ITO,WARD-10(1), NEW DELHI V. GENIEHR SOLUTIONS PVT LTD., DELHI

MA 385/DEL/2022

AI Insights

The case involves the Income Tax Department (Revenue) seeking to recall an ITAT order that had allowed the appeal of Geniehr Solutions Pvt. Ltd., which pertained to the disallowance of expenditure on account of delay in deposit of employees' contributions to EPF and ESI. Initially, the ITAT had deleted the disallowances based on precedents that favored the assessee. However, following a Supreme Court decision that confirmed the disallowance, the Revenue filed an application to recall the ITAT'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, and reiterated the principle that the law applicable is that which is in force in the relevant assessment year.

• Counselvise Citation: [2024] 140 COUNSELVISE.COM (IT) 31644 (ITAT-DELHI)
• Duration Of Justice: 1 year(s) 10 month(s) 4 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 04-10-2024
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: G
• Next Hearing Date: 04-10-2024
• Assessment Year: 2019-2020
• Appeal Filed On: 30-11-2022
• Other Referred Cases: CIT Vs. Amil Ltd., SPL Industries vs. CIT, Checkmate Services P. Ltd. v. CIT-1 & others, DCIT vs. ANI Integrated Services Ltd., Goslino Mario Case, Reliance Jute and Industries Ltd. V CIT, CIT vs. M/s Vegetable Products Ltd., CIT vs. Reliance Telecom Ltd., ACIT vs. Saurashtra Kutch Stock Exchange Ltd.
• Laws Referred To: Income Tax Act
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Section: 195; 143(1); 192; 254(2)

Judgement Text

"IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH “G”: NEW DELHI BEFORE SHRI M. BALAGANESH, ACCOUNTANT MEMBER AND SHRI ANUBHAV SHARMA, JUDICIAL MEMBER M.A. no. 385/Del/2022 ( In ITA No. 1535/DEL/2022) Assessment Year: 2019-20 ITO, Ward-10(1), New Delhi. Vs. Geniehr Solutions Pvt. Ltd., Shop No.20 WA-107/1211, Shakarpur, East Delhi. Delhi – 110 092. PAN: AAFCG9829H. APPLICANT RESPONDENT Assessee represented by Ms Monalisa Maity, Advocate Department represented by Shri B.K. Singh, Sr. DR Date of hearing 04.10.2024 Date of pronouncement 04.10.2024 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 29.07.2022 by which the appeal of the assessee was allowed. 3. The brief background of the case is that the assessee had filed its return of income for the AY 2019-20 declaring a total income of Rs.56,01,606/-. The return 2 MA no. 385/Del/2022 of the assessee was processed u/s 143(1) of the Act determining a total income of Rs.1,18,31,432/- after making an addition of Rs.62,29,826/- on account of belated payment of employees contribution to PF & ESI. Being aggrieved with the order dated 23.07.2020 passed u/s 143(1) of the Act, the assessee filed an appeal before the ld.CIT(A) which, vide its order CIT(A), Delhi-4/10075/2020-21 dated 13.06.2022 has confirmed the addition made u/s 36(1)(va) of the Act. Being aggrieved with the order of the ld.CIT(A), dated 13.06.2022, the assessee filed an appeal before the Hon’ble ITAT. However, relying on Hon’ble Delhi High Court decision in the case of CIT Vs. Amil Ltd. (2010) 321 ITR 508 (Del.) and SPL Industries vs. CIT (2011) 9 Taxmann.com 195 (Delhi), the disallowances made u/s 36(1)(va) of the Act were deleted vide order dated 29.07.2022 in ITA No.1535/Del/2022. 4. The application in hand has been moved 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. 3 MA no. 385/Del/2022 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 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 4 MA no. 385/Del/2022 assessee. Thus, where assessee is benefited due to one favorable view then, due to 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 5 MA no. 385/Del/2022 assessee which then existed and, subsequently, when the assessee came to know 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 04.10.2024. Sd/- Sd/- (M. BALAGANESH) (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 "