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TMI Blog2023 (8) TMI 1508X X X X Extracts X X X X X X X X Extracts X X X X ..... t. Ltd. [ 2022 (10) TMI 617 - SUPREME COURT] held that payment towards employee s contribution to P.F. / E.S.I.C. after the due date prescribed under the relevant statute is not allowable as a deduction u/s 36(1)(va) HELD THAT:- We find that the Hon'ble Supreme Court in ACIT v/s Saurashtra Kutch Stock Exchange [ 2008 (9) TMI 11 - SUPREME COURT] held that non consideration of the decision of the Hon'ble Jurisdictional High Court or the Hon'ble Supreme Court can be said to be a mistake apparent from record which can be rectified under section 254(2) - Also that the judicial decision acts retrospectively and it is not the function of the Court to pronounce a new rule , but to maintain and expound the old one . Thus, it was held tha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Tribunal in assessee s appeal being ITA no.1999/Mum./2021, for the assessment year 2019 20. 2. During the hearing, the learned Departmental Representative ( learned D.R. ) submitted that the Co ordinate Bench of the Tribunal allowed the appeal filed by the assessee following its earlier decision rendered in Kalpesh Synthetics Pvt. Ltd. v/s DCIT, in ITA no. 1785/Mum./2021, order dated 27/04/2022. The learned D.R. further submitted that the Hon'ble Supreme Court in Checkmate Services Pvt. Ltd. v/s CIT, [2022] 448 ITR 518 (SC) upheld the disallowance made under section 36(1)(va) of the Act due to delayed payment towards employee s contribution to Provident Fund (P.F) / Employees State Insurance Corporation (E.S.I.C.). Therefore, it wa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... urisdictional High Court or the Hon'ble Supreme Court can be said to be a mistake apparent from record which can be rectified under section 254(2) of the Act. We further find that the Hon'ble Supreme Court in Saurashtra Kutch Stock Exchange (supra) also held that the judicial decision acts retrospectively and it is not the function of the Court to pronounce a new rule , but to maintain and expound the old one . Thus, it was held that the Judges do not make a law, they only discover or find the correct law. The relevant findings of the Hon'ble Supreme Court, in this regard, are as under: 42. In our judgment, it is also well-settled that a judicial decision acts retrospectively. According to Blackstonian theory, it is not the func ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... neral rule of the doctrine of precedent. 6. The facts before the Hon ble Supreme Court in Saurashtra Kutch Stock Exchange (supra) were that the decision of the Hon'ble Jurisdictional High Court was available, however, the attention of the Tribunal was not invited to the said decision at the time of the disposal of the appeal. Thus, in these circumstances, the aforesaid findings were rendered by the Hon'ble Supreme Court and the decision of the Tribunal under section 254(2) of the Act, in recalling its earlier order, was affirmed. 7. The issue now arises whether even a subsequent decision of the Hon'ble Supreme Court, which is binding as per Article 141 of the Constitution of India, can be a basis for rectifying the order under s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... held that the payment towards employees contribution to P.F. and E.S.I.C., after the due date prescribed under the relevant statute is not allowable as a deduction under section 36(1)(va) of the Act. The relevant findings of the Hon ble Supreme Court, in the aforesaid decision, are as under: 53. The distinction between an employer's contribution which is its primary liability under law in terms of Section 36(1)(iv), and its liability to deposit amounts received by it or deducted by it (Section 36(1)(va)) is, thus crucial. The former forms part of the employers' income, and the later retains its character as an income (albeit deemed), by virtue of Section 2(24)(x) unless the conditions spelt by Explanation to Section 36(1)(va) are sa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 condition for the deduction that such amounts are depos ..... X X X X Extracts X X X X X X X X Extracts X X X X
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