THE DY. COMMISSIONER OF INCOME TAX-7(1)(1), MUMBAI V. NOVA FLEXIPACK PVT LTD., MUMBAI

MA 400/MUM/2022

AI Insights

The case involves the Centralised Processing Centre (CPC) of Delhi as the appellant and Nova Flexipack Pvt Ltd as the respondent. Initially, the Tribunal had allowed Nova Flexipack's appeal, which resulted in the deletion of adjustments made by the CPC regarding the denial of deductions claimed for employees' contributions to Provident Fund (PF) and Employees' State Insurance (ESI). The CPC filed a miscellaneous application citing a 'mistake apparent on the record' based on a Supreme Court decision that emphasized the necessity of depositing employees' contributions to PF and ESI within the due dates prescribed by the respective statutes for the deductions to be allowable under section 36(1)(va) of the Income Tax Act. The Tribunal, acknowledging the Supreme Court's precedent, recalled its earlier order and directed a fresh adjudication of the case.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 131949 (ITAT-MUMBAI)
• Duration Of Justice: 4 month(s) 24 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 09-05-2023
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 16-02-2023
• Assessment Year: 2018-2019
• Appeal Filed On: 15-12-2022
• Other Referred Cases: M/s Checkmate Services Pvt. Ltd. v/s CIT 448 ITR 518 (SC)
• Laws Referred To: Income Tax Act
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Section: 143(1)

Judgement Text

THE INCOME TAX APPELLATE TRIBUNAL “B” BENCH, MUMBAI SHRI BASKARAN BR, ACCOUNTANT MEMBER & SHRI ABY T VARKEY, JUDICIAL MEMBER MA No. 400/Mum/2022 (Arising Out of ITA 1003/Mum/2022) (A.Y. 2018-19) Centralised Processing Centre Delhi, New Delhi, Delhi Vs. Nova Flexipack Pvt Ltd. 3 rd Floor, Sakeseria Chambers, 139, Nagindas Master Road, Fort, Mumbai-400023 PAN AAACN3161C (Appellant) (Respondent) Assessee by Shri Rashmikant Modi & Ms. Ketki Rajeshirke Department by Smt Mahita Nair (Sr. AR) Date of Hearing 17/02/2023 Date of Pronouncement 10/05/2023 O R D E R PER ABY T VARKEY:- This is a Miscellaneous Application (MA) filed by the Department against the order of this Tribunal in ITA No. 1122/Mum/2022 for AY 2017- 18 dated 30.06.2022, wherein the Tribunal had allowed the appeal of the assessee by deleting the adjustment made by the CPC, on the issue of assessee’s claim of deduction which was denied, on account of delay in making the remittance within the due dates towards the employees’ contribution towards the Provident Fund (PF) and ESI as per the respective Acts i.e. PF/ESI Act, while processing the return of income filed by the assesee u/s 143(1) of the Income Tax Act (“the Act”). 2. Before us, the revenue has filed this MA on 16.12.2022 against the impugned order passed by this Tribunal on 30.06.2022; and contends there 2 MA No. 400/Mum/2022 Nova Flexipack Pvt Ltd. is mistake apparent on the record, in the light of the decision of Hon’ble Supreme Court in the case of M/s Checkmate Services Pvt. Ltd. v/s CIT 448 ITR 518 (SC), wherein the Hon’ble Supreme Court on this issue has observed as under: “The distinction between an employer's contribution which is its primary liability under law in terms of section 36(1)(iv) and its liability to deposit amounts received by it or deducted by it (Section 36(1)(va)) is thus crucial. In the reasoned opinion of the court the non obstante clause would not in any manner dilute or override the employer's obligation to deposit the amounts retained by it or deducted by it from the employee's income, unless the condition that it is deposited on or before the due date is correct and justified. They are not part of the assessee employer's income, nor are they head of deduction per se in the form of statutory pay out. They are others’ income, monies, only deemed to be income, with the object of ensuring that they are paid within the due date specified in the particular law.” 3. In the light of the Hon’ble Supreme Court decision (supra), according to the revenue, while assessee’s claim of deduction in respect of employees’ contribution in PF/ESI is allowable only if it qualifies as deduction as stipulated under sub clause (va) of sub-section (1) of section 36 of the Act i.e. the assessee gets deduction only if it deposit the employee’s contribution in the Government Account within due date as prescribed for the respective statutes (PF-ESIC Act). 4. It is trite that the law laid down by the Hon’ble Supreme Court relates back the date of inception of the relevant provisions of the Act. Therefore, in view of the decision of the Hon’ble Supreme Court in the case of Checkmate Services Pvt. Ltd. (supra), the impugned order of the 3 MA No. 400/Mum/2022 Nova Flexipack Pvt Ltd. Tribunal is recalled for fresh adjudication and registry is directed to fix the appeal in due course. 5. In the result, the miscellaneous application filed by the revenue is allowed. Pronounced in the open court on 10/05/2023 Sd/- Sd/- (BASKARAN BR) (ABY T VARKEY) ACCOUNTANT MEMBER JUDICIAL MEMBER Mumbai; Dated : 10/05/2023 Aniket G. Rajput (STENOGRAPHER) Copy of the Order forwarded to : The Appellant; 1. The Respondent; 2. CIT; 3. DR, ITAT, Mumbai; 4. Guard File; BY ORDER, //True Copy// (Assistant Registrar) ITAT, Mumbai