Income Tax Appellate Tribunal - Raipur
Deputy Commissioner Of Income Tax ... vs Bec Projects Limited, Bhilai on 12 May, 2023
आयकर अपील य अ धकरण यायपीठ "एक-सद य" मामला रायपुर म
IN THE INCOME TAX APPELLATE TRIBUNAL
RAIPUR BENCH "SMC", RAIPUR
ी रवीश सूद, या यक सद य के सम
BEFORE SHRI RAVISH SOOD, JUDICIAL MEMBER
Sl. MA No. Name of Applicant Name of Respondent Asst.
No. Year
1. 44/RPR/2023 The DCIT, Circle- M/s. BEC Projects 2013-14
(Arising out of ITA 1(1), Bhilai Limited
No.88/RPR/2019) 82-83, Commercial
Complex,
Nehru Nagar (East)
Bhilai (C.G.)-490 020
PAN : AAACB9275H
Assessee by : Shri S.R. Rao, Advocate
Revenue by : Shri Piyush Tripathi, Sr. DR
Sl. MA No. Name of Applicant Name of Respondent Asst.
No. Year
2. 45/RPR/2023 The DCIT, CPC, Pramod Kumar Chand 2018-19
(Arising out of ITA Bengaluru Through legal heir Smt.
No.105/RPR/2022) Mira Chand
Shop NO.21/D,
Ganesh Commercial
Complex, Shakti Vihar,
Risali, Bhilai (C.G.)-
491 006
PAN : ABYPC5807E
Assessee by : None
Revenue by : Shri Piyush Tripathi, Sr. DR
2
MA No. 44/RPR/2023 & 5 others
Sl. MA Nos. Name of Applicant Name of Respondent Asst.
No. Year
3-4. 46/RPR/2023 The Assessing Shri Shivendra Singh 2018-19
47/RPR/2023 Officer, Ward- Paras Bhander Road, 2019-20
(Arising out of ITA 3(1), Raipur (CG.) Civil Lines, Baloda
Nos.12 & Bazar, Bhatapara,
13/RPR/2022) Raipur (C.G.)-493 332
PAN : BIUPS2187P
Assessee by : Shri S.R. Rao, Advocate
Revenue by : Shri Piyush Tripathi, Sr. DR
Sl. MA No. Name of Applicant Name of Respondent Asst.
No. Year
5. 48/RPR/2023 The DCIT (CPC), M/s. R.N Construction 2019-20
(Arising out of ITA Bengaluru ,
No.105/RPR/2021) House No.6/37, Ispat
Nagar, Risali, Bhilai
(C.G.)-490 001
PAN : AAGFR7299L
Assessee by : Shri R.B Doshi, CA
Revenue by : Shri Piyush Tripathi, Sr. DR
Sl. MA No. Name of Applicant Name of Respondent Asst.
No. Year
6. 49/RPR/2023 The Assessing Rajhara Engineering 2018-19
(Arising out of ITA Officer, Ward- Works Sahkari Samiti
No.110/RPR/2021) 1(2), Bhilai (C.G.) Maryadit
Shop No.29, Shopping
Complex, Dalli
Rajhara (C.G.)-491 228
PAN : AAGFR3974A
Assessee by : Shri S.R. Rao, Advocate
Revenue by : Shri Piyush Tripathi, Sr. DR
3
MA No. 44/RPR/2023 & 5 others
सुनवाई क तार ख / Date of Hearing : 20.02.2023
घोषणा क तार ख / Date of Pronouncement : 12.05.2023
आदे श / ORDER
PER RAVISH SOOD, JM
The captioned miscellaneous applications filed by the department are arising out of the respective orders of the Tribunal, wherein the additions made by the A.O of the delayed deposit of employee's share of contributions towards labour welfare funds, viz. Employee's Provident fund (EPF) and Employee's State Insurance (ESI) by the respective assessee's was vacated by the Tribunal. It is stated by the department that as the aforesaid orders of the Tribunal are not found to be in conformity with the recent judgement of the Hon'ble Supreme Court in the case of Checkmate Services Pvt. Ltd. Vs. Commissioner of Income Tax-I, Civil Appeal No.2833 of 2016 dated 12.10.2022, thus, the same suffers from a mistake which being glaring, apparent, patent and obvious from record had rendered the same amenable for rectification under sub-section (2) of Section 254 of the Act.
4
MA No. 44/RPR/2023 & 5 others
2. As a common issue is involved in the aforesaid applications, therefore, I shall dispose off the same by way of a consolidated order. I shall for the sake of convenience take up the MA No.44/RPR/2023 (arising out of ITA No.88/RPR/2019) as the lead matter, and the order therein passed shall apply mutatis- mutandis for the purpose of disposing off the remaining applications.
3. On a perusal of the miscellaneous application filed by the department in MA No.44/RPR/2023, I find that the revenue applicant under sub-section (2) of Section 254 of the Act has sought for recalling of the order passed by the Tribunal while disposing off the appeal in ITA No.88/RPR/2019, stating as under (relevant extract):
"Before the ld Members of ITAT, in connection with filing of the present Miscellaneous Application, the A.O relies upon the latest judicial pronouncement of the Hon'ble Supreme Court of India in the case of Checkmate Services Pvt Ltd v/s Commissioner of Income Tax 1 Civil Appeal NO. 2833 OF 2016 in their order dated 12.10.2022 wherein an elaborate discussion was made in r/o the provisions of section 2(24)(x), 36(1)(va) 85 section 43B of the Act and after making detailed discussion, in the conclusion, it was held that -
"53. The distinction between an employer's contribution which is its primary liability under law - in terms of Section 36(1)(iv), and its liability to deposit amounts received by it or deducted by it (Section 36(1)(va)) is, thus crucial. The former forms part of the employers' income, 5 MA No. 44/RPR/2023 & 5 others and the later retains its character as an income (albeit deemed), by virtue of Section 2(24)(x) - unless the conditions spelt by Explanation to Section 36(1)(va) are satisfied i.e., depositing such amount received or deducted from the employee on or before the due date. In other words, there is a marked distinction between the nature and character of the two amounts - the employer's liability is to be paid out of its income whereas the second is deemed an income, by definition, since it is the deduction from the employees' income and held in trust by the employer. This marked distinction has to be borne while interpreting the obligation of every assessee under Section 43B."
"54. In the opinion of this Court, the reasoning in the impugned judgment that the non-obstante clause would not in any manner dilute or override the employer's obligation to deposit the amounts retained by it or deducted by it from the employee's income, unless the condition that it is deposited on or before the due date, is correct and justified. The non-obstante clause has to be understood in the context of the entire provision of Section 43B which is to ensure timely payment before the returns are filed, of certain liabilities which are to be borne by the assessee in the form of tax, interest payment and other statutory liability. In the case of these liabilities, what constitutes the due date is defined by the statute. Nevertheless, the assessees are given some leeway in that as long as deposits are made beyond the due date, but before the date of filing the return, the deduction is allowed. That, however, cannot apply in the case of amounts which are held in trust, as it is in the case of employees' contributions- which are deducted from their income. They are not part of the assessee employer's income, nor are they heads of deduction per se in the form of statutory pay out. They are others' income, monies, only deemed to be income, with the object of ensuring that they are paid within the due date specified in the particular law. They have to be deposited in terms of such welfare enactments. It is upon deposit, in terms of those enactments and on or before the due dates mandated by such concerned law, that the amount which is otherwise retained, and deemed an income, is treated as a deduction. Thus, it is an essential condition for the deduction that such amounts are deposited on or before the due date. If such interpretation were to be adopted, the non-obstante clause under Section 43B or 6 MA No. 44/RPR/2023 & 5 others anything contained in that provision would not absolve the assessee from its liability to deposit the employee's contribution on or before the due date as a condition for deduction.
