M/s Oasis Laboratories Pvt. Ltd., SP-2, 22 Godam Industrial Estate, Jaipur V. CPC, Bengaluru/ ITO, Ward-2(3), Jaipur, Jaipur

ITA 160/JPR/2022

• Counselvise Citation: [2022] 106 COUNSELVISE.COM (IT) 2258 (ITAT-JAIPUR)
• Duration Of Justice: 1 month(s) 24 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-06-2022
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2017-2018
• Appeal Filed On: 03-05-2022
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Rectification of order; Set aside
• Section: 154; 43B; 143(1); 250; 22

Judgement Text

vk;dj vihyh; vf/kdj.k] t;iqj U;k;ihB] t;iqj IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHES, ‘SMC’ JAIPUR Jh laanhi xkslkbZ] U;kf;d lnL; ,oa Jh jkBkSM deys’k t;arHkkbZ] ys[kk lnL; ds le{k BEFORE: SHRI SANDEEP GOSAIN, JM & SHRI RATHOD KAMLESH JAYANTBHAI, AM vk;dj vihy la-@ITA No. 160/JP/2022 fu/kZkj.k o"kZ@Assessment Year :2017-18 M/s Oasis Laboratories Pvt. Ltd. SP-2, 22 Godam Industrial Estate, Jaipur cuke Vs. CPC, Bangalore/ ITO, Ward-2(3), Jaipur LFkk;h ys[kk la-@thvkbZvkj la-@PAN/GIR No.: AAACO 1643 G vihykFkhZ@Appellant izR;FkhZ@Respondent fu/kZkfjrh dh vksj ls@ Assessee by : Sh. P. C. Parwal (CA) jktLo dh vksj ls@ Revenue by : Sh. A. S. Nehara (Addl. CIT) lquokbZ dh rkjh[k@ Date of Hearing : 14/06/2022 mn?kks"k.kk dh rkjh[k@Date of Pronouncement: 28/06/2022 vkns'k@ ORDER PER: RATHOD KAMLESH JAYANTBHAI, A.M. This appeal is filed by assessee and is arising out of the order of the National Faceless Appeal Centre, Delhi dated 01/04/2022 [here in after (NFAC)] for assessment year 2017-18 dated 01.04.2022 which in turn arises from the order passed by the assessing officer passed under Section 154 of the Income tax Act, 1961 (in short 'the Act') dated 24.10.2019. ITA No. 160/JP/2022 M/s Oasis Laboratories Pvt. Ltd. vs. CPC, Bengaluru/ITO, Ward-2(3), Jaipur 2 2. The assessee is a private limited company and has assailed this appeal on the following grounds:- “1. The ld. CIT(A), NFAC has erred on facts and in law in dismissing the appeal filed by the assessee by holding that grounds of appeal are arising from the order passed u/s 143(1) dt. 15.03.2019 whereas appeal has been filed against order passed u/s 154 dt. 24.10.2019 and thus, dismissed in limine. 2. The Ld. CIT(A), NFAC has erred on facts and in law in not deciding on merit the grounds of appeal relating to deposit of employees contribution towards PF/ESI of Rs. 10,58,469/- and payment of bonus of Rs. 4,14,989/- which were paid before due date of filing of return. 3. The appellant craves to alter, amend and modify any ground of appeal. 4. Necessary cost be awarded to the assessee.” 3. The Ground Nos. 3 and 4 of the assessee are general and academic in nature which does not require any adjudication. 4. Before adjudicating the ground no. 1 & 2 it is necessary to understand the facts related to this case. The assessee filed its return of income on 28.10.2017 declaring total income of Rs.13,22,210/-. The CPC, Bangalore vide intimation u/s 143(1) dt. 15.03.2019 made adjustment of Rs.10,58,469/- u/s 36(1)(va) on account of delayed payment of employees contribution towards PF & ESI, Rs.4,14,989/- u/s 43B on account of nonpayment of bonus before due date of filing of return of income and some other ITA No. 160/JP/2022 M/s Oasis Laboratories Pvt. Ltd. vs. CPC, Bengaluru/ITO, Ward-2(3), Jaipur 3 adjustment of Rs.3,23,400/-, thereby making total adjustment of Rs.17,96,858/- under the head Income from business or profession and thus, computed the total income at Rs.31,19,070/-. 4.1 Against the above intimation assessee filed a rectification request on 23.03.2019. The CPC, Bangalore vide rectification order u/s 154 dt. 14.05.2019 again assessed the total income at Rs.31,19,070/- stating as under:- “In case the assessee desires rectification, the assessee is required to file an online rectification request, after logging in at http://www.incometaxindiaefiling.gov.in by opening the ‘e-filing’ tab therein and selecting the ‘taxpayer is correcting the data in rectification’, under the rectification request type.” 4.2 In view of the above advice, assessee again filed a rectification request on 07.06.2019 which was again rejected by the CPC, Bangalore vide rectification order u/s 154 dt. 15.06.2019 assessing the total income at Rs.31,19,070/- by stating as under:- “In case the assessee desires rectification, the assessee is required to file an online rectification request, after logging in at http://www.incometaxindiaefiling.gov.in by opening the ‘e-filing’ tab therein and selecting the ‘taxpayer is correcting the data in rectification’, under the rectification request type.” ITA No. 160/JP/2022 M/s Oasis Laboratories Pvt. Ltd. vs. CPC, Bengaluru/ITO, Ward-2(3), Jaipur 4 4.3 In