ITAT order allowing EPF & ESIC employee’s contribution prior to Checkmate Services Judgment suffers from ‘apparent mistake from record’ 

DCIT Vs N.R Wires Private Limited & 38 Others (ITAT Raipur)

ITAT order allowing EPF & ESIC employee’s contribution prior to Checkmate Services Judgment suffers from ‘apparent mistake from record’

ITAT allowed the Miscellaneous Applications filed by the Department holding that the Appellate Orders passed by the ITAT, Raipur Bench on section 36(1)(va) EPF & ESIC employee’s contribution disallowance allowing the appeals of the respective assessees prior to Checkmate Services Judgment suffers from ‘apparent mistake from record’ amenable to rectification jurisdiction u/s.254(2) based upon the subsequent judgment of the Hon’ble Supreme Court in Checkmate Services case relying upon ACIT Vs. Saurashtra Kutch Stock Exchange Ltd. (2008) 305 ITR 227 (SC), S.A.L. Narayana Row, CIT v. Model Mills Nagpur Ltd. [1967] 64 ITR 67 (SC) & plethora of other judgments. In an elaborate Order, the Hon’ble ITAT distinguishes assessee’s reliance on Mepco Industries Ltd. Vs. CIT & Ors. (2009) 319 ITR 208 (SC), CIT Vs. Reliance Telecom Limited (2022) 440 ITR 1 (SC) & M/s. Malabar Regional Co-operative Milk Producers Union Ltd. Vs. The Commissioner of Central Exercise, C.E Appeal No.10 of 2019 dated 06.12.2019 (on identical issue in the context of section 35C(2) of Central Excise Act) & plethora of other judgments. Distinguishes assessee’s reliance on Order LXVII Rule 1 of CPC and also holds that the ratio decidendi propounded by Supreme Court operates retrospectively.

FULL TEXT OF THE ORDER OF ITAT RAIPUR

The captioned miscellaneous applications filed by the department are arising out of the respective orders of the Tribunal, wherein the additions made by the A.O of the delayed deposit of employee’s share of contributions towards labour welfare funds, viz. Employee’s Provident fund (EPF) and Employee’s State Insurance (ESI) by the respective assessee’s was vacated by the Tribunal. It is stated by the department that as the aforesaid orders of the Tribunal are not found to be in conformity with the recent judgement of the Hon’ble Supreme Court in the case of Checkmate Services Pvt. Ltd. Vs. Commissioner of Income Tax-I, Civil Appeal No.2833 of 2016 dated 12.10.2022, thus, the same suffers from a mistake which being glaring, apparent, patent and obvious from record had rendered the same amenable for rectification under sub-section (2) of Section 254 of the Act.

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