RAJESH SINHA,JAIPUR V. LD. INCOME TAX OFFICER, JAIPUR

ITA 154/JPR/2025

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The case involves Sh. Rajesh Sinha, who appealed against the order of the Central Processing Center which disallowed his claims for deductions towards ESI and PF contributions for the assessment year 2017-18, on the grounds that these were not paid by the due date. The Income Tax Appellate Tribunal, Jaipur, examined the merits of the case, including the application of the Finance Act, 2021, which introduced relevant provisions effective from April 1, 2021. The Tribunal found that the CIT(A) erred in applying these provisions retrospectively to the assessment year 2017-18. Additionally, the Tribunal noted an error in the calculation of the total amount of contributions considered by the Central Processing Unit, leading to a double counting of the amounts.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 312110 (ITAT-JAIPUR)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-04-2025
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: B
• Assessment Year: 2017-2018
• Other Referred Cases: Sanjay Kumar Agarwal vs State Tax Officer, Beghar Foundation vs. Justice K.S. Puttaswamy (Retired) and Others
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: SWAPNIL PARIHAR
• Assessee Lawyers: DIVYA PHOPHALIA; THROUGH V.C
• Keywords: Condonation of delay; Set aside; Opportunity of being heard; Retrospective amendment
• Section: 154; 43B

Judgement Text

" vk;dj vihyh; vf/kdj.k] t;iqj U;k;ihB] t;iqj IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHES,”B-Bench” JAIPUR Jh xxu xks;y] ys[kk lnL; ,oa Jh ujsUnz dqekj] U;kf;d lnL; ds le{k BEFORE: SHRI GAGAN GOYAL, AM & SHRI NARINDER KUMAR, JM vk;dj vihy la-@ITA No. 154/JPR/2025 fu/kZkj.k o\"kZ@Assessment Year : 2017-18 Sh. Rajesh Sinha 10, Cosmo Colony, Vaishali Nagar, Jaipur. cuke Vs. Ld. Income Tax Officer, Jaipur. LFkk;hys[kk la-@thvkbZvkj la-@PAN/GIR No.: AKJPS0241A vihykFkhZ@Appellant izR;FkhZ@Respondent fu/kZkfjrh dh vksjls@Assesseeby : Ms. Divya Phophalia, C.A. (through V.C.) jktLo dh vksjls@Revenue by: Mrs. Swapnil Parihar, JCIT-DR lquokbZ dh rkjh[k@Date of Hearing : 28/04/2025 mn?kks\"k.kk dh rkjh[k@Date of Pronouncement: 29/04/2025 vkns'k@ORDER PER: NARINDER KUMAR, JUDICIAL MEMBER . Present appeal came to be presented on 03.02.2025, while challenging order dated 26.09.2024, passed by Learned CIT(A), NFAC, Delhi, whereby appeal filed by the assessee challenging order dated 15.02.2022, passed by Central Processing Center, u/s 154 of the Income Tax Act, 1961 (hereinafter referred to as “the Act”), came to be dismissed. 2 ITA No. 154/JPR/2025 Sh. Rajesh Sinha, Jaipur 2. As noticed above, the impugned order is dated 26.09.2024. The appeal having been filed on 03.02.2025, the Registry raised deficiency note that the appeal is barred by limitation. That is how, the appellant-applicant filed an application seeking condonation of delay in filing the appeal. 3. Arguments heard. File perused. Issue of condonation of Delay 4. As regards condonation of delay in filing the appeal, Ld. AR for the applicant has submitted that the impugned order was not received by the assessee either personally or through electronic mode. At the same time, Ld. AR for the applicant has submitted that the applicant being a senior citizen of 66 years of age is not conversant with the use of portal or electronic communication, and as such he could not know about passing of the impugned order. Ld. AR has further submitted that the assessee came to know of the impugned order only when he found that refund as regards the assessment year 2024-25 stood adjusted by the department against demand relating to the assessment year 2017-18, and then, he having consulted his tax consultant on 07.01.2025. 5. A perusal of form 35 submitted before Learned CIT(A), while presenting the appeal against the assessment order, would reveal that e- 3 ITA No. 154/JPR/2025 Sh. Rajesh Sinha, Jaipur mail address i.e. [e-mail] was furnished as the address for the purpose of service of notices to the appellant, in addition to the local address at Jodhpur. 6. Neither in the application nor in the course of arguments, ld. AR for the appellant has explained as to whose e-mail address it was. It is not case of the applicant that the assessee did not avail of service of Chartered Accountant/Practitioner. In the given situation even it be assumed that the applicant was not acquainted with the process of the electronic communication or as to how to use e-mail portal, it was expected from him to be in regular touch with the Chartered Accountant /Practitioner, after having filed appeal. But, the applicant wants us to believe that he contacted the Tax consultant only on 07.01.2025, whereas the impugned order came to be passed on 26.09.2024. We of the view that the applicant was not diligent enough in pursuing the appellate proceedings. Having record to the facts and circumstances, and the issue involved, we deem it a fit case to condone the delay of 65 days, but, also to burden the applicant with costs due to his non diligence. 