Centralized Prodeedings Centre (CPC), Bangalore V. Shankar Morappa & Co, Pune

MA 50/PUN/2023

AI Insights

The case revolves around a dispute concerning the disallowance of deductions for the Employees' share of EPF and ESI contributions by Shankar Morappa & Co. for the assessment year 2019-20. Initially, the Tribunal had allowed the deduction, citing a precedent from the Himachal Pradesh High Court which was favorable to the assessee. However, this view was later overturned by the Supreme Court, which clarified that such deductions are only permissible if the contributions are made within the statutory deadlines prescribed by the respective laws governing EPF and ESI. The Revenue filed a Miscellaneous Application seeking rectification of the Tribunal's earlier order based on this new Supreme Court judgment.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 137937 (ITAT-PUNE)
• Duration Of Justice: 4 month(s) 18 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 03-08-2023
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 03-08-2023
• Assessment Year: 2019-2020
• Appeal Filed On: 16-03-2023
• Other Referred Cases: CIT Vs. Nipso polyfabriks Ltd., Checkmate Services P. Ltd. & Ors. VS. CIT & Ors.
• Laws Referred To: Income Tax Act
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Keywords: TDS

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCHES “B”, PUNE BEFORE SHRI R.S. SYAL, VICE PRESIDENT AND SHRI S.S. VISWANETHRA RAVI, JUDICIAL MEMBER Miscellaneous Application No.50/PUN/2023 (arising out of ITA No.405/PUN/2021) Assessment Year : 2019-20 DCIT, CPC, Bengaluru Vs. Shankar Morappa & Co. 1114, Budhwar Peth, Pune, Maharashtra – 411002 PAN : AAEFS2256C (Applicant) (Respondent) Assessee by : None Revenue by : Shri Uma Shankar Prasad Date of Hearing : 04-08-2023 Date of Pronouncement : 04-08-2023 ORDER PER R.S.SYAL, VP : This Miscellaneous application by the Revenue is directed against the order passed by the Tribunal on 22-06-2022 in relation to the assessment year 2019-20. 2. The facts of the case are that the Assessing Officer (AO) made disallowance of Rs.10,54,797/- in the intimation u/s.143(1) of the Act on the ground that the assessee deposited the Employees‟ share of EPF and ESI etc. belatedly. The Tribunal in its order u/s.254(1) observed that the Employees‟ share was deposited prior to the due date of filing return u/s.139(1) and hence deduction was allowable under section M.A.No.50/PUN/2023 Shankar Morappa & Co. 2 36(1)(va) of the Act. In reaching this conclusion, the Tribunal relied on the judgment of Hon’ble Himachal Pradesh High Court in CIT Vs. Nipso polyfabriks Ltd. (2013) 350 ITR 327 (HP). 3. The Revenue has moved the instant Miscellaneous Application urging that the view taken by the Hon‟ble Himachal Pradesh High Court in Nipso polyfabriks Ltd. has since been overruled by the Hon‟ble Supreme Court in Checkmate Services P. Ltd. & Ors. VS. CIT & Ors. (2022) 448 ITR 518 (SC), holding that the deduction of the Employees‟ share can be allowed u/s.36(1)(va) only if it is deposited before the time limit under the respective statutes and not by the due date u/s.139(1) of the Act. It was, thus, urged by the ld. DR that the order earlier passed by the Tribunal granting the deduction, required rectification. No serious objection was taken by the ld. AR to the grievance of the Revenue. 4. We have heard the rival submissions and perused the relevant material on record. There is no dispute on the fact the law prevalent at that time of passing the order u/s.254(1) was in favour of the assessee by virtue of certain judgments, including Nipso polyfabriks Ltd., granting deduction u/s.36(1)(va) of the M.A.No.50/PUN/2023 Shankar Morappa & Co. 3 employees‟ share of EPF etc. even if the deposit was made after the due date under respective Acts but before the time limit provided for filing the return u/s.139(1) of the Act. Such favourable view has since been reversed by the Hon‟ble Supreme Court in the case of Checkmate Services P. Ltd.(SC). In view of the latest judgment of the Hon‟ble Supreme Court, which is binding under Article 141 of the Constitution, the benefit of deduction allowed by the Tribunal in its order u/s 254(1), requires rectification. Making necessary rectification, we hold that the disallowance made by the AO has to be sustained. It is ordered accordingly. 5. In the result, the Miscellaneous Application is allowed. Order pronounced in the Open Court on 4 th August, 2023. Sd/- Sd/- (S.S. VISWANETHRA RAVI) (R.S.SYAL) JUDICIAL MEMBER VICE PRESIDENT प ु णे Pune; दिन ांक Dated : 4 th August, 2023 GCVSR M.A.No.50/PUN/2023 Shankar Morappa & Co. 4 आदेश की प्रतिलिपि अग्रेपिि / Copy of the Order is forwarded to : 1. अपील र्थी / The Appellant; 2. प्रत्यर्थी / The Respondent; 3. The CIT-TDS, Pune 4. विभागीय प्रविविवि, आयकर अपीलीय अविकरण, पुणे “B” / DR „B‟, ITAT, Pune; 5. ग र्ड फ ईल / Guard file आदेशान ु सार/ BY ORDER, // True Copy // Senior Private Secretary आयकर अपीलीय अविकरण ,पुणे / ITAT, Pune Date 1. Draft dictated on 04-08-2023 Sr.PS 2. Draft placed before author 04-08-2023 Sr.PS 3. Draft proposed & placed before the second member JM 4. Draft discussed/approved by Second Member. JM 5. Approved Draft comes to the Sr.PS/PS Sr.PS 6. Kept for pronouncement on Sr.PS 7. Date of uploading order Sr.PS 8. File sent to the Bench Clerk Sr.PS 9. Date on which file goes to the Head Clerk 10. Date on which file goes to the A.R. 11. Date of dispatch of Order. *