In the light of the above reasoning, this court is of the opinion that there is no infirmity in the approach of the impugned judgment. The decisions of the other High Courts, holding to the contrary, do not lay down the correct law. For these reasons, this court does not find any reason to interfere with the impugned judgment. The appeals are accordingly dismissed."
2. Therefore, looking to the above facts 86 circumstances of the case as also considering the judgement of Hon'ble Supreme Court in the case of Checkmate Services Pvt Ltd v/s Commissioner of Income Tax 1 Civil Appeal No. 2833 OF 2016 in their order dated 12.10.2022, the Miscellaneous Application is being filed before the Hon'ble ITAT for rectification of the mistake in their order in ITA No.88/RPR/2019 dated 14.9.2022 wherein the Ld. Members have allowed the assessee's appeal on the issue of the addition of Rs 16,15,349/- which was made on account of delayed payment of the Employees Provident Fund/ESI Fund those were not paid to the respective funds on or before the due dates will have to be taxed as income of the assessee employer under section 2(24)(x) r.w.s. 36(1)(va) of the Income Tax Act 1961."
4. I have heard the ld. Authorized Representatives of both the parties, perused the material available on record a/w. the respective written submissions filed by them, as well as considered the judicial pronouncements that have been pressed into service by them to drive home their respective contentions.
5. Issue leading to filing of the present miscellaneous application by the department lies in a narrow compass, i.e. as to 7 MA No. 44/RPR/2023 & 5 others whether or not the order passed by the Tribunal while disposing off the appeal not being in conformity with the subsequent judgment of the Hon'ble Supreme Court in the case of Checkmate Services P. Ltd. Vs. Commissioner of Income Tax-I, Civil Appeal No.2833 of 2016 dated 12.10.2022, had thus rendered the same as suffering from a mistake, which being manifest on the face of the record makes it amenable for rectification under sub-section (2) of Section 254 of the Act?
6. It is the claim of the Ld. Departmental Representative ("DR", for short) that as the view taken by the Tribunal that the assessee as per Section 43B of the Act was entitled for deduction of its delayed deposit of employees share of contributions towards Employees Provident Fund (EPF) and Employees State Insurance (ESI) is not in conformity with the subsequent judgment of the Hon'ble Supreme Court in the case of Checkmate Services P. Ltd. Vs. Commissioner of Income Tax-I, Civil Appeal No.2833 of 2016 dated 12.10.2022, wherein the Hon'ble Apex Court, had held, that as per the provisions of Section 2(24)(x) r.w.s.36 (1)(va) of the Act such delayed deposits were not to be allowed as a deduction in the hands of the assessee, therefore, the same had rendered 8 MA No. 44/RPR/2023 & 5 others its order that was passed while disposing off the appeal as suffering from a mistake which being apparent from record is amenable for rectification under sub-section (2) of Section 254 of the Act. The Ld. DR in order to support his contention that pursuant to the order of the Hon'ble Apex Court in the case of Checkmate Services Pvt. Ltd. (supra), the order passed by the Tribunal, taking a view to the contrary, was amenable for rectification under sub-section (2) of Section 254 of the Act, had relied on the judgment of the Hon'ble Apex Court in the case of ACIT Vs. Saurashtra Kutch Stock Exchange Ltd. (2008) 305 ITR 227 (SC) and that of Hon'ble Punjab & Haryana High Court in the case of CIT Vs. Smt. Aruna Luthra (2001) 252 ITR 76 ( P & H).
7. It was submitted by the ld. DR, that the Hon'ble Apex Court in its recent judgment in the case of Checkmate Services Pvt. Ltd. Vs. Commissioner of Income Tax-I (supra), had held that the delayed deposit of the amount of employees share of contribution towards labour welfare funds by the assessee-employer was not to be allowed as a deduction under section 2(24)(x) r.w.s.36(1)(va) of the Act. Carrying his contention further, it was submitted by the ld. DR that the Hon'ble Apex Court, had observed, that as the 9 MA No. 44/RPR/2023 & 5 others assessee is not absolved from its obligation to deposit the employees share of contributions on or before the "due date" as contemplated in the respective Labour Welfare Acts, a pre- condition for claiming the same as a deduction under Section 2(24)(x) r.w.s. 36(1)(va) of the Act, therefore, it would not be saved by the non-obstante clause of Section 43B of the Act. It was submitted by the ld. DR, that as the view taken by Tribunal while disposing off the captioned appeals was not found to be in conformity with the subsequent judgment of the Hon'ble Apex Court in the case of Checkmate Services (P) Ltd. (supra), therefore, the same were amenable for rectification under sub- section (2) of Sec. 254 of the Act.
8. Per contra, Shri S.R Rao, Advocate (for assessee respondents at Sr Nos. 1, 3-4 & 6) and Shri R.B Doshi (for assessee respondent at Sr. No.5), the Ld. Authorized Representatives ("ARs", for short), had come forth with multi- facet contentions, to drive home their claim that the orders passed by the Tribunal while disposing off the appeals were not amenable for rectification under sub-section (2) of Section 254 of 10 MA No. 44/RPR/2023 & 5 others the Act. I shall hereinafter deal with the respective contentions of the Ld. ARs.
9. The Ld. ARs had objected to the miscellaneous applications filed by the department. It was submitted by the Ld. ARs that the Tribunal was divested of its jurisdiction to carry out rectification of its orders u/s.254(2) of the Act on the basis of the subsequent judgment of the Hon'ble Apex Court in the case of Checkmate Services Pvt. Ltd. Vs. Commissioner of Income Tax-I (supra). The Ld. ARs in order to fortify their contention had drawn support from a host of judicial pronouncements, as under :-
(i) Sree Palaniappa Transports Vs. CIT (1999) 156 CTR (Mad) 324
(ii) CIT Vs. K. Venkateshwar Rao (1988) 169 ITR 330 (AP)
(iii) Jiyajeerao Cotton Mills Ltd. Vs. ITO (1981) 130 ITR 710 (Cal)
(iv) Mepco Industries Ltd. Vs. CIT & Ors. (2009) 319 ITR 208 (SC).
(v) CIT Vs. Thambi Modern Spinning Mills Ltd. (2012) 341 ITR 229 (Mad.)