view of the above advice, assessee again filed a rectification request on 05.10.2019. The AO(CPC) vide rectification order u/s 154 dt. 24.10.2019 deleted addition of Rs.3,23,400/- and assessed the total income at Rs.27,95,670/-. In the said rectification order u/s 154 dt. 24.10.2019 no such advice was given to file again the rectification application. Therefore, assessee filed appeal before Ld. CIT(A) against the latest rectification order. The Ld. CIT(A), however, held that order u/s 143(1) i.e., original order passed on 15.03.2019 continues where CPC Bengaluru had assessed appellant’s income at Rs.27,95,670/- vis a vis returned income of Rs.13,22,210/-. Order u/s 154 does not propose a further change in income from one which was determined while passing order u/s 143(1). Consequently, grounds of appeals being agitated are primarily directed against order passed u/s 143(1) wherein addition was made to returned income of appellant whereas appeal has been filed against order of 154 dated 24.10.2019. If there were further mistakes committed in recalculation, it would have been cause of further grievance apropos order u/s 154 of ITA, 1961. Accordingly, Ld. CIT(A) dismissed the appeal in limine. ITA No. 160/JP/2022 M/s Oasis Laboratories Pvt. Ltd. vs. CPC, Bengaluru/ITO, Ward-2(3), Jaipur 5 5. The only reason given by the Ld. CIT(A) for dismissing the appeal filed by the assessee is that the assessee has filed an appeal against intimation u/s 154 dt. 24.10.2019 and not against intimation u/s 143(1) dt. 15.03.2019 in which the adjustment of Rs.17,96,858/- was made. In this connection the ld. AR submitted that since the adjustment made by CPC were apparent mistake assessee filed rectification request on 23.03.2019. On this rectification request, an order dt. 14.05.2019 was passed where assessee was advised to again file online rectification request if it is not satisfied with the order u/s 154. Accordingly, a rectification request was again filed on 07.06.2019 but the same was also rejected vide order u/s 154 dt. 15.06.2019. In this order assessee was again advised to file online rectification request if it is not satisfied with the order u/s 154. Accordingly, a rectification request was again filed on 05.10.2019. Against this rectification request, the CPC passed rectification order u/s 154 dt. 24.10.2019 where adjustment of Rs.3,23,400/- was rectified but adjustment of Rs.10,58,469/- made u/s 36(1)(va) and adjustment of Rs.4,14,989/- made u/s 43B was not rectified. In this rectification order, no advice was given to file online rectification request and ITA No. 160/JP/2022 M/s Oasis Laboratories Pvt. Ltd. vs. CPC, Bengaluru/ITO, Ward-2(3), Jaipur 6 thus, assessee filed appeal before Ld. CIT(A) against the said rectification order. Therefore, when CPC, Bangalore itself has advised the assessee to file the rectification request if the assessee is not satisfied with the order u/s 154, the finding of Ld. CIT(A) that appeal should be filed against the order passed u/s 143(1) dt. 15.03.2019 from where grounds of appeal are arising and not against order passed u/s 154 dt. 24.10.2019 is against the advice given by the CPC, Bangalore and also not as per provision of law. Further the observation of Ld. CIT(A) that the original order passed on 15.03.2019 continues where CPC Bengaluru had assessed appellant’s income at Rs.27,95,670/- and order u/s 154 does not propose a further change in income from one which was determined while passing order u/s 143(1) is also incorrect in as much as in the original order dt. 15.03.2019 the CPC Bengaluru has assessed the total income at Rs.31,19,070/- whereas in the order u/s 154 dt. 24.10.2019 the total income was assessed at Rs.27,95,670/- and thus against this order the appeal was filed before Ld. CIT(A). ITA No. 160/JP/2022 M/s Oasis Laboratories Pvt. Ltd. vs. CPC, Bengaluru/ITO, Ward-2(3), Jaipur 7 6. The finding of the ld. CIT(A)/NFAC made vide its order dated 01.04.2022 is extracted here in below for the sake of brevity: “4.1 I have carefully considered facts of case, contention of appellant and order passed by learned AO against which appeal has been preferred. 4.2 At this stage, question is, if addition made to income under section 143(1) be agitated in appeal against later order of 154? Will order under section 143(1) will get merged in later order of 154? 