DCIT/ACIT 3(1), Bhopal V. On Door Concepts P Ltd, Bhopal

MA 22/Ind/2022

AI Insights

The case involves the Deputy Commissioner of Income Tax (DCIT) and Assistant Commissioner of Income Tax (ACIT) as the applicants and On Door Concepts Pvt. Ltd. as the respondent. The Revenue filed Miscellaneous Applications seeking rectification of the Tribunal's earlier order, which had allowed deductions for delayed payments of employees' contributions to P.F. and ESIC. The Tribunal's earlier decision was based on various High Court judgments, but this was overturned by the Supreme Court in Checkmat Services P.Ltd. vs. CIT, which held that such deductions are not permissible if the payments are not made by the due dates specified under section 36(1)(va) of the Act. The Tribunal, acknowledging the Supreme Court's retrospective decision, allowed the rectification applications and set the matter for a fresh hearing.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 130813 (ITAT-INDORE)
• Duration Of Justice: 5 month(s) 21 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 08-06-2023
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 08-06-2023
• Assessment Year: 2016-2017
• Appeal Filed On: 18-12-2022
• Other Referred Cases: Checkmat Services P.Ltd. vs. CIT, ACIT, Rajkot vs. Saurashtra Kutch Soap Exchange Limited, Kutch
• Laws Referred To: Income Tax Act
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Section: 43B; 139(1); 254(2); 22

