DCIT, CPC, Bangalore V. Shyamal Kundu, Kolkata

MA 21/KOL/2023

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The case revolves around a Miscellaneous Application (M.A. No. 21/KOL/2023) filed by the Revenue against the decision of the Income Tax Appellate Tribunal (ITAT) which had earlier deleted a disallowance made by the Assessing Officer regarding employees' contributions to PF and ESI. The Revenue contended that the ITAT's earlier decision was contrary to a subsequent Supreme Court ruling which clarified the law on deductions for employees' contributions not paid within the due dates prescribed under the respective Acts. However, the Tribunal dismissed the application on procedural grounds, noting that it was filed beyond the permissible time limit.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 129844 (ITAT-KOLKATA)
• Duration Of Justice: 4 month(s) 7 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 06-08-2023
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 2018-2019
• Appeal Filed On: 29-03-2023
• Other Referred Cases: CIT \\u2013vs.- Vijayshree Limited, Checkmate Services Pvt. Limited \\u2013vs.- CIT, ACIT vs Saurashtra Kutch Stock Exchange Ltd.
• Laws Referred To: Income Tax Act
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Opportunity of being heard; Reasonable cause; Condonation of delay
• Section: 254(2)

Judgement Text

M.A. 21/KOL/2023 (in ITA No. 172/KOL/2022) A.Y. 2018-2019 Shyamal Kundu 1 IN THE INCOME TAX APPELLATE TRIBUNAL, ‘A’ BENCH, KOLKATA Before Shri Rajpal Yadav, Vice-President (KZ) & Shri Manish Borad, Accountant Member M.A. No. 21/KOL/2023 (in I.T.A. No. 172/KOL/2022) Assessment Year: 2018-2019 Deputy Commissioner of Income Tax,.....Applicant CPC, Bangalore Centralized Processing Centre, Income Tax Department, Bangalore-560500 -Vs.- Shyamal Kundu,................................. Respondent 100/72A, Jessore Road, Kolkata-700074 [PAN: AFTPK0421P] Appearances by: Shri K.M. Roy, C.A, appeared on behalf of the assessee Shri B.K. Singh, JCIT, Sr. D.R., appeared on behalf of the Revenue Date of concluding the hearing : July 28, 2023 Date of pronouncing the order : August 07, 2023 O R D E R Per Rajpal Yadav, Vice-President (KZ):- The present Miscellaneous Application is directed at the instance of Revenue pointing out an apparent error M.A. 21/KOL/2023 (in ITA No. 172/KOL/2022) A.Y. 2018-2019 Shyamal Kundu 2 in the order of the Tribunal dated 8 th July, 2022 passed in ITA No. 172/KOL/2022. 2. Brief facts of the case are that the assesese failed to deposit employees’ contribution to respective P.S. & ESI Act as provided under section 36(1)(va) read with section 2(24)(x) of the Income Tax Act within the due date provided in the P.F. & ESI Acts. The assessee has paid these contributions to the respective accounts before the due date of filing of the return. The ld. Assessing Officer made an addition of Rs.1,22,41,788/- on the ground that the employees’ contribution was not paid to the respective P.F. & ESI Act within the due date. When the matter travelled to the Tribunal, then the Tribunal by placing reliance upon the decision of the Hon’ble Jurisdictional High Court in the case of CIT –vs.- Vijayshree Limited, reproduced in paragraph 1 of the Tribunal’s order, deleted the disallowance by holding that payment was made before the due date of filing of the return. 3. The Revenue has filed the present Miscellaneous Application contending therein that position of law has been explained by the Hon’ble Supreme Court in the case of Checkmate Services Pvt. Limited –vs.- CIT (2022) 143 taxman.com 178 (SC) rendered on 12.10.2022. According to this decision of the Hon’ble Supreme Court, it has been propounded M.A. 21/KOL/2023 (in ITA No. 172/KOL/2022) A.Y. 2018-2019 Shyamal Kundu 3 that if employees’ contributions of EPF, ESI are not being paid to the respective P.F. & ESI Act within the due date provided under those Acts, then it will be deemed as an income of the assessee and no deduction is to be allowed. The Revenue contended that subsequent decision of the Hon’ble Supreme Court expounding scope and meaning of a particular section and the Tribunal has adopted a contrary view even prior to the decision of the Hon’ble Supreme Court will brand the order of the ITAT as suffering from patent error. The simple reason for the above proposition is that a Court decides a dispute between the parties. The cause can involve a decision on facts. It can also involve a decision on points of law. Both may have a bearing on the ultimate result of the cause. When a Court interprets a provision, it decides as to what is the meaning and effect of words used by the legislature. It has a declaration regarding the statute. In other words, the judgment declares as to what the legislature had said at the time of promulgation of the law. The declaration is - this was the law, this is the law, this is how the provisions shall be constituted. For buttressing this proposition, Revenue has placed reliance upon the judgment of the Hon’ble Supreme Court in the case of ACIT vs Saurashtra Kutch Stock Exchange Ltd. 305 ITR 227 (SC). 