4.3 The underlying logic of Doctrine of Merger is that there cannot be more than one decree or an operative order governing the same subject-matter at a given point of time. The Doctrine of Merger can be better understood from the following observations of the Hon'ble Supreme Court in a landmark decision in the case of Kunhayammed v. State of Kerala. "Where an appeal or revision is provided before a superior forum against an order passed by a Court, Tribunal or any other authority and such superior forum modifies, reverses or affirms the decision put in issue before it, the decision by the subordinate forum merges with the decision by the superior forum and it is the latter which subsists, remains operative and is capable of enforcement in the eye of law. The doctrine of merger is not a doctrine of universal or unlimited application. It will depend on the nature of jurisdiction exercised by the superior forum and the content or subject-matter of challenge." 4.4 How does it apply to facts of our case i.e., where an authority passes an order and subsequently decides to reconsider same matter and passes a subsequent order, will previous order merge with subsequent order passed by same authority? 4.5 Hon'ble Karnataka High Court In case of Kothari Industrial Corporation v. Agricultural Income Tax Officer propounded that there are two circumstances where an authority has an occasion to reconsider his own order: ITA No. 160/JP/2022 M/s Oasis Laboratories Pvt. Ltd. vs. CPC, Bengaluru/ITO, Ward-2(3), Jaipur 8 By way of review; and By way of rectification 4.6 Normally, review is done by an authority where any new and important evidence is discovered, and rectification is done where there is any mistake apparent on face of record. 4.7 Section 154 of IT Act provides that, with a view to rectifying any mistake apparent from record an income tax authority may amend any order passed by it under provisions of Act or amend any intimation under Sections 143(1) or 200A(1) or 206CB(1) of the IT Act. When an application for rectification is accepted by authority, original order is 'rectified' or corrected. 4.8 The High Court of Karnataka in Kothari Industrial Corporation made the following observations: a) 'Rectification' presupposes the continuance of the original order with the change incorporated and it only process by which an order which contains an error set right. b) the entire order is to be replaced by new order by the same authority, such an order is not an 'order of rectification', but an 'order of review'. c) When rectification is directed, there is no merger since there is no order into which the original order can merge into. d) When an order of rectification is made, the effect is that the original order has to be read subject to the corrections/modifications made by the rectification. The correction is incorporated in the original order, as for example, where merely a figure is altered, or typographical correction is made. 4.9 Relevant text of judgment quoted above is reproduced below for ready reference - "11. The next question is where the authority who passed the order, has occasion to reconsider the matter and passed a subsequent order, whether there is any merger, and if so to what extent. There are two circumstances where an authority has occasion to reconsider his own order: (a) by way of review; and ITA No. 160/JP/2022 M/s Oasis Laboratories Pvt. Ltd. vs. CPC, Bengaluru/ITO, Ward-2(3), Jaipur 9 (b) by way of rectification. Normally, review is contemplated where new and important matter or evidence comes to light or where there is a mistake or error apparent on the face of the record. Rectification is resorted to, to correct clerical or arithmetical errors. When the authority grants an application for review of an order, the order in regard to which review is granted stands vacated or set aside and the order subsequently passed on review (either modifying, reversing or confirming the earlier order) will supersede the original order. In such a case, there is no question of merger, as the second order supersedes the first order and only the second order remains in existence. On the other hand, when an application for rectification is allowed, the original order is 'rectified' or corrected. The 'Rectification' presupposes the continuance of the original order with the change incorporated. Rectification is the process by which an order which contains an error is set right. If the entire order is to be replaced by a new order by the same authority, such an order is not an 'order of rectification', but an 'order on review'. When rectification is directed, there is no merger, as there is no order into which the original order can merge. When an order of rectification is made, the effect is that the original order has to be read subject to the corrections/modifications made by the rectification order. The correction is incorporated in the original order, as for example, where merely a figure is altered or typographical correction is made. However, having regard to the nature of original order and rectification order, if the correction cannot be incorporated in the original order, the rectification becomes an addendum to the original order, both being read together as in the case of a will and a codicil. The effect of an order of rectification is succinctly stated by a Division Bench of this Court in B. Basamma vs. Agrl. ITO 1964 (2) Mys. LJ 245 thus: "When a mistake in an order is rectified, the original order is not set aside, the original order remains on record and the mistakes or omissions are corrected therein". 