INCOME TAX OFFICER-42(1)(5), MUMBAI V. VISHAL & COMPANY, MUMBAI

MA 213/MUM/2023

AI Insights

The case involves Vishal & Company, which faced disallowances for delayed payments of provident fund and employees' contributions under the ESIC scheme for the assessment years 2017-18 and 2019-20. Initially, the Tribunal had allowed the appeals based on precedents favoring the assessee. However, following the Supreme Court's ruling in Checkmate Services Pvt. Ltd., which contradicted the earlier decisions, the Income Tax Officer filed miscellaneous applications to recall the Tribunal's orders. The Tribunal, acknowledging the change in legal interpretation by the Supreme Court, recalled its previous decisions and dismissed the appeals.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 300200 (ITAT-MUMBAI)
• Duration Of Justice: 4 month(s) 14 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 11-07-2023
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: SMC
• Next Hearing Date: 22-06-2023
• Assessment Year: 2017-2018
• Appeal Filed On: 27-02-2023
• Other Referred Cases: Checkmate Services Pvt. Ltd. vs. Income Tax Officer, Kalpesh Synthetics Pvt. Ltd. vs. Income Tax Officer
• Laws Referred To: Provident Fund Act
• Result in Favour of: Assessee
• Court: TRIBUNAL

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL “SMC” BENCH, MUMBAI BEFORE SHRI PRASHANT MAHARISHI, AM & MS. KAVITHA RAJAGOPAL, JM MA No. 213/MUM/2023 (Assessment Year 2017-18) (Arising out of ITA No. 30/Mum/2022) MA No. 214/MUM/2023 (Assessment Year 2019-20) (Arising out of ITA No. 31/Mum/2022) & ITA No. 30 & 31 /Mum/2022 A Y 2017-18 and 2018-19 IT O-42(1) (5 ) Room No. 945, 9 th Floo r, Kauti l ya Bhavan, Band ra Ku rla com ple x, Mum bai-400051 Vs. Vishal & Company Galli No.2, Gandhi Nagar Kalyan Samaj Seva Soc. Near Durga Mata Mandir, KD Compound, Link Road, Kandivali(W), Mumbai-400067 (Appellant) (Respondent) PAN No. AANFV6946P Assessee by : None Revenue by : Shri Aditya M. Rai, DR Date of hearing: 23.06.2023 Date of pronouncement : 12.07.2023 O R D E R PER PRASHANT MAHARISHI, AM: 01. The Miscellaneous Application Nos. 213 & 214/Mum/2023 are filed by the Income Tax Officer 42(1)(5), Mumbai for Page | 2 MA No. 213 & 214/Mum/2023 A.Y. 2017-18 & 2019-20 VISHAL & COMPANY assessment years 2017-18 and 2019-20 respectively submitting that the co-ordinate bench has deleted the disallowance of ₹1,19,001/- on account of delayed payment of provident fund and employee’s contribution under the ESIC scheme, following the decision of the Hon’ble Jurisdictional High Court for assessment year 2017-18 and further for assessment year 2019-20 similar disallowance of ₹3,64,521/- on account of delayed deposit of employee’s contribution fund was deleted. The Ld. AO has preferred miscellaneous application stating that the order passed by the Hon’ble Supreme Court in case of Checkmate Services Pvt. Ltd. 143 taxmann.com 178 covers the issue against the assessee and therefore, the order passed by the co-ordinate bench deserved to be recalled. 02. The Ld. Departmental Representative reiterated the same issue. 03. Despite notice to the assessee, none appeared. Same is the case for earlier occassions. In view of these miscellaneous applications filed by the Ld. AO is decided in the absence of the assessee, on merits. 04. We find that originally appeal of the assessee was allowed on the basis of the decision of the co-ordinate bench in the case of Kalpesh Synthetics Pvt. Ltd. 37 taxmann.com 475 and the decision of the Hon’ble Jurisdictional High Court in favor of the assessee. Based on this, the Co-ordinate Bench deleted the disallowance of ₹1,90,001/- for Page | 3 MA No. 213 & 214/Mum/2023 A.Y. 2017-18 & 2019-20 VISHAL & COMPANY assessment year 2017-18 and of ₹3,64,521/- for assessment year 2019-20, being employees’ contribution deposited beyond due date prescribed u/s 38 of the provident fund Act but paid before the due date of filling of the return of income. 05. Now the Ld. AO has pointed out that decision of the Hon’ble Supreme Court in the case of Checkmate Services Pvt. Ltd. clearly shows that order was erroneous. The Ld. Departmental Representative also submitted that several such orders where originally appeal is decided in favour of the assessee , but in view of subsequent decision of Honourable supreme court have been recalled by the co- ordinate benches. Accordingly, we find that the order of the co-ordinate bench for those two assessment years allowing the appeal of the assessee suffers from the mistake and therefore we recall orders passed in the case of the assessee for both the years. 06. Thus, the miscellaneous application filed by the Ld. AO for both the years are allowed. ITA No. 30/Mum/2022 [Assessment Year 2017-18] & ITA No. 31/Mum/2022 [Assessment Year 2019-20] Page | 4 MA No. 213 & 214/Mum/2023 A.Y. 2017-18 & 2019-20 VISHAL & COMPANY 07. As we have already recalled the order of the co-ordinate bench in the above court ITAs preferred by the assessee for assessment years 2017-18 & 2019-20, those ITAs are also covered against the assessee by the decision of the Hon’ble Supreme Court in case of Checkmate Services Pvt. Ltd. wherein it has been held that if employees’ contribution of provident fund Act is not paid before due date prescribed u/s 38 of the Provident Fund Act, despite the above sum paid before due date of filing the return of income, it is not allowable. Therefore, based on the above decision of the Hon’ble Supreme Court the appeal of the assessee are not sustainable and liable to be dismissed. Accordingly, these two appeals recalled are dismissed. 08. Order pronounced in the open court on 12.07. 2023. Sd/- Sd/- (KAVITHA RAJAGOPAL) (PRASHANT MAHARISHI) (JUDICIAL MEMBER) (ACCOUNTANT MEMBER) Mumbai, Dated: 12.07. 2023 Sudip Sarkar, Sr.PS Copy of the Order forwarded to : 1. The Appellant 2. The Respondent. 3. The CIT(A) 4. CIT 5. DR, ITAT, Mumbai 6. Guard file. BY ORDER, True Copy// Sr. Private Secretary/ Asst. Registrar Income Tax Appellate Tribunal, Mumbai