THE DY.COMMISSIONER OF INCOME-TAX, CIRCLE-6(1)(1), MUMBAI V. DELTA ADVENTURE AND RESORTS PVT. LTD., MUMBAI

MA 289/MUM/2023

AI Insights

The case involves the Deputy Commissioner of Income Tax (Dy. CIT) Circle-6(1)(1) as the appellant and M/s Della Adventure Resorts Pvt. Ltd. as the respondent, concerning the disallowance of employees' contributions to the Provident Fund under section 36(1)(va) of the Income Tax Act, 1961 for the assessment years 2018-19 and 2019-20. The Tribunal initially allowed the assessee's claim based on earlier decisions but later recalled this decision following the Supreme Court's ruling in Checkmate Services Pvt. Ltd., which clarified that such contributions are not allowable if deposited beyond the prescribed due dates. The Tribunal's decision to recall was based on the need to correct a mistake apparent from the record, aligning with the Supreme Court's retrospective interpretation of the law.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 123334 (ITAT-MUMBAI)
• Duration Of Justice: 5 month(s) 2 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 07-09-2023
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: D
• Next Hearing Date: 29-06-2023
• Assessment Year: 2019-2020
• Appeal Filed On: 04-04-2023
• Other Referred Cases: CIT v. Alom Extrusions Ltd., CIT v. Ghatge Patil Transports Ltd., DCIT v. Maharashtra Tourism Development Corporation Ltd., M/s Haldiram Food International Pvt. Ltd., M/s Chintoo Creations v. DCIT, Checkmate Services Pvt. Ltd.
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Section: 143(1)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH “D” MUMBAI BEFORE SHRI AMIT SHUKLA (JUDICIAL MEMBER) AND SHRI OM PRAKASH KANT (ACCOUNTANT MEMBER) M.A. Nos. 288 & 289/MUM/2023 (Arising out of ITA Nos. 1708 & 1707/MUM/2022) Assessment Years: 2018-19 & 2019-2020 The Dy. CIT Circle-6(1)(1), Room No. 563, 5 th floor, Aayakar Bhavan, Mumbai. Vs. M/s Della Adventure Resorts Pvt. Ltd., 401, Delta Tower, 795, Parsi Colony, Jam-e-Jamshed Road, Mumbai-400014. PAN No. AADCD 2549 K Appellant Respondent ITA Nos. 1708 & 1707/MUM/2022 Assessment Years: 2018-19 & 2019-2020 M/s Della Adventure Resorts Pvt. Ltd., 401, Delta Tower, 795, Parsi Colony, Jam-e-Jamshed Road, Mumbai-400014. Vs. The Dy. CIT Circle-6(1)(1), Room No. 563, 5 th floor, Aayakar Bhavan, Mumbai. PAN No. AADCD 2549 K Appellant Respondent Assessee by : Mr. Hitesh P. Shah Revenue by : Mr. Manoj Kumar Singh, DR Date of Hearing : 30/06/2023 Date of pronouncement : 08/09/2023 PER OM PRAKASH KANT, AM By way of these Miscellaneous Applications, the Revenue is seeking rectification/recall of the order of the Tribunal dated 12.09.2022 passed in ITA No. 1708 and 1707/Mum/2022 for assessment years 2018 miscellaneous application, the Revenue has prayed for recalling / rectification of grounds of the assessee’s appeal related to disallowance u/s 36(1)(va) of the Act. The grounds for the both the assessment years are identically worded, therefore, for ready reference, grounds in the appeal for AY 2019 under: 1. On the facts and in the circumstances of the case and Rs. 2. in law, the Commissioner (Appeals) erred in disallowing the employees' contribution Rs. 10,76,069/ Fund u/s. 36(1) 2. The Commissioner (Appeals) erred in not following the binding decision of the Supreme Court in the case of CIT v. Alom Extrusions Ltd. [(2009) 319 ITR 306 (SC)] and the Bombay High Court in the case of CIT v. Ghatge Patil Transp that employees' contribution to Provident Fund deposited before the due date for filing the return of income of the appellant company cannot be disallowed and added to the income of the appellant company. 3. The Commissioner (Appeal) erred in not considering the ground raised by the Appellant Company that the disallowance U/s 36(1)(va) is not permitted adjustment to the returned income U/s 143(1) of the Act: and hence the action of the Ld AO is ultra M/s Della M.A Nos. 288 & 289/Mum/2023 ITA Nos. 1708 and 1707/Mum/2022 ORDER KANT, AM By way of these Miscellaneous Applications, the Revenue is seeking rectification/recall of the order of the Tribunal dated 12.09.2022 passed in ITA No. 1708 and 1707/Mum/2022 for 2018-19 and 2019-2020 respectively. aneous application, the Revenue has prayed for recalling / rectification of grounds of the assessee’s appeal related to disallowance u/s 36(1)(va) of the Act. The grounds for the both the assessment years are identically worded, therefore, for ready nce, grounds in the appeal for AY 2019-19 are reproduced as On the facts and in the