12. The following principles thus emerge in regard to the doctrine of merger: (i) Where any order of decree of a Court, authority or Tribunal is subjected to an appeal or revision and the appellate or revisional authority passes an order modifying, reversing or affirming the ITA No. 160/JP/2022 M/s Oasis Laboratories Pvt. Ltd. vs. CPC, Bengaluru/ITO, Ward-2(3), Jaipur 10 order, the original order merges with the order of the superior authority on the principle that there cannot be more than one order operating at the same time. (ii) If the appeal or revision is restricted to a delinkable part or portion of the original order or one of the several matters or issues dealt by the original order, then, only that part of the original order which is the subject-matter of the appeal or revision will merge in the order of the superior authority and the remaining portion of the original order which is not subjected to appeal or revision will remain undisturbed. (iii) Where the appellate authority has given plenary jurisdiction over the entire matter dealt with by the original order, irrespective of the fact whether appeal is filed in regard to the entire matter or part of the matter, the entire original order will merge in the order of the appellate authority. However, where such appellate authority entrusted with plenary jurisdiction consciously restricts the scope of scrutiny to only a part of the original order, then, whether only that part of the original order which is subjected to scrutiny and not the entire order will get merged with the order of the appellate authority, is a matter on which there is divergence of views. The view of this Court in such cases has been that the merger will be in respect of the entire order. (iv) The doctrine of merger is not a doctrine of rigid and universal application. The applicability of the doctrine depends on the nature of appellate or revisional order in each case and the scope of statutory provision conferring the appellate or revisional jurisdiction. (v) There will be no merger at all where the subsequent order is passed by the same authority, either by way of review or rectification. Where an order is passed on review, the origoersed wiped out as it is set aside by the order order granting review and is by the order made on review. There is thus no 'merger. Where an order is passed rectifying any mistake in the original order, there is neither 'merger' nor 'supersession'. The original order gets amended by the order of rectification by correcting the error." ITA No. 160/JP/2022 M/s Oasis Laboratories Pvt. Ltd. vs. CPC, Bengaluru/ITO, Ward-2(3), Jaipur 11 4.10 Appellant filed return of income for AY 2017-18 on 28.10.2017 with Income of Rs.13,22,210/-. The same was processed by CPC Bengaluru on 15.03.2019 by making addition of Rs.10,58,469/- on account of delayed payment of employee's contribution towards ESI and PF. Appellant filed rectification application under section 154 against this order, however CPC has rejected the rectification application of the appellant and income as per 143(1) was retained vide order u/s.154 dated 24.10.2019. Appellant has come up with appeal against order passed under section 154 by CPC Bengaluru. 4.11 If appellant's case is tested on above observations, order under section 143(1) i.e., original order passed on 15.03.2019 continues where CPC Bengaluru had assessed appellant's income at Rs.27,95,670/- vis a vis returned income of Rs. 13,22,210/-. Order u/s.154 does not propose a further change in income from one which was determined while passing order u/s.143(1). 4.12 Consequently, grounds of appeals being agitated, are primarily directed against order passed under section 143(1), wherein addition was made to returned income of appellant, whereas appeal has been filed against order of 154 dated 24.10.2019. If there were further mistakes committed in recalculation, it would have been cause of further grievance apropos order u/s.154 of ITA, 1961. 4.13 In view of above facts, grounds of appeal cannot be decided on merits and are being dismissed in limine. 5. As a result, the appeal for A.Y 2017-18 is dismissed in limine.” 