(vi) Dinosour Steels Ltd. Vs. JCIT (2012) 349 ITR 360 (SC)
(vii) CIT Vs. Reliance Telecom Ltd. (2022) 440 ITR 1 (SC) 11 MA No. 44/RPR/2023 & 5 others
10. I shall hereinbelow deal with the respective judicial pronouncements relied upon by the Ld. AR's, as under:
(A) Sree Palaniappa Transports Vs. CIT (1999) 156 CTR (Mad) 324
11. As regards the reliance placed by the Ld. ARs on the aforesaid judgment, to drive home their contention that a subsequent decision of the Hon'ble Apex Court would not render an earlier order of the Tribunal taking a view to the contrary, amenable for rectification u/s.254(2) of the Act, I am unable to concur with the same. I, say so, for the reason that the Hon'ble Apex Court in the case of ACIT Vs. Saurashtra Kutch Stock Exchange Ltd. (2008) 305 ITR 227 (SC), had observed, that if a point is covered by a decision of the Hon'ble Jurisdictional High Court or Hon'ble Supreme Court rendered prior to or even subsequent to the order proposed to be rectified, then, it could be said to be a mistake apparent from record u/s. 254(2) of the Act and could be corrected by the Tribunal. It was observed by the Hon'ble Apex Court, that if a subsequent decision altered the earlier one, then the later decision does not lay down any new law but only discovers the correct principle of law which had to be 12 MA No. 44/RPR/2023 & 5 others applied retrospectively. It was further observed by the Hon'ble Apex Court that 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.
(B) CIT Vs. K. Venkateshwar Rao (1988) 169 ITR 330 (AP)
12. On a careful perusal of the aforesaid judicial pronouncement, I find that the Ld. ARs had misconstrued the facts involved in the said case. Controversy involved in the aforesaid case, was as to whether or not the amount of tax paid by the assessee after the prescribed date could be considered as a payment towards advance tax, and thus, be eligible for interest on the same u/s.214 of the Act. Although the A.O had earlier treated the amount of tax paid by the assessee as an advance tax and allowed interest u/s.214 of the Act, but thereafter he had withdrawn the same vide his order u/s.154 of the Act dated 30.08.1977.
13. On appeal, the Appellate Assistant Commissioner of Income Tax (AAC) reversed the order of the ITO, and held that the 13 MA No. 44/RPR/2023 & 5 others assessee was duly entitled for interest u/s. 214 of the Act. On further appeal, the Tribunal did not find favour with the exercise of jurisdiction u/s.154 of the Act by the ITO and thus, dismissed the appeal filed by the revenue. On further appeal, it was the claim of the department before the Hon'ble High Court that as the issue was squarely covered by the judgment of the Hon'ble High Court in the case of Kangundi Industrial Wors (P) Ltd. (1980) 121 ITR 339 dated 06.03.1979, therefore, the A.O had rightly assumed jurisdiction and rectified his order u/s.154 of the Act. However, it was observed by the Hon'ble High Court that as the decision in Kangundi Industrial Works (P) Ltd. (supra) was rendered on March 6, 1979, while for the A.O had passed the rectification order u/s.154 of the Act on 30.08.1977, therefore, the proceedings initiated by the ITO for rectification of the alleged mistake were not with reference to the aforesaid judgment of the Hon'ble High Court which came much later.
14. On the basis of the aforesaid facts involved in the aforesaid order of the Hon'ble High Court, I am of the considered view, that the facts therein involved are clearly distinguishable as against those involved in the case before me. As the Hon'ble High Court 14 MA No. 44/RPR/2023 & 5 others in its order had no occasion to adjudicate as to whether or not a subsequent judgment of the Hon'ble Jurisdictional High Court or that of the Hon'ble Apex Court would render the orders of lower authorities, taking a view to the contrary amenable for rectification, therefore, the same by no means would assist the case of the assessee before me.
(C) Jiyajeerao Cotton Mills Ltd. Vs. ITO (1981) 130 ITR 710 (Cal)
15. As regards the reliance placed by the Ld. AR on the judgment of the Hon'ble High Court of Calcutta in the case of Jiyajeerao Cotton Mills Ltd. Vs. ITO, (1981) 130 ITR 710 (Cal.), I find that the Hon'ble High Court had observed, that as the law laid down by the Hon'ble Supreme Court cannot be said to have retrospective operation in the sense that although a debate, doubt or conflict of a judicial opinion is resolved and settled by the Supreme Court but it does not obliterate the existence of such debate, doubt or conflict prior to such decision. As the Hon'ble Apex Court in the case of Saurashtra Kutch Stock Exchange Ltd. (supra) and Model Mills Nagpur Ltd. (supra), had held, that if a point is covered by a decision of the Hon'ble Jurisdictional High Court or that of the Hon'ble Supreme Court rendered prior to or 15 MA No. 44/RPR/2023 & 5 others even subsequent to the order proposed to be rectified, then, it could be said to be a mistake apparent from record u/s. 254(2) of the Act and could be corrected by the Tribunal, therefore, I respectfully follow the aforesaid judgments of the Hon'ble Apex Court and is unable to concur with the contentions placed by the Ld. AR.
(D) Mepco Industries Ltd. Vs. CIT & Ors. (2009) 319 ITR 208 (SC).
16. Although at the first blush the reliance placed by the Ld. AR's on the aforesaid judgment appeared to be very convincing, but as the facts involved in the case of Mepco India Ltd. (supra) are found to be distinguishable as against those involved in the case before me, therefore, the reliance placed on the same would not assist their case. In the case before the Hon'ble Apex Court, the assessee appellant which was engaged in the business of manufacturing of potassium chlorates had received power subsidy for two years. The power subsidy received was initially offered by the assessee as a "revenue receipt" in its return of income. However, the assessee thereafter in its application filed u/s. 264 of the Act by relying upon the judgment of the Hon'ble 16 MA No. 44/RPR/2023 & 5 others Apex Court in the case of CIT Vs. P.J. Chemicals Ld., (1994) 210 ITR 830 (SC), had claimed that the amount of subsidy received was a "capital receipt" and hence, not liable to be taxed. The aforesaid revision petition filed by the assessee applicant u/s.264 of the Act was allowed by the CIT vide his order dated 30.04.1997. Subsequent to the aforesaid order, the Hon'ble Apex Court in the case of Sahney Steel and Press Works Ltd. (1997) 228 ITR 258 (SC) had held that the incentive subsidy in the case before them was a "revenue receipt" and hence, was liable to be taxed u/s.28 of the Act. The decision of the Hon'ble Apex Court was based on a detailed examination of the subsidy scheme formulated by the Government of Andhra Pradesh. It was observed by the Hon'ble Apex Court that the incentives would not be available until and unless production had commenced. The Hon'ble Apex Court had observed, that as the incentives which were given as refund of sales tax and subsidy on power consumed for production to which the assessee was entitled only after commencing its production, and was not in the nature of a payment made directly or indirectly for setting up the industries, therefore, the same was a "revenue receipt". The CIT after considering the judgment of the 17 MA No. 44/RPR/2023 & 5 others Hon'ble Apex Court in the case of Sahney Steel and Press Works Ltd. (supra) dated 19.09.1997, vide his order of rectification u/s.154 dated 30.03.1998, held that as the power tariff subsidy received by the assessee after commencement of its business was an operational subsidy, therefore, the same was not a "capital receipt".
