THE ASSTT. COMMISSIONER OF INCOME TAX, CIRCLE-14(1)(2), MUMBAI V. FAIR EXPORTS(INDIA) PVT. LTD, MUMBAI

MA 429/MUM/2022

AI Insights

The case involves the Revenue's Miscellaneous Application seeking to recall an earlier Tribunal order concerning M/s. Fair Exports (India) Pvt. Ltd. The Tribunal initially ruled on an appeal by the company regarding certain deductions. The Revenue contended that the order was received late by the Principal Commissioner of Income Tax, affecting the timeline for filing the Miscellaneous Application. The Tribunal, referencing decisions from the Delhi High Court and the Supreme Court, found that the application was timely and proceeded to recall the earlier order based on the Supreme Court's clarification on the deposit timelines for employees' contributions to PF and ESI.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 302417 (ITAT-MUMBAI)
• Duration Of Justice: 1 month(s) 25 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 16-02-2023
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: F
• Next Hearing Date: 16-02-2023
• Assessment Year: 2018-2019
• Appeal Filed On: 21-12-2022
• Other Referred Cases: Golden Times Services Pvt. Ltd. vs DCIT, Bharat Petroleum Corporation Ltd. vs. ITAT, Checkmate Services Pvt. Ltd vs CIT
• Laws Referred To: Income Tax Act
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Section: 43B; 139(1)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, ‘F‘ BENCH MUMBAI BEFORE: SHRI M.BALAGANESH, ACCOUNTANT MEMBER & SHRI PAVAN KUMAR GADALE, JUDICIAL MEMBER MA No.429/Mum/2022 (Arising out of ITA No.304/Mum/2022) (Asse ssment Year :2018-19) The Asst. Commissioner of Income Tax, Circle-14(1)(2) Room No.455, Aayakar Bhavan M.K.Road, Mumbai – 400 020 Vs. M/s. Fair Exports (India) Pvt.Ltd. 501, Madhava, Bandra Kurla Complex Bandra (E) Mumbai - 400051 PAN/GIR No.AAACF3799A (Appellant) .. (Respondent) Assessee by Shri Haresh P Shah Revenue by Shri Manoj Kumar singh Date of Hearing 17/02/2023 Date of Pronouncement 17/02/2023 आदेश / O R D E R PER M. BALAGANESH (A.M): By virtue of this Miscellaneous Application, the Revenue seeks to recall the order passed by this Tribunal in ITA No. 304/Mum/2022 dated 24/05/2022. 2. We have heard rival submissions and perused the materials available on record. At the outset, the ld. AR stated that the order of this Tribunal was passed on 24/05/2022 and the Miscellaneous Application has been preferred by the Revenue on 22/12/2022 which is barred by MA No. 429/Mum/2022 M/s. Fair Exports (India) Pvt.Ltd. 2 limitation. We find that the order passed by this Tribunal was received by the Pr. Commissioner of Income Tax on 17/08/2022 which is evident from the office stamp given in the Tribunal order enclosed by the Revenue before us. Since the order has been received by the Pr. Commissioner of Income Tax from the Tribunal only on 17/08/2022, we hold that the Miscellaneous Application preferred by the Revenue is in time. 3. We find that the Hon’ble Delhi High Court in the case of Golden Times Services Pvt. Ltd. vs DCIT in W.P.(c)402/2020 dated 13/01/2020 had held that limitation for filing Miscellaneous Application has to be reckoned from the date of communication of order to the parties. 4. There is absolutely no quarrel with regard to the decision rendered by the Hon’ble Jurisdictional High Court relied by the ld. AR before us in the case of Bharat Petroleum Corporation Ltd. vs. ITAT reported in 359 ITR 371.In the said decision, the Hon’ble Jurisdictional High Court had held that there is no provision in the statute available to the ITAT to condone the delay. As stated earlier, there is no quarrel on this proposition. We have already held that the date on which the order has been communicated to the parties would the date from which the limitation is to be reckoned. Hence, the argument advanced by the ld. AR in this regard is hereby dismissed. 