ITO, WARD-22(3), NEW DELHI V. MADKARTER TECHNOLOGIES PVT. LTD. , DELHI

MA 56/DEL/2023

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The case involves the Income Tax Department (revenue) seeking to rectify a Tribunal order that had deleted disallowances made under section 36(1)(va) of the Income Tax Act, concerning delayed payments of employees' contributions to PF and ESI. The Tribunal's original decision was based on a Delhi High Court ruling favoring the assessee, which was later contradicted by a Supreme Court decision. The revenue argued that the Tribunal's earlier decision should be recalled in light of the Supreme Court's judgment. However, the Tribunal found that the earlier decision was based on the law as it stood at that time, and a mere change in judicial interpretation does not amount to a mistake apparent from the record.

• Counselvise Citation: [2024] 140 COUNSELVISE.COM (IT) 470189 (ITAT-DELHI)
• Duration Of Justice: 1 year(s) 9 month(s) 7 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 08-11-2024
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: E
• Next Hearing Date: 13-09-2024
• Assessment Year: 2019-2020
• Appeal Filed On: 01-02-2023
• Other Referred Cases: Checkmate Services P. Ltd. v. CIT-1 & others, PCIT Vs. Pro Interactive Service (India) Ltd, CIT vs. M/s Vegetable Products Ltd., CIT vs. Reliance Telecom Ltd., ACIT vs. Saurashtra Kutch Stock Exchange Ltd., DCIT vs. ANI Integrated Services Ltd.
• Laws Referred To: Income Tax Act
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: YOGESH KUMAR NAYYAR
• Section: 143(1); 192; 254(2)

Judgement Text

"Page | 1 INCOME TAX APPELLATE TRIBUNAL DELHI BENCH “E”: NEW DELHI BEFORE SHRI M. BALAGANESH, ACCOUNTANT MEMBER AND SHRI ANUBHAV SHARMA, JUDICIAL MEMBER MA No. 56/Del/2023 (In ITA No.1548/Del/2021) (Assessment Year: 2019-20) ITO, Ward-22(3), New Delhi Vs. Madkarter Technologies Pvt. Ltd, D-12, PUshpanjali Farms Bijwasan, New Delhi (Appellant) (Respondent) PAN:AAKCM2803J Assessee by : None Revenue by: Shri Yogesh Kumar Nayyar, Sr. DR Date of Hearing 13/09/2024 Date of pronouncement 08/11/2024 O R D E R PER M. BALAGANESH, A. M.: By virtue of this miscellaneous application, the revenue seeks to rectify the Tribunal order in ITA No. 1548/Del/2021 dated 13.10.2022 in view of the decision of the Hon'ble Supreme Court in the case of Checkmate Services in Civil Appeal No. 2833 of 2016 dated 12.10.2022. 2. None appeared on behalf of the assessee. We have heard the ld DR and perused the materials available on record. 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.59,15,545/-. The return of the assessee was processed u/s 143(1) of the Act determining a total income of Rs.1,37,54,330/- MA No. 56/Del/2023 Madkarter Technologies Pvt. Ltd Page | 2 after making an addition of Rs.78,38,785/- on account of belated payment of employees contribution to PF & ESI. Being aggrieved with the order dated 13.05.2020 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-8/10033/2020-21 dated 11.10.2021 has confirmed the addition made u/s 36(1)(va) of the Act. Being aggrieved with the order of the ld.CIT(A), dated 11.10.2021, the assessee filed an appeal before this Tribunal. However, relying on Hon’ble Delhi High Court decision in the case of PCIT Vs. Pro Interactive Service (India) Ltd ITA No. 983/2018 dated 10.09.2018, the disallowances made u/s 36(1)(va) of the Act were deleted vide order dated 13.10.2022 in ITA No.1548/Del/2021. 3. 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. 4. 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 High Court in MA No. 56/Del/2023 Madkarter Technologies Pvt. Ltd Page | 3 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 of law is recognized. 5. 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 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. 6. 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 MA No. 56/Del/2023 Madkarter Technologies Pvt. Ltd Page | 4 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”. 7. 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 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. 8. We find that Co-ordinate Bench decision of Mumbai Tribunal in the case of DCIT vs. ANI Integrated Services Ltd., MA No.167/Mum/2023, order dated 29.05.2024 had held that on this MA No. 56/Del/2023 Madkarter Technologies Pvt. Ltd Page | 5 contentious aspect holding that the scope of section 254 (2) of the Act is limited and review of an order is not possible. 9. Consequently the miscellaneous application of the revenue has no merit and is dismissed. Order pronounced in the open court on 08/11/2024. -Sd/- -Sd/- (ANUBHAV SHARMA) (M. BALAGANESH) JUDICIAL MEMBER ACCOUNTANT MEMBER Dated:08/11/2024 A K Keot Copy forwarded to 1. Applicant 2. Respondent 3. CIT 4. CIT (A) 5. DR:ITAT ASSISTANT REGISTRAR ITAT, New Delhi "