Ld. Departmental Representative submitted that the Tribunal while deciding the above appeals, in so far as the issue of late deposit of ESI & PF are concerned, allowed the Grounds of the Appeal of the Assessee. Further submitted that 2 MA Nos. 441 & 442/Del/2022 Oxigen Services India Pvt. Ltd. the issue of allow-ability of deduction u/s 36(1)(va) of the Act has been finally decided by the Apex Court in the case of Checkmate Services Pvt. Ltd. vs. CIT-1 in Civil Appeal No. 2833 of 2016, vide order dated 12/10/2022 by the Hon’ble Supreme Court. The ground of the Assessee regarding late payment of ESI & PF deserves to be decided in favour of the Revenue, therefore, sought for allowing the captioned MAs and restoring the ITA to its original file for fresh adjudication of the issue. 3. The Assessee's Representative submitted that the order of the Tribunal cannot be recalled since there is no error apparent from record and the Tribunal has no jurisdiction to recall its own order except there is any error apparent on record as held by the Hon'ble Supreme Court in the case of Reliance Telecom Ltd. thus, sought for dismissal of the MAs filed by the Revenues. 4. We have heard both the parties and perused the material available on record. The issue regarding allow-ability of late payment of ESI and PF has been decided in favour of the Revenue by the Hon'ble Supreme Court in the case of Checkmate Services (supra) on 12/10/2022. The Appeal filed by the Assessee in ITA No. 4843/Del/2018has been heard and pronounced the order on 28/07/2022. During the hearing of the Appeals/pronouncement of the order, in the above referred Appeals by the Tribunal, the benefit of the above Judgment of the Hon'ble Supreme Court in the case of Checkmate Services (supra) was not available for the benefit of the Tribunal. Therefore, the Grounds of Appeal of the Assessee on the issue of late payment of ESI & PF has been decided in favour of the Assessee. Now the Department has filed the present M.A with a prayer to recall the order of the Tribunal on the ground that the 3 MA Nos. 441 & 442/Del/2022 Oxigen Services India Pvt. Ltd. Hon'ble Supreme Court has decided the issue of late payment of ESI & PF in favour of the Revenue. 5. The similar question in the Miscellaneous Application filed by the Revenue has been decided by the Co-ordinate Bench of the Tribunal of Pune Bench in the case of Income Tax Officer Vs. Infantry Security and Facilities, wherein the Tribunal allowed the MA filed by the Department vide order dated 26/07/2022. The Assessee therein challenged the order of the Tribunal dated 26/07/2022 in the writ petitions 17175- 77/2024. The Hon’ble High Court of judicature at Bombay vide order dated 03/12/2024, allowed the petitions of the Assessee in following manner: - “10. Having heard the learned counsel for the parties and having perused the record, we find that there is much substance in the contentions as urged on behalf of the petitioner. At the outset, we may observe that the jurisdiction of the Tribunal as invoked by the Revenue, was the jurisdiction as conferred on the Tribunal under Section 254(2) of the IT Act provides, which is in relation to the orders passed by the Tribunal. Section 254, is required to be noted, which reads thus: \"254. Orders of Appellate Tribunal (1) The Appellate Tribunal may, after giving both the parties to the appeal an opportunity of being heard, pass such orders thereon as it thinks fit. (1A) [***] (2) The Appellate Tribunal may, at any time within six months from the end of the month in which the order was passed, with a view to rectifying any mistake apparent from the record, amend any order passed by it under sub-section (1), and shall make such amendment if the mistake is brought to its notice by the assessee or the Assessing Officer : Provided that an amendment which has the effect of enhancing an assessment or reducing a refund or otherwise increasing the liability of the assessee, shall not be made under this sub-section unless the Appellate Tribunal has given notice to the assessee of its intention to do 4 MA Nos. 441 & 442/Del/2022 Oxigen Services India Pvt. Ltd. so and has allowed the assessee a reasonable opportunity of being heard: Provided further that any application filed by the assessee in this sub- section on or after the 1st day of October, 1998, shall be accompanied by a fee of fifty rupees. (2A) In every appeal, the Appellate Tribunal, where it is possible, may hear and decide such appeal within a period of four years from the end of the financial year in which such appeal is filed under sub-section (1) or sub-section (2) of section 253: Provided that the Appellate Tribunal may, after considering the merits of the application made by the assessee, pass an order of stay in any proceedings relating to an appeal filed under sub-section (1) of section 253, for a period not exceeding one hundred and eighty days from the date of such order subject to the condition that the assessee deposits not less than twenty