circumstances of the case and Rs. 2. in law, the Commissioner (Appeals) erred in disallowing the employees' contribution Rs. 10,76,069/- to Provident Fund u/s. 36(1)(va) of the I.T. Act, 1961. The Commissioner (Appeals) erred in not following the binding decision of the Supreme Court in the case of CIT v. Alom Extrusions Ltd. [(2009) 319 ITR 306 (SC)] and the Bombay High Court in the case of CIT v. Ghatge Patil Transports Ltd. (368 ITR 749, Bom.) wherein it was held that employees' contribution to Provident Fund deposited before the due date for filing the return of income of the appellant company cannot be disallowed and added to the income of the appellant company. he Commissioner (Appeal) erred in not considering the ground raised by the Appellant Company that the disallowance U/s 36(1)(va) is not permitted adjustment to the returned income U/s 143(1) of the Act: and hence the action of the Ld AO is ultra-virus. Della Adventure Resorts Pvt. Ltd. 2 M.A Nos. 288 & 289/Mum/2023 ITA Nos. 1708 and 1707/Mum/2022 By way of these Miscellaneous Applications, the Revenue is seeking rectification/recall of the order of the Tribunal dated 12.09.2022 passed in ITA No. 1708 and 1707/Mum/2022 for 2020 respectively. In the aneous application, the Revenue has prayed for recalling / rectification of grounds of the assessee’s appeal related to disallowance u/s 36(1)(va) of the Act. The grounds for the both the assessment years are identically worded, therefore, for ready 19 are reproduced as On the facts and in the circumstances of the case and Rs. 2. in law, the Commissioner (Appeals) erred in disallowing to Provident The Commissioner (Appeals) erred in not following the binding decision of the Supreme Court in the case of CIT v. Alom Extrusions Ltd. [(2009) 319 ITR 306 (SC)] and the Bombay High Court in the case of CIT v. Ghatge Patil orts Ltd. (368 ITR 749, Bom.) wherein it was held that employees' contribution to Provident Fund deposited before the due date for filing the return of income of the appellant company cannot be disallowed and added to the he Commissioner (Appeal) erred in not considering the ground raised by the Appellant Company that the disallowance U/s 36(1)(va) is not permitted adjustment to the returned income U/s 143(1) of the Act: and hence the 2. Before us, the Ld. Departmental Representative (DR) submitted that the Tribunal vide impugned order has deleted the addition made by the AO u/s 36(1)(va) of the Act for deposit of contribution to PF/ESI beyond the date prescribed under the relevant Acts, following the decision DCIT v. Maharashtra Tourism Development Corporation Ltd. (supra); M/s Haldiram Food International Pvt. Ltd. (supra) M/s Chintoo Creations v. DCIT (supra) subsequent decision of the Hon’ble Supreme Court in the case of Checkmate Services Pvt. Ltd. in Civil Appeal No. 2833 of 2016 dated 12.10.2022, employee due date under the relevant Act 36(1)(va) of the Act. He submitted that apparent from record the record, the order of the Tribunal needs be recalled/rectified. 3. We have heard rival submission of the parties on the issue in dispute and perused the relevant material on recor in the case, the Tribunal in para 3 to 3.4 of the impugned order allowed the claim of the assessee for employee’s contribution to EPF/ESI deposited beyond the due date prescribed under relevant Acts, following the decisions of the Tribunal Maharashtra Tourism Development Corporation Ltd. (supra) M/s Haldiram Food International Pvt. Ltd. (supra) Chintoo Creations v. DCIT (supra) M/s Della M.A Nos. 288 & 289/Mum/2023 ITA Nos. 1708 and 1707/Mum/2022 Before us, the Ld. Departmental Representative (DR) submitted that the Tribunal vide impugned order has deleted the addition made by the AO u/s 36(1)(va) of the Act for deposit of PF/ESI beyond the date prescribed under the following the decisions of the Tribunal in the case of DCIT v. Maharashtra Tourism Development Corporation Ltd. M/s Haldiram Food International Pvt. Ltd. (supra) M/s Chintoo Creations v. DCIT (supra). Whereas n of the Hon’ble Supreme Court in the case of Checkmate Services Pvt. Ltd. in Civil Appeal No. 2833 of 2016 dated employee’s contribution to PF/ESI deposited after the due date under the relevant Acts is not allowable the Act. He submitted that this being a mistake apparent from record the record, the order of the Tribunal needs be recalled/rectified. 