Prakash D. Koli Vs Income Tax Appellate Tribunal (Bombay High Court)
Bombay High Court in Prakash D. Koli vs. Income Tax Appellate Tribunal examined the validity of the ITAT’s order dated 4 August 2023, passed under Section 254(2) of the Income Tax Act, 1961, and the consequential order dated 26 October 2023. The petitioner challenged these orders on the ground that the Tribunal exceeded its jurisdiction under Section 254(2), which only permits rectification of mistakes apparent on the face of the record.
The dispute originated from an assessment in which the Assessing Officer (AO) disallowed Rs. 24.74 lakh on account of delayed deposit of employees’ contributions towards Provident Fund (EPF) and Employees’ State Insurance (ESI). The AO held that since the payments were made after the statutory due dates prescribed under the respective Acts, the assessee was not entitled to claim a deduction under Section 36(1)(va) of the Income Tax Act. The Commissioner of Income Tax (Appeals) [CIT(A)] upheld the AO’s disallowance.
On further appeal, the ITAT, by its order dated 22 June 2022 under Section 254(1), allowed the assessee’s claim. The Tribunal noted that the contributions had been deposited before the due date of filing the return under Section 139(1) of the Act. Relying on the Himachal Pradesh High Court’s decision in CIT v. Nipso Polyfabriks Ltd. (2013) 350 ITR 327, the ITAT held that such payments qualified for deduction under Section 36(1)(va).