7. Based on the stated facts, the ld. AR submitted that the appeal filed by them is in accordance with the latest order of the CPC should have been decided by the ld. CIT(A) on merits. Since, the assessee could not get justice in an appeal filed before the ld. CIT(A) filed this appeal before us. ITA No. 160/JP/2022 M/s Oasis Laboratories Pvt. Ltd. vs. CPC, Bengaluru/ITO, Ward-2(3), Jaipur 12 8. The learned authorized representative [ ld. AR for short ] of the assessee submitted his detailed submission in respect of their ground No. 1,& 2 of the assessee’s appeal. The extract of the submission made is as under:- Submission:- 1. The only reason given by the Ld. CIT(A) for dismissing the appeal filed by the assessee is that the assessee has filed an appeal against intimation u/s 154 dt. 24.10.2019 and not against intimation u/s 143(1) dt. 15.03.2019 in which the adjustment of Rs.17,96,858/- was made. In this connection it may be noted that since the adjustment made by CPC were apparent mistake assessee filed rectification request on 23.03.2019. On this rectification request, an order dt. 14.05.2019 was passed where assessee was advised to again file online rectification request if it is not satisfied with the order u/s 154. Accordingly, a rectification request was again filed on 07.06.2019 but the same was also rejected vide order u/s 154 dt. 15.06.2019. In this order assessee was again advised to file online rectification request if it is not satisfied with the order u/s 154. Accordingly, a rectification request was again filed on 05.10.2019. Against this rectification request, the CPC passed rectification order u/s 154 dt. 24.10.2019 where adjustment of Rs.3,23,400/- was rectified but adjustment of Rs.10,58,469/- made u/s 36(1)(va) and adjustment of Rs.4,14,989/- made u/s 43B was not rectified. In this rectification order, no advice was given to file online rectification request and thus, assessee filed appeal before Ld. CIT(A) against the said rectification order. Therefore, when CPC, Bangalore itself has advised the assessee to file the rectification request if the assessee is not satisfied with the order u/s 154, the finding of Ld. CIT(A) that appeal should be filed against the order passed u/s 143(1) dt. 15.03.2019 from where grounds of appeal are arising and not against order passed u/s 154 dt. 24.10.2019 is against the advice given by the CPC, Bangalore and also not as per law. Further the observation of Ld. CIT(A) that the original order passed on 15.03.2019 continues where CPC Bengaluru had assessed appellant’s income at Rs.27,95,670/- and order u/s 154 does not propose a further change in income from one which was determined while passing order u/s 143(1) is also incorrect in as much as in the original order dt. 15.03.2019 the CPC Bengaluru has assessed the total income at Rs.31,19,070/- whereas in the order u/s 154 dt. 24.10.2019 the total ITA No. 160/JP/2022 M/s Oasis Laboratories Pvt. Ltd. vs. CPC, Bengaluru/ITO, Ward-2(3), Jaipur 13 income was assessed at Rs.27,95,670/- and thus against this order the appeal was filed before Ld. CIT(A). Therefore, dismissing the appeal filed by the assessee in limine and not deciding it on merit is illegal and bad in law. 2. Without prejudice to above, it is submitted that a legitimate claim of the assessee cannot be denied on technicalities as it is a settled proposition of law that technicalities should not come in way in imparting the substantial justice. Hon’ble Supreme Court in case of S. Nagaraj & Others Vs. State Of Karnataka & Another 4 SCC 595 in para 18 of the order has held as under:- “18. Justice is a virtue which transcends all barriers. Neither the rules of procedure nor technicalities of law can stand in its way. The order of the Court should not be prejudicial to anyone. Rule of stare decisis is adhered for consistency but it is not as inflexible in Administrative Law as in Public Law. Even the law bends before justice. Entire concept of writ jurisdiction exercised by the higher courts is founded on equity and fairness. If the Court finds that the order was passed under a mistake and it would not have exercised the jurisdiction but for the erroneous assumption which in fact did not exist and its perpetration shall result in miscarriage of justice then it cannot on any principle be precluded from rectifying the error. Mistake is accepted as valid reason to recall an order. Difference lies in the nature of mistake and scope of rectification, depending on if it is of fact or law. But the root from which the power flows is the anxiety to avoid injustice. It is either statutory or inherent. The latter is available where the mistake is of the Court. In Administrative Law the scope is still wider. Technicalities apart if the Court is satisfied of the injustice then it is its constitutional and legal obligation to set it right by recalling its order.” 