Karnataka High Court
Deputy Commissioner Of Income Tax vs Shri. Mangilal Padamchand on 10 September, 2025
Author: M.Nagaprasanna
Bench: M.Nagaprasanna
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WP No. 27626 of 2023
HC-KAR
IN THE HIGH COURT OF KARNATAKA AT BENGALURU
DATED THIS THE 10TH DAY OF SEPTEMBER, 2025
BEFORE
THE HON'BLE MR. JUSTICE M.NAGAPRASANNA
WRIT PETITION NO. 27626 OF 2023 (T-IT)
BETWEEN:
DEPUTY COMMISSIONER OF INCOME TAX,
CIRCLE 1(1),
BMTC COMPLEX,
KORAMANGALA,
BENGALURU 560 034.
...PETITIONER
(BY SRI.E.I.SANMATHI, ADVOCATE)
AND:
Digitally
signed by
NAGAVENI SHRI MANGILAL PADAMCHAND,
Location: NO.1450,
High Court of
Karnataka
HINDUSTHAN ENTERPRISES,
KABIR ROAD,
MANDI MOHALA,
MYSURU,
KARNATAKA-570 021.
...
RESPONDENT
(BY SMT. VANI H, ADVOCATE)
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THIS WRIT PETITION IS FILED UNDER ARTICLES 226
AND 227 OF THE CONSTITUTION OF INDIA PRAYING TO SET
ASIDE ORDER PASSED BY INCOME TAX APPELLATE TRIBUNAL,
C BENCH, BANGALORE DATED 16.06.2023 IN M.A NO.
77/BANG/2023 IN ITA NO.25/BANG/2022 (ANNEXURE-A) IS
PRODUCED FOR A.Y. 2018-19; CONDONE THE DELAY IN
FILING THE MISCELLANEOUS PETITION BEFORE TRIBUNAL
AND DIRECT THE INCOME TAX APPELLATE TRIBUNAL TO
CONSIDER THE MISCELLANEOUS PETITION ON MERITS OF THE
CASE OR ALTERNATIVELY CONDONE THE DELAY IN FILING THE
MISCELLANEOUS PETITION BEFORE TRIBUNAL AND ALSO
HEAR THE MATTER ON MERITS OF THE CASE AND PASS SUCH
OTHER ORDERS AS MAY BE DEEMED APPROPRIATE UNDER THE
CIRCUMSTANCES OF THE CASE, IN THE ENDS OF JUSTICE.
THIS PETITION, COMING ON FOR PRELIMINARY HEARING
IN 'B' GROUP, THIS DAY, ORDER WAS MADE THEREIN AS
UNDER:
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CORAM: HON'BLE MR. JUSTICE M.NAGAPRASANNA
ORAL ORDER
The petitioner is before this Court seeking the following
prayers:
"(A) set aside order dated order passed by Income
Tax Appellate Tribunal, C Bench, Bangalore dated
16/6/2023 in M.A.No.77/Bang/2023 in ITA
No.25/Bang/2022 (Annexure-A) is produced for
A.Y.2018-19.
(B) Condone the delay in filing the miscellaneous
petition before Tribunal and direct the Income Tax
Appellate Tribunal to consider the miscellaneous petition
on merits of the case
(B) Or Alternatively condone the delay in filing the
miscellaneous petition before Tribunal and also hear the
matter on merits of the case
(C) Pass such other orders as may be deemed
appropriate under the circumstances of the case, in the
ends of justice."
2. Heard Sri.E.I.Sanmathi, learned counsel appearing
for the petitioner, Smt.Vani H, learned counsel appearing for
the respondent and have perused the material on record.
3. Learned counsel for the parties in unison submits
that the issue in the lis stands covered by the judgment
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rendered by this Court in W.P.No.27089/2023 (T-IT) disposed
on 30.07.2025. The order reads as follows:
"The petitioner/Deputy Commissioner of Income
Tax Department is at the doors of this Court calling in
question an order dated 25-05-2023 passed by the
Income Tax Appellate Tribunal, 'SMC-B' Bench,
Bengaluru ('the Tribunal' for short) rejecting
Miscellaneous Petition filed by the revenue seeking
rectification of the order dated 07-04-2022 passed in ITA
No.2/Bang/2022.
2. Heard Sri E.I. Samanthi, learned counsel appearing for
the petitioner and Sri S.V. Ravishankar, learned counsel
appearing for the respondent.
