ASSESSING OFFICER, NEW DELHI V. PANKAJ SAINI, NEW DELHI

MA 457/DEL/2022

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The case revolves around a miscellaneous application filed by the Revenue against an earlier ITAT decision which favored the assessee regarding the allowability of employee's contributions towards ESI/PF. The Revenue sought to recall the ITAT order based on a subsequent Supreme Court decision in Checkmate Services Private Limited, which clarified the law regarding the deposit timelines for employee contributions. The ITAT, however, found that the law as clarified by the Supreme Court was always in existence and a subsequent decision does not provide grounds for recalling an earlier order. The Tribunal referenced similar cases and decisions, particularly from the ITAT Mumbai Bench, which supported the view that a recall is not permissible under these circumstances.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 780241 (ITAT-DELHI)
• Duration Of Justice: 2 year(s) 9 month(s) 10 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 06-10-2025
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: G
• Assessment Year: 2018-2019
• Appeal Filed On: 26-12-2022
• Other Referred Cases: Checkmate Services Private Limited vs. 143 taxmann.com 278(SC), DCIT vs. ANI Integrated Services Ltd., ACIT vs. Logix Heights Private Ltd., ACIT vs. Saurashtra Kutch Stock Exchange Ltd., CIT vs. Reliance Telecom Ltd.
• Laws Referred To: Income-tax Act, 1961
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: ANURAG S DARIA
• Assessee Lawyers: RAJEEV SABHARWAL
• Keywords: Question of law; Rectification of order
• Section: 43B

Judgement Text

" IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCHES ‘G’ : NEW DELHI. BEFORE SHRI S.RIFAUR RAHMAN, ACCOUNTANT MEMBER and SHRI VIMAL KUMAR, JUDICIAL MEMBER MA No.457/DEL/2022 (in ITA No.1717/DEL/2021) (Assessment Year: 2018-19) Assessing Officer, vs. Pankaj Saini, Ward 62 (3), New Delhi. 8434, Arya Nagar, Paharganj, New Delhi – 110 055. (PAN : AYSPS0121N) (APPLICANT) (RESPONDENT) APPLICANT/REVENUE BY : Shri Anurag S Daria, Sr. DR ASSESSEE BY : Shri Rajeev Sabharwal, FCA Date of Hearing : 22.08.2025 Date of Order : .10.2025 O R D E R PER S. RIFAUR RAHMAN, AM : 1. This misc. application is filed by the Applicant/Revenue against the order of the Tribunal in ITA No.1717/Del/2021 dated 28.02.2022 for Assessment Year 2018-19 for recalling/amending the impugned order dated 28.02.2022. 2. This misc. application was filed by the Revenue against the order of ITAT dated 28.02.2022 wherein ITAT has decided the issue of allowability of employee’s contribution towards ESI/PF in favour of the assessee relying on various decisions prevailing at that point of time. Subsequent to the decision of Hon’ble Supreme Court in the case of Checkmate Services Private Limited 143 taxmann.com 278(SC), the Printed from counselvise.com 2 MA No.113/Del/2025 Revenue has filed the aforesaid misc. application with the plea that Hon’ble Supreme Court held that the non-obstante clause would not in any manner dilute or override the employer’s obligation to deposit the amounts retained by it from the employee’s income unless the condition that it is deposited on or before the due date of respective law. Based on the above decision, the plea was made to recall the order. 3. At the time of hearing, ld. DR for the Revenue reiterated that the responsibility of depositing the deducted amount of employee’s share from their salaries to the respective agencies before the due date of respective Act, the relevant provisions stresses the responsibilities of the assessee and also relevant provisions of section 2(24)(x), 36(1)(va) and section 43B of the Income-tax Act, 1961 (for short ‘the Act’) are existed prior to the decision of Hon’ble Supreme Court and forming part of the law and nothing was amended or brought to books subsequent to the decision of Hon’ble Supreme Court. Hon’ble Supreme Court has only interpreted the existing law and after interpretation, it cannot be called as a new law. Hon’ble Supreme Court decided the issue and it becomes judicial law. He reiterated that Hon’ble Supreme Court has sustained the addition on the basis of section 2(24)(x) as income of the assessee and time line given to the assessee to claim the same as deduction on payment of employee’s share as per relevant Acts. Therefore, as per the provisions of section 36(1)(va) when the assessee fails to deposit the same the assessee loses the power to claim it as an expenditure. 