Rajkumar Laxminarayan Kanojiya Vs DCIT (Bombay High Court)
The Bombay High Court delivered a judgment in the case of Rajkumar Laxminarayan Kanojiya Vs DCIT, challenging an order passed by the Income Tax Appellate Tribunal (ITAT) under Section 254(2) of the Income Tax Act, 1961. The core issue was whether a subsequent ruling by the Supreme Court, which overturns the legal precedent relied upon in an earlier ITAT order, constitutes a “mistake apparent from the record” that justifies the ITAT invoking its power of rectification.
Factual Background and Tribunal’s Original Order
The case originated from a tax assessment where the Assessing Officer (AO) disallowed a deduction of Rs. 18,31,226/- claimed by the Assessee, Rajkumar Laxminarayan Kanojiya. The disallowance was made under Section 36(1)(va) of the IT Act concerning the employee’s share of Provident Fund (PF) and Employees’ State Insurance (ESI) contributions. The AO argued the deduction was ineligible because the contributions were deposited belatedly, although they were paid before the due date for filing the income tax return under Section 139(1).
The Assessee’s appeal reached the ITAT. In its original order dated May 2, 2022, the ITAT allowed the deduction. The Tribunal relied on the then-prevailing law established by the Bombay High Court in Commissioner of Income-tax, (Central), Pune vs. Ghatge Patil Transports Ltd. [2015], which followed the Supreme Court’s decision in Commissioner of Income-tax vs. Alom Extrusions Ltd. [2009]. This established position held that deductions for employees’ contributions were permissible if deposited before the due date for filing the return under Section 139(1).
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