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TMI Blog2024 (7) TMI 881X X X X Extracts X X X X X X X X Extracts X X X X ..... t. of NCT of Delhi vs. M/s. K.L. Rathi Steels Limited and Others [ 2024 (7) TMI 811 - SUPREME COURT] issue of power to rectify error and power to review and after referring to catena of decisions of the Hon ble Supreme Court categorically held that, if the judgment has been passed by the Court following another judgment and subsequently by later judgment, the decision has been overruled or reversed, cannot have the effect of reopening or reviewing the former judgment based on following overruled judgment nor can the same be reviewed. The aforesaid judgment clearly clinches the issue that the subsequent judgment of the Hon ble Supreme Court in the case of Checkmate Services P Ltd. [ 2022 (10) TMI 617 - SUPREME COURT ] the earlier judgment passed by the Tribunal based on the binding precedents cannot be recalled or reviewed. Once this is the law of the land, then we are unable to appreciate the contention of the Revenue that the judgment of the Tribunal should be recalled which has been passed following catena of judgment of the Hon ble Jurisdictional High Court and other High Courts prevalent at that time in light of the subsequent judgment of the Hon ble Supreme Court this would be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sure timely payment before the returns are filed, of certain liabilities which are to be borne by the assessee in the form of tax, interest payment and other statutory liability. In the case of these liabilities, what constitutes the due date in defined by the statute. Nevertheless, the assessees are given some leeway in that as long as deposits are made beyond the due date, but before the date of filing the return, the deduction is allowed. That however, cannot apply in the case of amounts which are held in trust, as it is in the case of employees contributions which are deducted from their income. They are not part of the assessee employer's income, nor are they heads of deduction per se in the form of statutory pay out. They are others' income monies, only deemed to be income, with the object of ensuring that they are paid within the due date specified in the particular law. They have to be deposited in terms of such welfare enactments. It is upon deposit, in terms of those enactments and on or before the due dates mandated by such concerned law, that the amount which is otherwise retained, and deemed an income, is treated as a deduction. Thus, it is an essential conditi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... provident fund and ESIC, beyond the due date of the respective Acts. Against the disallowance made by the CPC u/s. 143(1), assessee had preferred appeal before the ld. CIT(A) on the following ground:- The appellant had received employees' contribution to Provident Fund (PF and ESI) and from the total contribution received a part of funds i.e. Rs. 1,74,09,948/-was deposited by the appellant after the due date of the respective act but before the due date of filling of return as per section 139(1) of the Income Tax Act, 1961. The appellant did not fail to pay the employees PF and ESI so deducted by it. It was a mere delay of depositing the PF and ESI payments. The CPC also failed to appreciate the fact of the judgments passed by the various appellate authorities viz. High Courts and Supreme Court in favour of the appellants allowing such payments even if paid after the due date of respective acts but before the due date of filing income tax return as specified under section 139(1) of the Income Tax Act 1961. We therefore, request your good self to allow these employee contributions of PF and ESIC paid by the appellant. 5.1 Before the ld. CIT (A) following facts were brought on r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... contribution to PF the business deduction can be allowed as per the provisions mentioned in Section 438 of the Act can be allowed if payment is made before the due date of furnishing the return of income. 3. High Court Of Bombay in the case of Commissioner of Income-tax 4 , Mumbai v. Hindustan Organics Chemicals Ltd [2014] 48 taxmann.com 421 (Bombay). The matter was in Supreme Court and the SLP has been dismissed as the department has subsequently withdrawn the appeal due to low tax effect (Commissioner of Income Tax v. Hindustan Organics Chemicals Ltd. [2020] 122 taxmann.com 171 (SC)) Hence, the Bombay High court decision still holds the ground. 4. In the case of Pr. Commissioner of Income Tax -2 v. Pranav Agro Industries Ltd., Official Liquidator, High Court, Mumbai (INCOME TAX APPEAL 333 OF 2017) Order Dated July 8, 2019, the Honourable Bombay High Court has reiterated its earlier decision passed in the case of Commissioner of Income tax (Central), Pune v/s Ghatge Patil Transports Ltd. 7. Apart from that assessee also quoted and relied upon more than 30 judgments of different Hon ble High Courts across the Country wherein similar views were taken. However, the ld. CIT (A) taking ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or the [Assessing] Officer: Provided that an amendment which has the effect of enhancing an assessment or reducing a refund or otherwise increasing the liability of the assessee, shall not be made under this sub-section unless the Appellate Tribunal has given notice to the assessee of its intention to do so and has allowed the assessee a reasonable