3. Reliance in this connection is placed on the decision of Hon’ble ITAT, Jaipur Bench in case of Smt. Parmeshwari Devi Vs. CPC, Bengaluru ITA No.216/JP/2021 order dt. 28.02.2022 (PB 26-34) where at Para 7 & 8 it was held as under:- 7. After having meticulously gone through the submissions of both the parties and facts of the present case, we also found that since the adjustment made by CPC were having apparent mistake, therefore, the assessee filed rectification request and while passing the order dated 20.11.2019, the assessee was advised to again file online rectification request if the assessee is not satisfied with the order u/s 154 of the Act. Since according to the ld. AR, the assessee was not satisfied with the ITA No. 160/JP/2022 M/s Oasis Laboratories Pvt. Ltd. vs. CPC, Bengaluru/ITO, Ward-2(3), Jaipur 14 order U/s 154 of the Act and accordingly, as per the records, the assessee again filed rectification request on 15.02.2020 which was also rejected on 28.02.2020. Therefore, we are concur with the submission of the ld. AR that when CPC Bangalore itself has advised the assessee to file the rectification request in case if the assessee is not satisfied with the initial order U/s 154 of the Act, thus, the finding of the ld. CIT(A) that appeal filed by the assessee is barred by limitation is not sustainable in the eyes of law. We are further of the view that a legitimate claim of the assessee cannot be denied on technicalities as it is a settled proposition of law that technicalities should not come in way in imparting the substantial justice. 8. In our view, the justice is a virtue which transcends all harriers. Neither the rules of procedure nor technicalities of law can stand in its way. The order of the Court should not be prejudicial to anyone. Rule of stare decisis is adhered for consistency but it is not as inflexible in Administrative Law as in Public Law. Even the law bends before justice. If the Court finds that the order was passed under a mistake and it would not have exercised the jurisdiction but for the erroneous assumption which in fact did not exist and its perpetration shall result in miscarriage of justice then it cannot on any principle be precluded from rectifying the error. Mistake is accepted as valid reason to recall an order. Difference lies in the nature of mistake and scope of rectification, depending on if it is of fact or law. But the root from which the power flows is the anxiety to avoid injustice. It is either statutory or inherent. The latter is available where the mistake is of the Court. In Administrative Law the scope is still wider. Technicalities apart if the Court is satisfied of the injustice then it is its constitutional and legal obligation to set it right by recalling its order. In view of the above observation, we had drawn strength from the decision of the Hon'ble Supreme Court in case of Nagaraj & Others Vs. State of Karnataka & Another 4 SCC 595, therefore, keeping in view the above observation, we set aside the order of the ld. CIT(A) by holding that the ld. CIT(A) ought to have decided the appeal on merits instead of adopting a hyper technical view. In view of above, Ld. CIT(A) ought to have decided the appeal on merit instead of adopting a hyper technical view and that too without any opportunity to counter the view which he has adopted. ITA No. 160/JP/2022 M/s Oasis Laboratories Pvt. Ltd. vs. CPC, Bengaluru/ITO, Ward-2(3), Jaipur 15 4. On merits it is submitted that disallowance of Rs.10,58,469/- made u/s 36(1)(va) on account of delayed payment of employees contribution towards PF & ESI and disallowance of Rs.4,14,989/- made u/s 43B on account of non payment of bonus before due date of filing of return of income is incorrect as explained hereunder:- Disallowance of Rs.10,58,469/- u/s 36(1)(va) (a) The details of disallowance of Rs.10,58,469/- made u/s 36(1)(va) is as under:- Details of Employees State Provident Fund Month Employers Contribution Employees Contribution Total Due date of payment Actual date of payment Apr-16 30,702 27,441 58,143 15-05- 2016 02-08- 2016 May- 16 28,830 25,757 54,587 15-06- 2016 02-08- 2016 June- 16 28,410 25,380 53,790 15-07- 2016 07-09- 2016 July-16 28,344 25321 53,665 15-08- 2016 16-11- 2016 Aug-16 27,930 24,949 52,879 15-09- 2016 22-11- 2016 Sep-16 27,813 24,843 52,656 15-10- 2016 28-11- 2016 Oct-16 27,780 24,813 52,593 15-11- 2016 28-11- 2016 Nov-16 33,188 29,676 62,864 15-12- 2016 31-03- 2017 Dec-16 33,935 30,350 64,285 15-01- 2017 16-05- 2017 Jan-17 50,138 45,595 95,733 15-02- 2017 21-06- 2017 Feb-17 62,075 55,376 1,17,451 15-03- 2017 28-07- 2017 Mar-17 61,633 56,090 1,17,723 31-03- 2017 25-08- 2017 Total 4,40,778 3,95,591 8,36,369 ITA No. 160/JP/2022 