Assistant Director of Income-Tax, CPC, Bengaluru V. M/s Master Mall, Nashik

MA 77/PUN/2023

AI Insights

The case involves multiple Miscellaneous Applications (MAs) filed by the Revenue against various respondents concerning the assessment years 2018-19 and 2019-20. The core issue was the disallowance made by the Assessing Officer (AO) on the grounds that the employees' share of EPF and ESI was deposited belatedly. Initially, the Tribunal allowed deductions for these contributions if they were deposited before the due date of filing the return under section 139(1) of the Income Tax Act, relying on earlier judgments. However, following the Supreme Court's decision in Checkmate Services P. Ltd. v. CIT, which clarified that such deductions are only permissible if the contributions are deposited within the statutory deadlines, the Tribunal rectified its earlier orders to comply with this binding precedent.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 138062 (ITAT-PUNE)
• Duration Of Justice: 6 month(s) 9 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 09-10-2023
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2019-2020
• Appeal Filed On: 30-03-2023
• Other Referred Cases: Checkmate Services P. Ltd. v. CIT [2022] 448 ITR 518 (SC), CIT v. Nipso Polyfabriks Ltd. [2013] 350 ITR 327 (HP), CIT v. Saurashtra Kutch Stock Exchange Ltd. [2008] 305 ITR 227 (SC), CIT v. Arun Luthra [2001] 252 ITR 76 (P&H) (FB), Kailashnath Malhotra v. JCIT [2009] 34 SOT 541 (TM)
• Laws Referred To: Income Tax Act
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Keywords: Retrospective amendment
• Section: 139(1)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PUNE „A‟ BENCHES :: PUNE BEFORE SHRI INTURI RAMA RAO, ACCOUNTANT MEMBER & SHRI PARTHA SARATHI CHAUDHURY, JUDICIAL MEMBER M.A.No. 67/PUN/2023 (Arising out of ITA No.644/PUN/2021) (A.Y. 2018-19) DCIT, Circle-1, Nashik vs Bedmutha Industries Ltd., Plot No.A70/71/72, STICE, Musalgaon, MIDC, Sinner, Maharashtra. PAN: AABCB 3313 M Applicant Respondent M.A.No. 77/PUN/2023 (Arising out of ITA No.673/PUN/2021) (A.Y. 2019-20) DCIT, Circle-1, Nashik vs Master Mall, Shradda Complex, B/H Sona Shopping Center, Ganjamal, Nashik. PAN: AARFM 7898 M Applicant Respondent M.A.No. 80/PUN/2023 (Arising out of ITA No.683/PUN/2021) (A.Y. 2019-20) ACIT, Central Circle-1(1), Pune. vs Ishanya Motors LLP, S.No.1, Ambegaon, Katraj Bypass, Next to Podar School, Pune. PAN: AAEFI 3414 N Applicant Respondent MA Nos. 67,77,80,81,82 & 84/PUN/2023 Bedmutha Industries Ltd. & Ors. 2 M.A.No. 81/PUN/2023 (Arising out of ITA No.601/PUN/2021) (A.Y. 2018-19) DCIT, Circle-1, Aurangabad vs Navjeevan Hatcheries Pvt. Ltd., Siddarth Arcade, Opp. MTDC, Railway Station Road, Aurangabad. PAN: AABCN 8562 A Applicant Respondent M.A.No.82/PUN/2023 (Arising out of ITA No.597/PUN/2021) (A.Y. 2018-19) DCIT, Circle-1, Aurangabad vs Khadkeshwar Hatcheries Ltd., Siddarth Arcade, Opp. MIDC, Railway Station Road, Aurangabad. PAN: AAACK 9837 G Applicant Respondent M.A.No. 84/PUN/2023 (Arising out of ITA No.620/PUN/2021) (A.Y. 2018-19) ITO, Ward-1(1), Aurangabad. vs Mangesh Manohar Wadwane, C/o Sumati Enterprises, House No.213, Jai Bhavani Nagar, CIDCO, Aurangabad. PAN: ABJPW 7879 F Applicant Respondent Assessee by : Shri Pramod S. Shingte (M.A.No. 67/PUN/2023) None (MA Nos.77, 80, 81,82 & 84/PUN/2023) Revenue by : Smt. Shraddha Nichal Date of hearing : 06/10/2023 Date of pronouncement : 10/10/2023 MA Nos. 67,77,80,81,82 & 84/PUN/2023 Bedmutha Industries Ltd. & Ors. 3 O R D E R Per PARTHA SARATHI CHAUDHURY, JM: These Misc. Applications preferred by the Revenue are directed against the separate orders passed by the Tribunal in relation to A.Ys. 2018-19 & 2019-20. 2. The facts involved in all these matters are that Assessing Officer (AO) had made disallowance on the ground that assessee had deposited the employees‟ share of EPF and ESI etc. belatedly. The Tribunal, in the referred impugned orders, had observed that the employees‟ share was deposited prior to the due date of filing return u/sec. 139(1) and hence deduction was allowable u/sec. 36(1)(va) of the Act. In reaching this conclusion, the Tribunal had relied on various case laws as are appearing therein. 3. The Revenue has moved these Misc. Applications submitting that the view taken by the Tribunal, following various decisions, has been overruled by the Hon'ble Supreme Court in Checkmate Services P. Ltd. v. CIT [2022] 448 ITR 518 (SC) holding that the deduction of the employees‟ share can be allowed u/sec.36(1)(va) only if it is deposited before the time limit under the respective statutes and not before the due date u/sec. 139(1) of the Act. It was, thus, urged by the ld.DR that the orders earlier passed by the Tribunal granting the deduction required rectification and necessary amendment in view of the MA Nos. 67,77,80,81,82 & 84/PUN/2023 Bedmutha Industries Ltd. & Ors. 4 judgment of the Hon'ble Supreme Court (supra). 