opportunity of being heard: 11. Thus, the scope is of rectifying the mistake which is apparent from the record on the date of passing the order. On the scope of section 254(2) of the Act, it would be relevant to refer to the judgment of the Hon ble Supreme Court in the case of CIT vs. Reliance Telecom Ltd, reported in (2022) 440 ITR 1 (SC) wherein Hon ble Court has defined the scope of powers u/s. 254(2). The Hon ble Supreme Court held that the powers u/s. 254(2) of the Act are akin to Order XLVII Rule 1 CPC and while considering the application u/s. 254(2) of the Act, the Appellate Tribunal is not required to re-visit its earlier order and to go into details on merits. The powers u/s. 254(2) are that they are only to rectify or correct any mistake apparent from the record. The relevant Observation of the Court reads as under:- 3.2 Havi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... law on which the judgment of the Court is based has been reversed or modified by the subsequent decision of a superior Court in any other case, shall not be a ground for the review of such judgment.] 13. Ergo, the Explanation clearly envisages that the decision on a question of law on which judgment of the Court is based has been reversed or modified by the subsequent decision of a superior Court in any of the case shall not be the ground for review of said judgment. Thus, there is a clear prohibition to review or revive the order simply based on the subsequent decision of a superior Court. This dictum has to be followed especially in the cases where lis has attained finality and qua both the parties the matter has been settled by the Court. 14 The Constitution Bench of the Hon ble Supreme Court in the case of Beghar Foundation vs. Justice K.S. Puttaswamy reported in (2021) 123 taxmann.com 344 (SC) wherein the Hon ble Supreme Court made following observations:- 4. The present review petitions have been filed against the final judgment and order dated 26-9-2018. We have perused the review petitions as well as the grounds in support thereof. In our opinion, no case for review of jud ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be accepted, then whenever a judgment is reversed by a higher Court or by any Constitutional Court subsequently in some different case, then all the appeals and matters which have been decided following the earlier order of the Constitutional Courts / High Court or Supreme Court does not mean that all such orders should be recalled even when there is no lis pending and to disturb the finality. 17. This principle has been reiterated by the Hon ble Supreme Court again in the case of CIT vs. Gracemac Corporation reported in (2023) 456 ITR 135 vide order dated 03/07/2023, wherein the Hon ble Supreme Court had made the following observations:- 5. Apart from this, it has also been brought to our notice by the learned ASG that in CIT (International Taxation) v. Microsoft Corporation (MS Corp.) [2023] 151 taxmann.com 372/453 ITR 746 (SC) bearing SLP (C) Dy. No. 7076/2023, a coordinate Bench of this Court by an order dated 20-3-2023 dismissed the special leave petition and liberty has been reserved to reopen and/or revive the special leave petition in the event the review petition in Engineering Analysis Centre of Excellence (P.) Ltd. (supra) is allowed. 6. In our view, as on today, Engine ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... icae ut sit finis litium (It is in the interest of the State that there should be an end to a litigation); and (iii) Res judicata pro veritate occipitur (A judicial decision must be accepted as correct). (Emphasis added) 18. Again the Hon ble Supreme Court reiterated the same principle in the case of Commissioner of CGST and Central Excise (J And K) vs. Saraswati Agro Chemicals Pvt. Ltd in SLP (Civil) Diary No(s).18051/2023 and others, vide judgment and order dated 04/07/2023 had made following observations:- Thus, in substance, by filing the miscellaneous application the revenue was seeking a second review of the said judgment which is impermissible in law (Order XLVII Rule 9 CPC). Secondly, by ignoring the Explanation to Order XLVII Rule 1 of the CPC and the principle that emerges from the same, what is sought to be contended by learned ASG is that if a judgment is overruled by this Court by a subsequent judgment, then the overruled judgment will have to be reopened and on reopening the said judgment will have to be brought in line with the subsequent judgment which had overruled it. This is not permissible in law for two reasons: firstly, there has to be finality in litigation a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... idered by the court, the ultimate decision would have been otherwise. 