M/s Oasis Laboratories Pvt. Ltd. vs. CPC, Bengaluru/ITO, Ward-2(3), Jaipur 16 Details of Employees State Insurance Month Employers Contributio n Employees Contributio n Total Due date of payment Actual date of payment Apr-16 10,429 3,864 14,29 3 16-05-2016 19-08- 2016 May-16 9,453 3,496 12,94 9 16-06-2016 23-08- 2016 June- 16 9,499 3,507 13,00 6 16-07-2016 30-08- 2016 July-16 9,518 3,517 13,03 5 16-08-2016 09-09- 2016 Aug-16 9,340 3,411 12,75 1 16-09-2016 16-11- 2016 Sep-16 9,280 3,428 12,70 8 16-10-2016 16-11- 2016 Oct-16 10,618 3,923 14,54 1 16-11-2016 24-12- 2016 Nov-16 12,561 4,641 17,20 2 16-12-2016 17-03- 2017 Dec-16 12,700 4,690 17,39 0 16-01-2017 28-03- 2017 Jan-17 19,902 7,351 27,25 3 16-02-2017 18-05- 2017 Feb-17 24,294 8,976 33,27 0 16-03-2017 06-07- 2017 Mar-17 24,610 9,092 33,70 2 31-03-2017 27-07- 2017 Total 1,62,204 59,896 2,22,1 00 (b) From the above table it can be noted that out of total disallowance of Rs.10,58,469/-, Rs.6,02,982/- relates to employer’s contribution towards PF and ESI (4,40,778+1,62,204/-) which has been wrongly disallowed by the Ld. AO(CPC) as employees’ contribution. The employer’s contribution is covered by the provisions of section 43B(b) as per which deduction is allowed if the contribution is made on or before the due date of filing the return. In the present case, the due date of filing the return was 07.11.2017. The assessee has deposited the contribution towards PF & ESI before the due date of filing ITA No. 160/JP/2022 M/s Oasis Laboratories Pvt. Ltd. vs. CPC, Bengaluru/ITO, Ward-2(3), Jaipur 17 return of income as evident from the above tables. Thus, disallowance of Rs.6,02,982/- made in respect of employer’s contribution is otherwise uncalled for. (c) In respect of employees contribution towards PF & ESI it is submitted that various High Courts including the jurisdictional Rajasthan High Court has held that if employees contribution to PF/ESI is deposited before the due date of filing of the return u/s 139(1), then the same is allowable. In the present case, the due date of filling the return was 07.11.2017. The assessee has deposited the employees contribution towards PF & ESI before the due date of filing the return of income as is evident from the table reproduced above. Reliance in this connection is placed on the following cases:- • CIT Vs. Rajasthan State Beverages Corporation Ltd. (2017) 250 Taxman 16 (SC) • CIT Vs. State Bank of Bikaner & Jaipur [2014] 99 DTR 131 (Raj.) (HC) • CIT Vs. Jaipur Vidyut Vitran Nigam Ltd. [2014] 98 DTR 105 (Raj.) (HC) • CIT Vs. Udaipur Dugdh Utpadak Sahakari Sangh Ltd. (2013) 98 DTR 109 (Raj.) (HC) (d) Amendment brought by FA, 2021 by way of Explanation 2 to section 36(1)(va) and Explanation 5 to section 43B which provides that the definition of due dates as per section 43B is deemed never to have been applied for the purpose of employees contribution is applicable from 01.04.2021, i.e. AY 2021-22 and thus, not applicable for the year under consideration. For this purpose reliance is placed on the following cases:- M/s Hotel Gaudavan Pvt. Ltd. Vs. CPC, Bengaluru/ACIT/DCIT, Circle-6, Jaipur ITA No.83 & 84/JP/22 order dt. 19.04.2022 (Jaipur) (Trib.) Sanjay Porwal Vs. CPC, Bengaluru/ ITO, Ward-6(4), Jaipur ITA No.63/JP/22 order dt. 06.04.2022 (Jaipur) (Trib.) In view of above, disallowance confirmed by Ld. CIT(A) u/s 36(1)(va) be directed to be deleted. Disallowance of Rs.4,14,989/- u/s 43B (a) During the year assessee made provision for bonus to employees for Rs.4,14,989/-. The same was paid on 28.10.2017. However the audit report was signed on 27.10.2017 and therefore the auditor has mentioned that ITA No. 160/JP/2022 M/s Oasis Laboratories Pvt. Ltd. vs. CPC, Bengaluru/ITO, Ward-2(3), Jaipur 18 bonus of Rs.4,14,989/- was not paid till the date of audit. The AO (CPC) disallowed the above simply on the basis of audit report while processing the return. (b) It is submitted that as per section 43B, deduction for bonus is allowable if the same is paid on or before the due date of filing of return. In the present case, the assessee made payment of bonus of Rs.4,14,989/- on 28.10.2017, i.e. before the due date of filing of return. Copy of ledger account of bonus payable. Hence, the payment of bonus is allowable u/s 43B of the Act. In view of above, disallowance confirmed by Ld. CIT(A) u/s 43B be directed to be deleted.” 9. On the other hand, the ld. DR supported the orders of the lower authorities and did not submit any thing to controvert the arguments placed by the ld. AR of the assessee that the appeal preferred by them is as per the latest order of CPC and did not controvert the judgement filed by the ld.AR of the assessee. 