3. We have heard rival submission of the parties on the issue in dispute and perused the relevant material on recor in the case, the Tribunal in para 3 to 3.4 of the impugned order allowed the claim of the assessee for employee’s contribution to EPF/ESI deposited beyond the due date prescribed under relevant Acts, following the decisions of the Tribunal in the case of Maharashtra Tourism Development Corporation Ltd. (supra) M/s Haldiram Food International Pvt. Ltd. (supra) Chintoo Creations v. DCIT (supra). But, we find that subsequently Della Adventure Resorts Pvt. Ltd. 3 M.A Nos. 288 & 289/Mum/2023 ITA Nos. 1708 and 1707/Mum/2022 Before us, the Ld. Departmental Representative (DR) submitted that the Tribunal vide impugned order has deleted the addition made by the AO u/s 36(1)(va) of the Act for deposit of PF/ESI beyond the date prescribed under the of the Tribunal in the case of DCIT v. Maharashtra Tourism Development Corporation Ltd. M/s Haldiram Food International Pvt. Ltd. (supra) and . Whereas, in view of the n of the Hon’ble Supreme Court in the case of Checkmate Services Pvt. Ltd. in Civil Appeal No. 2833 of 2016 dated s contribution to PF/ESI deposited after the is not allowable under section this being a mistake apparent from record the record, the order of the Tribunal needs to 3. We have heard rival submission of the parties on the issue in dispute and perused the relevant material on record. We find that in the case, the Tribunal in para 3 to 3.4 of the impugned order allowed the claim of the assessee for employee’s contribution to EPF/ESI deposited beyond the due date prescribed under relevant in the case of DCIT v. Maharashtra Tourism Development Corporation Ltd. (supra); M/s Haldiram Food International Pvt. Ltd. (supra) and M/s . But, we find that subsequently Hon’ble Supreme Court in the case of Ltd. (supra) has held that employee’s contribution to EPF/ESI deposited beyond the due date prescribed under relevant Acts is not allowable under section 36(1)(va) of the Act. The Hon’ble Supreme Court has interpreted the law on the issue of employee’s contribution to ESI/EPF u/s 36(1)(va) of the Act from the date on which the relevant provisions have been introduced in the Act. The decision of the Hon’ble Supreme Court operates retrospectively unless specifically directed to a Since in the case of Checkmate Services Pvt. Ltd. (supra), the Hon’ble Supreme Court has not given any specific direction for operation of the decision as prospective and therefore same operates retrospectively from the date of the inc relevant provisions in the Act. Thus, decision of the Tribunal on the issue of disallowance of employee’s contribution to ESI/EPF u/s 36(1)(va) of the Act being contrary to the decision of Hon’ble Supreme Court in the case of Checkmate Servic it is a mistake apparent from record. Accordingly, we recalled the appeals to the extent of the issue of the disallowance of contribution to ESI/EPF u/s 36(1)(va) of the Act. The miscellaneous applications of the Revenue are accordin 5. We have heard the parties on the issue of the disallowance of contribution to ESI/PF. Both the parties had agreed that assessment year 2018 M/s Della M.A Nos. 288 & 289/Mum/2023 ITA Nos. 1708 and 1707/Mum/2022 Hon’ble Supreme Court in the case of Checkmate has held that employee’s contribution to EPF/ESI deposited beyond the due date prescribed under relevant Acts is not allowable under section 36(1)(va) of the Act. The Hon’ble Supreme Court has interpreted the law on the issue of employee’s contribution to ESI/EPF u/s 36(1)(va) of the Act from the date on which the relevant provisions have been introduced in the Act. The decision of the Hon’ble Supreme Court operates retrospectively unless specifically directed to act as prospectively. Since in the case of Checkmate Services Pvt. Ltd. (supra), the Hon’ble Supreme Court has not given any specific direction for operation of the decision as prospective and therefore same operates retrospectively from the date of the inc relevant provisions in the Act. Thus, decision of the Tribunal on the issue of disallowance of employee’s contribution to ESI/EPF u/s 36(1)(va) of the Act being contrary to the decision of Hon’ble Supreme Court in the case of Checkmate Services Pvt. Ltd. (supra) , it is a mistake apparent from record. Accordingly, we recalled the appeals to the extent of the issue of the disallowance of contribution to ESI/EPF u/s 36(1)(va) of the Act. The miscellaneous applications of the Revenue are accordingly allowed. We have heard the parties on the issue of the disallowance of contribution to ESI/PF. Both the parties had agreed that assessment year 2018-19 the contribution to PF/ESI consist Della Adventure