LINEN DESIGN COMPANY PVT LTD,GURGAON vs. ACIT,CIRCLE-13(1), DELHI
Income Tax Appellate Tribunal, DELHI BENCH ‘E’: NEW DELHI
Before: SHRI SUDHIR KUMAR & SHRI MANISH AGARWALLinen Design Company Private Limited, Flat No.701, Tower-II, Sohna Road, Vipul Greens, Sector-48, Gurgaon (Gurugram)-122018. PAN-AABCL7123P
PER MANISH AGARWAL, AM:
This appeal is filed by the assessee against the order of Learned Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC), Delhi dated
27.03.2025 in DIN & Order No. ITBA/NFAC/154/2024-25/1075116153(1) passed u/s 154 r.w.s250 of the Income Tax Act, 1961 (the Act, in short) for Assessment
Year 2018-19. 2. Brief facts of the case are that the return of income filed by the assessee was processed u/s 143(1) of the Act vide order dated 06.01.2020 for the captioned
Assessment Year wherein disallowance of delayed payment of employees’
contribution towards the ESI/EPF of Rs.20,17,444/- was made.
Against such order, an appeal was filed by the assessee which was allowed by ld. Ld. CIT(A) in Appeal No. CIT(A), Delhi-5/10571/2019-20 vide order dated 10.09.2020 by following the judgment of Hon’ble Delhi High Court in the case of CIT vs. AIMIL Ltd. 321 ITR 508 and of Pro Interactive Service (India) Pvt. Ltd. in ITA No. 983/2018. Thereafter, Revenue filed an application u/s 154 of the Act before ld. CIT(A) for rectification of the aforesaid order based on the judgment of Hon’ble Supreme Court in the case of Checkmate Services Pvt. Ltd. vs. DCIT, [2022] 143 taxmann.com 178 (SC) wherein the hon’ble Supreme Court has confirmed the disallowance made towards delayed payment of employees contribution towards PF/ESI. The ld. CIT(A) vide impugned order dt. 27.3.2025 has rectified the order its earlier order dt. 10.9.2020 and uphold the disallowance vide order passed u/s 154 r.w.s 250 of the Act.
Aggrieved by the said order, the assessee is in appeal before the Tribunal by taking the following grounds of appeal: “1. On the facts and circumstances of the case, the order passed by the learned Commissioner of Income Tax (Appeals), Income Tax Department, National Faceless Appeal Centre (hereinafter referred to as CIT(A), ITD), under section 154 read with section 250 is bad both in the eye of law and on facts.
On the facts and circumstances of the case, the order passed by the learned CIT(A), ITD is illegal, invalid and without juri iction and hence liable to be quashed.
On the facts and circumstances of the case, the learned CIT(A), ITD has erred both on facts and in law in passing the order u/s 154 r.w.s 250 of the Income Tax Act rejecting the contention of the assessee that CIT(A) does not have power to review it's earlier order under section 154 of the Act.
On the facts and circumstances of the case, the Learned CIT(A), ITD has erred both on facts and in law in passing the order u/s 154 r.w.s 250 of the Income Tax Act despite the fact that there is no mistake apparent from the record in the order passed by him Linen Design Company Pvt. Ltd. vs. ACIT in respect of appeal filed against order passed under section 143(1) of the Act and hence the order passed by him u/s 154 r.w.s 250 is without juri iction and liable to be quashed.
(i) On the facts and circumstances of the case, the learned CIT(A), ITD has erred both on facts and in law in rejecting the contention of the assessee that the issue involved in the present appeal is of debatable in nature and outside the purview of section 154 of the Income Tax Act.
(ii) That the CIT(A), ITD has erred both on facts and in law in rejecting the judicial precedent brought on record by the assessee in this regard.
On the facts and circumstances of the case, the learned CIT(A), ITD has erred both on facts and in law in confirming the adjustment of disallowance of late deposit of ESI/PF made in the order passed under section 143(1) of the Act despite the fact that the adjustment made by AO(CPC) itself is invalid, illegal, debatable and impermissible adjustment under section 143(1) of the Act.
(i) On the facts and circumstances of the case, learned CIT(A), ITD has erred both on facts and in law in ignoring the contention of the assessee that order passed by CIT(A), ITD u/s 143(1) r.w.s 250 of the Act cannot be recalled based on subsequent decision of a superior court and thus, the same is outside purview of the section 154 of the Act.
(ii) That the learned CIT(A) has erred in ignoring the various judicial precedents relied upon by the assessee in this regard.
(1) On the facts and circumstances of the case, the learned CIT(A). ITD has erred both on facts and in law in confirming the disallowance of Rs.20,17,444/- made by the AO(CPC) on account of late deposit of ESI and PF invoking the provisions of section 36(1)(va) of the Income Tax Act.
(ii) That the above said disallowance has been confirmed rejecting the submissions and explanations made by the assessee in this regard.
The appellant craves leave to add, amend or alter any of the grounds of appeal.”
Before us, Ld. AR of the assessee submits that appeal of the assessee was originally allowed in terms of the order passed by Ld. CIT(A) on 10.09.2020. Thereafter, an application u/s 154 for rectification of the said order was filed by the Revenue solely based on the judgment of the Hon’ble Supreme Court in the case of Checkmate Services Pvt. Ltd. (Supra). It is submitted by Ld. AR that when the order was passed by the Ld. CIT(A) allowing the appeal of the assessee, the judgements Linen Design Company Pvt. Ltd. vs. ACIT were in favour of the assessee and ld. CIT(A) followed the decision of Hon’ble Juri ictional High Courtin the case of AMIL Ltd (supra) and deleted the disallowance made by AO. Since, the decision of Hon’ble Supreme Court in the case of Checkmate Services Pvt. Ltd. (supra) is given subsequently, therefore, the same cannot be applied retrospectively on the appeal which has already been decided. The Ld. AR in this regard placed reliance on the recent judgment of Hon’ble Bombay High Court in the case of Vaibhav Maruti Dombale Vs. T