4. During the course of hearing, we find that the Tribunal order was passed on 8 th July, 2022. The application as per section 254(2) ought to have been filed within six months from the end of the month in which the order was passed with a view M.A. 21/KOL/2023 (in ITA No. 172/KOL/2022) A.Y. 2018-2019 Shyamal Kundu 4 to rectify any mistake apparent from the record. This application has been filed after six months. When this fact was brought to the notice of the ld. D.R., then he filed the present application:- M.A. 21/KOL/2023 (in ITA No. 172/KOL/2022) A.Y. 2018-2019 Shyamal Kundu 5 5. On the other hand, ld. Counsel for the assessee submitted that the application of the assesese is time-barred and Tribunal has no jurisdiction to consider this application. 6. We have duly considered the rival contentions and gone through the record carefully. It is pertinent to note that section 254(2) of the Income Tax Act has a direct bearing on the controversy. Therefore, we deem it appropriate to take note of the relevant provision, which reads as under:- “Section 254(1) of Income Tax Act:- The Appellate Tribunal may, after giving both the parties to the appeal an opportunity of being heard, pass such orders thereon as it thinks fit. (1A).............. Section 254(2) of Income Tax Act 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: Provided that an amendment which has the effect of enhancing an assessment or reducing a refund or otherwise increasing the liability of the assessee, shall not be made under this sub-section unless the Appellate Tribunal has given notice to the assessee of its intention to do so and has allowed the assessee a reasonable opportunity of being heard : Provided further that any application filed by the assessee in this sub-section on or after the 1st day of October, 1998, shall be accompanied by a fee of fifty rupees”. 7. A perusal of sub-section (2) would reveal that in order to rectify any apparent mistake, an application ought to be filed M.A. 21/KOL/2023 (in ITA No. 172/KOL/2022) A.Y. 2018-2019 Shyamal Kundu 6 within six months from the end of the month, in which the order was passed. It does not talks off the date of communication, though in the present Miscellaneous Application we are taking limitation from the date of communication because as per Income Tax Appellate Tribunal Rules, it is incumbent upon the Tribunal to communicate the orders to the parties. In other words, parties are not require to apply for a Certified Copy, rather it is an obligation of the Tribunal to supply Certified Copy of the Orders to both the parties. Thus from the date of communication of the order, we are taking the limitation for the purpose of filing this application. A perusal of sub-clause (2) of section 254 would indicate that it has nowhere provided a mechanism that on the ground of reasonable cause, Tribunal can condone the delay in filing such an application, wherever the power has been infused in the authority for condonation of delay in this Act, then such powers have been specifically provided. For example – 249(3), where ld. CIT(Appeals) was empowered to condone the delay in entertaining appeal; 253(5)- where Tribunal has been empowered to condone the delay in filing the appeal and Cross Objection, but no such power is being provided for the purpose of rectification of mistakes. This period of six months has been incorporated w.e.f. Finance Act, 2016 (01.06.2016) prior to that the time limit was four years. The ld. Assessing Officer/CIT have still been empowered to rectify the apparent mistake in their orders within four years. Therefore, never any occasion in the present case had arisen for condonation of delay. M.A. 21/KOL/2023 (in ITA No. 172/KOL/2022) A.Y. 2018-2019 Shyamal Kundu 7 8. It is also observed that on certain occasion, the proceedings are not within the knowledge of a particular party and appeal stands decided ex-parte qua appellant/respondent. In that case under Rule 24 of the Income Tax Act, Income Tax Appellate Tribunal Rules, 1963, it has been provided that if Tribunal is satisfied that party was prevented by reasonable cause, then ex parte proceeding can be set aside. Under those Rules, a reasonable cause is being provided but for the purpose of rectification of mistake, no power beyond six months from the end of the month in which order was passed or communicated to the party is being provided. Therefore, we cannot entertain this application of the Revenue because it is time-barred. Accordingly, Miscellaneous Application of the Revenue is dismissed. 9. In the result, the Miscellaneous Application of the Revenue is dismissed. Sd/- Sd/- (Manish Borad) (Rajpal Yadav) Accountant Member Vice-President (KZ) Kolkata, the 7 th day of August, 2023 Copies to :(1) Deputy Commissioner of Income Tax, CPC, Bangalore Centralized Processing Centre, Income Tax Department, Bangalore- 560500 (2) Shyamal Kundu, 100/72A, jessore Road, Kolkata-700074 M.A. 21/KOL/2023 (in ITA No. 172/KOL/2022) A.Y. 2018-2019 Shyamal Kundu 8 (3) Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC)- Delhi, (4) The Departmental Representative (5) Guard File TRUE COPY By order Assistant Registrar, Income Tax Appellate Tribunal, Kolkata Benches, Kolkata Laha/Sr. P.S.