Resorts Pvt. Ltd. 4 M.A Nos. 288 & 289/Mum/2023 ITA Nos. 1708 and 1707/Mum/2022 Checkmate Services Pvt. has held that employee’s contribution to EPF/ESI deposited beyond the due date prescribed under relevant Acts is not allowable under section 36(1)(va) of the Act. The Hon’ble Supreme Court has interpreted the law on the issue of disallowance of employee’s contribution to ESI/EPF u/s 36(1)(va) of the Act from the date on which the relevant provisions have been introduced in the Act. The decision of the Hon’ble Supreme Court operates ct as prospectively. Since in the case of Checkmate Services Pvt. Ltd. (supra), the Hon’ble Supreme Court has not given any specific direction for operation of the decision as prospective and therefore same operates retrospectively from the date of the inception of the relevant provisions in the Act. Thus, decision of the Tribunal on the issue of disallowance of employee’s contribution to ESI/EPF u/s 36(1)(va) of the Act being contrary to the decision of Hon’ble es Pvt. Ltd. (supra) , it is a mistake apparent from record. Accordingly, we recalled the appeals to the extent of the issue of the disallowance of contribution to ESI/EPF u/s 36(1)(va) of the Act. The miscellaneous applications We have heard the parties on the issue of the disallowance of contribution to ESI/PF. Both the parties had agreed that in 19 the contribution to PF/ESI consists of employer’s as well as employee the issue to the file of the Assessing Officer for of the employee’s share of the contribution to ESI/PF decision of Hon’ble Supreme Court in the case of Services Pvt. Ltd. (supra) and contribution to PF/ESI in accordance with the provision 43B of the Act. The relevant grounds of the appeal are accordingly allowed for statistical purposes. 5.1 As far as assessment year 2019 parties agreed that contribution share and therefore same is disallowed in view of the decision of the Hon’ble Supreme Court in the case of Checkmate Services Pvt. Ltd. (supra). The relevant assessment year 2019 6. In the result, the Miscellaneous Applications of the Revenue are allowed. The appeal for assessment year 2018 partly for statistical purposes whereas ap 2019-20 is dismissed. Order pronounced in the open Court on Sd/ (AMIT SHUKLA JUDICIAL MEMBER Mumbai; Dated: 08/09/2023 Rahul Sharma, Sr. P.S. M/s Della M.A Nos. 288 & 289/Mum/2023 ITA Nos. 1708 and 1707/Mum/2022 as well as employee’s contribution. Therefo the issue to the file of the Assessing Officer for making s share of the contribution to ESI/PF decision of Hon’ble Supreme Court in the case of Services Pvt. Ltd. (supra) and allow the employer contribution to PF/ESI in accordance with the provision The relevant grounds of the appeal are accordingly allowed for statistical purposes. far as assessment year 2019-2020 is concerned es agreed that contribution to ESI/PF is only share and therefore same is disallowed in view of the decision of the Hon’ble Supreme Court in the case of Checkmate Services Pvt. Ltd. he relevant grounds of appeal of the assessee in ssment year 2019-20 are dismissed. the Miscellaneous Applications of the Revenue he appeal for assessment year 2018 partly for statistical purposes whereas appeal for assessment year 20 is dismissed. nounced in the open Court on 08/09/2023. Sd/- Sd/ AMIT SHUKLA) (OM PRAKASH KANT JUDICIAL MEMBER ACCOUNTANT MEMBER Della Adventure Resorts Pvt. Ltd. 5 M.A Nos. 288 & 289/Mum/2023 ITA Nos. 1708 and 1707/Mum/2022 ribution. Therefore, we restore making disallowance s share of the contribution to ESI/PF following the decision of Hon’ble Supreme Court in the case of Checkmate ployer’s share of contribution to PF/ESI in accordance with the provisions of section The relevant grounds of the appeal are accordingly 2020 is concerned, both the is only of employee’s share and therefore same is disallowed in view of the decision of the Hon’ble Supreme Court in the case of Checkmate Services Pvt. Ltd. grounds of appeal of the assessee in the Miscellaneous Applications of the Revenue he appeal for assessment year 2018-19 is allowed peal for assessment year /09/2023. Sd/- OM PRAKASH KANT) ACCOUNTANT MEMBER Copy of the Order forwarded to 1. The Appellant 2. The Respondent. 3. CIT 4. DR, ITAT, Mumbai 5. Guard file. //True Copy// M/s Della M.A Nos. 288 & 289/Mum/2023 ITA Nos. 1708 and 1707/Mum/2022 Copy of the Order forwarded to : BY ORDER, (Assistant Registrar) ITAT, Mumbai Della Adventure Resorts Pvt. Ltd. 6 M.A Nos. 288 & 289/Mum/2023 ITA Nos. 1708 and 1707/Mum/2022 BY ORDER, (Assistant Registrar) ITAT, Mumbai