ASSESSING OFFICER, NASHIK V. APIDOR ABRASIVE PRODUCTS PVT LTD, NASHIK

MA 193/PUN/2023

AI Insights

The case revolves around a Miscellaneous Application filed by the Revenue seeking rectification of a previous Tribunal order that allowed deductions under section 36(1)(va) of the IT Act for the assessee, Apidor Abrasive Products Pvt. Ltd. The original Tribunal order was challenged based on a Supreme Court judgment in Checkmate Services P. Ltd. & Ors. vs. CIT & Ors., which clarified that such deductions are only permissible if the employees' contributions are deposited by the employer before the due dates specified in the respective Acts. The Tribunal, upon reviewing the MA, acknowledged the oversight and rectified the earlier decision, thus recalling the appeal for re-examination.

• Counselvise Citation: [2024] 140 COUNSELVISE.COM (IT) 474215 (ITAT-PUNE)
• Duration Of Justice: 1 year(s) 3 month(s) 21 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 11-11-2024
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 20-09-2024
• Assessment Year: 2018-2019
• Appeal Filed On: 21-07-2023
• Other Referred Cases: Checkmate Services P. Ltd. & Ors. vs. CIT & Ors., ACIT vs. Saurashtra Kutch Stock Exchange Ltd.
• Laws Referred To: Income Tax Act
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RAMNATH P. MURKUNDE
• Assessee Lawyers: PRAVEEN KUMAR; INSPECTOR OF INCOME TAX
• Keywords: Retrospective amendment
• Section: 254(2); 139(1)

