DY. COMMISSIONER OF INCOME TAX, CIRCLE-5(2)(1), MUMBAI V. M/S. NILAMBER DYEING AND BLEACHING MILLS PVT. LTD, MUMBAI

MA 127/MUM/2023

AI Insights

The case involves a Miscellaneous Application by the Revenue seeking to recall an order of the Income Tax Appellate Tribunal, which had allowed deductions for employees' contributions towards PF and ESI under section 36(1)(va) of the Income Tax Act, 1961. The Revenue contended that the Tribunal's decision was inconsistent with a Supreme Court judgment in Checkmate Services India (Pvt.) Ltd. vs. CIT, which clarified that such contributions must be deposited before the due date to be eligible for deduction. The Tribunal, upon reviewing the Supreme Court's decision and the circumstances of the case, agreed that an error had occurred in the initial ruling and thus recalled the order, restoring the appeal for re-hearing.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 136062 (ITAT-MUMBAI)
• Duration Of Justice: 5 month(s) 3 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 06-07-2023
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: SMC
• Next Hearing Date: 08-06-2023
• Assessment Year: 2019-2020
• Appeal Filed On: 02-02-2023
• Other Referred Cases: Checkmate Services India (Pvt.) Ltd. vs. CIT, 448 ITR 518(SC)
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Section: 254(2)

Judgement Text

म ु ंबई ठ “ एस एम स ”, म ु ंबई स , स ए ं एस. !" हम न, ेख स े सम' IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH “ SMC”, MUMBAI BEFORE SHRI VIKAS AWASTHY, JUDICIAL MEMBER & SHRI S.RIFAUR RAHMAN, ACCOUNTANT MEMBER MA NO.127/MUM/2023 [Arising out of ITA No.1990/Mum/2021, A.Y.2019-20] Dy. Commissioner of Income Tax, Circle -5(2)(1), Mumbai, R.No.571, 5 th Floor, Aaykar Bhavan, M.K.Road, Mumbai – 400 020 ..... ( ) /Applicant बन म Vs. Nilamber Dyeing and Bleaching Mills Pvt. Ltd. 12/2, Sethia Bhavan, Dr.D.D.Sathe Marg, Girgaon, Mumbai 400 004. PAN: AABCN-8531-H ..... ( + /Respondent ( ) , / Applicant by : Shri Soumendu Kumar Dash, Sr.DR. ( + , /Respondent by : None स ु न ई - + / Date of hearing : 09/06/2023 ./0 - + / Date of pronouncement : 07/07/2023 ेश/ ORDER PER VIKAS AWASTHY, JM: This Miscellaneous Application has been filed by the Revenue u/s. 254(2) of the Income Tax Act, 1961 [in short ‘the Act’] for recalling Tribunal order dated 11/05/2022 vide which the claim of the assessee in respect of Employees Contribution towards PF and ESI was allowed as deduction u/s. 36(1)(va) of the Act. 2 MA NO.127/MUM/2023 [Arising out of ITA No.1990/Mum/2021, A.Y.2019-20] 2. Shri Soumendu Kumar Dash representing the Department submitted that the Tribunal order dated 11/05/2022 requires rectification in the light of judgment passed by the Hon'ble Supreme Court in the case of Checkmate Services India (Pvt.) Ltd. vs. CIT, 448 ITR 518(SC). 3. The notice of hearing of Miscellaneous Application was sent to the respondent/assessee through RPAD. The acknowledgement available on record shows that the notice was duly served to the respondent/assessee. Despite service, none appeared to represent the respondent/assessee. It appears that the respondent/assessee is not keen to contest the Miscellaneous Application filed by the Department. Therefore, we proceed to decide the Miscellaneous Application with the assistance from ld. Departmental Representative and the material available on record. 4. The issue regarding allowability of Employees share of contribution towards PF and ESI after the “due date” as specified under the respective laws has been laid to rest by Hon'ble Apex Court in the case of Checkmate Services India (Pvt.) Ltd. vs. CIT (supra). The Hon'ble Apex Court in an unambiguous manner has explained that the law has always been that Employees share of contribution towards PF and ESI is to be deposited before the “due date” as explained under the respective laws. The said contribution made after due date under the respective laws is not an allowable deduction u/s. 36(1)(va) of the Act. Thus, in view of the settled legal position we find that an error has crept in the order of Tribunal dated 11/05/2022. Accordingly, the same is recalled and the appeal is restored to its original number. The Registry is directed to fix the appeal for hearing in due course after notice to both sides. 3 MA NO.127/MUM/2023 [Arising out of ITA No.1990/Mum/2021, A.Y.2019-20] 5. In the result, Miscellaneous Application filed by the Revenue is allowed. Order pronounced in the open Court on Friday the 07 th day of July, 2023 Sd/- Sd/- (S.RIFAUR RAHMAN) (VIKAS AWASTHY) ेख स /ACCOUNTANT MEMBER स /JUDICIAL MEMBER म ु ंबई/ Mumbai, 2 न ं /Dated 07/07/2023 Vm, Sr. PS(O/S) त ल प अ े षतCopy of the Order forwarded to : 1. )/The Appellant , 2. ( + / The Respondent. 3. ु 3+ CIT 4. 4 5 ( + न , . . ., म ु बंई/DR, ITAT, Mumbai 5. 5 78 ! 9 /Guard file. BY ORDER, //True Copy// (Dy./Asstt. Registrar) ITAT, Mumbai