UCO BANK,KOLKATA V. D.C.I.T., CIRCLE - 5(1), KOLKATA

ITA 1800/KOL/2024

AI Insights

The case involves UCO Bank appealing against the order of the Commissioner of Income Tax (Appeals), which confirmed the disallowance of employees' contributions to the Provident Fund. The primary legal contention was whether the reopening of the assessment for the assessment year 2011-12 constituted a 'change of opinion' and was thus impermissible. The Tribunal considered the precedents set by the Supreme Court and the High Court regarding the interpretation of sections related to tax deductions for employees' contributions to Provident Fund. The Tribunal concluded that the reopening was valid and the disallowance was rightly confirmed based on the Supreme Court's interpretation, which is applicable retrospectively.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 33037 (ITAT-KOLKATA)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 24-03-2025
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2011-2012
• Other Referred Cases: Chekmate Services Pvt. Ltd. Vs. CIT, CIT Vs. Vijay Shree Ltd., CIT Vs. Alom Extrusion Ltd., Consolidated Photo & Finvest Ltd. Vs. ACIT
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: CHANDAN DAS
• Assessee Lawyers: SONU KUMAR AGARWAL
• Keywords: Difference of opinion; Change of opinion
• Section: 147; 250; 43

Judgement Text

"IN THE INCOME TAX APPELLATE TRIBUNAL “B” BENCH, KOLKATA BEFORE SHRI GEORGE MATHAN, JUDICIAL MEMBER AND SHRI SANJAY AWASTHI, ACCOUNTANT MEMBER ITA No. 1800/KOL/2024 Assessment Year: 2011-12 UCO Bank 10, B.T.M. Sarani, BBD Bag, Kolkata-700001. (PAN: AAACU3561B) Vs DCIT, circle-5(1), Kolkata. (Appellant) (Respondent) Present for: Appellant by : Shri Sonu Kumar Agarwal, AR Respondent by : Shri Chandan Das, Addl. CIT, Sr. DR Date of Hearing : 24.03.2025 Date of Pronouncement : 24.03.2025 O R D E R Per Bench : This is an appeal filed by the assessee against the order of the Ld. Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC), Delhi [hereinafter referred to as “the Ld. CIT(A)”] vide order no. ITBA/NFAC/S/250/2024-25/1066004130(1) dated 25.06.2024 passed u/s. 250 of the Income Tax Act, 1961 (hereinafter referred to as “the Act”) for AY 2011-12. 2. Shri Sonu Kumar Agarwal, AR appeared on behalf of the assessee and Shri Chandan Das, Addl. CIT, Sr. DR appeared on behalf of the revenue. 2 ITA No.1800/Kol/2024 UCO Bank AY: 2011-12 3. It was submitted by the Ld. AR that in ground nos. 1 and 2 the assessee has challenged the issue of reopening and in the other grounds issue was against the action of the Ld. CIT(A) in confirming the disallowance made by the Assessing Officer in respect of the employees’ contribution to Provident Fund to the extent of Rs.20,22,256/-. It was the submission that admittedly, the ld. CIT(A) has applied the principles laid down by the Hon’ble Supreme Court in the case of Chekmate Services Pvt. Ltd. Vs. CIT (2022) 143 taxmann.com 178 (SC). It was the submission by the Ld. AR that the assessment year involved is the assessment year 2011-12. The original assessment was completed in 2014 on 27.02.2014. Subsequently, the assessment had been reopened and the reassessment had been completed on 31.12.2017. It was the submission that the decision of the Hon’ble Supreme Court was on 12.10.2022. It was the submission that when the reopening was done the decision of the Hon’ble Supreme Court was not available and thus it could be stated that there is a change of opinion which has led to the reopening. It was the submission that in fact before 2022, the decision of the Hon’ble Calcutta High Court in the case of CIT Vs. Vijay Shree Ltd. [2014] 43 taxmann.com 396 (Calcutta) held the field in so far as the jurisdiction of West Bengal was concerned. It was further submitted that the decision in the case of CIT Vs. Alom Extrusion Ltd. [2009] 319 ITR 306 had been passed on 25.11.2009 and the said decision held the field. It was the submission that there was clearly a change of opinion which was not permissible for reopening. It was, however, fairly agreed by the Ld. AR that on merits, as on today, in view of the decision of the Hon’ble Supreme Court in the case of Chekmate Services Pvt. Ltd. (supra) the issue is against the assessee. 4. In reply, the Ld. Sr. DR relied on the decision of the Hon’ble Delhi High Court in the case of Consolidated Photo & Finvest Ltd. Vs. ACIT [2006] 151 Taxman 41 (Delhi) wherein it has been held that the principle of a mere 3 ITA No.1800/Kol/2024 UCO Bank AY: 2011-12 change of opinion cannot be a basis for reopening completed assessment would have no application where the order of assessment does not address itself to aspect which is the basis for reopening of the assessment. It was the submission that in the original assessment the issue of the employees’ contribution to PF was not an issue and the reopening was done only for the purpose of making the said disallowance. It was the submission that the reopening of the assessment is liable to be deleted. 5. We have considered the rival submissions. A perusal of the provisions of section 147 clearly shows that in Explanation 2(c) wherein if the income chargeable to tax has been underassessed then the reopening is permissible. It is trite law that once the Hon’ble Supreme Court passes an order in regard to the interpretation of any section then the said interpretation is deemed to be the actual interpretation from the time that such section or provision has been introduced in the Act. The decision of the Hon’ble Supreme Court in the case of Alom Extrusions Ltd. (supra) admittedly did not specifically deal with the employees’ contribution to PF/ESI. However, the Hon’ble Supreme Court’s decision in the case of Chekmate Services Pvt. Ltd. (supra) was clear cut on the issue, therefore, it needs to be held that the interpretation in regard to the employees’ contribution to PF and its applicability to section 36(1)(va) read with section 2(24(x) and section 43B, is applicable from the time the said provision was introduced. Once this principle is applied then the reopening as done by the Assessing Officer on the basis of the interpretation which is in line with the decision of the Hon’ble Supreme Court in the case of Chekmate Services Pvt. Ltd. (supra) would be applicable and the reopening is liable to be upheld and we do so. In the circumstances, we are of the view that the reopening of the assessment as done by the Assessing Officer and upheld by the Ld. CIT(A) is valid. In regard to the merits, the issue is squarely covered by the decision of the Hon’ble Supreme Court in the case of 4 ITA No.1800/Kol/2024 UCO Bank AY: 2011-12 Chekmate Services Pvt. Ltd. (supra). Consequently, the addition on merit stands sustained. 6. In the result, the appeal of the assessee is dismissed. Order dictated and pronounced in the open court. Sd/- Sd/- (Sanjay Awasthi) (George Mathan) Accountant Member Judicial Member Dated: 24th March, 2025 JD, Sr. P.S. Copy to: 1. The Appellant: UCO Bank 2. The Respondent. DCIT, Circle-5(1), Kolkata. 3. CIT(A), NFAC, Delhi 4. Pr. CIT 5. DR, ITAT, Kolkata Bench, Kolkata 6. Guard file. True Copy By Order Assistant Registrar ITAT, Kolkata "