10. We have heard both the parties, perused the material available on record and also gone through the judgement placed on record. The ld. AR of the assessee has relied upon the judgment co-ordinate bench of this tribunal in the case of Smt. Parmeshwari Devi Vs. CPC, Bengaluru ITA No.216/JP/2021 order dt. 28.02.2022 (PB 26-34) where at Para 7 & 8 it was held as under:- ITA No. 160/JP/2022 M/s Oasis Laboratories Pvt. Ltd. vs. CPC, Bengaluru/ITO, Ward-2(3), Jaipur 19 7. After having meticulously gone through the submissions of both the parties and facts of the present case, we also found that since the adjustment made by CPC were having apparent mistake, therefore, the assessee filed rectification request and while passing the order dated 20.11.2019, the assessee was advised to again file online rectification request if the assessee is not satisfied with the order u/s 154 of the Act. Since according to the ld. AR, the assessee was not satisfied with the order U/s 154 of the Act and accordingly, as per the records, the assessee again filed rectification request on 15.02.2020 which was also rejected on 28.02.2020. Therefore, we are concur with the submission of the ld. AR that when CPC Bangalore itself has advised the assessee to file the rectification request in case if the assessee is not satisfied with the initial order U/s 154 of the Act, thus, the finding of the ld. CIT(A) that appeal filed by the assessee is barred by limitation is not sustainable in the eyes of law. We are further of the view that a legitimate claim of the assessee cannot be denied on technicalities as it is a settled proposition of law that technicalities should not come in way in imparting the substantial justice. 8. In our view, the justice is a virtue which transcends all harriers. Neither the rules of procedure nor technicalities of law can stand in its way. The order of the Court should not be prejudicial to anyone. Rule of stare decisis is adhered for consistency but it is not as inflexible in Administrative Law as in Public Law. Even the law bends before justice. If the Court finds that the order was passed under a mistake and it would not have exercised the jurisdiction but for the erroneous assumption which in fact did not exist and its perpetration shall result in miscarriage of justice then it cannot on any principle be precluded from rectifying the error. Mistake is accepted as valid reason to recall an order. Difference lies in the nature of mistake and scope of rectification, depending on if it is of fact or law. But the root from which the power flows is the anxiety to avoid injustice. It is either statutory or inherent. The latter is available where the mistake is of the Court. In Administrative Law the scope is still wider. Technicalities apart if the Court is satisfied of the injustice then it is its constitutional and legal obligation to set it right by recalling its order. In view of the above observation, we had drawn strength from the decision of the Hon'ble Supreme Court in case of Nagaraj & Others Vs. State of Karnataka & Another 4 SCC 595, therefore, keeping in view the above observation, we set aside the order of the ld. CIT(A) by holding that the ld. CIT(A) ITA No. 160/JP/2022 M/s Oasis Laboratories Pvt. Ltd. vs. CPC, Bengaluru/ITO, Ward-2(3), Jaipur 20 ought to have decided the appeal on merits instead of adopting a hyper technical view. 11. Respectfully, following the judgement of the co-ordinate bench of this tribunal as facts and circumstance being similar to the case relied upon, we are of the considered view that the ld. NFAC should have decided the appeal of the assessee on merits instead dealing in the technicality of the matter should have decided the appeal of the assessee on merits. In terms of this observations, we set-a-side the order of the first appellate authority with a direction to pass a speaking order on merits after giving a proper opportunity of hearing to the assessee. In the result the appeal of the assessee is allowed for statistical purpose. Order pronounced in the open Court on 28/06/2022. Sd/- Sd/- ¼ lanhi xkslkbZ ½ ¼ jkBkSM deys’k t;arHkkbZ ½ (Sandeep Gosain) (Rathod Kamlesh Jayantbhai) U;kf;d lnL;@Judicial Member ys[kk lnL;@Accountant Member Tk;iqj@ Jaipur fnukad@Dated:- 28/06/2022 *Ganesh Kr. vkns'k dh izfrfyfi vxzsf’kr@Copy of the order forwarded to: 1. vihykFkhZ@The Appellant- Oasis Laboratories Private Limited, Jaipur 2. izR;FkhZ@ The Respondent- CPC, Banagalore/ITO, Ward-2(3), Jaipur ITA No. 160/JP/2022 M/s Oasis Laboratories Pvt. Ltd. vs. CPC, Bengaluru/ITO, Ward-2(3), Jaipur 21 3. vk;dj vk;qDr@ CIT 4. vk;dj vk;qDr@ CIT(A) 5. foHkkxh; izfrfuf/k] vk;dj vihyh; vf/kdj.k] t;iqj@DR, ITAT, Jaipur. 6. xkMZ QkbZy@ Guard File {ITA No. 160/JP/2022} vkns'kkuqlkj@ By order, lgk;d iathdkj@Asst. Registrar