TaxTMI 
TaxTMI 
2024 (7) TMI 881
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....olding as under:- "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 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 in 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....
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.... should be recalled but should be decided in line with the subsequent judgment of the Hon'ble Supreme Court and therefore, it is a mistake apparent from record which deserves to be rectified and recalled within the scope and ambit of section 254(2) of the Act. 5. The brief facts are that assessee has filed its return of income for A.Y.2019-20 u/s. 139(1) on 02/10/2019. The CPC while processing the return had made disallowance of Rs. 1,74,09,948/- on account of delay in deposits of employee's contribution towards provident fund and ESIC, beyond the due date of the respective Acts. Against the disallowance made by the CPC u/s. 143(1), assessee had preferred appeal before the ld. CIT(A) on the following ground:- "The appellant had received employees' contribution to Provident Fund (PF and ESI) and from the total contribution received a part of funds i.e. Rs. 1,74,09,948/-was deposited by the appellant after the due date of the respective act but before the due date of filling of return as per section 139(1) of the Income Tax Act, 1961. The appellant did not fail to pay the employees PF and ESI so deducted by it. It was a mere delay of depositing the PF and ESI payments. The CPC....
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.... Commissioner for disposal on merits. It is noticed that all payments towards employee's contribution to the PF were made before the due date of the filing of the return. If that be so, surely, the Commissioner would be guided by the decision of this Court on the relevant issue namely - CIT v. Ghatge Patil Transport Ltd. 2. Commissioner of Income-tax, (Central), Pune v/s Ghatge Patil Transports Ltd. (Bombay High Court) [2015] 53 taxmann.com 141 (Bombay), it was held that no distinction is to be made between employer & employee's contribution to PF & the business deduction can be allowed as per the provisions mentioned in Section 438 of the Act & can be allowed if payment is made before the due date of furnishing the return of income. 3. High Court Of Bombay in the case of Commissioner of Income-tax4, Mumbai v. Hindustan Organics Chemicals Ltd [2014] 48 taxmann.com 421 (Bombay). The matter was in Supreme Court and the SLP has been dismissed as the department has subsequently withdrawn the appeal due to low tax effect (Commissioner of Income Tax v. Hindustan Organics Chemicals Ltd. [2020] 122 taxmann.com 171 (SC)) Hence, the Bombay High court decision still holds the grou....
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....it of Section 254(2). 10. Subsection 2 to Section 254 reads as under:- "254. (1) The Appellate Tribunal may, after giving both the parties to the appeal an opportunity of being heard, pass such orders thereon as it thinks fit", (1A)[[***] (2) The Appellate Tribunal may, at any time within [six months from the end of 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-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 increasing the liability of the assessee, shall not be made under this sub-section unless the Appellate Tribunal has given notice to the assessee of its intention to do so and has allowed the assessee a reasonable opportunity of being heard: 11. Thus, the scope is of rectifying the mistake which is apparent from the record on the date of passing the order. On the scope of section 254(2) of the Act, it would be relevant to refer to the judgment of the Hon'ble Supreme Court in the case ....
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....icient reason, desires to obtain a review of the decree passed or order made against him, may apply for a review of judgment to the Court which passed the decree or made the order. (2) A party who is not appealing from a decree or order may apply for a review of judgment notwithstanding the pendency of an appeal by some other party except where the ground of such appeal is common to the applicant and the appellant, or when, being respondent, he can present to the Appellate Court the case on which he applies for the review. [Explanation. The fact that the decision on a question of law on which the judgment of the Court is based has been reversed or modified by the subsequent decision of a superior Court in any other case, shall not be a ground for the review of such judgment.] 13. Ergo, the Explanation clearly envisages that the decision on a question of law on which judgment of the Court is based has been reversed or modified by the subsequent decision of a superior Court in any of the case shall not be the ground for review of said judgment. Thus, there is a clear prohibition to review or revive the order simply based on the subsequent decision of a superior Court. This dictu....
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....ing of the matter as held by the Constitutional Bench of the Hon'ble Supreme Court. If the Revenue was aggrieved, then appeal should have been filed before the Hon'ble High Court. The judgment of the Hon'ble Supreme Court will apply in all the cases where the lis or cases are pending before any Court or forum. But once the issue in the appeal has attained finality following the earlier binding precedence of Jurisdictional High Court and there is no lis pending, and then based on subsequent judgment of a superior Court do not alter the finality of the judgment. If the Revenue's contention is to be accepted, then whenever a judgment is reversed by a higher Court or by any Constitutional Court subsequently in some different case, then all the appeals and matters which have been decided following the earlier order of the Constitutional Courts / High Court or Supreme Court does not mean that all such orders should be recalled even when there is no lis pending and to disturb the finality. 17. This principle has been reiterated by the Hon'ble Supreme Court again in the case of CIT vs. Gracemac Corporation reported in (2023) 456 ITR 135 vide order dated 03/07/2023, wherein the Hon'ble Sup....