5. Since the issue is already covered in favour of the Revenue by the recent decision of the Hon’ble Supreme court in the case of Checkmate Services Pvt. Ltd vs CIT reported in 448 ITR 518, we proceed to dispose of this appeal by hearing the ld. DR and perusing the materials available on record. It is not in dispute that the employees contribution to PF and ESI were deposited by the assessee to the Government account beyond the due dates prescribed under the respective acts but well before the MA No. 429/Mum/2022 M/s. Fair Exports (India) Pvt.Ltd. 3 due date of filing of return of income u/s. 139(1) of the Act. We find that the recent decision of the Hon’ble Supreme Court had settled the entire dispute to rest by deciding it in favour of the Revenue by observing as under:- “53. 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. The former forms part of the employers' income, and the later retains its character as an income (albeit deemed), by virtue of section 2(24)(x) - unless the conditions spelt by Explanation to section 36(1)(va) are satisfied i.e., depositing such amount received or deducted from the employee on or before the due date. In other words, there is a marked distinction between the nature and character of the two amounts - the employer's liability is to be paid out of its income whereas the second is deemed an income, by definition, since it is the deduction from the employees' income and held in trust by the employer. This marked distinction has to be borne while interpreting the obligation of every assessee under section 43B. 54. In the opinion of this Court, the reasoning in the impugned judgment that 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. The non-obstante clause has to be understood in the context of the entire provision of Section 43B which is to ensure timely payment before the returns are filed, of certain liabilities which are to be borne by the assessee in the form of tax, interest payment and other statutory liability. In the case of these liabilities, what constitutes the due date is defined by the statute. Nevertheless, the assessees are given some leeway in that as long as deposits are made beyond the due date, but before the date of filing the return, the deduction is allowed. That, however, cannot apply in the case of amounts which are held in trust, as it is in the case of employees' contributions- which are deducted from their income. They are not part of the assessee employer's income, nor are they heads 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. They have to be deposited in terms of such welfare enactments. It is upon deposit, in terms of those enactments and on or before the due dates mandated by such concerned law, that the amount which is otherwise retained, and deemed an income, is treated as a deduction. Thus, it is an essential condition for the deduction that such amounts are deposited on or before the due date. If such interpretation were to be adopted, the non-obstante clause under section 43B or anything contained in that provision would not absolve the assessee from its liability to deposit the employee's contribution on or before the due date as a condition for deduction. MA No. 429/Mum/2022 M/s. Fair Exports (India) Pvt.Ltd. 4 55. In the light of the above reasoning, this court is of the opinion that there is no infirmity in the approach of the impugned judgment. The decisions of the other High Courts, holding to the contrary, do not lay down the correct law. For these reasons, this court does not find any reason to interfere with the impugned judgment. The appeals are accordingly dismissed.” 3.2. In view of the aforesaid decision of the Hon’ble Supreme Court, the claim made by the assessee in the return of income becomes an incorrect claim. Hence, the same could be subject matter of primafacie adjustment u/s.143(1) of the Act. Hence, we deem it fit to recall the Tribunal order dated 24/05/2022 and Registry is directed to fix the appeal for main hearing on 29/03/2023. Both parties informed in the open Court. 4. In the result, Miscellaneous Application of the Revenue is allowed. Order pronounced on 17/02/2023 by way of proper mentioning in the notice board. Sd/- (PAVAN KUMAR GADALE) Sd/- (M.BALAGANESH) JUDICIAL MEMBER ACCOUNTANT MEMBER Mumbai; Dated 17/02/2023 KARUNA, sr.ps MA No. 429/Mum/2022 M/s. Fair Exports (India) Pvt.Ltd. 5 Copy of the Order forwarded to : BY ORDER, (Asstt. Registrar) ITAT, Mumbai 1. The Appellant 2. The Respondent. 3. The CIT(A), Mumbai. 4. CIT 5. DR, ITAT, Mumbai 6. Guard file. //True Copy//