Mistake Apparent from Record U/s 254(2) of Income Tax Act could be corrected by Tribunal: ITAT allows Rectification Application [Read Order]

The Raipur bench of the Income Tax Appellate Tribunal (ITAT) held that the mistakes that are apparent from the records under Section 254(2) of the Income Tax Act, 1961 can be rectified by the tribunal.

The applications filed by the department has raised out of the respective orders of the Tribunal, where the additions made by the Assessing Officer (AO) for the delayed deposit of the employee’s share of contributions towards labour welfare funds, the Employee’s Provident fund (EPF) and Employee’s State Insurance (ESI) by the respective assessee’s was vacated by the Tribunal.

Also, the order of the tribunal was not found in conformity with the recent judgement of the Supreme Court in the case of Checkmate Services Pvt. Ltd. Vs. Commissioner of Income Tax-I, Civil Appeal No.2833.

It was claimed by the Departmental Representative (DR) that as the view taken by the Tribunal that the assessee as per Section 43B of the Income Tax Act was entitled for deduction of its delayed deposit of employees’ share of contributions towards Employees Provident Fund (EPF) and Employees State Insurance (ESI) is not in conformity with the subsequent judgment of the Supreme Court in the case of Checkmate Services P. Ltd. Vs. Commissioner of Income Tax, Civil Appeal No.2833, the court held that as per the provisions of Section 2(24)(x) r.w.s.36 (1)(va) of the Act such delayed deposits were not to be allowed as deduction in the hands of the assessee, therefore, the same had rendered its order that was passed while disposing off the appeal as suffering from a mistake which being apparent from record is amenable for rectification under sub-section (2) of Section 254 of the Act.

The Authorized Representatives (AR) for the respective assessees had come forth with multi-facet contentions to drive home their claim that the orders passed by the Tribunal while disposing off the appeals were not amenable for rectification under sub-section (2) of Section 254 of the Income Tax Act. The counsel has relied on various judgements in light of the argument.

The two-bench member comprising of Ravish Sood (Judicial member) and Dipak P. Ripote (Accountant member) concluded that the orders passed while disposing off the respective appeals as suffering from a mistake, which being apparent from record had therein made those amenable for rectification under sub-section (2) to Section 254 of the Income Tax Act, 1961. The orders which were filed by the department and were passed by the tribunal while disposing off the appeals were recalled.

To Read the full text of the Order CLICK HERE

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