I.T.O., Ward - 49(1), Kolkata, Kolkata V. Ranjit Paul, Kolkata

MA 48/KOL/2022

AI Insights

The case involves a Miscellaneous Application (M.A. No. 48/KOL/2022) filed by the Revenue against an earlier Tribunal order (ITA No. 136/KOL/2022) concerning the disallowance of employees' contributions to P.F. and ESI accounts claimed as deductions by the assessee, Ranjit Paul. Initially, the Tribunal had allowed the deduction based on a High Court judgment. However, following a Supreme Court decision that contradicted this position, the Revenue filed a Miscellaneous Application citing the apparent error in the Tribunal's earlier decision. The Tribunal acknowledged the change in legal interpretation post-Supreme Court judgment and recalled its earlier order, restoring the appeal for re-adjudication.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 129853 (ITAT-KOLKATA)
• Duration Of Justice: 5 month(s) 17 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 01-05-2023
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 23-02-2023
• Assessment Year: 2018-2019
• Appeal Filed On: 14-11-2022
• Other Referred Cases: CIT \\u2013vs.- Vijayshree Limited, Checkmate Services P. Limited \\u2013vs.- CIT, ACIT \\u2013vs.- Saurashtra Kutch Stock Exchange Limited
• Laws Referred To: Income Tax Act
• Result in Favour of: Revenue
• Court: TRIBUNAL

Judgement Text

M.A. No. 48/KOL/2022 (in ITA No. 136/KOL/2022) A.Y. 2018-2019 Ranjit Paul 1 IN THE INCOME TAX APPELLATE TRIBUNAL, ‘B’ BENCH, KOLKATA Before Shri Rajpal Yadav, Vice-President & Shri Rajesh Kumar, Accountant Member M.A. No. 48/KOL/2022 (in I.T.A. No. 136/KOL/2022) Assessment Year: 2018-2019 Income Tax Officer,...................................Applicant Ward-49(1), Kolkata -Vs.- Ranjit Paul,............................................Respondent 93, Dakshindari Road, Ultadanga, Kolkata-700048 [PAN:AFXPP8545D] Appearances by: Shri P.P. Barman, Addl. CIT, appeared on behalf of the Revenue Shri K.M. Roy, C.A., appeared on behalf of the assesseee Date of concluding the hearing : February 24, 2023 Date of pronouncing the order : May 02, 2023 O R D E R Per Shri Rajpal Yadav, Vice-President (KZ):- This Miscellaneous Application is directed at the instance of Revenue pointing out an apparent error in the order of the Tribunal dated 14 th July, 2022 passed in ITA No. 136/KOL/2022. M.A. No. 48/KOL/2022 (in ITA No. 136/KOL/2022) A.Y. 2018-2019 Ranjit Paul 2 2. The Revenue has pleaded that the ld. Assessing Officer has disallowed a claim of Rs.7,21,831/- with the aid of section 36(1)(va) of the Income Tax Act. It is the employees’ contribution in the P.F. and ESI Account. It was claimed as a deduction by the assessee, which was disallowed by the ld. Assessing officer and confirmed by the ld. CIT(Appeals). 3. The Tribunal after putting reliance upon the judgment of the Hon’ble Calcutta High Court in the case of CIT –vs.- Vijayshree Limited in ITAT No. 243 of 2011 and G.A. No. 26607 of 2011 has held that if such contributions are paid to the respective P.F. & ESI Accounts before the due date of filing of the return, then the assessee will be entitled for deduction of such amounts. 4. The Revenue further pleaded that recently Hon’ble Supreme Court in the case of Checkmate Services P. Limited –vs.- CIT reported in 2022 LiveLaw (SC) 838 (the copy of the judgment has been placed on record by the Revenue along with the Miscellaneous Application), has held that such employees’ contributions are required to be paid within the due date provided in the P.F. & ESI Account and in case such payment was not made, then the deduction will not be allowed to the assessee. The M.A. No. 48/KOL/2022 (in ITA No. 136/KOL/2022) A.Y. 2018-2019 Ranjit Paul 3 Hon’ble Supreme Court has explained the meaning of section 36(1)(va) read with section 2(24)(x) of the Income Tax Act. Thus after this decision rendered on 12 th October, 2022, the position of law has been changed. On the strength of this subsequent judgment of the Hon’ble Supreme Court, it has been contended that order of the Tribunal is to be construed as suffered by the apparent error. 5. On the other hand, ld. Counsel for the assessee was unable to controvert the submissions made by the Revenue. 6. We have duly considered the rival contentions and gone through the record carefully. The Hon’ble Supreme Court in the case of ACIT –vs.- Saurashtra Kutch Stock Exchange Limited reported in 305 ITR 227 has laid down that subsequent change of law by the judgment of the Hon’ble Supreme Court would brand the Tribunal’s order as suffering from an apparent error. In other words, if on a point of law, a decision of the Hon’ble Jurisdictional High Court and of the Hon’ble Supreme Court is being delivered after the order of the Tribunal, then on the strength of those judgments, Tribunal order could be treated as suffering from apparent error. The simple reason for this proposition is that a Court decides a dispute between the parties. The cause can involve the M.A. No. 48/KOL/2022 (in ITA No. 136/KOL/2022) A.Y. 2018-2019 Ranjit Paul 4 decision of facts. It can also involve a decision on points of law. Both may have bearing on the ultimate result of the case. When a Court interprets a provision, it decides as to what is the meaning and effect of the words used by the legislature. It is a declaration regarding the statute. In other words, the judgment declares as to what the legislature had said at the point of promulgation of the law. The declaration is – this was the law, this is the law, and this is how the provision shall be construed. Thus the Hon’ble Supreme Court has explained the position of law on the interpretation of section 36(1)(va) read with section 2(24)(x) and laid down as to how the meaning and scope of above provision is to be construed and as to how these are to be applied from the date when the legislature has enacted these provisions. Therefore, if these provisions are applied incorrectly by the Tribunal, its order would be termed as suffering from apparent error. Respectfully following the judgments of the Hon’ble Supreme Court in the case of Checkmate Services Pvt. Limited as well as in the case of Saurashtra Kutch Stock Exchange Limited, we find that the Tribunal’s order is suffering from an apparent error and, therefore, it deserves to be recalled. We re-call the Tribunal’s order dated 14.07.2022 and restore the appeal for re- adjudication on merit. M.A. No. 48/KOL/2022 (in ITA No. 136/KOL/2022) A.Y. 2018-2019 Ranjit Paul 5 7. In the result, the Miscellaneous Application filed by the Revenue is allowed for statistical purposes. Order pronounced in the open Court on May 02, 2023. Sd/- Sd/- (Rajesh Kumar) (Rajpal Yadav) Accountant Member Vice-President(KZ) Kolkata, the 2 nd day of May, 2023 Copies to : (1) Income Tax Officer, Ward-49(1), Kolkata (2) Ranjit Paul, 93, Dakshindari Road, Ultadanga, Kolkata-700048 (3) Commissioner of Income Tax (Appeals), NFAC, Delhi; (4) CIT- , Kolkata; (5) The Departmental Representative (6) Guard File TRUE COPY By order Assistant Registrar Income Tax Appellate Tribunal, Kolkata Benches, Kolkata Laha/Sr. P.S.