THE ASSISTANT COMMISSIONER OF INCOME TAX, CIRCLE 4(1)(1) , MUMBAI V. ASHISH DYECHEM & TEXTILES PROCESSORS PVT. LTD, MUMBAI

MA 132/MUM/2023

AI Insights

The case involves two Miscellaneous Applications (MAs) filed by the Revenue seeking rectification of a Tribunal order that had allowed certain grounds of appeal by the assessee, M/s Ashish Dyechem & Textile Processors Private Limited. The original Tribunal decision had deleted additions made by the Assessing Officer regarding delayed deposits of Employees' Contribution to Provident Fund and Employees' State Insurance, which were made before the due date of filing the return under Section 139(1) of the Income Tax Act. However, following the Supreme Court's decision in Checkmate Services Private Ltd. v. CIT-1, which clarified that such contributions must be deposited within the due dates prescribed by their respective statutes to be deductible under Section 36(1)(va), the Tribunal found the need to rectify its earlier order.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 113432 (ITAT-MUMBAI)
• Duration Of Justice: 5 month(s) 13 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 19-07-2023
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 20-04-2023
• Assessment Year: 2018-2019
• Appeal Filed On: 05-02-2023
• Other Referred Cases: Checkmate Services Private Ltd. v. CIT-1, Assistant Commissioner of Income Tax, Rajkot Vs. Saurashtra Kutch Stock Exchange Ltd., Kailashnath Malhotra Vs. Joint Commissioner of Income-tax, Special Range 56, Mumbai, Assistant Commissioner of Income-tax Vs. Hughes Services (FE) Pte. Ltd.
• Laws Referred To: Income Tax Act
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Keywords: Rectification of order
• Section: 43B; 143(1); 139(1)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL "A" BENCH, MUMBAI SHRI PRASHANT MAHARISHI, ACCOUNTANT MEMBER SHRI RAHUL CHAUDHARY, JUDICIAL MEMBER MA No. 132/MUM/2023 (Arising out of ITA No. 1748/Mum/2021) (Assessment Year: 2018-19) & MA No. 133/MUM/2023 (Arising out of ITA No. 1749/Mum/2021) (Assessment Year: 2019-20) The Assistant Commissioner of Income Tax, Circle 4(1)(1), Mumbai Room No. 640, Aayakar Bhavan, M.K. Road, Churchgate, Mumbai - 400020 ................ Appellant M/s Ashish Dyechem & Textile Processors Private Limited, 420, Laxmi Plaza, Laxmi Industrial Estate, Mumbai - 400053 [PAN : AAACA3928N] Vs ................ Respondent Appearance For the Appellant/Department For the Respondent/Assessee : : Ms. Mahita Nair None Date Conclusion of hearing Pronouncement of order : : 21.04.2023 20.07.2023 O R D E R Per Rahul Chaudhary, Judicial Member: 1. These are two Miscellaneous Applications filed by the Revenue for rectification of order, dated 01/07/2022, passed by the Tribunal in ITA No. 1748 & 1749/Mum/2021, pertaining to the Assessment Years 2018-2019 and 2019-2020. 2. Vide common order, dated 01/07/2022, passed in ITA No. 1748 & MA No. 132/Mum/2023 (Assessment Year 2018-19) MA No. 133/Mum/2023 (Assessment Year 2019-20) 2 1749/Mum/2021, Ground No. 1 and 2 raised in appeal by the Assessee were allowed. The addition made by the Assessing Officer, vide order/intimation, issued under Section 143(1) of the Act on account deposits of Employees’ Contribution to Provident Fund and Employees’ State Insurance after lapse of time prescribed in the applicable statute was deleted since the aforesaid deposit, though delayed, was made before the due date of filing return specified under Section 139(1) of the Act. 3. Subsequently, in the case of Checkmate Services Private Ltd. v. CIT- 1:[2022] 448 ITR 518 (SC)[12-10-2022], the Hon’ble Supreme Court has held that where an assessee failed to deposit Employees' Contribution towards Provident Fund and Employees’ State Insurance within due date prescribed in respective statutes, deduction under Section 36(1)(va) of the Act was not allowable. The non-obstante clause contained in Section 43B of the Act would not apply in the case of Employees’ Contribution deducted from the salary of employees and held in trust by assessee-employer. Therefore, such assessee- employer would not be absolve from the liability to deposit Employees’ Contribution on or before the due date specified in the respective statutes as a pre-condition for claiming deduction under Section 36(1)(va) of the Act. Explanation 2 inserted by way of Finance Act, 2021 (with effect from 01/04/2021) providing that the provisions of Section 43B of the Act shall be deemed never to have been applied for the purpose of determining the ‘due date’ under Section 36(1)(va) of the Act is now stands aligned with the position of law as declared by the Hon’ble Supreme Court. 4. The subsequent decision of the Hon’ble Supreme Court can form the basis for rectification under Section 254 of the Act in view of the MA No. 132/Mum/2023 (Assessment Year 2018-19) MA No. 133/Mum/2023 (Assessment Year 2019-20) 3 judgment of the Hon’ble Supreme Court in the case of Assistant Commissioner of Income Tax, Rajkot Vs. Saurashtra Kutch Stock Exchange Ltd.: 2008] 305 ITR 227 (SC) and the decisions of the Tribunal in the case of Kailashnath Malhotra Vs. Joint Commissioner of Income-tax, Special Range 56, Mumbai [2009] 34 SOT 541 (Mum.) (TM), and Assistant Commissioner of Income-tax Vs. Hughes Services (FE) Pte. Ltd.: [2009] [2005] 93 ITD 77 (Delhi)(TM). 5. The view taken by the Tribunal vide common order dated, 01/07/2022, being contrary to view taken by the Hon’ble Supreme Court in the case of Checkmate Services Private Ltd. (supra) constitutes a mistake apparent on record. Accordingly, we allow the rectification application preferred by the Revenue. Common order, dated 01/07/2022, is recalled for adjudication of Ground No. 1 and 2 raised in appeal for Assessment Year 2018-19 (ITA No. 1748/Mum/2021) and Ground No. 1 and 2 of appeal for Assessment Year 2019-2020 (ITA No. 1749/Mum/2021). The registry is directed to list both the appeals for hearing before the regular bench in due course after notice to both the parties. 6. In result, both the Miscellaneous Applications filed by the Revenue are allowed. Order pronounced on 20.07.2023 Sd/- Sd/- (Prashant Maharishi) Accountant Member (Rahul Chaudhary) Judicial Member म ुंबई Mumbai; दिन ुंक Dated : 20.07.2023 Alindra, PS MA No. 132/Mum/2023 (Assessment Year 2018-19) MA No. 133/Mum/2023 (Assessment Year 2019-20) 4 आदेश की प्रतितिति अग्रेतिि/Copy of the Order forwarded to : 1. अपील र्थी / The Appellant 2. प्रत्यर्थी / The Respondent. 3. आयकर आय क्त/ The CIT 4. प्रध न आयकर आय क्त / Pr.CIT 5. दिभ गीय प्रदिदनदध, आयकर अपीलीय अदधकरण, म ुंबई / DR, ITAT, Mumbai 6. ग र्ड फ ईल / Guard file. आिेश न स र/ BY ORDER, सत्य दपि प्रदि //True Copy// उप/सह यक पुंजीक र /(Dy./Asstt. Registrar) आयकर अपीलीय अदधकरण, म ुंबई / ITAT, Mumbai