Pr. CIT-2, Bhopal V. M/s. Kamla Construction Co., Bhopal

MA 10/Ind/2023

AI Insights

The case involves a Miscellaneous Application filed by the Revenue against M/s. Kamla Construction concerning an earlier ITAT order that partly allowed the assessee's appeal for the assessment year 2015-16. The Revenue sought a recall of the ITAT's order dated 20.07.2022, which was based on judicial precedents favoring the assessee regarding deductions for employees' contributions to PF/ESI. However, a subsequent Supreme Court decision contradicted this position, leading the Revenue to file the M/A. The ITAT found the M/A to be within the time limit and meritorious, leading to the recall of the earlier order and restoration of the original appeal for a fresh hearing.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 130735 (ITAT-INDORE)
• Duration Of Justice: 5 month(s) 25 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 31-08-2023
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 17-08-2023
• Assessment Year: 2015-2016
• Appeal Filed On: 06-03-2023
• Other Referred Cases: Pacific Projects Limited Vs. ACIT, ACIT, Central, Indore Vs. Shri Manish Kedia, Checkmat Services Private Limited vs. CIT
• Laws Referred To: Income-tax Act, 1961
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: ASSESSEERESPONDENT RAISED A
• Assessee Lawyers: ON..
• Section: 43B; 254(2)

