E Factor Adventure Tourism Pvt. Ltd Vs DCIT (ITAT Delhi)
In E Factor Adventure Tourism Pvt. Ltd. vs DCIT (AY 2017-18), the ITAT Delhi partly allowed the assessee’s appeal and held that rectification u/s 154 cannot be invoked merely because of a later Supreme Court judgment. The AO had reopened the concluded assessment to disallow employees’ PF/ESI contributions relying on Checkmate Services Pvt. Ltd. decided after completion of assessment; however, the Tribunal observed that at the time of original assessment the legal position was settled by various High Courts allowing deduction if paid before due date of return.
ITAT held that a subsequent change in law or judicial interpretation does not constitute a “mistake apparent on record” for purposes of rectification. Since the original assessment was made in accordance with prevailing law, invoking sec 154 was beyond jurisdiction. Accordingly, the addition made in the guise of rectification was deleted, while other unrelated grounds were dismissed
FULL TEXT OF THE ORDER OF ITAT DELHI
This appeal by the assessee is directed against the order of Commissioner of Income Tax-26, New Delhi [in short ‘the CIT(A)’] dated 06.03.2025, for AY 2017-18 in proceedings u/s.154 of the Income Tax Act,1961(hereinafter referred to as ‘the Act’).