17. Aggrieved the assessee carried the matter by way of a writ petition before the Hon'ble High Court of Madras. The Hon'ble High Court, concluded, that the CIT subsequent to the judgment of Hon'ble Apex Court in the case of Sahney Steel and Press Works Ltd. (supra) was right in treating the receipt of subsidy as a "revenue receipt".
18. On further appeal, the Hon'ble Apex Court after deliberating on the scope of Section 154 of the Act, observed, that as the same was taken recourse to by the CIT on the basis of a "change of opinion", therefore, he had clearly exceeded his jurisdiction. At this stage, it would be relevant to point out that the Hon'ble Apex Court, had observed, that as the issue that had formed the very basis for rectification of the order u/s.154 of the Act required 18 MA No. 44/RPR/2023 & 5 others examination of the nature of subsidy that was received by the assessee, therefore, the said exercise could not have been undertaken by the CIT in the garb of his jurisdiction for rectifying a mistake. Apart from that, it was observed by the Hon'ble Apex Court that as the CIT while passing order u/s.264 of the Act dated 30.04.1997 had taken a view that the subsidy received by the assessee was not taxable as it was a "capital receipt", therefore, the view subsequently taken by him to the contrary after the judgment of the Hon'ble Apex Court in the case of Sahney Steel and Press Works Ltd. (supra) by treating the said subsidy as a "revenue receipt" was a classic illustration of "change of opinion." In sum and substance, as the CIT while taking recourse to Section 154 of the Act had recharacterized the subsidy received by the assessee as a "revenue receipt", which was earlier held by him vide his order passed u/s.264 of the Act dated 30.04.1997 as a "capital receipt", it was, thus, on the basis of the said fact that the Hon'ble Apex Court had held that jurisdiction for rectifying a mistake could not have been assumed on the basis of a "change of opinion".
19
MA No. 44/RPR/2023 & 5 others
19. I am unable to persuade myself to subscribe to the claim of the Ld. AR's that the Hon'ble Apex Court in the case of Mepco Industries Ltd. Vs. CIT(supra), had held that an order passed by the Tribunal which is not found to be in conformity with the ratio decidendi of a subsequent judgment of the Hon'ble Apex Court cannot be rectified under sub section (2) of Section 254 of the Act. Considering the distinguishable facts that were involved in the case of Mepco Industries Ltd. Vs. CIT (supra), I am of the considered view that as in the case of the present assessee before me the department is only seeking rectification of the order passed by the Tribunal, i.e. for the limited purpose of bringing the same in conformity with the judgment of the Hon'ble Supreme Court in the case of Checkmate Services Pvt. Ltd. Vs. Commissioner of Income Tax-I (supra), therefore, the reliance placed by the Ld. ARs on the aforesaid judgment would by no means assist their case.
(E) CIT Vs. Thambi Modern Spinning Mills Ltd. (2012) 341 ITR 229 (Mad.)
20. Controversy involved in the aforementioned order was that as on the date of assessment, there was a divergence of opinion 20 MA No. 44/RPR/2023 & 5 others and the issue was highly debatable, then, would the same fall within the purview of mistake of fact on the face of record, and therefore, be amenable for rectification u/s.154 of the Act? Once again, I am of the considered view that as the aforesaid judgment does not address the issue as is there before me, i.e. as to whether or not a subsequent judgment of the Hon'ble Supreme Court, would render an order of the Tribunal taking a view to the contrary amenable for rectification under sub-section (2) of Section 254 of the Act, therefore, the same too would by no means assist the assessee's case.
(F) Dinosour Steels Ltd. Vs. JCIT (2012) 349 ITR 360 (SC)
21. Considering the fact that the provisions of Chapter VI-A of the Act particularly those dealing with quantification of deductions had been amended several times, the Hon'ble Apex Court, had observed that there was no patent mistake in the assessment order allowing the assessee's claim of deduction u/s.80-IA before setting off the earlier year's losses and therefore, Section 154 was not applicable. The Hon'ble High Court had allowed the assessee's appeal in the aforesaid case, and held that the assessee's claim of deduction u/s.80-IA could not have been 21 MA No. 44/RPR/2023 & 5 others withdrawn u/s.154 of the Act, as it was not a case involving a patent mistake. In my considered view as the aforesaid judgement does not address the issue involved in the present set of applications before me, therefore, the same too would be of no assistance to the case of the assessees.
(G) CIT Vs. Reliance Telecom Limited (2022) 440 ITR 1(SC)
22. I shall now deal with the reliance placed by the Ld. ARs on the judgment of the Hon'ble Apex Court in the case of CIT Vs. Reliance Telecom Limited (2022) 440 ITR 1 (SC). The Ld. ARs by referring to the aforesaid judgment had drawn support from the observation of the Hon'ble Apex Court, wherein it was observed that the powers u/s.254(2) of the Act are akin to those under Order XLVII, Rule 1 of the Code of Civil Procedure, 1908. The Ld. ARs referred to aforesaid observations of the Hon'ble Apex Court, in the backdrop of Order XLVII, Rule 1 of the Code of Civil Procedure (5 of 1908).
23. The Ld. ARs submitted, that as per "Explanation" to Order XLVII, Rule 1 of the Code of Civil Procedure (5 of 1908), as a subsequent decision of a superior court cannot form a ground for 22 MA No. 44/RPR/2023 & 5 others the review of a judgment, therefore, the power vested with the Tribunal u/s.254(2) of the Act, which have been held by the Hon'ble Apex Court to be akin were to be similarly construed. To sum up, the Ld. ARs by drawing support from the restriction placed on the powers of a court to review its order, had assailed the seeking of rectification of the order of the Tribunal, which the department had sought under section 254(2) of the Act on the basis of the subsequent judgment of the Hon'ble Apex Court in the case of Checkmate Services Pvt. Ltd. Vs. Commissioner of Income Tax-I (supra).