7. Delay in filing the appeal is condoned and for that the applicant to deposit costs of Rs. 1000/- with “Prime Minister’s National Relief Fund”. 4 ITA No. 154/JPR/2025 Sh. Rajesh Sinha, Jaipur On Merits 8. Ld. AR for the appellant and Ld. DR for the department have argued the appeal today itself even on merits. 9. As noticed above, Central Processing Centre rejected the application u/s 154 of the Act submitted by the appellant, who is proprietor of his proprietorship concern. While processing the income tax return furnished by the appellant, expenditure by the assessee towards ESI and PF were disallowed the reason being that the same were not paid on the due date. The contention Ld. AR for the appellant is that explanation to section 36(1)(va) and Section 43B of the Act came to be inserted by Finance Act, 2021, w.e.f. 01.04.2021, and as such, Learned CIT(A) fell in error in applying said provisions with retrospective effect, to the present case that pertains to the assessment year 2017-18. Ld. AR for the appellant has also submitted that the Central Processing Unit also fell in error in calculating the total amount of contributions towards ESI and PF i.e. Rs. 18,47,041/- twice, and thereby taking into consideration total sum of Rs. 36,49,080/- in place of Rs. 18,47,041/-. 5 ITA No. 154/JPR/2025 Sh. Rajesh Sinha, Jaipur 10. As is available from the impugned order, following amount towards ESI and PF contributions were disallowed:- Name of Fund Actual date Due date The actual amount paid Remarks Employees State Insurance 26-JUL-2016 21-Jul-2016 53789 Paid before due date of filing of return Employees State Insurance 01-Oct-2016 21-SEP-2016 47548 Paid before due date of filing of return Employees State Insurance 22-OCT-2016 21-OCT--2016 48084 Paid before due date of filing of return Employees State Insurance 22-NOV-2016 21-NOV-2016 54065 Paid before due date of filing of return Employees State Insurance 04.02.2017 21.01.2017 58110 Paid before due date of filing of return Employees State Insurance 08.03.2017 21.02.2017 55824 Paid before due date of filing of return Employees State Insurance 31.03.2017 21.03.2017 56826 Paid before due date of filing of return Employees State Insurance 24.05.2017 21.04.2016 73971 Paid before due date of filing of return Provident Fund 20.06.2016 15.05.2016 68162 Paid before due date of filing of return Provident Fund 25.06.2016 15.06.2016 83669 Paid before due date of filing of return Provident Fund 20.07.2016 15.07.2016 85784 Paid before due date of filing of return Provident Fund 08.09.2016 15.08.2016 67819 Paid before due date of filing of return Provident Fund 01.10.2016 15.09.2016 65581 Paid before due date of filing of return Provident Fund 19.11.2016 15.11.2016 66430 Paid before due date of filing of return Provident Fund 09.02.2017 15.01.2017 66286 Paid before due date of filing of return Provident Fund 17.02.2017 15.02.2017 54198 Paid before due date of filing of return Provident Fund 21.03.2017 15.03.2017 64310 Paid before due date of filing of return Provident Fund 25.05.2017 15.04.2017 78945 Paid before due date of filing of return Provident Fund 20.07.2016 15.07.2016 68785 Paid before due date of filing of return Provident Fund 26.11.2016 15.07.2016 2222 Paid before due date of filing of return Provident Fund 23.08.2016 15.07.2016 80001 Paid before due date of 6 ITA No. 154/JPR/2025 Sh. Rajesh Sinha, Jaipur filing of return Provident Fund 07.10.2016 15.09.2016 74461 Paid before due date of filing of return Provident Fund 07.10.2016 15.09.2016 74461 Paid before due date of filing of return Provident Fund 26.11.2016 15.10.2016 73244 Paid before due date of filing of return Provident Fund 26.11.2016 15.11.2016 74106 Paid before due date of filing of return Provident Fund 26.12.2016 15.12.2016 74830 Paid before due date of filing of return Provident Fund 09.02.2017 15.01.2017 80321 Paid before due date of filing of return Provident Fund 08.03.2017 15.02.2017 90305 Paid before due date of filing of return Provident Fund 30.05.2017 15.04.2017 79365 Paid before due date of filing of return Total 1847041 11. Learned CIT(A), while disposing of the appeal observed as under:- “4. I have examined the facts and legal issued involved in this case and gone through the order as well as grounds of appeal. The appellant has also relied upon various judgments of different courts of law on this issue. Since there are divergent views in this matter, the whole issue becomes contentious. This cannot, therefore, be said that there is an apparent mistake that had crept in the Order. It has been held by Hon'ble Supreme Court in Review Petition (Civil) no. 1620 of 2023 in Civil appeal no. 1661 of 2020 in the case of Sanjay Kumar