THE ASSISTANT COMMISSIONER OF INCOME TAX, CIRCLE 6(1)(2)., MUMBAI V. ASK WEALTH ADVISORS PRIVATE LIMITED , MUMBAI

MA 298/MUM/2023

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The case involves a Miscellaneous Application (MA.No. 298/MUM/2023) filed by the Revenue against the order of the Income Tax Appellate Tribunal (ITAT) which had previously allowed the appeal of Ask Wealth Advisors Pvt. Ltd., deleting the disallowance for AY 2018-19 of Rs. 12,81,781 under section 36(1)(va) of the Income Tax Act concerning late payment of Employee's Contribution towards PF/ESI. The Revenue contended that the ITAT's decision was a mistake apparent from the record in light of the Supreme Court's decision in Checkmate Services Pvt. Ltd. vs CIT, which clarified that no deduction is allowable for delayed deposit of employees' contribution to PF/ESI under section 36(1)(va). The Tribunal found the Revenue's application to be within the limitation period and acknowledged the Supreme Court's interpretation as a mistake apparent from the record, leading to the recall of the earlier order.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 123114 (ITAT-MUMBAI)
• Duration Of Justice: 2 month(s) 23 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 03-07-2023
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 29-06-2023
• Assessment Year: 2018-2019
• Appeal Filed On: 10-04-2023
• Other Referred Cases: Checkmate Services Pvt. Ltd vs CIT, Daryapur Shetkari Sahakari Ginning and Pressing Factory v. ACIT
• Laws Referred To: Income Tax Act
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Keywords: Period of limitation; Time period of passing order; Set aside