24. I have given a thoughtful consideration to the aforesaid contention of the Ld. ARs and is unable to persuade myself to subscribe to the same. The Hon'ble Apex Court in the case of CIT(IT-4) Vs. Reliance Telecom Limited (2021) 133 taxmann.com 41 (SC), had held that the powers vested with the Tribunal under section 254(2) of the Act are akin to Order XLVII, Rule 1 of CPC. However, the Ld. ARs had erred in loosing sight of the context in which the said observations were recorded by the Hon'ble Apex Court. The Hon'ble Apex Court, had observed, that in the case before it the Tribunal which had originally passed a detailed order 23 MA No. 44/RPR/2023 & 5 others and held the payment made by the assessee company for purchase of software, as royalty, had thereafter, in exercise of powers u/s.254(2) completely recalled its earlier order dated 06.09.2013 and re-heard the entire appeal on merits as if it was deciding the appeal against the order passed by the CIT. It was observed by the Hon'ble Apex Court that the Tribunal in exercise of powers under section 254(2) could only rectify/correct any mistake apparent from record. In our considered view, the reference by the Hon'ble Apex Court to Order XLVII, Rule 1 of CPC, 1908 was for the purpose of making it clear that the Tribunal in exercise of powers vested u/s. 254(2) cannot revisit its earlier order and go into the details on merits. The Ld. ARs interpretation, if accepted, would mean that the Tribunal in exercise of Section 254(2) can review an order. The Hon'ble Apex Court in its order had clearly observed, that the Tribunal in exercise of powers u/s. 254(2) cannot review its order, i.e. revisit its earlier order and go into details on merits. Be that as it may, it was clearly observed by the Hon'ble Court, that the Tribunal in exercise of powers u/s.254(2) can only rectify/correct any mistake apparent from record. Our aforesaid view is supported 24 MA No. 44/RPR/2023 & 5 others by the judgment of a three judge bench of the Hon'ble Apex Court in the case of Income Tax Officer Vs. Ashok Textiles Ltd. (1961) 41 ITR 732 (SC). The Hon'ble Apex Court in its aforesaid order in the case of Ashok Textiles Ltd. (supra) that was rendered in context of Section 35 of 1922 Act (pari materia to Section 154), had observed that the restrictive operation of power of review under Order XLVII, Rule 1 of Code of Civil Procedure, 1908 is not applicable in case of Section 35 of 1922 Act. I, thus, am of the considered view, that as held by the Hon'ble Apex Court in the case of Reliance Telecom Limited (supra) though the Tribunal u/s.254(2) can rectify/correct any mistake apparent from record but it cannot review its order, i.e. revisit its earlier order and go into details on merits, therefore, the contention of the Ld. ARs who have tried to read the restriction placed on review of an order by a court as provided in the "Explanation" to order XLVII, Rule 1 into the scope of powers of the Tribunal to rectify any such mistake apparent from record cannot be accepted. On the contrary, I find that the issue leading to filing of the present miscellaneous applications by the department, i.e. as to whether an order passed by the Tribunal while disposing off an appeal can 25 MA No. 44/RPR/2023 & 5 others be rectified u/s. 254(2) of the Act for the purpose of bringing the same in conformity with a subsequent judgment of the Hon'ble Apex Court; or that of the Hon'ble Jurisdictional High Court is squarely covered by the judgments of the Hon'ble Apex Court in the case of ACIT Vs. Saurashtra Kutch Stock Exchange Ltd. (2008) 305 ITR 227 (SC) and S.A.L Narayana Row, CIT Vs. Model Mills Nagpur Ltd. (1967) 64 ITR 67 (SC) and thus, is no more res- integra.
25. I have given a thoughtful consideration to the issue before me and am unable to persuade myself to subscribe to the contentions advanced by the Ld. ARs for the respective assessees. Admittedly, it is a matter of fact borne from record that the view taken by the Tribunal, wherein it had vacated the additions made by the AO's w.r.t delayed deposit of employee's share of contribution towards labour welfare funds, viz. EPF & ESI by the respective assessee-employers, i.e. beyond the stipulated time period contemplated in the said respective Acts is not in conformity with the view taken by the Hon'ble Apex Court in the case of Checkmate Services Pvt. Ltd. Vs. Commissioner of Income Tax-I (supra). The genesis of the present controversy, is as to 26 MA No. 44/RPR/2023 & 5 others whether or not the aforesaid subsequent judgment of the Hon'ble Apex Court would render the orders passed by the Tribunal while disposing off the appeals, wherein a view to the contrary had been taken, as suffering from a mistake which being apparent, patent, obvious and glaring from record would render the same amenable for rectification u/s. 254(2) of the Act?
26. In my considered view, the aforesaid issue can safely be resolved by referring to the judgment of the Hon'ble Supreme Court in the case of ACIT Vs. Saurashtra Kutch Stock Exchange Ltd. (2008) 305 ITR 227 (SC). The Hon'ble Apex Court by referring to the order of the Hon'ble High Court of Gujarat in the case of Suhrid Geigy Ltd. Vs. CIT (1999) 237 ITR 834 (Guj), had observed, that if a point is covered by the decision of the Hon'ble Jurisdictional High Court rendered prior to or even subsequent to the order proposed to be rectified, then it could be said to be a mistake apparent from record u/s. 254(2) of the Act and could be corrected by the Tribunal. The Hon'ble Apex Court drawing support from Blackstonian theory, had observed that it is not the function of the court to pronounce a "new rule" but to maintain and expound the old one. The Hon'ble Apex Court had observed 27 MA No. 44/RPR/2023 & 5 others that if a subsequent decision altered the earlier one, then the later decision does not lay down any new law but only discovers the correct principle of law which had to be applied retrospectively. It was further observed by the Hon'ble Apex Court that 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. Referring to its historical decision in the case of I.C Golaknath Vs. State of Punjab & ors, 1967 SCR (2) 762, it was further observed by the Hon'ble Supreme Court that though the Court in the said judgment had accepted the doctrine of "prospective overruling", however, the same was an exception to the general rule of the doctrine of precedent. For the sake of clarity, the relevant observations of the Hon'ble Apex Court in the case of ACIT Vs. Saurashtra Kutch Stock Exchange Ltd. (supra) are culled out as under:
"40. The core issue, therefore, is whether non-consideration of a decision of Jurisdictional Court (in this case a decision of the High Court of Gujarat) or of the Supreme Court can be said to be a "mistake apparent from the record"? In our opinion, both - the Tribunal and the High Court - were right in holding that such a mistake can be said to be a "mistake apparent from the record" which could be rectified under Section 254(2).
41. A similar question came up for consideration before the High Court of Gujarat in Suhrid Geigy Limited v. Commissioner of Surtax, Gujarat, (1999) 237 ITR 834 28 MA No. 44/RPR/2023 & 5 others (Guj). It was held by the Division Bench of the High Court that if the point is covered by a decision of the Jurisdictional Court rendered prior or even subsequent to the order of rectification, it could be said to be "mistake apparent from the record"
under Section 254 (2) of the Act and could be corrected by the Tribunal.
42. In our judgment, it is also well- settled that a judicial decision acts retrospectively. According to Blackstonian theory, it is not the function of the Court to pronounce a `new rule' but to maintain and expound the `old one'. In other words, Judges do not make law, they only discover or find the correct law. The law has always been the same. 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.
43. Salmond in his well-known work states;
"The theory of case law is that a judge does not make law; he merely declares it; and the overruling of a previous decision is a declaration that the supposed rule never was law. Hence any intermediate transactions made on the strength of the supposed rule are governed by the law established in the overruling decision. The overruling is retrospective, except as regards matters that are res judicatae or accounts that have been settled in the meantime". (emphasis supplied)
44. It is no doubt true that after a historic decision in Golak Nath v. Union of India, (1967) 2 SCR 762, this Court has accepted the doctrine of `prospective overruling'. It is based on the philosophy: "The past cannot always be erased by a new judicial declaration". It may, however, be stated that this is an exception to the general rule of the doctrine of precedent.
