Deputy Commissioner of Income-Tax, Circle-1(1), Pune, Pune V. Glazium Facades P Ltd, Pune

MA 272/PUN/2023

• Counselvise Citation: [2024] 100 COUNSELVISE.COM (IT) 1316 (ITAT-PUNE)
• Duration Of Justice: 8 month(s) 23 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 27-06-2024
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2017-2018
• Appeal Filed On: 04-10-2023
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Section: 254(2)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH “A”, PUNE BEFORE SHRI INTURI RAMA RAO, ACCOUNTANT MEMBER AND SHRI VINAY BHAMORE, JUDICIAL MEMBER M.A. Nos.272 & 273/PUN/2023 (Arising out of ITA Nos.564 & 565/PUN/2021) नधा रण वष / Assessment Years: 2017-18 & 2018-19 DCIT, Circle-1(1), Pune Vs. Glazium Facades Pvt. Ltd., 210, Ashoka Centre, Pune-Satara Road, Bibwewadi Corner, Pune 411 009 PAN : AAECG6663L Applicant Respondent आदेश / ORDER PER INTURI RAMA RAO, AM: These are the two Miscellaneous Applications filed by the Department against the common order passed by this Tribunal in ITA Nos.564 & 565/PUN/2021, dated 27.09.2022 for the assessment years 2017-18 & 2018-19. 2. When the matter was called on, none appeared on behalf of the respondent-assessee despite due service of notice of hearing. After hearing the ld. Sr.DR and perusing the material on record, we proceed to dispose of this M.A. ex parte qua the assessee. 3. At the outset, the ld. Sr. DR submitted that the addition made u/s. 36(1)(va) of the Income Tax Act, 1961 (‘the Act’) in respect of contribution of employees to PF and ESI deposited beyond the stipulated period under the respective Acts was required to be disallowed by virtue of judgment of Hon’ble Supreme Court in the case of Checkmate Assessee by : None Revenue by : Shri Sourabh Nayak Date of hearing : 28.06.2024 Date of pronouncement : 28.06.2024 MA Nos. 272 & 273/PUN/2023 2 Services P. Ltd. & Ors. vs. CIT & Ors. (2022) 448 ITR 518 (SC), as against the same having been allowed by this Tribunal in the impugned order. 4. We heard the ld. Sr. DR and perused the material on record. The Tribunal in the impugned order had allowed the deduction u/s 36(1)(va) of the Act on the premise that the deposits were made prior to the due date u/s.139(1) of the Act. However, the issue of making disallowance u/s.36(1)(va) in respect of Employees share of PF and ESI deposited beyond the due date under the respective Acts, but before the time limit for filing the return of income u/s.139(1) is no more res integra in view of the later judgment of Hon’ble Supreme Court in Checkmate Services P. Ltd. & Ors. VS. CIT & Ors. (supra). The Hon’ble Apex Court has held that the deduction u/s.36(1)(va) can be allowed only if the employees’ share in the relevant funds is deposited by the employer before the due date stipulated in respective Acts and further that the due date u/s.139(1) of the Act is alien for this purpose. The above enunciation of law by the Hon’ble Supreme Court (supra) denying the benefit of deduction, has rendered the order u/s.254(1) erroneous necessitating its rectification in terms of section 254(2) of the Act. In this context, we refer to the observation made by the Hon’ble Supreme Court in the case of ACIT v. Saurashtra Kutch Stock Exchange Ltd., 305 ITR 227 (SC) vide paras 40 to 43, as under :- “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 Limited v. Commissioner of Surtax, Gujarat, (1999) 237 ITR 834 (Guj). 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" MA Nos. 272 & 273/PUN/2023 3 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 some time, the decision rendered later on would have retrospective effect clarifying the legal position which was earlier not correctly understood. 43. Salmond in his well-known work states; "The theory of case law is that a judge does not make law; he merely declares it; and the overruling of a previous decision is a declaration that the supposed rule never was law. Hence any intermediate transactions made on the strength of the supposed rule are governed by the law established in the overruling decision. The overruling is retrospective, except as regards matters that are res judicatae or accounts that have been settled in the meantime". (emphasis supplied).” 5. Thus, the impugned order of the Tribunal stands modified to this extent confirming the disallowance made u/s.36(1)(va) of the Act. Thereby, the appeals of the assessee are dismissed. 6. In the result, both the Miscellaneous Applications filed by the Revenue stand allowed in above terms. Order pronounced on this 28 th day of June, 2024. Sd/- Sd/- (VINAY BHAMORE) (INTURI RAMA RAO) JUDICIAL MEMBER ACCOUNTANT MEMBER पुणे / Pune; दनांक / Dated : 28 th June, 2024 Satish MA Nos. 272 & 273/PUN/2023 4 आदेश क ितिलिप अ ेिषत / Copy of the Order forwarded to : 1. अपीलाथ / The Appellant. 2. यथ / The Respondent. 3. The Pr. CIT concerned. 4. िवभागीय ितिनिध, आयकर अपीलीय अिधकरण, “A” ब च, पुणे / DR, ITAT,”A” Bench, Pune. 5. गाड फ़ाइल / Guard File. आदेशानुसार / BY ORDER, // True Copy // Senior Private Secretary आयकर अपीलीय अिधकरण, पुणे / ITAT, Pune.