TaxTMI 
TaxTMI 
TaxTMI 
2025 (10) TMI 1310
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....some brief facts of the matter. In the present case, initially, the Assessing Officer made a disallowance of Rs.9,14,357/- in the intimation under Section 143 (1) of the Act on the ground that the Assessee had deposited the employee's share of provident fund, ESI etc., belatedly, and hence, they were not allowed to claim a deduction of this amount under Section 36 (1)(va) of the IT Act. Being aggrieved by this disallowance, the Assessee filed an Appeal before the Commissioner of Income Tax (Appeals) ["CIT(A)"] without any success. In these circumstances, the Assessee finally approached the ITAT. The ITAT, by its order dated 20th September 2022 [passed under Section 254(1)], observed that the employee's share of provident fund and ESI etc., was deposited prior to the due date of filing of the return under Section 139 (1), and hence, the Assessee is entitled to the deduction. It accordingly allowed the deduction under Section 36(1)(va) of the Act. In reaching this conclusion, the Tribunal relied on the judgment of the Hon'ble Bombay High Court in the case of Commissioner of Income-tax, (Central), Pune vs. Ghatge Patil Transports Ltd. [2015] 53 taxmann.com 141 (Bombay)[14-....
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....es (supra). Hence, we are of the view, that on the date when the Tribunal passed its original order (on 20th September 2022), it could not be said that there was any error or mistake apparent on the record, giving jurisdiction to the Tribunal to invoke Section 254(2) of the IT Act. 9. We find that the view that we take is squarely covered by a Division Bench decision of this Court in the case of Infantry Security and Facilities v Income Tax Officer [Writ Petition No. 17175 and other connected matters, dated 3-12-2024]. The Division Bench in Infantry Securities and Facilities (supra) was concerned with the exact same decision of the Hon'ble Supreme Court in Checkmates Services (supra). The Division Bench, after examining the law on the subject, came to the conclusion that the Tribunal was in patent error in exercising jurisdiction under Section 254(2), and passing the impugned order. The relevant portion of this decision read thus:- "14. In our clear opinion, the question would be required to be answered against the Revenue and in favour of the assessee. The reasons for which we discuss here under. In such context, at the outset, we may observe that the petitioner ha....
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....itself cannot be regarded as a ground for review. Such principles of law are squarely applicable in the facts of the present case. 18. In Sanjay Kumar Agrawal v. State Tax Officer (1) and Another, the Supreme Court following the decision in the Constitution Bench in Beghar Foundation (supra), made the following observations: "15. It is very pertinent to note that recently the Constitution Bench in Beghar Foundation v. K. S. Puttaswamy (Aadhaar Review - 5 J.), held that even the change in law or subsequent decision/judgment of coordinate Bench or larger Bench by itself cannot be regard as a ground for review." 19. We may observe that recently a bench of the Tribunal in the case of ANI Integrated Services Ltd (supra), had the occasion to consider the very issue as raised by the Revenue in light of the decision rendered by the Supreme Court in Checkmate Services Private Limited (supra). In such case similar applications were filed by the Revenue praying that the Tribunal set aside its orders in relation to Employees State Insurance Corporation ("ESIC" for short) (for the Assessment Year 2019-20) considering the changed position in law in "Checkmate Services ....
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....ifying any mistake apparent from the record only. Therefore, the powers under Section 254(2) of the Act are akin to Order XLVII Rule 1 CPC. While considering the application under Section 254(2) of the Act, the Appellate Tribunal is not required to re-visit its earlier order and to go into detail on merits. The powers under Section 254(2) of the Act are only to rectify/correct any mistake apparent from the record." (emphasis supplied) 16. As can be seen from the aforesaid judgement, it holds that the powers under Section 254(2) of the IT Act are akin to Order 47 Rule 1 of the CPC. The Explanation to Order 47 Rule 1 of the CPC clearly provides that the fact that a decision on a question of law on which the judgement of the Court is based has been reversed or modified by a subsequent decision of a superior court in any other case was not a ground for review of such judgement. Hence, the said Explanation under Order 47 Rule 1 of the CPC expressly bars a review on the ground that there is a mistake apparent on the face of the record on the basis of a subsequent decision of a Court. 17. Further, this exposition of law in respect of the Explanation under Order ....
