Deputy Commissioner of Income-Tax, CPC, , Bengaluru V. Supreme Equipments P Ltd, Nashik

MA 88/PUN/2023

• Counselvise Citation: [2023] 100 COUNSELVISE.COM (IT) 6756 (ITAT-PUNE)
• Duration Of Justice: 6 month(s) 5 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 05-10-2023
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 05-10-2023
• Assessment Year: 2019-2020
• Appeal Filed On: 30-03-2023
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Section: 143(1); 139(1); 254(2)

Judgement Text

।आयकर अपीलीय न्यायाधिकरण, पुणे न्यायपीठ, “बी” बेंच, पुणे में। ITAT-Pune Page 1 of 5 IN THE INCOME TAX APPELLATE TRIBUNAL, PUNE ‘B’ BENCH, PUNE BEFORE SHRI SS VISWANETHRA RAVI, JUDICIAL MEMBER AND SHRI G. D. PADMAHSHALI, ACCOUNTANT MEMBER आयकरअपऩलसं. / MA No. 088/PUN/2023 (Arising out of ITA No. 224/PUN/2021 निर्धारणवर्ा / Assessment Year : 2019-2020 Deputy Commissioner of Income Tax CPC, Bengaluru . . . . . . . अपऩलधथी / Appellant बिधम / V/s. Supreme Equipments Private Limited B-19, NICE, MIDC, Satpur, Nashik. . . . . . . . प्रत्यथी / Respondent द्वारा / Appearances Assessee by : None for the Assessee Revenue by : Smt Shraddha Nichal सपिवधई की तधरऩख / Date of conclusive Hearing : 06/10/2023 घोर्णध की तधरऩख / Date of Pronouncement : 06/10/2023 आदेश / ORDER PER G. D. PADMAHSHALI, AM; This Miscellaneous application [for short ‘MA’] of the Revenue is directed against order of the Tribunal on passed u/s 254(1) of the Income-Tax Act, 1961 [for short ‘the Act’] dt. 05/09/2022 in ITA No. 224/PUN/2021 relation to Assessment Year 2019-20. Supreme Equipments Private Limited MA No. 088/PUN/2023 Arising out of ITA No. 224/PUN/2021 ITAT-Pune Page 2 of 5 2. In the absence of assessee, we proceeded to hear the matter ex-parte u/r 25 of ITAT-Rules, 1963 by placing on records able assistance from the Revenue side. 3. During the course of physical hearing, Smt Nichal appearing for the Revenue, adverting to the impugned order of this Tribunal submitted that, in the case of the assessee the return of income file on 31/10/2019 was proceeded by Ld. CPC u/s 143(1) by disallowing the payment of EPF & ESI paid beyond due date prescribed under relevant Act, but paid before filing of ITR u/s 139(1) of the Act, which came to be confirmed in an appeal before first appellate authority. However the Tribunal allowed the appeal of the assessee in the light of the decision of Hon’ble Apex Court in case of ‘CIT Vs Alom Extrusions Ltd.’ reported in 319 ITR 306 and the jurisdictional High Court of Bombay in ‘CIT Vs Ghatge Patil Transport Ltd.’ reported at 368 ITR 749. The Ld. DR further contended that, since former ratio has been overruled by their Lordships in ‘Checkmate Services P. Ltd. & Ors. VS. CIT’ (2022) 448 ITR 518 (SC), therefore the present MA filed seeking to recall of impugned order of this Tribunal for dismissal of assessee’s original appeal. Supreme Equipments Private Limited MA No. 088/PUN/2023 Arising out of ITA No. 224/PUN/2021 ITAT-Pune Page 3 of 5 4. We have heard the Revenue and gone through the relevant material on record. The admitted facts in this case are that the Tribunal allowed deduction u/s 36(1)(va) of the Act on the premise that the deposits were made prior to the due date u/s 139(1) of the Act. Such a view has since been overturned by the Hon’ble Supreme Court in ‘Checkmate Services P. Ltd. & Ors. VS. CIT’ (supra) 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. Thus rendered the earlier order of this Tribunal passed u/s 254(1) as erroneous. 5. It is seen that similar issue in miscellaneous application u/s.254(2) of the Act came up for consideration before the Tribunal in ‘ACIT Vs Winjit Tehnologies P. Ltd.’ (MA No. 384/Pun/2022), which was argued elaborately by both the sides. Taking note of all the arguments, the Tribunal has allowed the Miscellaneous application of the Department, vide its order dated 19/05/2023, by holding as under; `5. 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, Supreme Equipments Private Limited MA No. 088/PUN/2023 Arising out of ITA No. 224/PUN/2021 ITAT-Pune Page 4 of 5 including Nipso polyfabriks Ltd., granting deduction u/s.36(1)(va) of the 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). 6. The moot question is whether the subsequent judgment, which was not available at the time of passing of the order u/s 254(1) of the Act, would provide a foundation for rectification? It is fundamental that the Courts declare law and do not legislate. The 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 Vs. 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 earlier not correctly understood.’ Similar view was taken by the Full Bench of the Hon’ble Punjab & Haryana High Court in CIT Vs. Arun Luthra (2001) 252 ITR 76 (P&H) (FB). In that case also, it was argued on behalf of the assessee that a decision rendered by a court subsequent to the passing of the order cannot constitute an error apparent from the record so as to entitle an authority to proceed u/s.154. Rejecting such a 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 Vs. JCIT (2009) 34 SOT 541 (TM) holding that non-consideration of a judgment of the Hon’ble Supreme Court or that of the Hon’ble jurisdictional High Court delivered prior to or even subsequent to the order constitutes a mistake apparent from record. In view of the above discussion, it is observed and held that the subsequent judgment of the Hon’ble Supreme Court in Checkmate Services P. Ltd. denying the benefit of deduction has rendered the order u/s 254(1) erroneous necessitating its rectification in terms of section 254(2) of the Act.‟ (Emphasis supplied) Supreme Equipments Private Limited MA No. 088/PUN/2023 Arising out of ITA No. 224/PUN/2021 ITAT-Pune Page 5 of 5 6. As the facts and circumstances of the instant miscellaneous application are mutatis mutandis similar, we hold that the disallowance was called for; therefore the impugned order of this Tribunal (supra) is rectified to this extent & effect dismissing the corresponding grounds raised by the assessee therein. 7. Resultantly, the MA of the Revenue is allowed. U/r 34 of ITAT Rules, order pronounced in open court on this Friday 06 th day of October, 2023. -S/d- -S/d- SS VISWANETHRA RAVI G. D. PADMAHSHALI JUDICIAL MEMBER ACCOUNTANT MEMBER पुणे / PUNE ; दिन ांक / Dated : 06 th day of October, 2022. आदेश की प्रधिधलधप अग्रेधिि / Copy of the Order forwarded to : 1.अपील र्थी / The Appellant. 2. प्रत्यर्थी / The Respondent. 3. The Pr. CIT, Pune (Mh-India) 4. The CIT, Nashik (Mh-India) 5. DR, ITAT, Pune “B” Bench ,Pune. 6. ग र्डफ़ इल / Guard File. आिेश नुस र / BY Order, वररष्ठदनजीसदिव / Sr. Private Secretary आयकर अपीलीय न्य य दिकरण, पुणे / ITAT, Pune.