INCOME TAX OFFICER-41(1)(3), MUMBAI V. NSS EQUIPMENTS INDIA LLP, MUMBAI

MA 97/MUM/2023

AI Insights

The case involves a Miscellaneous Application by the Revenue seeking to recall a Tribunal order that allowed deductions for employees' contributions to PF and ESI. The recall was based on a Supreme Court judgment which clarified that such contributions must be made within the due dates specified under respective laws to be deductible. The Tribunal acknowledged the error in its previous order and restored the appeal to its original number for re-examination under the new legal precedent.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 136065 (ITAT-MUMBAI)
• Duration Of Justice: 5 month(s) 13 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 06-07-2023
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 08-06-2023
• Assessment Year: 2018-2019
• Appeal Filed On: 23-01-2023
• Other Referred Cases: Checkmate Services India (Pvt.) Ltd. vs. CIT, 448 ITR 518(SC)
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Section: 143(3); 143(1); 254(2)

Judgement Text

म ु ंबई ठ “ ब ”, म ु ंबई , ए ं म ज त " ं#, ेख े म& IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH “ B”, MUMBAI BEFORE SHRI VIKAS AWASTHY, JUDICIAL MEMBER & SHRI AMARJIT SINGH, ACCOUNTANT MEMBER MA NO.97/MUM/2023 [Arising out of ITA No.1394/Mum/2021, A.Y.2018-19] Income Tax Officer – 41(1)(3), Room No.315, 3 rd Floor, G-Block, Kautilya Bhavan, Bandra Kurla Complex, Bandra (E),Mumbai – 400 051 ..... ' ( /Applicant बन म Vs. M/s. NSS Equipments India LLP, Shetty House, Panchsheel Nagar, Vasant Patil Marg, Sion, Chunabhatti, Mumbai – 400 022. PAN: AAKFN-7271-J ..... ' त /Respondent ITA No.1394/Mum/2021 (A.Y.2018-19) M/s. NSS Equipments India LLP, Shetty House, Panchsheel Nagar, Vasant Patil Marg, Sion, Chunabhatti, Mumbai – 400 022. PAN: AAKFN-7271-J ...... /Appellant बन म Vs. DCIT, CPC, Bangalore, 1 st Floor, Prestige Alpha No.48/1, 48/2, Beratenaagrahara Begur, Hosur Road, Uttarahallihobli, Bengaluru – 560 100. ..... ' त /Respondent Assessee by : Shri Bhupendra Shah Revenue by : Ms. Mahita Nair 2 MA NO.97/MUM/2023 & ITA No.1394/Mum/2021, A.Y.2018-19 ु न ई + त / Date of hearing : 09/06/2023 ,-. + त / Date of pronouncement : 07/07/2023 ेश/ ORDER PER VIKAS AWASTHY, JM: This Miscellaneous Application has been filed by the Revenue u/s. 254(2) of the Income Tax Act, 1961 [in short ‘the Act’] for recalling Tribunal order dated 24/05/2022 vide which the claim of the assessee in respect of Employees Contribution towards PF and ESI was allowed as deduction u/s. 36(1)(va) of the Act. 2. Ms. Mahita Nair representing the Department submitted that the Tribunal order dated 24/05/2022 requires rectification in the light of judgment passed by Hon'ble Supreme Court in the case of Checkmate Services India (Pvt.) Ltd. vs. CIT, 448 ITR 518(SC). 3. Per contra Shri Bhupendra Shah Appearing on behalf of the assessee opposed the Miscellaneous Application field by the assessee and submitted that the order of the Tribunal is in line with the law expounded by the Hon’ble Jurisdictional High Court High Court as was applicable at the time of passing the order. 4. Both sides heard. The issue regarding allowability of Employees share of contribution towards PF and ESI after the “due date” as specified under the respective laws has been laid to rest by Hon'ble Apex Court in the case of Checkmate Services India (Pvt.) Ltd. vs. CIT (supra). The Hon'ble Apex Court in an unambiguous manner has explained that the law has always been that Employees share of contribution towards PF and ESI is to be deposited before 3 MA NO.97/MUM/2023 & ITA No.1394/Mum/2021, A.Y.2018-19 the “due date” as explained under the respective laws. The said contribution made after due date under the respective laws is not an allowable deduction u/s. 36(1)(va) of the Act. Thus, in view of the settled legal position we find that an error had crept in the order of Tribunal dated 24/05/2022. Accordingly, the same is recalled and the appeal is restored to is original number. 5. In the result, the Miscellaneous Application filed by the Revenue is allowed. ITA No.1394/Mum/2021 6. With the concurrence of both sides, appeal of the assessee is taken up for hearing. Both sides heard, orders of authorities below examined. The short contention of Authorized Representative for the assessee is that the decision in the case of Checkmate Services India (Pvt) Ltd.(supra) is distinguishable, as in the said case assessment was made u/s. 143(3) of the Act, whereas in the case of assessee it is u/s. 143(1) of the Act. Once, it is evident from the records that payments in respect of employees contribution to PF and ESIC has been made beyond the “due date” as specified under the respective laws, the same has to be disallowed u/s 36(1)(va) of the Act. A perusal of section 143(1)(a)(ii) of the Act makes it clear that adjustment can be made in respect of an incorrect claim made that is apparent from the information in the return. The mandatory requirement before making adjustment is that intimation has to be given to the assessee. It is not disputed by the assessee that before making adjustment u/s. 143(1)(a) of the Act, notice was served on the assessee. Thus, disallowance was made after 4 MA NO.97/MUM/2023 & ITA No.1394/Mum/2021, A.Y.2018-19 following due procedure under the Act. The distinction put across by the ld. Authorized Representative for the assessee is devoid of any merit. 7. We deem it appropriate to restore the issue to the file of Assessing Officer for denovo adjudication in the light of judgment rendered in the case of Checkmate Services India (Pvt.) Ltd. vs. CIT (supra). The Assessing Officer shall grant reasonable opportunity for making submissions to the assessee, in accordance with law. 8. In the result, appeal of the assessee is allowed for statistical purpose. Order pronounced in the open Court on Friday the 07 th day of July, 2023 Sd/- Sd/- (AMARJIT SINGH) (VIKAS AWASTHY) $% /ACCOUNTANT MEMBER /JUDICIAL MEMBER म ु ंबई/ Mumbai, 0 * ं /Dated 07/07/2023 Vm, Sr. PS(O/S) त ल प अ े षतCopy of the Order forwarded to : 1. (/The Appellant , 2. ' ! / The Respondent. 3. ु 1! CIT 4. 2 3 ' ! * , . . ., म ु बंई/DR, ITAT, Mumbai 5. 3 56 7 8 /Guard file. BY ORDER, //True Copy// (Dy./Asstt. Registrar) ITAT, Mumbai