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Income Tax Appellate Tribunal, MUMBAI BENCH “B”, MUMBAI
Before: SHRI VIKAS AWASTHY & SHRI GAGAN GOYAL
PER GAGAN GOYAL, A.M:
This appeal by assessee is directed against the order of National Faceless Appeal Centre (for short “NFAC”) dated 29.12.2022 u/s. 250 of the Income Tax Act, 1961 (in short ‘the Act’) for A.Y. 2018-19. The assessee has raised the following grounds of appeal:-
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In confirming an addition of Rs. 13, 45,077 which was added while processing the return U / s. 143(1) being received from Employees towards contribution of Provident Fund and paid beyond the due date prescribed under Provident Fund Act but before the date of filing of the Income Tax Return.
In not appreciating that the said adjustment did not fall within any of the adjustments permitted u / s. 143(1)(a) of the Act.
In not appreciating that the appeal ought to have been decided based on whether or not the making of the adjustment by the CPC u/s 143(1) was justified on the date when the addition was made basis the jurisprudence available then and not based on any subsequent jurisprudence delivered.
In not appreciating that the appeal was not against an order u / s. 143(3) but was on the issue of whether or not the adjustment could have been made u / s. 143(1).
In not granting the appellant a hearing via Video Conferencing when one was specifically sought resulting in a denial of natural justice.
The brief facts of the case are that assessee filed its return of income on 25-06-2020. Return of the assessee was processed u/s. 143(1) and intimation was issued vide dated: 26-08-2020. In this intimation CPC, Bengaluru made adjustment u/s. 143(1) (a) (iv) of the Act w.r.t. employee’s contribution u/s. 36(1) (va) r.w.s. 2(24) (x) of the Act.
Before this adjustment was being made an opportunity was provided to the assessee vide communication dated: 16.07.2020, against which assessee had not responded and CPC, Bangalore confirmed the contents of its notice issued vide dated: 16.07.2020.
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“As there has been no response/the response given is not acceptable the adjustment(s) as mentioned below are being made to the total income as per the provisions of section 143(1)(a) of the Act.”
Being aggrieved, assessee preferred an appeal before the Ld. CIT(A) Against this intimation, but Ld. CIT (A) also confirmed the version of CPC, Bengaluru vide his order u/s. 250, Dated: 29-12-2022. Being further aggrieved assessee approached us through this appeal.
We have gone through the intimation issued by CPC, Bengaluru u/s. 143(1), Order of Ld. CIT (A) and submissions of the assessee along with copies of judicial pronouncements relied upon by the assessee and revenue. We observed, the main grievance of the assessee is not on merits, its main grievance is w.r.t. the procedure adopted by the CPC, Bengaluru.
Through this order we will discuss the merit as well as technical issue raised by the assessee about the procedure being adopted by CPC, Bengaluru. In this regard we heavily relied upon the decision of Hon’ble Supreme Court in the case of ACIT v. Saurashtra Kutch Stock Exchange Ltd. [2008] 305 ITR 227 (SC), wherein it was held as under:-
The core issue, therefore, is whether non-consideration of a decision of Jurisdictional Court or of the Supreme Court can be said to be a 'mistake apparent from the record'? 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 can be rectified under section 254(2). [Para 40]
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
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maintain and expound the 'old one'. In other words, the 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 a new law. It only discovers the correct principle of law which must be applied retrospectively. To put it differently, even where an earlier decision of the Court operated for quite some time, the decision rendered later would have retrospective effect, clarifying the legal position which was earlier not correctly understood. [Para 42]
In the instant case, according to the assessee, the Tribunal had decided the matter on 27- 10-2000. Hiralal Bhagwati's case (supra) was decided few months prior to that decision, but it was not brought to the attention of the Tribunal. In the circumstances, the Tribunal had not committed any error of law or of jurisdiction in exercising power under sub- section (2) of section 254 and in rectifying 'mistake apparent from the record'. Since no error was committed by the Tribunal in rectifying the mistake, the High Court was not wrong in confirming the said order. Both the orders, therefore, were strictly in consonance with law and no interference was called for. *Para 47+”
In view of the above decision of Hon’ble Apex Court, the statement of law contained in the order of the Hon’ble Supreme Court is a declaration of law. Thus, the issue is not debatable at all and only one view is possible. It only discovers the correct principle of law which must be applied retrospectively. So as far as merits is concerned assessee’s appeal is not sustainable in view of the decision of Hon’ble Supreme Court in the case of [2022] 143 taxmann.com 178(SC)Checkmate Services (P.) Ltd. v. CIT. As far as technical point is concerned CPC, Bengaluru clearly mentioned“As there has been no response/the response given is not acceptable”. In the given circumstances, where a law of land has been declared by Hon’ble Apex Court and that is applicable retrospectively as
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discussed (Supra), we are of the opinion that assessee’s case falls well within the jurisdiction of CPC, Bangalore. 8. In view of above we don’t find any force in the contentions of the assessee and there is no point to interfere in the order of Ld. CIT (A). As we have gone through the paper book dated 20.04.2023 in which assessee has submitted a part of its tax audit report containing schedule 20(b) i.e. details of contribution received from employees for various funds as referred to in section 36(1)(va). As per this schedule 20(b), although assessee never bring this issue to the notice of Ld. CIT(A) and before us also, but assessee made all the payments well in time i.e. before the due dates prescribed under the relevant statutes except column no. 9, 25, 26, 33, 34 and 35. The amounts involved against these columns were only considered by the CPC, Bangalore for the purposes of disallowance and rest of the amount was allowed. In view of this, we hereby confirm the findings in the order of Ld. CIT (A) and action of CPC, Bengaluru. 9. In the result, appeal of the assessee is dismissed.
Order pronounced in the open court on 12th day of June, 2023. Sd/- Sd/- (VIKAS AWASTHY) (GAGAN GOYAL) JUDICIAL MEMBER ACCOUNTANT MEMBER Mumbai, दिन ांक/Dated: 12/06/2023 Sr. PS (Dhananjay)
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Copy of the Order forwarded to: अपील र्थी/The Appellant , 1. प्रदिव िी/ The Respondent. 2. आयकर आयुक्त(अ)/The CIT(A)- 3. आयकर आयुक्त CIT 4. दवभ गीय प्रदिदनदि, आय.अपी.अदि., मुबांई/DR, ITAT, Mumbai 5. ग र्ड फ इल/Guard file. 6.
BY ORDER, //True Copy// (Asstt. Registrar) ITAT, Mumbai