2024 (7) TMI 1531 - AT - Income Tax

Rectification u/s 254 - Delayed payment of PF ESI - HELD THAT - We find no apparent error in the order of the Tribunal warranting any rectification on this ground. Merely because the tribunal has followed the decision of the same Tribunal which are already there in public domain, there is no mistake which requires rectification. The contention of the assessee is not at all acceptable that the Tribunal ought to have followed the recent decision of the Tribunal 2023 (12) TMI 1351 - ITAT BANGALORE wherein the Tribunal has remitted the matter back to the AO to consider the payment made to ESI and PF account, i.e., 15 days from the end of the month in which the salary is paid. In the present Miscellaneous Application we are of the opinion that the Tribunal is not required to revisit its earlier order and go into the details on merits again. The ITAT has no power to re heard the entire appeal on merits again in the garb of miscellaneous application. Now coming to the submission of assessee that the bench agreed to remit the case back to the AO cannot be a reason to allow the present Miscellaneous petition for the simple reason that the decision relied by the ld. AR are distinguishable on facts therefore a conscious decision by the bench that no purpose could be served to the assessee by remitting the issue to the AO. In our opinion there is nothing left to the AO to verify as the Auditor had rightly pointed out the several delayed payment of PF ESI in sl. No. 20(b) of Form 3CD accepted by the Assessee which are contrary to the dictum laid down by the Hon ble Supreme Court as observed in para 10.2 in the case of Manikandan Vazhukkappara Kumaran 2023 (11) TMI 1294 - ITAT BANGALORE . Thus we are of the firm opinion that section 254(2) can be invoked only with a view to rectifying any mistake apparent from record. The assessee cannot seek a review of the order passed by the Tribunal through a miscellaneous application u/s.254(2) of the Act, as held by the Hon ble Supreme Court in the case of Reliance Telecom Limited 2021 (12) TMI 211 - SUPREME COURT We further clarify that if the assessee is of the opinion that the order passed by the Tribunal is erroneous either on facts or in law, in that case the only remedy available to the assessee is to prefer an appeal before the Hon ble High Court. Under the above mentioned facts and circumstances, we partly allow the miscellaneous application filed by the assessee.

Summary

Issues Involved:
1. Whether the Tribunal wrongly relied on case laws not relevant to the grounds of appeal.
2. Whether the Tribunal should have remitted the case back to the Assessing Officer for verification of payment to ESI and PF accounts.
3. Whether the Tribunal has jurisdiction to revisit its earlier order under section 254(2) of the Income-tax Act, 1961.

Issue-wise Detailed Analysis:

1. Wrong Reliance on Case Laws:
The assessee filed a miscellaneous application under section 254(2) of the Income-tax Act, 1961, seeking rectification of the Tribunal's order dated 27.06.2024. The assessee contended that the Tribunal wrongly relied on the case of Manikandan Vazhukkappara Kumaran (ITA No.577/Bang/2023) instead of the more recent ITAT decision in ITA No.806/Bang/2023, which remitted a similar issue back to the Assessing Officer for verification. The Tribunal acknowledged that there was a mistake in referring to the decisions relied upon by the parties and agreed that this mistake was apparent on the face of the record, thus needing rectification.

2. Remitting the Case Back to the Assessing Officer:
The assessee argued that during the course of the argument, it was agreed by the Bench to remit the issue back to the Assessing Officer to verify the payment made to ESI and PF accounts within 15 days from the end of the month in which the salary is paid. However, the Tribunal found that the decision in the case of MTR Maiya's (ITA No.95/Bang/2023) was not applicable as it was based on an earlier decision of the Calcutta Bench, which was superseded by the Supreme Court's decision in Checkmate Services Ltd vs CIT-1 (2023) 6 SCC 45. The Tribunal concluded that there was no purpose in remitting the issue back to the AO as the delayed payments were already pointed out by the auditor and accepted by the assessee.

3. Jurisdiction to Revisit Earlier Order:
The Tribunal emphasized that under section 254(2) of the Income-tax Act, 1961, it has limited jurisdiction to rectify any mistake apparent from the record and cannot revisit its earlier order to rehear the entire appeal on merits. The Tribunal cited the Supreme Court's decision in Reliance Telecom Limited (2021) 133 taxmann.com 41 (SC), which held that section 254(2) powers are akin to Order XLVII Rule 1 CPC and are only for correcting mistakes apparent from the record, not for re-adjudicating the merits. The Tribunal reiterated that if the assessee believes the order is erroneous, the appropriate remedy is to appeal to the High Court, not to seek a review through a miscellaneous application.

Conclusion:
The Tribunal partly allowed the miscellaneous application for statistical purposes, acknowledging the mistake in the reference to case laws but maintaining that there was no change in the final result of the original order dated 27.06.2024. The Tribunal concluded that section 254(2) cannot be invoked to reargue the case on merits and that the assessee's remedy lies in appealing to the High Court if they believe the order is erroneous. The order was pronounced in the open court on 30th July, 2024.