3. The respondent/assessee files its return of income
tax. An order comes to be passed on 02-07-2020 under
Section 143(1) of the Income Tax Act, 1961 ('the Act' for
short) whereby the return of income was disallowed due
to delayed payment of employees' contribution to
provident fund and Employees State Insurance Fund by
the assessee. The assessee then prefers an appeal
before the Commissioner of Income Tax (Appeal) against
the order passed by the Assessing Officer dated 02-07-
2020. The Authority disposed of the appeal in terms of
his order dated 18-08-2021 affirming what the Assessing
Officer had opined.
4. Against the said order, the assessee prefers an appeal
before the Tribunal. The Tribunal, in terms of its order
dated 07-04-2022, disposed of the appeal setting aside
the order of assessment and that of the Commissioner
(Appeal) and grants relief to the assessee as was sought
for. Things were allowed to rest.
5. Revenue prefers a miscellaneous petition before the
Tribunal for rectification of its order on the ground that
there is a change in law declared by the Apex Court after
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the Tribunal had passed the order. The Tribunal, by the
impugned order rejects the petition, on the ground that
the Tribunal does not have power to condone the delay
in filing the miscellaneous petition in terms of its order
dated 25-05-2023. It is this order that drives the
revenue to this Court in the subject petition.
6. The learned counsel appearing for the revenue
Sri E.I. Sanmathi would contend that the law being laid
down by the Apex Court though being subsequent, the
petition should have been entertained by the Tribunal.
The Tribunal erroneously rejects the miscellaneous
petition on the ground of delay. There can be no delay,
as the revenue has preferred the application immediately
after the judgment of the Apex Court. He would seek
quashment of the said order and permitting adjudication
on merit of the miscellaneous petition.
7. Per contra, the learned counsel appearing for the
respondent Sri S.V. Ravishankar would seek to place
reliance upon the judgment rendered by the Division
Bench of the High Court of Bombay in the case of
PRAKASH D. KOLI v. INCOME TAX APPELLATE
TRIBUNAL1, on an identical circumstance and would
submit that at the time of rendering the judgment, the
Tribunal did not commit any error. Later comes about the
decision of the Apex Court only after adjudication of
rights of parties and, therefore, the petition be
dismissed, though the reason rendered by the Tribunal to
reject the miscellaneous petition is erroneous.
8. I have given my anxious consideration to the
submissions made by the respective learned counsel and
have perused the material on record.
9. The afore-narrated facts and link in the chain of
events are all a matter of record. The only issue that
calls for consideration is, whether a subsequent change
in law would take away the adjudication that has already
undergone to follow. The revenue seeks review of the
order of the Tribunal in the light of the judgment
(2025) 176 Taxmann.com 481 (Bombay)
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rendered by the Apex Court in CHECKMATE SERVICES
PRIVATE LIMITED v. COMMISSIONER OF INCOME
TAX-12. This is an admitted fact. Whether subsequent
law being laid down become the subject matter of review
of already concluded proceeding is necessary to be
noticed. The Apex court in the case of SANJAY KUMAR
AGARWAL v. STATE TAX OFFICER3, has held as
follows:
"15. It is very pertinent to note that
recently the Constitution Bench in Beghar
Foundation v. K.S. Puttaswamy (Aadhaar Review-
5 J.) [Beghar Foundation v. K.S. Puttaswamy
(Aadhaar Review-5 J.), (2021) 3 SCC 1] , held
that even the change in law or subsequent
decision/judgment of coordinate Bench or larger
Bench by itself cannot be regarded as a ground
for review.
... ... ...
16.8. Even the change in law or subsequent
decision/judgment of a coordinate or larger
Bench by itself cannot be regarded as a ground
for review."
(Emphasis supplied)
The Apex Court holds that in BEGHAR FOUNDATION, a
five Judge Bench holds that even the change in law or
subsequent decision/judgment of a Coordinate Bench or
a larger Bench cannot by itself be regarded as a ground
for review. The Apex Court was following the judgment
of the Constitution Bench in BEGHAR FOUNDATION v.
JUSTICE K.S. PUTTASWAMY4, wherein the Apex Court
holds as follows:
"2. The present review petitions have been
filed against the final judgment and order dated
26-9-2018 [K.S. Puttaswamy (Aadhaar-5
J.) v. Union of India, (2019) 1 SCC 1]. 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 [K.S. Puttaswamy (Aadhaar-5 J.) v. Union
(2023) 6 SCC 451
(2024) 2 SCC 362
(2021) 3 SCC 1
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of India, (2019) 1 SCC 1] 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."
