Income Tax Appellate Tribunal - Mumbai
Adit Centralized Processsing Center , ... vs M/S. Centrum Microcredit Limited , ... on 28 April, 2023
IN THE INCOME TAX APPELLATE TRIBUNAL
MUMBAI BENCH "C" MUMBAI
BEFORE SHRI KULDIP SINGH (JUDICIAL MEMBER)
AND
SHRI OM PRAKASH KANT (ACCOUNTANT MEMBER)
MA No. 59/MUM/2023
(Arising out of ITA No. 1602/MUM/2021)
Assessment Year: 2019-2020
ITO (Ward)-4(3)(1), Centrum Microcredit Ltd.,
Room No. 648, Aayakar 801, Centrum House,
Bhavan, M.K. Road, Vs. Vidyanangari,
Mumbai-400020. Santacruz (East),
Mumbai-400098.
PAN No. AAFCN 3506 L
Appellant Respondent
Assessee by : Mr. Ravikant S. Pathak
Revenue by : Smt. Mahita Nair, DR
Date of Hearing : 28/04/2023
Date of pronouncement : 28/04/2023
ORDER
PER OM PRAKASH KANT, AM
By way of this Miscellaneous Application filed on 18.01.2023, the Revenue is seeking recall/rectification of the order of the Tribunal dated 06.04.2022 passed in ITA No. 1602/Mum/2021 for assessment year 2019-2020.
2. The Ld. Departmental Representative (DR) referred to the Miscellaneous Application and submitted that in view of the Centrum Microcredit Ltd. 2 MA No. 59/M/2023 decision of Hon'ble Supreme Court in the case of Checkmate Services Pvt. Ltd. v. CIT reported in 143 taxmann.com 178, the employee's s contribution to ESI/PF deposited after the due date of the deposit acts is disallowable in terms of sit under the relevant acts, section 36(1)(va) of the Act. He submitted that non-consideration non consideration of decision of the Hon'ble Supreme Court has rendered the mistake apparent from record as held by the Hon'ble Supreme Court in the case of ACIT v. Saurashtra Kutch Stock Exchange Ltd. [2008] 173 Taxman 322 (SC), (SC) therefore, the impugned order of the Tribunal need to be recalled and decided afresh.
3. On the contrary, the Ld. Counsel of the assessee submitted that this Miscellaneous Application filed by the Revenue is barred Application by the limitation. He submitted that the impugned order was passed on 06.04.2022 and therefore, limitation for filing Miscellaneous Application as provided in section 254(2) of the Act expires on six months month from the end of the month in which the order was passed,, which falls on 31.04.2022.. Whereas, W this Miscellaneous Application has been filed on 18.01.2023 ,therefore, it is beyond the period prescribed for filing of the Miscellaneous Application and hence, the miscellaneous application of the revenue need to be rejected.
4. In the rejoinder, the Ld. DR submitted that limitation for filing miscellaneous application should be reckoned from the date of receipt of the order of the ITAT by the PCIT. He submitted submitted that the Centrum Microcredit Ltd. 3 MA No. 59/M/2023 order of the ITAT was received in the office of the Ld. PCIT on 20.09.2022 and therefore, limitation for filing miscellaneous application would expire from the end of six months month from the date ITAT, which happen to be of the receipt of the order of the ITAT 31.03.2023, therefore, therefore, the Miscellaneous Application filed on 18.01.2023 by the Revenue is within the limitation period. The Ld. DR in support of contention that period of six month for filing the Miscellaneous Application has to be reckoned from the date on which the affected parties got knowledge of the order in question, relied on the decision of the jurisdictional High Court in the case of DaryapurShetkariSahakari Ginning and Pressing Factory v. ACIT [2021] 123 taxmann.com 301 (Bombay).
(Bombay)
5. We have heard d rival submission of the parties on the issue-in-
issue dispute and perused the relevant material on record. As far as the concerned the section 254(2) of the Income- issue of limitation is concerned, Income tax Act, 1961 (in short 'the Act' ) read as under:
"(2) The Appellate Tribunal may, at any time within six months from the month in which the order was passed,, with a view to rectifying any mistake apparent from the record, amend any order passed by it under sub-
sub section (1), and shall make such amendment if the mistake is brought to its notice by the assessee or the [Assessing] Officer:
Provided that an amendment which has the effect of enhancing an assessment or reducing a refund or otherwise the liability of the assessee, shall not be made increasing the sub section unless the Appellate Tribunal has under this. sub-
given notice to the assessee of its intention to do so and has Centrum Microcredit Ltd. 4 MA No. 59/M/2023 allowed the assessee a reasonable opportunity of being heard."
5.1 With reference to the the provision of section 254(2) of the Act, the Hon'ble Bombay High Court in the case of DaryapurShetkariSahakari Ginning and Pressing Factory (supra) has considered the issue of limitation as to from which date the period of six month has to be reckoned. The Hon'ble High Court following the decision of the Hon'ble Delhi High Court in the case of Golden Times Service (P.) Ltd. v. DCIT [2020] 113 taxmann.com 524(Delhi 524(Delhi), held that period of limitation for filing fili the Miscellaneous Application in terms of section 254(2) of the Act should be reckoned from the date of obtaining knowledge of the order by the affected parties. The relevant finding of the Hon'ble Bombay High Court is reproduced as under:
"11.
