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Judgment
Ajay Kumar Mittal, J.—This order shall dispose of two appeals bearing IT Appeal Nos. 115 and 116 of 2009 as according to the learned counsel for the parties, the issue involved herein is identical. For brevity, the facts are being extracted from IT Appeal No. 115 of 2009. This appeal has been filed by the assessee under s. 260A of the IT Act, 1961 (in short "the Act") against the order dt. 17th Sept., 2008 passed by the Tribunal, Amritsar Bench, Amritsar in MA No. 33/Asr/2008 arising out of ITA No. 322/Asr/2007, relating to the asst. yr. 2003-04.
The appeal was admitted by this Court vide order dt. 4th Aug., 2009 for determination of the following substantial question of law:
Whether the Tribunal in light of the judgment of the Hon''ble Supreme Court so passed in the case of Assistant Commissioner, Income Tax, Rajkot Vs. Saurashtra Kutch Stock Exchange Ltd., , wherein the Hon''ble apex Court had held that where the decision of the jurisdictional High Court or the Hon''ble Supreme. Court was not brought to the notice of the Tribunal during the course of the appellate proceedings, the same would constitute a ''mistake apparent from record'', rectifiable on filing of an application under s. 254(2) of the Act, therein in the case of the present assessee firm was right in law in dismissing the ''miscellaneous application'' filed by the latter, for the reason that as the order of the Hon''ble Supreme Court was not brought to the notice of the Tribunal during the course of the appellate proceedings, therefore the same would not constitute a ''mistake apparent from record''?
Put shortly, the facts necessary for adjudication of the present appeal as narrated therein are that the assessee is a partnership firm carrying on the business of manufacturing and export of rubber goods at Jalandhar under the name and style of M/s. R.M. Exports. The assessee filed its return on 24th Nov., 2003 for the asst. yr. 2003-04 declaring net income at Rs. 13,84,433. Its case was taken up for a limited scrutiny under s. 143(3)(ii) of the Act. During the year under consideration, the assessee had delayed the deposits of various amounts of employees contributions towards ESI and EPF. During the course of assessment proceedings, the AO issued a show-cause notice to the assessee for adding the amounts of the employees contributions towards ESI and EPF which stood deposited beyond the stipulated time period to the latter''s income. In pursuance thereof, the assessee submitted that as all of the aforesaid amounts stood deposited much before the due date applicable in its case for filing of the return, therefore, in light of the post-amended provisions of s. 43B of the Act, no addition of the aforesaid amounts was liable to be made in the hands of the assessee. Accordingly, the AO, vide order dt. 31st Jan., 2006 (Annex. A-1) made an addition of Rs. 1,40,048 holding the assessee firm in default for depositing the aforesaid amounts beyond the stipulated time period. Feeling aggrieved, the assessee took the matter in appeal before the CIT(A) who vide order dt. 29th March, 2007 (Annex. A-2) allowed the appeal and deleted the addition of Rs. 1,40,048 made by the AO. Being dissatisfied, the Revenue filed an appeal before the Tribunal. The Tribunal vide order dt. 23rd Nov., 2007 (Annex. A-3) allowed the appeal and sustained the addition made by the AO. This gave rise to the assessee to approach this Court by way of instant appeal.
Learned counsel for the appellant submitted that this Court in Commissioner of Income Tax (Central) Vs. Avery Cycle Industries (P.) Ltd., on 5th Sept., 2006 had held that the proviso to s. 43B was retrospective and no disallowance could be made if the payment had been made before the due date prescribed under s. 139(1) of the Act. According to the learned counsel, the Hon''ble apex Court in Commr. of Income Tax-II, Gauhati Vs. Vinay Cement Ltd. had concluded that any contribution made to the provident fund before filing of the return could not be disallowed under s. 43B of the Act as it stood prior to the amendment w.e.f. 1st April, 2004. Relying upon the judgment of the Hon''ble apex Court in Assistant Commissioner, Income Tax, Rajkot Vs. Saurashtra Kutch Stock Exchange Ltd., , it was urged that non-consideration of decision of the jurisdictional High Court or of the Hon''ble Supreme Court is a ''mistake apparent from record'' which is rectifiable under s. 254(2) of the Act. It was argued that the substantial question of law as claimed is, thus, required to be answered in favour of the assessee and the appeal deserves to be allowed.
On the other hand, learned counsel for the Revenue, besides supporting the order passed by the Tribunal, submitted that the application filed by the assessee under s, 254(2) of the Act, if allowed, would amount to review of the order which is not permissible. According to the learned counsel, the Tribunal was, thus, right in rejecting the application filed by the assessee.
After hearing the learned counsel for the parties and perusing the record, we find merit in the contention of the learned counsel for the assessee. In Saurashtra Kutch Stock Exchange Ltd.''s case (supra), the Hon''ble Supreme Court while interpreting the provisions of s. 254(2) of the Act had pronounced that the non-consideration of the decision of the jurisdictional High Court or of the Supreme Court would constitute ''mistake apparent from the record''. It was held as under:
As stated earlier, the decision was rendered in appeal by the Tribunal, Rajkot. Miscellaneous application came to be filed by the assessee under sub-s. (2) of s. 254 of the Act stating therein that a decision of the ''jurisdictional Court'' i.e. the High Court of Gujarat in Hiralal Bhagwati (supra) was not brought to the notice of the Tribunal and thus there was a ''mistake apparent from record'' which required rectification.
The core issue, therefore, is whether non-consideration of a decision of jurisdictional Court (in this case a decision of the High Court of Gujarat) or of the Supreme Court can be said to be a ''mistake apparent from the record''? In our opinion, both--the Tribunal and the High Court-were right in holding that such a mistake can be said to be a ''mistake apparent from the record'' which could be rectified under s. 254(2).
In the present case, the assessee had deposited the amounts under ESI and EPF contributions prior to the filing of the return under s. 139(1) of the Act. Sec. 43B of the Act was interpreted by this Court vide judgment delivered on 5th Sept, 2006 in Avery Cycle Industries (P) Ltd.''s case (supra) and on 7th March, 2007 delivered by the Hon''ble Supreme Court in Vinay Cement Ltd.''s case (supra). The said decisions were prior in point of time to the decisions of the Tribunal on 5th Nov., 2007 and 23rd Nov., 2007. Once that was so, applying the enunciation of law as laid down by the Hon''ble Supreme Court in Saurashtra Kutch Stock Exchange Ltd.''s case (supra), the Tribunal was in error in declining to rectify the mistake which was apparent on the face of the record. In view of the above, the substantial question of law is answered in favour of the assessee and against the Revenue. As a consequence thereof, the appeals stand allowed.