(Emphasis supplied)
The Tribunal while deciding the issue had followed the
judgment of the High Court of Himachal Pradesh in
COMMISSIONER OF INCOME TAX v. NIPSO
POLYFABRIKS LIMITED5. Relief was granted to the
assessee following the aforesaid Division Bench
judgment. This is subsequently reversed by the Apex
Court in the case of CHECKMATE SERVICES PRIVATE
LIMITED (supra).
10. As observed by the Apex Court, a subsequent
change in law would not exhume already decided
adjudication. At best it would become applicable to
subsequent adjudications. As on the date, the Tribunal
rendered its order, the law as obtaining on the day was
followed. The law changed a year later. Change of law, a
year later, would not mean that concluded proceeding
can be revived. If this would be permitted, it would lead
to chaotic circumstances.
11. The High Court of Bombay considered an
identical circumstance in PRAKASH D. KOLI's case
supra following the afore-quoted judgments. The High
Court of Bombay has held as follows:
".... .... ....
6. In light of this decision of the Hon'ble
Supreme Court, and which was rendered on 12th
October, 2022, the Revenue moved a Rectification
Application before the ITAT by invoking the provisions
of Section 254 (2) of the IT Act. It is in this Rectification
Application that the impugned order is passed, wherein
the Tribunal has allowed the Miscellaneous Application
filed by the Revenue, and holding that the disallowance
made by the Assessing Officer is sustained.
2012 SCC OnLine HP 6967
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7. The only ground on which the Rectification is
allowed is on the basis of the judgment of the Hon'ble
Court in Checkmates Services (supra) As mentioned
earlier, this judgment was rendered by the Hon'ble
Supreme Court on 12th October, 2022 which is after the
date when the original order was passed by the ITAT on
22nd June, 2022 holding that the Assessee was entitled
to this deduction under Section 36 (1)(va).
8. Having heard the learned Counsel for the
parties, we agree with the learned Counsel
appearing on behalf of the Petitioner that a
subsequent ruling of the Hon'ble Supreme Court
cannot be a ground for invoking the provisions of
Section 254 (2) Section 254 (2) can be invoked
with a view to rectify any mistake apparent from
the record and not otherwise Admittedly, on the
date when the original order was passed by the
ITAT on 22nd June, 2022, it followed the law as it
stood then That was overruled subsequently by
the Hon'ble Supreme Court in Checkmates
Services (supra) Hence, we are of the view, that
on the date when the Tribunal passed its original
order (on 22nd June, 2022), it could not be said
that there was any error or mistake apparent on
the record, giving jurisdiction to the Tribunal to
invoke Section 254(2) of the IT Act
9. We find that the view that we take is squarely
covered by a Division Bench decision of this Court in the
case of Infantry Security and Facilities v Income Tax
Officer [Writ Petition No 17175 and other connected
matters, dated 3-12-2024]. The Division Bench in
Infantry Securities and Facilities (supra) was concerned
with the exact same decision of the Hon'ble Supreme
Court in Checkmates Services (supra). The Division
Bench, after examining the law on the subject, came to
the conclusion that the Tribunal was in patent error in
exercising jurisdiction under Section 254(2), and
passing the impugned order. The relevant portion of
this decision read thus-
14. In our clear opinion, the question would be
required to be answered against the Revenue and
in favour of the assessee The reasons for which we
discuss hereunder In such context, at the outset,
we may observe that the petitioner had succeeded
before the Tribunal on the basis of the position in
law as it prevailed on the day the decision was
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rendered on the petitioner's appeal on 26 July
2022. Subsequent to the said orders passed by the
Tribunal, on 12 October 2022, the Supreme Court
rendered its decision in "Checkmate Services
Private Limited" (supra), whereby the Supreme
Court held that the deduction of the employees'
share can be allowed under Section 36(1)(va) of
the IT Act, only if such share was deposited before
the time limit under the respective statutes and not
before the due date under Section 139(1) of the IT
Act. In the fact situation, certainly it cannot be said
that the Tribunal has overlooked the existing
position in law, as laid down by the Supreme Court
or the High Court, so as to bring about a situation
that the law declared by the Supreme Court was
not followed by the Tribunal and/or the decision of
the Tribunal is contrary to the law as laid down by
the Supreme Court. Such decision of the Supreme
Court which never existed when the Tribunal
passed the original order could never have been
applied by the Tribunal, and hence it cannot be
said that there was any mistake on the face of the
record, so as to confer jurisdiction on the Tribunal
to exercise its jurisdiction under Section 254(2) of
the IT Act.