41. Regarding (ii) (supra), the review petitioner has to satisfy the court that the mistake or error committed by it is self-evident and such mistake or error can be pointed out without any long-drawn process of reasoning; and, if such mistake or error is not corrected and is permitted to stand, the same will lead to a failure of justice. There cannot be a fit-in all definition of mistake or error apparent on the face of the record and it has been considered prudent by the courts to determine whether any mistake or error does exist considering the facts of each individual case coming before it. 42. With regard to (iii) (supra), we can do no better than refer to the traditional view in Chhajju Ram (supra), a decision of a Bench of seven Law Lords of the Judicial Committee of the Privy Council. It was held there that the words any other sufficient reason means a reason sufficient on grounds at least analogous to those specified immediately previously , meaning thereby (i) and (ii) (supra). Notably, Chhajju Ram (supra) has been consistently followed by this Court in a number of decisions starting with Moran Mar Bass ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Hon ble Judges, while dismissing the review petitions before it, made pertinent observations reaching out to the very core of the said Explanation. This Court observed that simply because there has been a Constitution Bench decision, passed in the aftermath of the judgment impugned, would be no ground for a review of the said judgment. It also went on to observe that a reference to a Constitution Bench would stand on a still weaker footing. 52. The question arising for decision in State of West Bengal v. Kamal Sengupta32 was whether a tribunal established under section 4 of the Administrative Tribunals Act, 1985 can review its decision on the basis of a subsequent order/decision/judgment rendered by a coordinate or larger Bench or any superior court or on the basis of subsequent event/development. It was contended on behalf of the State that any subsequent decision on an identical or similar point by a coordinate or larger Bench or even change of law cannot be made the basis for recording a finding that the order sought to be reviewed suffers from an error apparent on the face of the record. After considering a host of decisions with a finetooth comb, the Court went on to cull ou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... from any error apparent on the face of the order and in absence of any such error, finality attached to the judgment/order cannot be disturbed. 54. The final one is a decision of the Constitution Bench in Beghar Foundation v. K.S. Puttaswamy34. The majority was of the following view: 2. The present review petitions have been filed against the final judgment and order dated 26-9-2018. We have perused the review petitions as well as the grounds in support thereof. In our opinion, no case for review of judgment and order dated 26-9-2018 is made out. We hasten to add that change in the law or subsequent decision/judgment of a coordinate or larger Bench by itself cannot be regarded as a ground for review. The review petitions are accordingly dismissed. Xxxxxxxxxxxxxxxxxxxxxxxxxxx Xxxxxxxxxxxxxxxxxxxxxxxxxxxx 89. The relevant principles deducible from the precedents on the Explanation to Rule 1 that we have considered, for the purpose of deciding the present reference, are as follows: a) in case of discovery of a new or important matter or evidence, such matter or evidence has to be one which existed at the time when the decree or order under review was passed or made; and b) Order XLVII ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... reviewed. Once this is the law of the land, then we are unable to appreciate the contention of the Revenue that the judgment of the Tribunal should be recalled which has been passed following catena of judgment of the Hon ble Jurisdictional High Court and other High Courts prevalent at that time in light of the subsequent judgment of the Hon ble Supreme Court this would be against the principle of law laid down by the Hon ble Supreme Court in the aforesaid cases specially once this law has been upheld by the Hon ble Supreme Court in various judgments which we are bound to follow. 20. We are aware that many of the Co-ordinate Benches have recalled the order of the Tribunal on this issue on the principle of the Hon ble Supreme Court in the case of ACIT vs. Saurashtra Kutch Stock Exchange Ltd. reported in (2008) 305 ITR 227. In the aforesaid case the issue was that the Tribunal has passed an order on 27/10/2000 upholding the decision of CIT that assessee was not entitled for exemption u/s. 11. Thereafter, the Miscellaneous Application was filed u/s. 254(2) to rectify the error committed by the Tribunal in the decision rendered by any appeal as it has not followed the judgment of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es not make a new law. This observation of the Court does not lead to any inference to draw that any rectification order u/s. 254(2) can be based on subsequent judgment which comes later on. On the contrary, all the aforesaid judgments of Hon ble Supreme Court which we have quoted above extenso have clearly held that there would be no review or recall of the order based on the subsequent judgment. Finally, the Hon ble Supreme Court in the case of Saurashtra Kutch Stock Exchange Ltd. on the fact of the case has concluded as under:- In the present case, according to the assessee, the Tribunal decided the 47 matter on October 27, 2000. Hiralal Bhagwati was decided a few months prior to that decision, but it was not brought to the attention of the Tribunal In our opinion, in the circumstances, the Tribunal has not committed any error of law or of junsdiction in exercising power under sub-section (2) of section 254 of the Act and in rectifying the mistake apparent from the record Since no error was committed by the Tribunal in rectifying the mistake, the High Court was not wrong in confirming the said order Both the orders, therefore, in our opinion, are strictly in consonance with law ..... X X X X Extracts X X X X X X X X Extracts X X X X
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