11. The Supreme Supr Court in the case of SreeAyyankar Spinning & Weaving Mills Ltd. v. Commissioner of Income Tax (2008) 301 ITR 434 (SC),while analysing Section 254 of the Act, prior to the amendment of 2016, while considering a different question, has observed that Section 254 (2) of the Act is divided in two parts. In the first part, the ITAT may, at any time, within four years [as stipulated in the erstwhile provision], from the date of order rectify any mistake apparent from the record and amend an order sub section (1). Under the second part passed by it under sub-section ection 254 (2) of the Act, provision has been made for of Section the amendment of the order passed by the Tribunal under section (1), when the mistake is brought to its notice by sub-section the assessee or the assessing officer through an application. The first part of Section 254 (2) of the Act refers to suo moto exercise of the power of rectification by the ITAT whereas the second part refers to rectification and amendment on an Centrum Microcredit Ltd. 5 MA No. 59/M/2023 application being made by the assessing of ficer or the officer assessee pointing out the mistake apparent from the record.
12. As noted above, Section 254(2) of the Act has undergone certain amendments. However, there is no dispute that the provision still still retains the distinctive two parts as observed by the Supreme Court in the abovenoted case. We are presently concerned with a scenario under Section 254 (2) of the Act where the assessee has invoked its jurisdiction seeking rectification / amendment of the order passed by the ITAT. In this situation, the assessee has claimed that it did not have the knowledge of the earlier order passed by the ITAT on 18.10.2016 and the period of limitation of six months should commence from the date of the receipt of the order. In our opinion, the limitation would begin to run when the affected person has the knowledge of the decision. The date when the order was passed cannot be solely determined by referring to the date when the same was signed by the ITAT. We further find that under Section 254 (3) of the Act, the law stipulates that the ITAT shall send a copy of the order passed by it to the assessee and the Principal Commissioner. Further, Rule 35 of the ITAT Rules also requires that the orders are required to be communicated to the parties. For ready reference, Section 254 (3) of the Act and the relevant rule are reproduced re hereinunder:
"254. Orders of Appellate Tribunal.
xxxxxxxxxxxx (3) The Appellate Tribunal shall send a copy of any orders passed under this section to the assessee and to the Principal Commissioner or Commissioner.
35. Order to be communicated to parties.
p The Tribunal shall, after the order is signed, cause it to be communicated to the assessee and to the Commissioner."
13. From the abovenoted provisions, it emerges that the Section and the Rule mandates the communication of the parties. Thus, the date of communication or order to the parties.
knowledge, actual or constructive, of the orders sought to be rectified or amended under Section 254(2) of the Act becomes critical and determinative for the commenceme commencement of Centrum Microcredit Ltd. 6 MA No. 59/M/2023 the period of limitation. The ITAT has not applied its mind on this aspect and has been swayed by the literal and mechanical construction of the words "six months from the end of the month in which the order was passed". The ITAT failed to even delve into the question whether the affected party, either actually or constructively, was in knowledge of the order passed by the ITAT."
ITAT.
5.2 In view of the decision of the Hon'ble Jurisdictional High Court, the decision of the Tribunal in the case of ITO v. Vishwanathan Pudugraman Neelkantan ITA No. 339 & 340/Mum/2020, wherein the limitation period of six month has been reckoned from the date of the passing of the order, is hereby ignored.
5.3 As far as issue on merit is concerned, we find that Tribunal held that issue of employee's employee s contribution to PF/ESI after due date under the relevant enactment was not subject matter of adjustment nature But in u/s 143(1) of the Act as same was issue of debatable nature. view of the decision of the Hon'ble Supreme Court in the case ca of (supra), any payment for PF/ESI paid Checkmate Services Pvt. Ltd. (supra) after the due date under the relevant enactment, enactment is disallowable in terms of section 36(1)(va) of the Act. Since, the interpretation of the law by the Hon'ble Supreme Court is effective effective since the date of inception of provisions of the Act, therefore, the issue is no longer the debatable. Further, under the provisions of section 143(1)(a)(ii) of the Act, any incorrect claim which is apparent from the information on the return, is liable for adjustment u/s 143(1) of the Act. Therefore, the Impugned order of the ITAT is hereby recalled.
Centrum Microcredit Ltd. 7 MA No. 59/M/2023 Accordingly, the Miscellaneous Application filed by the Revenue is allowed. As both the parties agreed to argue argue/hear the matter on the same date itself, therefore, refore, both parties were also heard on the ITA also.
6. In the result, the Miscellaneous Application filed by the Revenue is allowed.
Order pronounced nounced in the open Court on 28/0 /04/2023.
Sd/
Sd/- Sd/
Sd/-
(KULDIP
KULDIP SINGH
SINGH) (OM
OM PRAKASH KANT)
KANT
JUDICIAL MEMBER ACCOUNTANT MEMBER
Mumbai;
Dated: 28/04/2023
Rahul Sharma, Sr. P.S.
Copy of the Order forwarded to :
1. The Appellant
2. The Respondent.
3. CIT
4. DR, ITAT, Mumbai
5. Guard file.
BY ORDER,
//True Copy//
(Assistant Registrar)
ITAT, Mumbai