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....uperior Court in any other case, shall not be a ground for the review of such judgment." 8. The explanation is also in the nature of an exception. In other words, the Explanation being in the nature of a proviso is a qualifying or an exception to what is stated in Order XLVII Rule 1 CPC which states the grounds for seeking a review. Hence, the object and intendment of the Explanation must be given its full effect. The object and purpose of the Explanation can be related to the following three maxims: (i) Nemo debet bis vexari pro una et eadem causa (No man should be vexed twice for the same cause); (ii) Interest reipublicae ut sit finis litium (It is in the interest of the State that there should be an end to a litigation); and (iii) Res judicata pro veritate occipitur (A judicial decision must be accepted as correct)." (Emphasis added) 18. Again the Hon'ble Supreme Court reiterated the same principle in the case of Commissioner of CGST and Central Excise (J And K) vs. Saraswati Agro Chemicals Pvt. Ltd in SLP (Civil) Diary No(s).18051/2023 and others, vide judgment and order dated 04/07/2023 had made following observations:- "...............................................
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....tive provision, does. Review power under section 114 read with Order XLVII, CPC is available to be exercised, subject to fulfilment of the above conditions, on setting up by the review petitioner any of the following grounds: (i) discovery of new and important matter or evidence; or (ii) mistake or error apparent on the face of the record; or (iii) any other sufficient reason. 40. Insofar as (i) (supra) is concerned, the review petitioner has to show that such evidence (a) was actually available on the date the court made the order/decree, (b) with reasonable care and diligence, it could not be brought by him before the court at the time of the order/decree, (c) it was relevant and material for a decision, and (d) by reason of its absence, a miscarriage of justice has been caused in the sense that had it been produced and considered by the court, the ultimate decision would have been otherwise. 41. Regarding (ii) (supra), the review petitioner has to satisfy the court that the mistake or error committed by it is self-evident and such mistake or error can be pointed out without any long-drawn process of reasoning; and, if such mistake or error is not corrected and is permi....
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....s held that: "2. *** Even if the question regarding the legality of the said three-Judge Bench decision is pending scrutiny before the Constitution Bench the same is not relevant for deciding the review petition for two obvious reasons - firstly, this was not pointed out to the Bench which decided the civil appeal; and secondly, by the time the impugned order was passed the three-Judge Bench judgment had not been upset and even in future if the Constitution Bench takes a contrary view it would be a subsequent event which cannot be a ground for review as is clear from the explanation to Order 47 Rule 1(2) of the Code of Civil Procedure ***". (emphasis supplied) The principle, thus, laid down is that a decision being upset in the future would be a subsequent event which could not be a ground to seek review. 51. In Nand Kishore Ahirwar v. Haridas Parsedia, a Bench of three Hon'ble Judges, while dismissing the review petitions before it, made pertinent observations reaching out to the very core of the said Explanation. This Court observed that simply because there has been a Constitution Bench decision, passed in the aftermath of the judgment impugned, would be no ground for a ....
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....idence is not sufficient ground for review. The party seeking review has also to show that such matter or evidence was not within its knowledge and even after the exercise of due diligence, the same could not be produced before the court/tribunal earlier." (emphasis supplied) 53. This Court, in Subramanian Swamy v. State of Tamil Nadu33, has read the Explanation as follows: "52. *** The Explanation to Order XLVII, Rule 1 of Code of Civil Procedure 1908 provides that if the decision on a question of law on which the judgment of the court is based, is reversed or modified by the subsequent decision of a superior court in any other case, it shall not be a ground for the review of such judgment. Thus, even an erroneous decision cannot be a ground for the court to undertake review, as the first and foremost requirement of entertaining a review petition is that the order, review of which is sought, suffers from any error apparent on the face of the order and in absence of any such error, finality attached to the judgment/order cannot be disturbed." 54. The final one is a decision of the Constitution Bench in Beghar Foundation v. K.S. Puttaswamy34. The majority was of the followin....
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....ecision and even its recall, for that matter, would not afford a ground for review within the parameters of Order XLVII of the CPC. (Emphasis added) The aforesaid judgment of the Hon'ble Supreme Court had elaborately dealt the issue of power to rectify error and power to review and after referring to catena of decisions of the Hon'ble Supreme Court categorically held that, if the judgment has been passed by the Court following another judgment and subsequently by later judgment, the decision has been overruled or reversed, cannot have the effect of reopening or reviewing the former judgment based on following overruled judgment nor can the same be reviewed. The aforesaid judgment clearly clinches the issue that the subsequent judgment of the Hon'ble Supreme Court in the case of Checkmate Services P Ltd. Vs CIT reported in 143 Taxmann.com 178, the earlier judgment passed by the Tribunal based on the binding precedents cannot be recalled or reviewed. Once this is the law of the land, then we are unable to appreciate the contention of the Revenue that the judgment of the Tribunal should be recalled which has been passed following catena of judgment of the Hon'ble Jurisdictional Hig....
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....h principle which has been laid down that if after passing of the order of the Tribunal which has attained finality between the parties and in subsequent judgment is rendered by the superior Court, the same should also be recalled within the scope of Section 254(2). Though the Hon'ble Supreme Court had referred to a decision of Gujarat High Court in the case of Suhrid Geigy Ltd vs. Commissioner of Surtax reported in (1999) 237 ITR 834 that if the point is covered by the decision of the Hon'ble Jurisdictional High Court rendered prior or even subsequent to the order of rectification, it could be a mistake apparent from the record u/s. 254(2) and could be corrected by the Tribunal. However, the Hon'ble Supreme Court has referred this judgment and only held that if a judgment is being rendered by any High Court or Supreme Court that means the law was always being the same and if a subsequent decision alters the earlier one, the later decision does not make a new law. This observation of the Court does not lead to any inference to draw that any rectification order u/s. 254(2) can be based on subsequent judgment which comes later on. On the contrary, all the aforesaid judgments of Hon'b....