HOUSING & URBAN DEVELOPMENT CORPORATION LTD (HUDCO),NEW DELHI vs. ADDL. CIT, RANGE-4, NEW DELHI

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ITA 7627/DEL/2018Status: DisposedITAT Delhi25 April 2025AY 2006-07Bench: SHRI CHALLA NAGENDRA PRASAD, JUDICIAL MEMBER, SHRI NAVEEN CHANDRA (Accountant Member)2 pages
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What did the Tribunal hold?

The Tribunal found no merit in the Revenue's contentions. The Tribunal held that the Assessing Officer had already duly considered the ESI/PF issue in his regular assessment. Therefore, revisiting the same issue through Section 154 rectification is not permissible, citing the Supreme Court decision in T. S. Balaram, ITO vs. Volkart Bros. (1971) 82 ITR 40 (SC). Consequently, the impugned rectification order dated 26.09.2022 was reversed. The Tribunal did not expressly leave any issue undecided.

What were the facts?

The assessee, Mahesh Sunny Enterprises Pvt. Ltd., is in appeal against the order of the Addl./JCIT(A)-1, Bengaluru, dated 30.10.2025. This order was passed in proceedings under Section 154 of the Income Tax Act, 1961. The original assessment under Section 143(3) was framed on 12.12.2019. Subsequently, the Assessing Officer invoked Section 154 jurisdiction to disallow the assessee's Employees' State Insurance (ESI) and Provident Fund (PF) claim of Rs. 29,26,971/-. A notice dated 06.06.2022 was issued, culminating in the rectification order dated 26.09.2022, which is the subject of this appeal. The assessment year in question is 2017-18.

What were the issues?

1. Whether the learned lower authorities' action in invoking Section 154 rectification jurisdiction to disallow the assessee's ESI/PF claim of Rs. 29,26,971/- is sustainable, considering the assessee allegedly did not comply with the due date in the corresponding statute. Assessee's contentions: Not recorded in the judgment. Revenue's contentions: The Revenue argued that once the assessee was found to have not complied with the due date in the corresponding statute, the lower authorities' action invoking Section 154 rectification deserves to be upheld.

Which sections of the Income-tax Act were involved?

Section 154,Section 143(3)

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Income Tax Appellate Tribunal, DELHI BENCH ‘SMC’, NEW DELHI

Before: Sh. Satbeer Singh Godara

For Appellant: Adv. &
Hearing: 23.12.2025Pronounced: 23.12.2025

ORDER This assessee’s appeal for Assessment Year 2017-18 arises against the Addl./JCIT(A)-1, Bengaluru’s DIN & order No. ITBA/APL/S/250/2025-26/1082129793(1) dated 30.10.2025, in proceedings u/s 154 of the Income Tax Act, 1961 (in short “the Act”).

2.

Heard both the parties at length. Case file perused.

3.

It is noticed at the outset during the course of hearing that the learned Assessing Officer had framed his section 143(3) assessment on 12.12.2019; and, thereafter, he invoked his section 154 rectification jurisdiction to disallow the assessee’s ESI/PF claim of Rs.29,26,971/- by issuing notice dated 06.06.2022 culminating in the final rectification order in issue dated 26.09.2022 in issue.

1.

Mahesh Sunny Enterprises Pvt. Ltd. 4. The Revenue vehemently argues that once the assessee has been found to have not complied with the due date in the corresponding statute, both the learned lower authorities’ impugned action invoking section 154 rectification deserves to be upheld.

5.

This tribunal finds no merit in the Revenue’s foregoing vehement contentions. This is for the precise reason that given the fact that the learned Assessing Officer had duly considered the instant ESI/PF issue in his regular assessment, revisiting the very binding by way of section 154 rectification is no more permissible going by T. S. Balaram, ITO vs. Volkart Bros. (1971) 82 ITR 40 (SC). The impugned rectification order dated 26.09.2022 is hereby reversed therefore.

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