Vaibhav Maruti Dombale Vs Assistant Registrar (Bombay High Court)
In Vaibhav Maruti Dombale v. Assistant Registrar, ITAT (Bombay High Court, 2025), the assessee filed its return for AY 2019–20, claiming deduction of employees’ PF and ESI contributions under Sections 36(1)(va) read with 43B of the Income Tax Act. The Centralized Processing Centre (CPC) disallowed the claim under Section 143(1)(a), and the CIT(A) upheld the addition relying on Explanation 5 to Section 43B, inserted by Finance Act 2021. On appeal, the ITAT allowed the assessee’s claim, holding the amendment as prospective, citing CIT v. Alom Extrusions Ltd. (SC) and CIT v. Ghatge Patil Transport Ltd. (Bom HC). Revenue filed a Miscellaneous Application under Section 254(2), citing Checkmate Services (SC), prompting the ITAT to recall its order, treating the Supreme Court ruling as a “mistake apparent from record” and relying on ACIT v. Saurashtra Kutch Stock Exchange Ltd. (SC). The assessee challenged this via writ petition. The Bombay High Court held that powers under Section 254(2) are akin to CPC Order 47 Rule 1 review, which expressly bars review based on a subsequent decision of a superior court. The Court clarified that a later ruling cannot constitute a “mistake apparent from record,” and that Saurashtra Kutch Stock Exchange dealt only with a prior binding decision not noticed, not a subsequent ruling. Consequently, the Tribunal exceeded its jurisdiction in recalling its earlier order. The writ petition was allowed, and ITAT orders dated 17-09-2024 were set aside. However, the Revenue retains the right to appeal under Section 260A against the original ITAT order dated 05-09-2022.