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....apply for a review of judgement to the Court which passed the decree or made the order. Explanation - The fact that the decision on a question of law on which the judgement 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 judgement." (emphasis supplied) 18. Further, in its decision in Beghar Foundation vs. Justice K.S. Puttaswamy [2021] 123 taxmann.com 344 (SC), the Hon'ble Supreme Court has held that a change in law or a subsequent decision/ judgement of a Co-ordinate Bench or a Larger Bench by itself cannot be regarded as a ground of review. 19. In the case of Government of NCT of Delhi and Another vs. K.L. Rathi Steels Limited and Others (2023) 9 SCC 757, there was a difference of opinion between two Judges of the Hon'ble Supreme Court. Justice Nagarathna, whilst disagreeing with Justice M.R. Shah, held that, in view of a specific bar created by the Explanation to Rule 1 of Order 47 of the Code of Civil Procedure, 1908, the Review Petition could not be entertained by taking into consideration a subsequent overruling of a determined....
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....xistence, the said decision being the law of the land when the civil appeals/special leave petitions were finally decided, the subsequent overruling of such decision and even its recall, for that matter, would not afford a ground for review within the parameters of Order 47 CPC. 125. We respectfully concur with the opinion expressed by the Hon'ble Companion Judge on the said Division Bench and record our inability to be ad idem with the Hon'ble Presiding Judge." (emphasis supplied) 21. The ITAT, in its decision in Deputy Commissioner of IT vs. ANI Integrated Services Limited (2024) 162 taxmann.com 889, has also held that in its judgement in Saurashtra Kutch Stock Exchange Ltd. (supra), the Hon'ble Supreme Court has not laid down the principle that after the passing of the Order of the Tribunal which has attained finality between the parties, a subsequent judgement is rendered by a superior court, then the order of the Tribunal should be recalled within the scope of Section 254(2) of the IT Act. Paragraphs 20 to 22 of the said judgement are relevant and are set out hereunder: "20. We are aware that many of the Co-ordinate Benches have reca....
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....ourt in the case of Suhrid Geigy Ltd (Supra) 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 judgement and only held that if a judgement 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 judgement which comes later on. On the contrary, all the aforesaid judgements of Hon'ble Supreme Court which we have quoted above extenso have clearly held that there would be no review or recall of the order based on the subsequent judgement. Finally, the Hon'ble Supreme Court in the case of Saurashtra Kutch Stock Exchange Ltd. on the fact of the case has concluded as under:- "In the present case, according to the assessee, the Tribunal decided t....
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....estion would be required to be answered against the Revenue and in favour of the assessee. The reasons for which we discuss hereunder. In such context, at the outset, we may observe that the petitioner had succeeded before the Tribunal on the basis of the position in law as it prevailed on the day the decision was rendered on the petitioner's appeal on 26 July 2022. Subsequent to the said orders passed by the Tribunal, on 12 October 2022, the Supreme Court rendered its decision in "Checkmate Services Private Limited" (Supra), whereby the Supreme Court held that the deduction of the employees' share can be allowed under Section 36(1)(va) of the IT Act, only if such share was deposited before the time limit under the respective statutes and not before the due date under Section 139(1) of the IT Act. In the fact situation, certainly it cannot be said that the Tribunal has overlooked the existing position in law, as laid down by the Supreme Court or the High Court, so as to bring about a situation that the law declared by the Supreme Court was not followed by the Tribunal and/or the decision of the Tribunal is contrary to the law as laid down by the Supreme Court. Such decision....
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....ng that the Tribunal set aside its orders in relation to Employees State Insurance Corporation ("ESIC" for short) (for the Assessment Year 2019-20) considering the changed position in law in "Checkmate Services Private Limited" (Supra). The Tribunal by its decision dated 29 May 2024 [ANI Integrated Services Limited (Supra)] did not accept the contentions as urged on behalf of the Revenue and rejected the Miscellaneous Applications filed by the Revenue, also considering the decision in Beghar Foundation (Supra) and the scope of its limited jurisdiction under Section 254(2) of the IT Act. We are in complete agreement with the view taken by the Tribunal in ANI Integrated Services Ltd (Supra) and which is on the very issue as urged by the petitioner. 20. In view of the aforesaid discussion, we are of the clear opinion that the Tribunal was in a patent error in exercising jurisdiction under Section 254(2) in passing the impugned order. The petitions accordingly need to succeed. The petitions are allowed in terms of prayer clause (a) of each of these petitions." (emphasis supplied) 23. As far as the judgement of the Gujarat High Court in Suhrid Geygy Limited vs....