per cent of the amount of tax, interest, fee, penalty, or any other sum payable under the provisions of this Act, or furnishes security of equal amount in respect thereof and the Appellate Tribunal shall dispose of the appeal within the said period of stay specified in that order: Provided further that no extension of stay shall be granted by the Appellate Tribunal, where such appeal is not so disposed of within the said period of stay as specified in the order of stay, unless the assessee makes an application and has complied with the condition referred to in the first proviso and the Appellate Tribunal is satisfied that the delay in disposing of the appeal is not attributable to the assessee, so however, that the aggregate of the period of stay originally allowed and the period of stay so extended shall not exceed three hundred and sixty-five days and the Appellate Tribunal shall dispose of the appeal within the period or periods of stay so extended or allowed: Provided also that if such appeal is not so disposed of within the period allowed under the first proviso or the period or periods extended or allowed under the second proviso, which shall not, in any case, exceed three hundred and sixty-five days, the order of stay shall stand vacated after the expiry of such period or periods, even if the delay in disposing of the appeal is not attributable to the assessee. (2B) The cost of any appeal to the Appellate Tribunal shall be at the discretion of that Tribunal. 5 MA Nos. 441 & 442/Del/2022 Oxigen Services India Pvt. Ltd. (3) The Appellate Tribunal shall send a copy of any orders passed under this section to the assessee and to the Principal Commissioner or Commissioner. (4) Save as provided in section 256 or section 260A, orders passed by the Appellate Tribunal on appeal shall be final.\" (emphasis supplied) 11. A perusal of Sub-section (2) of Section 254 of the IT Act, clearly indicates that the Tribunal at any time within six months from the end of month in which the order was passed by the Tribunal, with a view to rectify any \"mistake apparent from the record\", amend any order passed by under sub- Section (1) and shall make such amendment, if the mistake is brought to the notice by the assessee or the assessing officer by following the procedure as set out in the said provision. What is significant is that such jurisdiction on the Tribunal is conferred with a view to \"rectify any mistake apparent from the record\" and accordingly amend any order, that too on the applicant satisfying the conditions, that such mistake is brought to the notice of the Tribunal by the assessee or the assessing officer \"within six months\" from the end of the month, when the order was passed. 12. Thus, from the plain language of sub-Section (2) of Section 254, it is clear that the jurisdiction of the Tribunal as conferred under sub-Section (2) of Section 254 is akin to the review jurisdiction of the Civil Court, that is to be rectify any mistake apparent from the record. 13. The question in the present case is whether there was any mistake apparent on the face of the record and/or whether a decision which was rendered by the Supreme Court subsequent to the Tribunal's decision of which rectification is sought, could be relevant to come to a conclusion on the ground that there was a mistake apparent on the face of the order, the Tribunal could substitute its original order. 14. In our clear opinion, the question would be required to be answered against the Revenue and in favour of the assessee. The reasons for which we discuss hereunder. In such context, at the outset, we may observe that the petitioner had succeeded before the Tribunal on the basis of the position in law as it prevailed on the day the decision was rendered on the petitioner's appeal on 26 July 2022. Subsequent to the said orders passed by the Tribunal, on 12 October 2022, the Supreme Court rendered its decision in \"Checkmate 6 MA Nos. 441 & 442/Del/2022 Oxigen Services India Pvt. Ltd. Services Private Limited\" (Supra), whereby the Supreme Court held that the deduction of the employees' share can be allowed under Section 36(1)(va) of the IT Act, only if such share was deposited before the time limit under the respective statutes and not before the due date under Section 139(1) of the IT Act. In the fact situation, certainly it cannot be said that the Tribunal has overlooked the existing position in law, as laid down by the Supreme Court or the High Court, so as to bring about a situation that the law declared by the Supreme Court was not followed by the Tribunal and/or the decision of the Tribunal is contrary to the law as laid down by the Supreme Court. Such decision of the Supreme Court which never existed when the Tribunal passed the original order could never have been applied by the Tribunal, and hence it cannot be said that there was any mistake on the face of the record, so as to confer jurisdiction on the Tribunal to exercise its jurisdiction under Section 254(2) of