4. On the other hand, ld. AR of the assessee objected to the recalling of the impugned order. 5. Considered the submissions of both the parties and material placed on record. We observed that the issue of PF and ESI relating to employee’s contribution was more or Printed from counselvise.com 3 MA No.113/Del/2025 less settled by the decision of Hon’ble Supreme Court in the case of Checkmate Services Private Limited (supra), wherein it is held that non-deposit of employee’s share of contribution before the due date mentioned in the respective Acts of PF and ESI, the assessee loses the benefit of claiming the same as expenditure irrespective of the fact that the same was deposited before filing the return of income. It becomes rule of law from the date of pronouncement of the decision of Hon’ble Supreme Court in the case of Checkmate Services Private Limited (supra). It is being a fact on record, we also observed that various Courts had decided the similar issue in favour of the assessee when the respective Benches adjudicated the issue. The issue before us is whether the order passed by the coordinate Bench can be subject matter of recall of the order when the decision of Hon’ble Supreme Court was not in existence at that point of time. The Revenue has filed this misc. application before us based on the decision of Hon’ble Supreme Court on a question of law which has been reversed or modified subsequent to the date of appellate order. Whether can that be a ground for a review of earlier concluded decision? We observed that similar issue was considered by ITAT, Mumbai Bench in the case of DCIT vs. ANI Integrated Services Ltd. order dated 29.05.2024 and it was observed that the above said decision was relied by ITAT, Delhi in the case of ACIT vs. Logix Heights Private Ltd. order dated 21.06.2024 and accordingly, dismissed the misc. applications filed by the Revenue. The ITAT, Mumbai Bench decided the issue elaborately and for the sake of repetition, we reproduce the same as under :- 20. We are aware that many of the Co-ordinate Benches have recalled the order of the Tribunal on this issue on the principle of the Hon’ble Supreme Court in the cased of ACIT vs. Saurashtra Kutch Stock Exchange Ltd. reported in (2008) 305 ITR 227. In the aforesaid case the issue was that the Tribunal has passed an order on 27/10/2000 upholding the decision of CIT that assessee was not entitled for exemption u/s.11. Thereafter, the Miscellaneous Application was filed u/s. 254(2) to rectify the error committed by the Tribunal in the decision rendered by any appeal as it has not followed Printed from counselvise.com 4 MA No.113/Del/2025 the judgment of the Hon'ble Jurisdictional High Court in the case of HiralalBhagwati vs. CIT reported in [2000] 246 ITR 188; SuhridGeigy Ltd VS. Commissioner of Surtax reported in (1999) 237 ITR 834 which was already available on the date of the order. Thus, non- consideration of binding decision of the Jurisdictional High Court which was not followed by the Tribunal, rather it was not brought to the notice of the Tribunal therefore, Miscellaneous Application was filed and Tribunal had then recalled the order. Against this recalling of the order, Revenue had filed the writ petition which was dismissed by the Hon'ble High Court. Thus, before the Hon'ble Supreme Court one of the question was, whether the ITAT was right in exercising the powers under sub- section (2) of Section 254 on the ground that there was a mistake apparent from record committed by the Tribunal while deciding the appeal and whether it could have recalled the earlier order of the Tribunal on that ground. Thus, the core issue was, whether non- consideration of a decision of the Jurisdictional High Court or of the Hon'ble Supreme Court which was already existing at that time when the judgment was rendered by the Tribunal can be stated to be mistake apparent from the record. The Hon'ble Supreme Court upheld that the Tribunal was right in holding that it was a mistake which can be said to be mistake apparent from the record which could be rectified u/s.254(2). There was no such principle which has been laid down that if after passing of the order of the Tribunal which has attained finality between the parties and in subsequent judgment is rendered by the superior