Judgement Text

Page 1 of 5 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. 22 & 23/Ind/2022 (Arising out of ITA Nos.12 & 13/Ind/2022) Assessment Year: 2016-17 & 2017-18 DCIT/ACIT , 3(1), Bhopal बनाम/ Vs. On Door Concepts Pvt.Ltd., Hoshangabad (Applicant/Revenue) (Respondent/Assessee) PAN: AACCOO825C Assessee by None Revenue by Shri Ashish Porwal, Sr. DR Date of Hearing 09.06.2023 Date of Pronouncement 09.06.2023 आदेश/O R D E R Per B.M. Biyani, A.M.: These two Misc. Applications are filed by the Revenue for rectification of the mistake in the composite order of the Tribunal dated 03.08.2022. 2. None appeared on behalf of the assessee, despite the notice was issued through RPAD. At the out-set, we noted that the issue decided by the Tribunal by passing the impugned order is now covered by the judgement of the Hon'ble Supreme Court in the case of Checkmat Services P.Ltd. vs. CIT, DCIT /ACIT vs. On Door Concepts Pvt.Limited,Hoshangabad MANos.22 & 23/Ind/2022 A.Ys.: 2016-17 & 2017-18 Page 2 of 5 448 ITR 518, whereby the view taken by this Tribunal has been reversed. Accordingly, we propose to hear and dispose of these misc applications ex- parte. 3. We have heard the ld. DR and carefully perused the impugned order of the Tribunal. The Tribunal while passing the impugned order has followed the decisions of the Hon'ble Delhi High Court, Hon'ble Allahabad High Court and Hon'ble Rajasthan High Court on the issue of allowability of belated payment on account of Employees Contribution to P. F. and ESIC. Now the Hon'ble Supreme Court has settled this controversy in the case of Checkmat Services Private Limited vs. CIT, (supra) by holding that delay in payment of employees’ contribution to P.F. and ESIC as per the due date provided u/s 36(1)(va) is not allowable deduction even if the payment is made on or before due date of filing the return of income u/s 139(1) of the Act. Hon'ble Supreme Court has held that provisions of Section 43B does not cover the deduction in respect of employees contribution to P.F. and E.S.I.C. The Hon'ble Supreme Court in the case of ACIT , Rajkot vs. Saurashtra Kutch Soap Exchange Limited, Kutch, 173 Taxman 322, has held in para 39 to 42 as under :- “39. As stated earlier, the decision was rendered in appeal by the Income-tax Appellate Tribunal, Rajkot. Miscellaneous Application came to be filed by the assessee under sub-section (2) of section 254 of the Act stating therein that a decision of the 'Jurisdictional Court', i.e., the High Court of Gujarat in Hiralal Bhagwati's case (supra) was not brought to the notice of the DCIT /ACIT vs. On Door Concepts Pvt.Limited,Hoshangabad MANos.22 & 23/Ind/2022 A.Ys.: 2016-17 & 2017-18 Page 3 of 5 Tribunal and thus there was a "mistake apparent from record" which required rectification. 40. The core issue, therefore, is whether non-consideration of a decision of Jurisdictional Court (in this case a decision of the High Court of Gujarat) or of the Supreme Court can be said to be a "mistake apparent from the record"? In our opinion, both - the Tribunal and the High Court - were right in holding that such a mistake can be said to be a "mistake apparent from the record" which could be rectified under section 254(2). 41. A similar question came up for consideration before the High Court of Gujarat in Suhrid Geigy Ltd.'s case (supra). It was held by the Division Bench of the High Court that if the point is covered by a decision of the Jurisdictional Court rendered prior or even subsequent to the order of rectification, it could be said to be "mistake apparent from the record" under section 254(2) of the Act and could be corrected by the Tribunal. 42. In our judgment, it is also well-settled that a judicial decision acts retrospectively. According to Blackstonian theory, it is not the function of the Court to pronounce a 'new rule' but to maintain and expound the 'old one'. In other words, Judges do not make law, they only discover or find the correct law. The law has always been the same. If a subsequent decision alters the earlier one, it (the later decision) does not make new law. It only discovers the correct principle of law which has to be applied retrospectively. To put it differently, even where an earlier decision of the Court operated for quite sometime, the decision rendered later on would have retrospective effect clarifying the legal position which was earlier not correctly understood.” 4. Therefore, the judgment of the Hon'ble Supreme Court even if it is passed subsequent to the order of the Tribunal, amounts to laid down the DCIT /ACIT vs. On Door Concepts Pvt.Limited,Hoshangabad MANos.22 & 23/Ind/2022 A.Ys.: 2016-17 & 2017-18 Page 4 of 5 correct principle of law, which has to be applied retrospectively. Accordingly, in view of the Hon'ble Supreme Court in the case of Checkmat Services Private Limited vs. CIT, (supra) an apparent mistake has crept in the impugned order of the Tribunal taking a view, which is contrary to, the judgment of Hon'ble Supreme Court. Hence, in the facts and circumstances of the case and in the interest of justice, we recall the impugned order of Tribunal dated 3 rd August, 2022 and the appeals of the assessee to be heard afresh. The Registry is directed to fix the appeals of the assessee for fresh hearing and adjudication on 12 th July, 2023. Notice be issued to the parties for the hearing of the appeals. 5. Order pronounced in the Open Court after conclusion of hearing on 09.06.2023. The same is reduced in writing and signed on the date indicated below. 6. Resultantly, this Misc. Application is allowed. Order pronounced in the open court on 09/06/2023. Order pronounced as per Rule 34 of I.T.A.T. Rules, 1963 on....../....../2023. Sd/- Sd/- VIJAY PAL RAO B.M.BIYANI JUDICIAL MEMBER ACCOUNTANT MEMBER Indore Ǒदनांक /Dated : 09.06.2023 CPU/Sr. PS DCIT /ACIT vs. On Door Concepts Pvt.Limited,Hoshangabad MANos.22 & 23/Ind/2022 A.Ys.: 2016-17 & 2017-18 Page 5 of 5 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 1. Date of taking dictation 2. Date of typing & draft order placed before the Dictating Member 3. Date on which the approved draft comes to the Sr. P.S./P.S. 4. Date on which the approved draft is placed before other Member 5. Date on which the fair order is placed before the Dictating Member for pronouncement 6. Date on which the file goes to the Bench Clerk 7. Date on which the file goes to the Head Clerk 8. Date on which the file goes to the Assistant Registrar for signature on the order 9. Date of dispatch of the Order