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH “A”, MUMBAI BEFORE SHRI AMIT SHUKLA, HON'BLE JUDICIAL MEMBER AND SHRI S. RIFAUR RAHMAN, HON'BLE ACCOUNTANT MEMBER MA.No. 298/MUM/2023 [ARISING OUT OF ITA NO. 1904/MUM/2022 (A.Y: 2018-19)] The Asst. Commissioner of Income-tax Circle – 6(1)(2)) Room No. 506, 5 th Floor Aayakar Bhavan, M.K. Road Mumbai - 400020 v. Ask Wealth Advisors Pvt. Ltd., Birla Aurora, 16 Level Office Floor 9 Dr. Annie Besant Road, Worli Mumbai - 400030 PAN: AAFCA9124M Appellant Respondent Assessee Represented by : Shri Shreyam B. Shah Department Represented by : Ms. Mahita Nair Date of conclusion of Hearing : 30.06.2023 Date of Pronouncement : 04.07.2023 O R D E R PER S. RIFAUR RAHMAN (AM) 1. Through this Miscellaneous Application revenue is seeking for rectification in the order passed by the Tribunal in ITA.No.1904/Mum/2022 dated 30.09.2022 for the A.Y. 2018-19. MA.No. 298/MUM/2023 Ask Wealth Advisors Pvt. Ltd., Page No. 2 2. In the Miscellaneous Application revenue has submitted as under: - “The following submissions are placed before the Hon'ble Income- tax Appellate Tribunal for kind consideration and appropriate orders- 2. This is with reference to the appellate order in ITA No. 1904/MUM/2022 dated 30/09/2022 for AY 2018-19, passed by the Hon'ble A Bench, Mumbai. The Hon'ble ITAT allowed the assessee's appeal by stating that the assessee had deposited the Employee's contribution to Provident Fund Contribution before filing return of income. A copy of the said order is enclosed 3. In view of the above, a Miscellaneous Application in the case of M/s. Ask Wealth Advisors Pvt Ltd in respect of order of the ITAT. Mumbai 'A' Bench bearing ITA NO. 1904/Mum/2022 dated 30/09/2022 for AY 2018-19 is hereby filed by the Department. 4. Considering the above, a Miscellaneous Application is filed before ITAT, for withdrawal of its order in the assessee's case u/s 254(2) of the IT Act for reconsideration on merit on the following grounds of appeals is recommended: 1. "Whether on the facts and circumstance of the case and in law, the Hon'ble ITAT erred in deleting the disallowance for AY 2018-19 of Rs. 12,81,781/- u/s: 36(1)(va) in respect of late payment of Employee's Contribution towards PF/ ESIC etc?" 2. "Whether on the facts and in the circumstances of the case and in law the Hon'ble ITAT erred in not appreciating that the Explanation 2 to Section 36(1)(va) brought in by the Finance Act, 2021 is clarificatory in nature explaining the existing provision of section 36(1)(va)?" 3. "Whether on the fact and in the circumstance of the case an in law the Hon'ble ITAT erred in not appreciating that the Explanation 2 to section 36(1)(va) brought in by Finance Act, 2021 is clarificatory in nature explaining the existing provision of section 36(1)(va), which is upheld by the Hon'ble Supreme Court in recent decision in the case of Checkmate Services Pvt. Ltd vs CIT, Civil Appeal No 2833 of 2016 dated 12/10/2022? 4. The appellant prays that the order of the ITAT be set aside and the case be adjudicated considering the above grounds. 5. The appellant craves leaves to amend and/ or alter any grounds of the grounds of appeal, if need be. A Copy of the ITAT's order was received in this office on 14/12/2022.” MA.No. 298/MUM/2023 Ask Wealth Advisors Pvt. Ltd., Page No. 3 3. At the time of hearing, Ld. DR submitted that the present Miscellaneous Application is filed by the revenue on 11.04.2023 whereas order of the Tribunal is passed on 30.09.2022. In this regard he relied on the decision of the Hon'ble Bombay High Court in the case of Daryapur Shetkari Sahakari Ginning and Pressing Factory v. ACIT [2021] 123 taxmann.com 301 (Bombay), as per which the limitation period commence from the date when affected party got knowledge of decision in question and it would not commence from date when the order was passed. Accordingly, he submitted that the Assessing Officer came to know of the order subsequently. Accordingly, the Miscellaneous Application was filed. He brought to our notice the order was received by ACIT only on 14.12.2022. Accordingly, he prayed the Miscellaneous Application filed by the revenue is within the limitation period. 4. Further, Ld. DR submitted that in this appeal, the Tribunal has deleted the addition made by the Assessing Officer on account of delayed deposit of employees’ contribution to PF/Employees’ State Insurance (ESI). He further submitted that in view of the decision of the Hon’ble Supreme Court in the case of Checkmate Services Pvt Ltd v. CIT dated 12.10.2022, no deduction is allowable for delayed deposit of employees’ contribution to PF/ESI u/s. 36(1)(va) of the Act. Since the Hon’ble MA.No. 298/MUM/2023 Ask Wealth Advisors Pvt. Ltd., Page No. 4 Supreme Court has interpreted the provisions which were in existence from the date, the same have been introduced by the Parliament and, therefore, allowing the said deduction for late deposit of PF/ESI is a mistake apparent from record in view of the decision of the Hon’ble Supreme Court in the case of Checkmate Services Pvt Ltd v. CIT (supra). Accordingly, he submitted that order of the Tribunal need to be recalled. 5. On the other hand, Ld. AR of the assessee submitted that the limitation period cannot be stretched beyond the limitation period and objected for condonation of delay and admission of Miscellaneous Application. 6. Considered the rival submissions and material placed on record, we observe that the present Miscellaneous Application is filed by the revenue within six months from the date of receipt of the order. The revenue has furnished documents to show that order was received in the office of the ACIT on 14.12.2022. As per the decision of the Hon'ble Bombay High Court in the case of Daryapur Shetkari Sahakari Ginning and Pressing Factory v. ACIT (supra) the period of limitation would start from the date of knowledge of the order and not from the date of pronouncement of the MA.No. 298/MUM/2023 Ask Wealth Advisors Pvt. Ltd., Page No. 5 order. Accordingly, present Miscellaneous Application filed by the revenue is within the period of limitation. 7. Further, we observe that in view of the decision of the Hon’ble Supreme Court in the case of Checkmate Services Pvt Ltd v. CIT (supra), the finding of the Tribunal amounts to mistake apparent from record and, therefore, the order of the Tribunal on this appeal is recalled. Thus, we recall the order passed by the Tribunal in ITA.No. 1904/Mum/2022 dated 30.09.2022. The Registry is directed to post the appeal for hearing in due course after issuing notice to both parties. Accordingly, the Miscellaneous Application filed by the revenue is allowed. 8. In the result, Miscellaneous Application filed by the Revenue is allowed. Order pronounced in the open court on 04 th July, 2023. Sd/- Sd/- (AMIT SHUKLA) (S. RIFAUR RAHMAN) JUDICIAL MEMBER ACCOUNTANT MEMBER Mumbai / Dated 04/07/2023 Giridhar, Sr.PS MA.No. 298/MUM/2023 Ask Wealth Advisors Pvt. Ltd., Page No. 6 Copy of the Order forwarded to: 1. The Appellant 2. The Respondent. 3. CIT 4. DR, ITAT, Mumbai 5. Guard file. //True Copy// BY ORDER (Asstt. Registrar) ITAT, Mum