Judgement Text

" IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH “A”, PUNE BEFORE SHRI R. K. PANDA, VICE PRESIDENT AND SHRI VINAY BHAMORE, JUDICIAL MEMBER M.A. No.193/PUN/2023 (Arising out of ITA No.467/PUN/2021) िनधाᭅरण वषᭅ / Assessment Year : 2018-19 Assessing Officer, Nashik. Vs. Apidor Abrasive Products Pvt. Ltd., Gat No.40/1, 10th Mile, At: Jaulake, Tal. Dindori, Dist. Nashik- 422206. PAN : AAGCA9336A Appellant Respondent आदेश / ORDER PER VINAY BHAMORE, JM: This Miscellaneous Application u/s 254(2) of the IT Act is filed on 24.07.2023 by the Revenue seeking rectification of the order dated 20.09.2022 passed by this Tribunal in ITA No.467/PUN/2021 (filed by the assessee) for the assessment year 2018-19. Revenue by : Shri Ramnath P. Murkunde Assessee by : None Date of hearing : 20.09.2024 Date of pronouncement : 11.11.2024 MA No.193/PUN/2023 2 2. When the MA was called for hearing, none appeared on behalf of the assessee despite due service of notice of hearing through the Revenue. The notice of hearing was duly served upon the assessee by Shri Praveen Kumar, Inspector of Income Tax. The service report is also produced before the Bench. We therefore proceed to decide the matter after hearing ld. DR and with the help of material available on record. 3. It is seen that the impugned order of the Tribunal was passed on 20.09.2022 and the present MA is filed by the Revenue on 24.07.2023. Therefore, the present MA filed by the Department appears to be time barred being filed beyond the prescribed time limit. In this regard, ld. DR submitted before us that the limitation to file Miscellaneous Application starts from receipt of the Tribunal’s order and not from the date of the order. In this regard, it was submitted that although the Tribunal’s order was passed on 20.09.2022 but copy of the order was received by the Department on 02.06.2023. Accordingly, the present MA was required to be filed on or before 31.12.2023, and in the instant case the present MA is filed by the Department on 24.07.2023 which is within the prescribed time limit. MA No.193/PUN/2023 3 4. After hearing Ld. DR, we are of the considered opinion that the limitation to file MA starts not from the date of order of the Tribunal but from the date of receipt of the order of the Tribunal. Therefore, in our considered view, the present MA filed by the Department is within the prescribed time limit and is maintainable. Thus, we admit the present MA and proceed to adjudicate the grievance of the Department. 5. At the outset, Ld. DR submitted that the addition made u/s 36(1)(va) of the IT Act in respect of employees’ contribution to PF and ESI deposited beyond the stipulated period under the respective Acts was required to be disallowed by virtue of judgment of Hon’ble Supreme Court in the case of Checkmate Services P. Ltd. & Ors. vs. CIT & Ors. (2022) 448 ITR 518 (SC), as against the same having been allowed by this Tribunal in the impugned order. 6. We have heard ld. DR and perused the impugned order of the Tribunal dated 20.09.2022 as well as perused the material on record. The Tribunal in the impugned order had allowed the deduction u/s 36(1)(va) of the IT Act on the premise that the deposits were made prior to the due date u/s 139(1) of the IT Act. MA No.193/PUN/2023 4 However, the issue of making disallowance u/s 36(1)(va) in respect of Employees share of PF and ESI deposited beyond the due date under the respective Acts, but before the time limit for filing the return of income u/s 139(1) is no more res integra in view of the later judgment of Hon’ble Supreme Court in Checkmate Services P. Ltd. & Ors. vs. CIT & Ors. (supra). The Hon’ble Apex Court has held that the deduction u/s 36(1)(va) can be allowed only if the employees’ share in the relevant funds is deposited by the employer before the due date stipulated in respective Acts. The above enunciation of law by the Hon’ble Supreme Court (supra) denying the benefit of deduction, has rendered the order u/s 254(1) erroneous necessitating its rectification in terms of section 254(2) of the Act. In this context, we refer to the observation made by the Hon’ble Supreme Court in the case of ACIT vs. Saurashtra Kutch Stock Exchange Ltd., 305 ITR 227 (SC) vide paras 40 to 43, as under :- “40. The core issue, therefore, is whether non-consideration of a decision of Jurisdictional Court (in this case a decision of the High Court of Gujarat) or of the Supreme Court can be said to be a \"mistake apparent from the record\"? In our opinion, both - the Tribunal and the High Court - were right in holding that such a mistake can be said to be a \"mistake apparent from the record\" which could be rectified under Section 254(2). MA No.193/PUN/2023 5 41. A similar question came up for consideration before the High Court of Gujarat in Suhrid Geigy Limited v. Commissioner of Surtax, Gujarat, (1999) 237 ITR 834 (Guj). It was held by the Division Bench of the High Court that if the point is covered by a decision of the Jurisdictional Court rendered prior or even subsequent to the order of rectification, it could be said to be \"mistake apparent from the record\" under Section 254 (2) of the Act and could be corrected by the Tribunal. 42. In our judgment, it is also well- settled that a judicial decision acts retrospectively. According to Blackstonian theory, it is not the function of the Court to pronounce a `new rule' but to maintain and expound the `old one'. In other words, Judges do not make law, they only discover or find the correct law. The law has always been the same. If a subsequent decision alters the earlier one, it (the later decision) does not make new law. It only discovers the correct principle of law which has to be applied retrospectively. To put it differently, even where an earlier decision of the Court operated for quite some time, the decision rendered later on would have retrospective effect clarifying the legal position which was earlier not correctly understood. 43. Salmond in his well-known work states; \"The theory of case law is that a judge does not make law; he merely declares it; and the overruling of a previous decision is a declaration that the supposed rule never was law. Hence any intermediate transactions made on the strength of the supposed rule are governed by the law established in the overruling decision. The overruling is retrospective, except as regards matters that are res judicatae or accounts that have been settled in the meantime\". (emphasis supplied).” 7. Accordingly, we find that in light of above observation made by the Hon’ble Supreme Court in the case of Saurashtra Kutch Stock Exchange Ltd. (supra) and in the light of judgment of Hon’ble Supreme Court in Checkmate Services P. Ltd. (supra), the Tribunal in its order dated 20.09.2022 committed mistake in allowing the benefit of deduction u/s 36(1)(va) of the IT Act. MA No.193/PUN/2023 6 Therefore, we are of the considered opinion that it is a fit case to recall the appeal in ITA No.467/PUN/2021 for the assessment year 2018-19. Accordingly, the Registry is directed to fix the appeal in regular course of hearing. 8. In the result, the Miscellaneous Application filed by the Revenue stands allowed in above terms. Order pronounced on this 11th day of November, 2024. Sd/- Sd/- (R. K. PANDA) (VINAY BHAMORE) VICE PRESIDENT JUDICIAL MEMBER पुणे / Pune; ᳰदनांक / Dated : 11th November, 2024. Sujeet आदेश कᳱ ᮧितिलिप अᮕेिषत / Copy of the Order forwarded to : 1. अपीलाथᱮ / The Appellant. 2. ᮧ᭜यथᱮ / The Respondent. 3. The Pr. CIT concerned. 4. िवभागीय ᮧितिनिध, आयकर अपीलीय अिधकरण, “A” बᱶच, पुणे / DR, ITAT, “A” Bench, Pune. 5. गाडᭅ फ़ाइल / Guard File. आदेशानुसार / BY ORDER, // True Copy // Senior Private Secretary आयकर अपीलीय अिधकरण, पुणे / ITAT, Pune. "