45. Rectification of an order stems from the fundamental principle that justice is above all. It is exercised to remove the error and to disturb the finality." Also, I find support from the judgment of the Hon'ble Supreme Court in the case of S.A.L. Narayana Row, CIT v. Model Mills Nagpur Ltd. [1967] 64 ITR 67 (SC), wherein the levy of additional tax on excess dividend was declared by the High Court of Bombay as illegal. The assessee company had by relying on the said decision of the Hon'ble Jurisdictional High Court filed an 29 MA No. 44/RPR/2023 & 5 others application with the Income Tax Officer for refund of the additional tax that was deposited by it. The Income-tax Officer declined to accede to the request of the assessee on the ground that the assessment was completed long before the judgment was pronounced by the High Court. The revision application filed by the assessee before the Commissioner of Income Tax under section 33A was also rejected. Against the order passed by the Commissioner of Income Tax the assessee company filed a writ petition with the High Court. The Hon'ble High Court allowed the assessee's petition and directed the Commissioner of Income Tax to revise the order and refund the taxes which were illegally collected. On appeal by the revenue against the order of the High Court which had decided the issue in favour of the assessee, the Supreme Court upheld the decision of the High Court in which the Income-tax Officer was directed to revise the order and rectify the mistake. In Kil Kotagiri Tea and Coffee Estates Co. Ltd. v. ITAT [1988] 174 ITR 579 (Ker.), the Hon'ble High Court of Kerala, had held that an order of assessment passed upon an interpretation or application of law which is ultimately found to be wrong in light of judicial pronouncements rendered 30 MA No. 44/RPR/2023 & 5 others subsequently discloses a mistake apparent from the record. The Hon'ble High Court of Karnataka in the case of Mysore Cements Ltd. v. Deputy Commissioner of Commercial [1994] 93 STC 464, had observed, that it was needless to point out that when a point is covered by a decision of the Supreme Court or concerned Court, either rendered prior to or subsequent to the order proposed to be rectified, then the point ceases to be a debatable point and it also ceases to be a point requiring elaborate arguments or detailed investigation/enquiry. The Hon'ble High Court of Andhra Pradesh in the case of B.V.K. Seshavataram Vs. CIT [1994] 210 ITR 633 (AP) followed the ratio of the decision of the Supreme Court in the case of S.A.L. Narayana Row [1967] 64 ITR 67(SC), and came to the conclusion that a subsequent decision can form a valid basis for rectifying an order of assessment under section 154 of the Income-tax Act, 1961. The Hon'ble High Court of Madras in the case of M. K. Kuppuraj Vs. ITO [1995] 211 ITR 853 (Mad.), was of the view that an assessment made contrary to a judgment subsequently rendered by jurisdictional High Court constitutes an error on the face of the record amenable to rectification proceedings under section 31 MA No. 44/RPR/2023 & 5 others 154 of the Income tax Act, 1961. The Hon'ble High Court of Delhi in the case of Lakshmi Sugar Mills Co Ltd. Vs. CIT (2012) 22 taxmann.com 300 (Delhi), referring to the judgment of the Hon'ble Apex Court in the case of Saurashtra Kutch Stock Exchange Ltd. (supra), had observed, that as judges do not make law and only discover or find the law, therefore, a judicial decision acts retrospectively. It was observed by the High Court, that where a decision of the Hon'ble Supreme Court overrules an earlier decision, the views expressed in the later decision would have to be regarded as having always been the law. Also, I find that the issue in hand had exhaustively been looked into by the Hon'ble High Court of Punjab & Haryana in the case of CIT Vs. Smt. Aruna Luthra (2001) 252 ITR 76 (P&H). Indulgence of the Hon'ble High Court was sought for adjudicating the following question of law:
"Can proceedings for rectification of an order passed under the provisions of the Income Tax Act, 1961, be initiated on the basis of a judgment delivered by the jurisdictional or a superior court after the passing of the said order?"
The Hon'ble High Court on the basis of its exhaustive deliberations on the issue under consideration, had observed that the proceedings for rectification of an order passed under the 32 MA No. 44/RPR/2023 & 5 others provisions of Income Tax Act can be initiated on the basis of a judgment delivered by Jurisdictional High Court or a superior court after passing of the said orders. For the sake of clarity, the observations of the Hon'ble High Court are culled out as under:
"13. Apparently, the argument of Mr. Bansal appears to be attractive. If the issue of error in the order is to be examined only with reference to the date on which it was passed, it may be possible to legitimately contend that it was legal on the date on which it was passed. The subsequent decision has only rendered it erroneous or illegal. However, there was no error much less than an apparent error on the date of its passing. Thus, provision of Section 154 is not applicable. However, such a view shall be possible only if the provision were to provide that the error has to be seen in the order with reference to the date on which it was passed. Such words are not there in the statute. Resultantly, such a restriction cannot be introduced by the court. Thus, the contention raised by the counsel for the assessee cannot be accepted.
14. There is another aspect of the matter. In a given case, on interpretation of a provision, an authority can take a view in favour of one of the parties. Subsequent to the order, the jurisdictional High Court or their Lordships of the Supreme Court interpret the same provision and take a contrary view. The apparent effect of the judgment interpreting the provision is that the view taken by the authority is rendered erroneous. It is not in conformity with the provision of the statute. Thus, there is a mistake. Should it still be perpetuated? If the contention raised on behalf of the assessee were 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 couldn't be rectified for the reason that the decision is subsequent to the date of the order.
15. Only the dead make no mistake. Exemption from error is not the privilege of mortals. It would be a folly not to correct it. Section 154 appears to have been enacted to enable the Authority to rectify the mistake. The legislative intent is not to allow it to continue. This purpose has to be promoted. The legislature's will has to be carried out. By placing a narrow construction, the object of the legislation shall be defeated. Such a consequence should not be countenanced.33
MA No. 44/RPR/2023 & 5 others
16. Still further, it deserves mention that the Parliament has prescribed a period of four years for correction of the mistake. While assessment under Section 143 or 144 has to be normally made within a period of one or two years, the mistake can be rectified at any time during the period of four years. The obvious intention of the Legislature is that if the mistake has come to the notice of the authority within the prescribed time, it should not be allowed to continue. It should be rectified. Regardless of the fact that the limitation for passing an order of assessment or filing an appeal has elapsed.
17. Still further, the provision has inbuilt safeguards. It provides for the issue of notice. It ensures the grant of an opportunity. It limits the jurisdiction of the authority. The action can benefit the assessee as well as the Revenue. In this situation, there appears to be no ground for placing an unduly restricted interpretation on the provision.
18. Mr. Bansal contended that a judgment of a court operates only prospectively and not retrospectively. Thus, a decided cause cannot be re-decided. Is it so?
19. A court decides a dispute between the parties. The cause can involve decision on facts. It can also involve a decision on a point of law. Both may have bearing on the ultimate result of the case. When a court interprets a provision, it decides as to what is the meaning and effect of the words used by the legislature. It is a declaration regarding the statute. In other words, the judgment declares as to what the legislature had said at the time of the promulgation of the law. The declaration is -- This was the law. This is the law. This is how the provision shall be construed.