Judgement Text

Page 1 of 4 आयकर अपीलȣय अͬधकरण, इंदौर Ûयायपीठ, इंदौर IN THE INCOME TAX APPELLATE TRIBUNAL INDORE BENCH, INDORE BEFORE SHRI VIJAY PAL RAO, JUDICIAL MEMBER AND SHRI B.M. BIYANI, ACCOUNTANT MEMBER MA No. 10/Ind/2023 (Arising out of ITA No.16/Ind/2020) Assessment Year: 2015-16 Pr.CIT-2, Bhopal बनाम/ Vs. M/s.Kamla Construction, KCC Main Road, Obedullaganj, District Raisen, Bhopal (Applicant/Revenue) (Respondent/Assessee) PAN: AKTPP8040L Revenue by Shri Ashish Porwal, Sr. DR Assessee by Shri Anil Khabya, CA on14.07.2023 and None on 18.08.2023 Date of Hearing 14.07.2023/18.08.2023 Date of Pronouncement 01.09.2023 आदेश/O R D E R Per B.M. Biyani, A.M.: This Misc. Application [“M/A”] u/s 254(2) of Income-tax Act, 1961 is preferred by Revenue seeking part re-call of Order dated 20.07.2022 of ITAT, Indore Bench in ITA No.16/Ind/2020 for assessment-year 2015-16 by which the Assessee’s appeal was partly allowed. PR.CIT-2, Bhopal vs. M/s.Kamla Construction Co., Bhopal MANo.10/Ind/2023 Assessment year 2015-16 Page 2 of 4 2. Ld. AR for assessee appeared in last hearing on 14.07.2023 and made a brief submission. Thereafter, the case was adjourned to verify the date of service of impugned order upon revenue. Today, when the case is called, none appeared for assessee perhaps because the Ld. AR has already understood the case on last occasion. Therefore, it is though fit to continue hearing and dispose of matter. 3. During previous hearing, Ld. AR for assessee-respondent raised a preliminary objection stating that the impugned order dismissing the Revenue’s appeal was passed by ITAT on 20.07.2022 and the present M/A had been filed by the Revenue on 07.03.2023. Ld. AR invited our attention to the provision of section 254(2) whereunder this M/A is filed; that reads as under: “(2) The Appellate Tribunal may, at any time within six months from the end of the month in which the order was passed, with a view to rectifying any mistake apparent from the record, amend any order passed by it under sub-section (1), and shall make such amendment if the mistake is brought to its notice by the assessee or the Assessing Officer:” 4. Ld. AR submitted that the language of section 254(2) is very clear which provides for filing of M/A within six months from the end of the month in which the order was passed. Since in the present case, the original order disposing of appeal was passed on 20.07.2022, the prescribed time-limit got expired on 31.01.2023. Hence, the M/A filed by Revenue on 07.03.2023 is barred by limitation having been filed beyond the outer limit prescribed in section 254(2) and is not maintainable; the same must be dismissed. Ld. DR for revenue-applicant, however, submitted that although the Bench passed impugned order on 20.07.2022, it was received by the office of concerned PCIT on 28.10.2022 as averred by concerned AO in an affidavit dated 19.07.2023, copy filed through Inward Entry No. 675 in the office of ITAT. Therefore, the time-limit of 6 months shall be calculated from 28.10.2022 i.e. the date of actual receipt of order by revenue and not from 20.07.2022 in view of recent decision of this very Bench of ITAT, Indore in MA No. PR.CIT-2, Bhopal vs. M/s.Kamla Construction Co., Bhopal MANo.10/Ind/2023 Assessment year 2015-16 Page 3 of 4 19/Ind/2022 (Arising out of ITA No. 82/Ind/2021), ACIT, Central, Indore Vs. Shri Manish Kedia. Therefore, the present M/A filed by Revenue is within time-limitation and must be allowed. 5. We have considered submissions of both sides. We find that the in M/A No. 19/Ind/2022 (supra), this Bench has, following the decision of Hon’ble Delhi High Court in Pacific Projects Limited Vs. ACIT, 278 Taxmann 396, categorically held that the time period of 6 months shall be computed from the date of actual receipt of order. Notably, the receipt date of order by revenue is reported to be 28.10.2022. Therefore, the filing of M/A on 07.03.2023 is valid as per view taken by us in M/A No. 19/Ind/2022 (supra). Therefore, we hold that the present M/A is not barred by time-limitation. The objection raised by Ld. AR is rejected accordingly. 6. Now coming to the merits of the M/A, Ld. DR submitted that the revenue is seeking part re-call of the impugned order qua the issue of disallowance of employee’s contribution to PF/ESI paid after due date under the respective laws but before due date for filing return of income u/s 139(1). The ITAT has held as allowable deduction by following certain decisions of Hon’ble Courts favouring the assessee. Now, the Hon'ble Supreme Court has settled this controversy in the case of Checkmat Services Private Limited vs. CIT 448 ITR 518 against assessee and in favour of revenue by holding that the payment of employees’ contribution to PF / ESI after due dates under their respective laws is not allowable as deduction u/s 36(1)(va) even if the payment is made on or before due date of filing the return of income u/s 139(1). Hon'ble Supreme Court has also held that provisions of Section 43B does not cover the deduction of employees’ contribution to PF/ ESI. Therefore, in view of judgement in Checkmat PR.CIT-2, Bhopal vs. M/s.Kamla Construction Co., Bhopal MANo.10/Ind/2023 Assessment year 2015-16 Page 4 of 4 Services Private Limited vs. CIT (supra), an apparent mistake has crept in the impugned order taking a view which is contrary to the judgment of Hon'ble Supreme Court. Hence, this is a fit situation to re-call the impugned Order passed by ITAT, Indore. We find merit in the submission of Ld. DR. Therefore, we agree to accept the present M/A and restore the original appeal. Ordered accordingly. The registry is directed to list original appeal for a fresh hearing on a suitable date under intimation of both sides. 7. Resultantly, this M/A is allowed. Order pronounced in the open court on 01.09.2023. Sd/- sd/- (VIJAY PAL RAO) (B.M. BIYANI) JUDICIAL MEMBER ACCOUNTANT MEMBER Indore Ǒदनांक /Dated :01.09.2023 CPU/Sr. PS Copies to: (1) The appellant (2) The respondent (3) CIT (4) CIT(A) (5) Departmental Representative (6) Guard File By order UE COPY Sr. Private Secretary Income Tax Appellate Tribunal Indore Bench, Indore