the IT Act. 15. There is also much substance in the contention as urged on behalf of the petitioner, when it is contended that the Miscellaneous Application was filed by the Revenue beyond the prescribed limitation of six months as provided for in Sub-section (2) of Section 254 of IT Act, from the end of the month in which the order was passed. The Miscellaneous Applications were filed by the Revenue with a delay of 92 days. Considering the clear provisions of Sub-section (2) of Section 254, it is clear that it prescribes a limitation to file an application in invoking such provision. The Revenue could not make good, that in these circumstances there was any power with the Tribunal to condone delay if the Miscellaneous Application was to be filed beyond a period of six months. In any event, there was no application on the part of the Revenue in this regard. Thus, the impugned order would also be required to be faulted on such count that the same was passed beyond the limitation as prescribed under Sub- section (2) of Section 254 of the IT Act. 16. In so far as the petitioner's contention on the jurisdiction of the Tribunal to entertain the Miscellaneous Application is concerned, it appears that the position in law is well settled. The jurisdiction as conferred under sub- Section(2) of Section 254 is akin to the jurisdiction conferred on the Civil Court under the provisions of Order XLVII, Rule 1 of the CPC inter alia to correct mistakes apparent on the face of the record. However, on a comparative reading of sub-Section (2) of Section 254 of the IT Act, and Rule 1 of Order XLVII of CPC, it appears that such jurisdiction conferred on the Tribunal is more restricted. 7 MA Nos. 441 & 442/Del/2022 Oxigen Services India Pvt. Ltd. 17. In Beghar Foundation (Supra), the Supreme Court was considering a review petition, filed against the final judgment and order dated 26 September 2018, passed on the main proceedings. In rejecting the review petition, the Supreme Court observed that no case for review of such judgment was made out, and most importantly on the ground that change in law or subsequent decision/judgment of coordinate or larger bench by itself cannot be regarded as a ground for review. Such principles of law are squarely applicable in the facts of the present case. 18. In Sanjay Kumar Agrawal vs. State Tax Officer (1) and Another 5, the Supreme Court following the decision in the Constitution Bench in Beghar Foundation (Supra), made the following observations: \"15. It is very pertinent to note that recently the Constitution Bench in Beghar Foundation v. K. S. Puttaswamy (Aadhaar Review - 5 J.), held that even the change in law or subsequent decision/judgment of coordinate Bench or larger Bench by itself cannot be regard as a ground for review.\" 19. We may observe that recently a bench of the Tribunal in the case of ANI Integrated Services Ltd (Supra), had the occasion to consider the very issue as raised by the Revenue in light of the decision rendered by the Supreme Court in Checkmate Services Private Limited (Supra). In such case similar applications were filed by the Revenue praying that the Tribunal set aside its orders in relation to Employees State Insurance Corporation (\" ESIC \" for short) (for the Assessment Year 2019-20) considering the changed position in law in \"Checkmate Services Private Limited\" (Supra). The Tribunal by its decision dated 29 May 2024 [ANI Integrated Services Limited (Supra)] did not accept the contentions as urged on behalf of the Revenue and rejected the Miscellaneous Applications filed by the Revenue, also considering the decision in Beghar Foundation (Supra) and the scope of its limited jurisdiction under Section 254(2) of the IT Act. We are in complete agreement with the view taken by the Tribunal in ANI Integrated Services Ltd (Supra) and which is on the very issue as urged by the petitioner. 20. In view of the aforesaid discussion, we are of the clear opinion that the Tribunal was in a patent error in exercising jurisdiction under Section 254(2) in passing the impugned order. The petitions accordingly need to succeed. The petitions are allowed in terms of prayer clause (a) of each of these petitions.” 8 MA Nos. 441 & 442/Del/2022 Oxigen Services India Pvt. Ltd. 6. By following the ratio laid down by the Hon’ble High Court of judicature at Bombay in the Writ petitions 17175-77/2024 vide order dated 03/12/2024, finding no merit in the Miscellaneous application filed by the Revenue, we hold that there is no error apparent on record in the order of the Tribunal, which can be rectified under Section 254(2) of the Income Tax, 1961. Accordingly, we dismissed the M.A Nos. 441 & 442/Del/2022 filed by the Revenue. Order pronounced in the open court on: 09/04/2025 Sd/- Sd/- (SHAMIM YAHYA) (YOGESH KUMAR U.S.) ACCOUNTANT MEMBER JUDICIAL MEMBER Dated: 09/04/2025 *Kavita/R.N, Sr. PS Copy forwarded to:- 1. Appellant 2. Respondent 3. CIT 4. CIT(Appeals) 5. DR: ITAT ASSISTANT REGISTRAR ITAT NEW DELHI "