4. We observe that there is no dispute on the fact that the law prevalent at the time, when the Tribunal had passed the respective orders, was in favour of the assessee(s) by virtue of various cited judgments including the judgment of Hon'ble Himachal Pradesh High Court in CIT v. Nipso Polyfabriks Ltd. [2013] 350 ITR 327 (HP) granting deduction u/sec. 36(1)(va) of the employees‟ share of EPF etc. even if the deposit was made after the due date under the respective Acts, but before the time limit provided for filing the return u/sec. 139(1) of the Act. Such favourable view has been reversed by the Hon'ble Supreme Court in the case of Checkmate Services P. Ltd. (supra). The fundamental question is no more res integra that declaration of law by the Courts is always retrospective taking effect from the date of insertion of the provision. The Hon'ble Supreme Court in CIT v. Saurashtra Kutch Stock Exchange Ltd. [2008] 305 ITR 227 (SC) has held that any existing order in derogation of a subsequent binding judgment requires rectification. To be more specific, the Hon'ble Apex Court has held that ‘If a subsequent decision alters the earlier one, it (the later decision) does not make new law. It only discovers the correct principle of law which has to be applied retrospectively. To put it differently, even where an earlier decision of the court operated for quite some time, the decision rendered later on would have retrospective effect clarifying the legal position which was MA Nos. 67,77,80,81,82 & 84/PUN/2023 Bedmutha Industries Ltd. & Ors. 5 earlier not correctly understood.’ Similar view had been taken by Full Bench of the Hon'ble Punjab & Haryana High Court in CIT v. Arun Luthra [2001] 252 ITR 76 (P&H) (FB). In that case also, it was argued on behalf the assessee that the decision rendered by a Court subsequent to the passing of the order cannot be constitute an error apparent from the record so as to entitle an authority to proceed u/sec. 154. Rejecting such contention, the Hon'ble High Court held that if such a view point is accepted „the result would be that even though the order of the authority is contrary to the law declared by the highest court in the state or the country, still the mistake could not be rectified for the reason that the decision is subsequent to the date of the order‟. Almost similar view has been taken in a Third Member decision by the Mumbai benches of the Tribunal in Kailashnath Malhotra v. JCIT [2009] 34 SOT 541 (TM) holding that non-consideration of a judgment of the Hon'ble Supreme Court or that of the jurisdictional High Court delivered prior to or even subsequent to the order, constitutes a mistake apparent from record. We further take guidance from Article 141 of the Constitution of India, which stipulates that the law declared by the Supreme Court shall be binding on all Courts within the territory of India. This Article of the Indian Constitution signifies the judicial discipline and principle that has to be followed within the territory of India, whereby the decision of the Hon'ble Apex Court shall be followed by all other subordinate Courts in India and shall be the law of the land. Therefore, subsequent to any MA Nos. 67,77,80,81,82 & 84/PUN/2023 Bedmutha Industries Ltd. & Ors. 6 decision being passed by the Tribunal, if the law has been changed by the Hon'ble Supreme Court then that law has to be followed by all other subordinate judicial forums and that shall be binding upon all the stakeholders of a particular case. In view of the above discussion, it is observed and held that the subsequent judgment of Hon'ble Supreme Court in Checkmate Services P. Ltd. (supra) denying the benefit of deduction has rendered the impugned orders of the Tribunal erroneous, necessitating its rectification in terms of sec.254(2) of the Act. 4. In the result, all the Misc. Applications are allowed. Order pronounced in open Court on 10 th October, 2023. Sd/- Sd/- (INTURI RAMA RAO) (PARTHA SARATHI CHAUDHURY) ACCOUNTANT MEMBER JUDICIAL MEMBER Dated : 10 th October, 2023 vr/- Copy to : 1. The Appellant. 2. The Respondent. 3. The Pr. CIT concerned. 4. The DR, ITAT, “A” Bench Pune. 5. Guard File. By Order // TRUE COPY // Senior Private Secretary ITAT, Pune.