Agarwal vs State Tax Officer that an error which is not self-evident and has to be detected by a process of reasoning, cannot be said to be an error apparent on the face of record and that an error on the face of record must be such an error which, mere looking at the record should strike and it should not require any long- drawn process of reasoning on the points where there may conceivably be two opinions. Relevant part of the decision is reproduced below- \"5. It is very pertinent to note that recently the Constitution Bench in Beghar Foundation vs. Justice K.S. Puttaswamy (Retired) and Others, 7 ITA No. 154/JPR/2025 Sh. Rajesh Sinha, Jaipur held that even the change in law or subsequent decision/ judgment of co- ordinate Bench or larger Bench by itself cannot be regarded as a ground for review. 6. The gist of the afore-stated decisions is that:- (i) A judgment is open to review inter alia if there is a mistake or an error apparent on the face of the record. (ii) A judgment pronounced the Court is final, and departur from that principle is justified only when circumstances of a substantial and compelling character make it necessary to do (iii) An error which is not self-evident and has to be detected by a process of reasoning, can hardly be said to be an error apparent on the face of record justifying the court to exercise its power of review. (iv) In exercise of the jurisdiction under Order 47 Rule 1 CPC, it is not permissible for an erroneous decision to be \"reheard and corrected.\" (v) A Review Petition has a limited purpose and cannot be allowed to be \"an appeal in disguise.\" (vi) Under the guise of review, the petitioner cannot be permitted to reagitate and reargue the questions which have already been addressed and decided. (vii) An error on the face of record must be such an error which, mere looking at the record should strike and it should not require any long- drawn process of reasoning on the points where there may conceivably be two opinions. (viii) Even the change in law or subsequent decision/ judgment of a co- ordinate or larger Bench by itself cannot be regarded as a ground for review.\" The above discussion makes it clear that the issue is a controversial one and is yet to attain finality. Despite, having been asked, vide DIN & letter no. ITBA/NFAC/F/APL_1/2024-25/1068113919(1) dated 29.08.2024, to furnish ground-wise written submission along with supporting 8 ITA No. 154/JPR/2025 Sh. Rajesh Sinha, Jaipur documentary evidence, the appellant failed to furnish any such evidence. Therefore, being a controversial issue, this issue is beyond the ambit of provisions of section 154 of the Act. Various courts of law have time and again held that any controversial issue cannot be entertained u/s 154 of the Act, as the same cannot be stated to be \"mistake apparent on record\". Therefore, there is no scope in interfering with the Order and it is upheld. 7. In the result, the appeal is hereby dismissed.” From the observations made by Learned CIT(A), it transpires that in his view there are divergent views as transpired from the decisions cited before him by Ld. AR for the appellant. In the relevant A.Y. 2017-18, in view of clause (va) of sub-section (1) of sec. 36 of the Act, deductions as regards the sums received by the assessee from his employees and credited by the assessee to the employee’s account in the relevant fund on or before due date, were to be allowed. In this regard, impugned order passed by Learned CIT(A) deserves to be set aside. It is ordered accordingly. In the given situation, Ld. DR for the department and Ld. AR also are in agreement that the sums needs to be recalculated by the A.O ,keeping in view the relief granted here, to rule out double counting of the amount by way of contributions towards ESI& PF. Result 12. In view of the above discussion, this appeal is disposed of for statistical purposes and the matter is remitted to Assessing Officer for 9 ITA No. 154/JPR/2025 Sh. Rajesh Sinha, Jaipur recalculation in accordance with law, and this decision after providing opportunity of being heard to the appellant. Receipt in proof of deposit of costs to be submitted before Learned Assessing Officer before commencement of the proceedings on remand. File be consigned to the record room after the needful is done by the office. Order pronounced in the open court on 29/04/2025. Sd/- Sd/- ¼xxu xks;y½ ¼ujsUnz dqekj½ (GAGAN GOYAL) (NARINDER KUMAR) ys[kk lnL; @Accountant Member U;kf;d lnL;@Judicial Member Tk;iqj@Jaipur fnukad@Dated:- 29/04/2025 *Santosh vkns'k dh izfrfyfi vxzsf’kr@Copy of the order forwarded to: 1. The Appellant- Sh. Rajesh Sinha, Jaipur. 2. izR;FkhZ@ The Respondent- Ld. Income Tax Officer, Jaipur. 3. vk;dj vk;qDr@ The ld CIT 4. foHkkxh; izfrfuf/k] vk;dj vihyh; vf/kdj.k] t;iqj@DR, ITAT, Jaipur 5. xkMZ QkbZy@ Guard File ITA No. 154/JPR/2025) vkns'kkuqlkj@ By order, lgk;d iathdkj@Asstt. Registrar "