16. In so far as the petitioner's contention on the
jurisdiction of the Tribunal to entertain the
Miscellaneous Application is concerned, it appears
that the position in law is well settled. The
jurisdiction as conferred under sub-Section(2) of
Section 254 is akin to the jurisdiction conferred on
the Civil Court under the provisions of Order XLVII,
Rule 1 of the CPC inter alia to correct mistakes
apparent on the face of the record. However, on a
comparative reading of sub-Section (2) of Section
254 of the IT Act, and Rule 1 of Order XLVII of
CPC, it appears that such jurisdiction conferred on
the Tribunal is more restricted.
17. In Beghar Foundation (supra), the
Supreme Court was considering a review
petition, filed against the final judgment and
order dated 26 September 2018, passed on
the main proceedings. In rejecting the review
petition, the Supreme Court observed that no
case for review of such judgment was made
out, and most importantly on the ground that
change in law or subsequent
decision/judgment of coordinate or larger
bench by itself cannot be regarded as a
ground for review. Such principles of law are
squarely applicable in the facts of the present case.
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18. In Sanjay Kumar Agrawal v. State Tax Officer
(1) and Another, the Supreme Court following the
decision in the Constitution Bench in Beghar
Foundation (supra), made the following
observations:
"15 It is very pertinent to note that recently
the Constitution Bench in Beghar Foundation v K. S
Puttaswamy (Aadhaar Review 5 J.), held that even
the change in law or subsequent decision/judgment
of coordinate Bench or larger Bench by itself cannot
be regard as a ground for review."
19. We may observe that recently a bench of the
Tribunal in the case of ANI Integrated Services
Ltd (supra), had the occasion to consider the very
issue as raised by the Revenue in light of the
decision rendered by the Supreme Court in
Checkmate Services Private Limited (supra). In
such case similar applications were filed by the
Revenue praying that the Tribunal set aside its
orders in relation to Employees State Insurance
Corporation ("ESIC" for short) (for the
Assessment Year 2019-20) considering the
changed position in law in "Checkmate Services
Private Limited" (supra). The Tribunal by its
decision dated 29 May 2024 [ANI Integrated
Services Limited (supra)] did not accept the
contentions as urged on behalf of the Revenue
and rejected the Miscellaneous Applications filed
by the Revenue, also considering the decision in
Beghar Foundation (supra) and the scope of its
limited jurisdiction under Section 254(2) of the IT
Act. We are in complete agreement with the view
taken by the Tribunal in ANI Integrated Services
Ltd (supra) and which is on the very issue as
urged by the petitioner."
Not only do we agree with this decision, but we are also
bound by it.
10. In light of the aforesaid discussion, we are of
the view that this Petition deserves to be allowed.
Accordingly, the Writ Petition is allowed in terms of
prayer clause (a) which reads thus:-
"(a) to issue a Writ of Certiorari or a Writ in the
nature of Certiorarı or any other appropriate Wnt,
Order or direction, calling for the records of the
Petitioner's case and after going into the legality
and propriety thereof, to quash and set aside the
impugned Order dated 4th August 2023 and Order
giving effect dated 26th October 2023 and thereby
restoring back the Order dated 22nd June 2022
passed u/s. 254 (1) ofthe ITA."
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11. Rule is made absolute in the aforesaid terms
and the Writ Petition is also disposed of in terms thereof
However, there shall be no order as to costs.
12. We may clarify here that by virtue of this
order, the Revenue is not precluded from challenging
the original order passed by the ITAT dated 22nd June,
2022 under Section 260A of the IT Act, if they are
otherwise entitled to in law."
(Emphasis supplied)
12. In the light of the law being clear, though the reason
so rendered by the Tribunal to reject the application is
debatable, the said issue need not result in the matter
being remitted back to the hands of the Tribunal for fresh
consideration, only to follow the afore-quoted law and
pass necessary orders.
13. Therefore, finding no merit in the petition, the
petition stands rejected."
4. In the light of the issue standing covered by
judgment rendered by this Court supra, the petition stands
rejected on the same terms.
Sd/-
(M.NAGAPRASANNA)
JUDGE
CBC