20. Julius Stone in 'Social Dimensions of Law and Justice' () Ist Indian Reprint 1999 (Chapter (XIV) while dealing with the subject of 'Judge and Administrator in Legal Ordering', observes as under:--
"If, then, a main impulse underlying the stare decisis doctrine is that justice should respect reasonable reliance of affected parties based on the law as it seemed when they acted, this impulse still has force when reliance is frustrated by an overruling. Despite this, it has long been assumed that a newly emergent rule is to be applied not only to future facts, and to the necessarily past facts of the very case in which it emerges, but to all cases thereafter litigated, even if these involved conduct, which occurred before the establishment 34 MA No. 44/RPR/2023 & 5 others of the new rule. This has proceeded ostensibly on the conceptual basis, clearly formulated since Blackstone, that the new holding does not create but merely declares, law. So that any prior putative law under which the parties acted is to be regarded as simply not law".
(Emphasis supplied.)
21. The above observations clearly support the principle that the court merely declares law. An earlier decision as declared by the court is "simply no law".
22. Notwithstanding the above observations, the issue of judge- made law being prospective or retroactive is not free from difficulty. However, the system as followed in Indian courts ensures a "suitable legal order". It promotes "dignity and good repute of judicial institutions". It is only equitable and fair that similar cases lead to identical results.
23. Mr. Sanjay Bansal contended that the judicial principle of retroactive operative of judge-made law has now been negated by the Parliament by introducing the 'Explanation' in Order 47 Rule 1. A subsequent decision is no longer a good ground for review. Thus, the counsel contended that the same principle should be followed while construing the provisions of the Income Tax Act.
24. This contention cannot be accepted. Firstly, because a similar provision has not been made in S. 154. The plain language is materially different. Still further, we have the authoritative pronouncement of their Lordships of the Supreme Court in Income Tax Officer, Alwaye v. Asok Textiles Ltd., Alwaye AIR 1961 SC 699. It was held that the High Court had "fallen into an error in equating the language and the scope of Section 35 of the Act (Income Tax Act, 1922) with that of Order 47 Rule 1 CPC. The language of the two is different because according to Section 35 of the Act which provides for rectification of mistakes the power is given to the various income-tax authorities within four years from the date of any assessment passed by them to rectify any mistake 'apparent from the record' and in the Code of Civil Procedure the words are an error apparent on the face of the record and the two provisions do not mean the same thing". As such, the contention raised by the learned counsel cannot be accepted.
25. Mr. Bansal also pointed out that in the case of Jiyajeerao Cotton Mills Ltd. v. Income Tax Officer (1981) 130 ITR 710 a Division Bench of the Calcutta High Court had categorically 35 MA No. 44/RPR/2023 & 5 others taken the view that the judgment of the Supreme Court does not have retrospective effect. This decision was affirmed by their Lordships of the Supreme Court as SLP (c) Nos. 8791-8793 of 1980 were dismissed. Mr. Bansal also referred to the decision of the Andhra Pradesh High Court in Pingle Madhusudan Reddy v. Controller of Estate Duty, to contend that the judgment of the court does not operate retrospectively.
26. It is undoubtedly true that the view taken by the Andhra and Calcutta High Courts supports the argument of the petitioner. Even the Madras High Court has taken a veiw in favour of the assessee in State of Tamil Nadu v. K.S.M.G Meenambal and Co., () (1984) 56 STC 82 However, the view of the Kerala and Karnataka High Courts is to the contrary, In Kotagiri Tea and Coffee Estates Co. Ltd. v. Income Tax Appellate Tribunal () (1988) 174 ITR 579, the Kerala High Court relying upon the principle enunciated in 'Salmond's Jurisprudence' had held in favour of the Revenue. Similar view was expressed by the Karnataka High Court in Mysore Cemets Ltd. v. Deputy Commissioner of Commercial Taxes () (1994) 116 CTR (Karnataka) 284.
27. Learned counsel referred to the decision of a Bench of this Court in CIT v. Haryana State Co-operative Supply and Marketing Federation () (1990) 182 ITR 53. In this case, it was inter alia observed that "once the matter has been decided by the High Court, it is not possible for the Department to carry out rectification on the solitary ground that in a later decision, the Supreme Court has impliedly overruled the decision". In Hero Cycles Ltd. v. The State of Punjab, () (1995) 99 STC 611 and Ram Dass Rice and General Mills v. The State of Punjab, () (1996) 100 STC 211 the opinion was in favour of the Revenue.
28. On an examination of the judgments cited by the counsel for the Assessee, it appears that the rectification was not sought on the basis of a binding decision of the jurisdictional High Court or the Supreme Court. There was no such judgment when the application under S. 154 had been filed. The pronouncement had come at a later stage when the prescribed period of four years had already expired. Thus, the decisions have been given in a different context. Thus, these are distinguishable from the facts of the case in hand.
29. The basic principle is the certainty of law. Even though considerations of justice, equity and fair-play sometimes compel courts to deviate from a view expressed in an earlier case, yet the common law principle of stare decisis has been followed with the avowed object of ensuring that the litigant must be able to act on the view expressed by a court. Law can't 36 MA No. 44/RPR/2023 & 5 others move with the wind. It is not a weather cock. The citizen is entitled to act on the basis of the law declared by the court. Once he acts, he should not be told that this summer is very hot. Thus, the law has changed even though the legislature has not intervened. The gnawing uncertainty has certainly to be avoided.
30. It was then contended that in a case where the Income Tax Officer intimates the assessee that the return has been accepted under Section 143(1), the provision of rectification cannot be invoked. Learned counsel placed reliance on the decision of their Lordships of the Supreme Court in Commissioner Of Income-Tax v. Hero Cycles (P) Ltd. (1997) 228 ITR 463 in support of his contention.
31. On a perusal of Section 154, we find that the provision does not provide for rectification only when a mistake in the order is detected. The mistake has to be on the record of the case. The record would include everything on the case file. The return, the evidence and the order are a part of the record. The mistake can be detected from anything on the file. Thus, even in case of an assessment under Section 143(1), it has not to be assumed that there can be no error apparent from the record. As for the decision in the case of Hero Cycles, the rule laid down by their Lordships is that the mistake can be of fact and law. However, the rectification can be made only when "a glaring mistake of fact or law committed by the officer passing the order becomes apparent from the record. Rectification is not possible if the question is debatable". We cannot read this decision to mean that only the order has to be seen and not the record. Thus, the contention raised by the counsel cannot be accepted.
32. It was also contended that the decision of an authority decides the rights of the parties. It vests a right in them. The vested right can't be taken away except when specifically permitted by a retrospective law.
33. There is no quarrel with the proposition. However, what deserves notice is that the right, if any, is subject to the provisions of law. Section 154 clearly provides for the intervention of the Authority within the specified time. Subject to the condition that the mistake is apparent. The issue is not debatable. Thus, any right under an order is subject to the provision of the statute. That being so, there is no vested right which can be said to have been taken away."