Court, the same should also be recalled within the scope of Section 254(2). Though the Hon'ble Supreme Court had referred to a decision of Gujarat High Court in the case of SuhridGeigy Ltd vs. Commissioner of Surtax reported in (1999) 237 ITR 834 that if the point is covered by the decision of the Hon'ble Jurisdictional High Court rendered prior or even subsequent to the order of rectification, it could be a mistake apparent from the record u/s. 254(2) and could be corrected by the Tribunal. However, the Hon'ble Supreme Court has referred this judgment and only held that if a judgment is being rendered by any High Court or Supreme Court that means the law was always being the same and if a subsequent decision alters the earlier one, the later decision does not make a new law. This observation of the Court does not lead to any inference to draw that any rectification order u/s. 254(2) can be based on subsequent judgment which comes later on. On the contrary, all the aforesaid judgments of Hon'ble Supreme Court which we have quoted above extenso have clearly held that there would be no review or recall of the order based on the subsequent judgment. Finally, the Hon'ble Supreme Court in the case of Saurashtra Kutch Stock Exchange Ltd. on the fact of the case has concluded as under:- \"In the present case, according to the assessee, the Tribunal decided the 47 matter on October 27, 2000. HiralalBhagwati was decided a few months prior to that decision, but it was not brought to the attention of the Tribunal In our opinion, in the circumstances, the Tribunal has not committed any error of law or of junsdiction in exercising power under sub-section (2) of section 254 of the Act and in rectifying the \"mistake apparent from the record Since no error was committed by the Tribunal in rectifying the mistake, the High Court was not wrong in confirming the said order Both the orders, therefore, in our opinion, are strictly in consonance with law and no interference is called for.\" 21. The sequitor of the aforesaid decision of the Hon'ble Supreme Court is that, if already existing judgment of Jurisdictional High Court is not brought to the notice or attention of the Tribunal, then the Tribunal can recall the order while exercising the powers u/s.254(2). 22. Even otherwise also once in the latest decision in the case of CIT vs. Reliance Telecom Ltd. (supra) the Hon'ble Supreme Court have clearly held that the powers u/s. Printed from counselvise.com 5 MA No.113/Del/2025 254(2) of the Income Tax are akin to Order XLVII Rule 1 CPC, then it cannot be held that scope of power u/s.254(2) is beyond and much larger than scope of review as given in the Order XLVII Rule 1 of CPC. In fact, the scope of Section 254(2) is much limited and the scope of review is much wider. Accordingly, in view of the law laid down by the Hon'ble Constitutional Bench of the Hon'ble Supreme Court and several other judgments of Hon'ble Supreme Court cited supra, we hold that order of the Tribunal cannot be recalled based on the subsequent judgment of the Hon'ble Supreme Court when the order of the Tribunal had attained finality between the parties. Consequently, the Miscellaneous Application filed by the department is dismissed.” 6. Further, we observed that the order of ITAT was pronounced before the decision of Hon’ble Supreme Court in the case of Checkmate Services Private Limited (supra), therefore, the misc. application should not be entertained considering the fact that the order was pronounced much before the decision of Hon’ble Supreme Court came into existence. 7. In view of the aforesaid decision of ITAT, Mumbai Bench, it is held that scope of section 254 (2) of the Act is very limited and scope of review is much wider. Considering the above decision and the other decisions of coordinate Benches on identical issue, we do not find any merit in the misc. application filed by the Revenue. Accordingly, the misc. application filed by the Revenue is dismissed. 8. In the result, the misc. application filed by the Revenue is dismissed. Order pronounced in the open court on this 6th day of October, 2025. sd/- sd/- (VIMAL KUMAR) (S.RIFAUR RAHMAN) JUDICIAL MEMBER ACCOUNTANT MEMBER Dated: 06.10.2025 TS Printed from counselvise.com 6 MA No.113/Del/2025 Copy forwarded to: 1. Appellant 2. Respondent 3. CIT 4. CIT(Appeals). 5. DR: ITAT ASSISTANT REGISTRAR ITAT, NEW DELHI Printed from counselvise.com "