37
MA No. 44/RPR/2023 & 5 others
27. On the basis of my aforesaid deliberations read along with the settled position of law as had been expounded by the Hon'ble Courts, I am of the considered view, that as a subsequent decision of the Hon'ble Supreme Court do not enact the law but declare the law as it always was, therefore, an order can be rectified on the basis of a subsequent judgment of the Hon'ble Supreme Court. My aforesaid view is further fortified by Article 141 of the Constitution of India, which reads as under:
"A law declared by the Hon'ble Supreme Court is binding on the Courts within the territory of India".
28. Apart from that, I find that a "Third Member" of the ITAT, Mumbai, Bench "E" in the case of Kailashnath Malhotra Vs. JCIT, Special Range 56, Mumbai (2010) 129 TTJ 393 (Mum.), had after drawing support from the judgment of the Hon'ble Supreme Court in the case of ACIT Vs. Saurashtra Kutch Stock Exchange Ltd. (2008) 305 ITR 227 (SC), observed that if the order passed by the Tribunal is not found to be in conformity with the judgment of the Hon'ble Supreme Court or that of the Hon'ble Jurisdictional High Court, which may be rendered prior to or subsequent to the impugned order then the same would 38 MA No. 44/RPR/2023 & 5 others constitute a mistake apparent from record amenable for rectification u/s. 254(2) of the Act. For the sake of clarity, the relevant observations of the Tribunal are culled out as under:
"... I have absolutely no doubt in my mind that the 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 as has been held by the Hon'ble Supreme Court in Saurashtra Kutch Stock Exchange Ltd. (supra). Similar view was expressed earlier by the Hon'ble Gujarat High Court in CIT Vs. Subodhchandra S Patel (2004) 265 ITR 445. In view of these judgments, it is vivid that even if the Hon'ble Supreme Court or the Hon'ble Jurisdictional High Court render a judgment after the passing of the order, the same has to be strictly followed. Interpretation of a statutory provision by the Hon'ble Supreme Court is always understood from the inception of the provision and it is never considered as a prospective ruling unless so specified."
On a perusal of the aforesaid order, it transpires that the Tribunal had observed that even if the Hon'ble Apex Court renders a judgment after passing of the order sought to be rectified, the same is to be strictly followed, as the judgment of the Hon'ble Apex Court is always understood from the inception of the provision and it is never considered as a prospective ruling unless so specified. My aforesaid conviction is further fortified by the judgment of the Hon'ble Supreme Court in the case of M/s New Noble Educational Society Vs. The Chief Commissioner of Income Tax, (2023) 290 Taxman 206 (SC). The Hon'ble Apex Court in its 39 MA No. 44/RPR/2023 & 5 others aforesaid judgment, had while departing from its previous rulings regarding the meaning of the term "solely" used in Section 10(23C)(vi) of the Act, had held, that in order to avoid disruption, and to give time to institutions likely to be affected to make appropriate changes and adjustments, it would be in the larger interests of society that the law declared in the said judgment operates prospectively. For the sake of clarity, the relevant observations of the Hon'ble Supreme Court are culled out as under:
"78. In the light of the foregoing discussion, the assessees' appeals fail. It is however clarified that their claim for approval or registration would have to be considered in the light of subsequent events, if any, disclosed in fresh applications made in that regard. This court is further of the opinion that since the present judgment has departed from the previous rulings regarding the meaning of the term 'solely', in order to avoid disruption, and to give time to institutions likely to be affected to make appropriate changes and adjustments, it would be in the larger interests of society that the present judgment operates hereafter. As a result, it is hereby directed that the law declared in the present judgment shall operate prospectively. The appeals are hereby dismissed, without order on costs.
(emphasis supplied by me) On the basis of my aforesaid deliberations, it can safely be concluded that as and where the Hon'ble Apex Court had intended that its judgment be given a prospective applicability, a specific rider to the said effect as in the case of M/s New Noble Educational Society Vs. The Chief Commissioner of Income Tax 40 MA No. 44/RPR/2023 & 5 others (supra) had been provided. However, I am afraid that no such rider is found in the judgment of the Hon'ble Apex Court in the case of Checkmate Services Pvt. Ltd. Vs. Commissioner of Income Tax-I (supra), which means that the same would have a retrospective application. I, thus, considering the facts involved in the case before me r.w the aforesaid settled position of law, am of the considered view, that as stated by the department in its miscellaneous application and, rightly so, as the view taken by the Tribunal in the captioned appeals is not found to be in conformity with the judgment of the Hon'ble Apex Court in the case of Checkmate Services Pvt. Ltd. Vs. Commissioner of Income Tax-I (supra), therefore, the same had rendered the orders passed while disposing off the respective appeals as suffering from a mistake, which being apparent from record had therein made those amenable for rectification under sub-section (2) to Section 254 of the Act.
29. I, thus, in terms of my aforesaid observations allow the miscellaneous application filed by the department u/s. 254(2) of the Act, and recall the order that was passed by the Tribunal 41 MA No. 44/RPR/2023 & 5 others while disposing off the aforementioned appeal in ITA No.88/RPR/2019.
30. Resultantly, the miscellaneous application filed by the department in MA No.44/RPR/2023 is allowed in terms of my aforesaid observations.
MA Nos. 45 to 49/RPR/2023
31. As observed by me hereinabove, as the issue on the basis of which the department had filed miscellaneous applications in the remaining cases remains the same as was there before me in MA No.44/RPR/2023, therefore, the order therein passed shall apply mutatis-mutandis for the purpose of disposing off the said applications. Accordingly, all the Miscellaneous Applications filed by the department are allowed, on the same terms as are recorded by me hereinabove while disposing off the MA No.44/RPR/2023. Thus, the Miscellaneous Applications filed by the department in MA Nos.45 to 49/RPR/2023 are allowed in terms of my aforesaid observations.
32. In the combined result, all the miscellaneous applications filed by the department are allowed in terms of my aforesaid 42 MA No. 44/RPR/2023 & 5 others observations. The registry is directed to fix the respective appeals for hearing, for the limited purpose of giving effect to the judgment of the Hon'ble Apex Court in the case of Checkmate Services P. Ltd. Vs. Commissioner of Income Tax-I (supra) on 30.05.2023 after putting both the parties to notice. Order pronounced under rule 34(4) of the Appellate Tribunal Rules, 1963, by placing the details on the notice board on 12th day of May, 2023.
Sd/-
(रवीश सूद /RAVISH SOOD) या यक सद य/JUDICIAL MEMBER रायपुर / Raipur; दनांक / Dated : 12th May, 2023 SB आदे श क त ल प अ े षत / Copy of the Order forwarded to :
1. अपीलाथ / The Appellant.
2. यथ / The Respondent.
3. The concerned CIT.
4. The concerned CIT(Appeals).
5. वभागीय त न ध, आयकर अपील य अ धकरण, "एक-सद य" बच, रायपुर / DR, ITAT, "SMC" Bench, Raipur.
6. गाड फ़ाइल / Guard File.
आदे शानुसार / BY ORDER, // True Copy // नजी स चव /Private Secretary आयकर अपील य अ धकरण, रायपुर / ITAT, Raipur