ITESH BRDOLOI,BONGAIGAON vs. ASSISTANT COMMISSIONER OF INCOME TAX, CIRCLE-2, GUWAHATI
What did the Tribunal hold?
The Tribunal dismissed the appeal, relying on the Supreme Court's decision in Checkmate Services Pvt. Ltd. The court held that delayed deposit of employees' contribution to PF/ESI, even if made before the return filing due date, is not deductible under Section 36(1)(va).
What were the facts?
The assessee's appeal concerned the disallowance of delayed deposit of employees' contribution to PF/ESI. The assessee sought an adjournment due to a medical condition of their representative, which was not supported by documentation.
What were the issues?
Whether delayed deposit of employees' contribution to PF/ESI is allowable as a deduction when deposited before the due date of filing the return of income, considering the Supreme Court's ruling in Checkmate Services.
Which sections of the Income-tax Act were involved?
AI-generated summary — verify with the full judgment below
Cases cited in this judgment(4)Show listHide list
Detected automatically from the text. Citations are also linked where they appear in the judgment. The count shows how many other judgments on BharatTax rely on the same authority.
- Checkmate Services Pvt. Ltd. v. CIT1,392 citing143 Taxmann.com 178 · 2022 · SC · Read judgment
- ACIT v. Saurashtra Kutch Stock Exchange Ltd.470 citing14 SCC 171 · 2008 · Read judgment
- Goerge v. State of Kerala35 citing3 SCC 557 · 2007
- Bhikaji and Choudhary v. Sadananda27 citing1 SCC 550 · 1980
Income Tax Appellate Tribunal, “GUWAHATI BENCH, GUWAHATI
Before: Shri Sanjay Garg & Shri Girish Agrawal
order : June 06, 2023 आदेश / ORDER संजय गग�, �या�यक सद�य �वारा / Per Sanjay Garg, Judicial Member: The present appeal has been preferred by the assessee against the order dated 20.07.2022 of the National Faceless Appeal Centre [hereinafter referred to as ‘CIT(A)’] passed u/s 250 of the Income Tax Act (hereinafter referred to as the ‘Act’).
The sole issue involved in this appeals is relating to the disallowance made by the Assessing Officer/Central Processing Centre (CPC) u/s 36(1)(va) r.w.s. 2(24)(x) of the Act on account of delayed deposit of employees’ contribution to PF/ESI i.e. after the due date as provided under the respective welfare enactments. Assessment Year: 2019-20 Itesh Bordoloi 3. An unsigned application for adjournment has been received on behalf of the assessee, wherein, it has been stated that the authorized representative of the assessee is down with some medical condition, therefore, he was unable to attend the hearing. However, a perusal of the file reveals that no power of attorney of any authorized representative has been placed on file, therefore, the aforesaid contention written in the application does not seem to be correct.
Further we note that the issue raised by the assessee has come to rest by the recent verdict of the Hon’ble Supreme Court in Checkmate Services Pvt. Ltd. Vs. CIT (2022) 143 taxmann.com 178 (SC) dated 12.10.2022 wherein it has been held that “deduction u/s 36(1)(va) in respect of delayed deposit of amount collected towards employees’ contribution to PF cannot be claimed even though deposited within the due date of filing of return even when read with Section 43B of the Income-tax Act,1961. We therefore do not find any reason for further adjournment of the matter and hence proceed to decide the aforesaid issue on merits. The Hon’ble Supreme Court in the case of ‘Checkmate Services 5. Pvt. Ltd vs. CIT’ (supra) has held that by virtue of section 2(24)(x) of the Act, the amounts received or deducted by an employer u/s 36(1)(va), it retains its character as an income (albeit deemed) by virtue of section 2(24)(x), unless the condition stipulated by Explanation to section 36(1)(va) are satisfied i.e. depositing such amount received or deducted from the employee on or before the due date. The Hon’ble Supreme Court held that there is a marked distinction between the nature and character of the two amounts – the employer’s liability is to be paid out of its income, whereas, the second I.T.A. No.29/Gau/2022 Assessment Year: 2019-20 Itesh Bordoloi is deemed an income, by definition, since it is the deduction from the employee’s income and held in trust by the employer. The Hon’ble Supreme Court thus held that the conditions of section 43B prescribing the due date as the date of filing of return of income in case the employers’ contribution towards ESI/PF would not be applicable in case the employees’ contribution as provided u/s 36(1)(va) of the Act and that the due date in respect of deposit of employees’ contribution would be such as prescribed u/s 36(1)(va) of the Act.
It has been held time and again that law declared by a court will have retrospective effect, if not otherwise stated to be so specifically. It is also well settled proposition that whenever, a previous decision is overruled by a larger bench of the Supreme Court, the previous decision is completely wiped out and Article 141 will have no application to the decision which has already been overruled and the court would have to decide the cases according to the law laid down by the latest decision of the Hon’ble Supreme Court and not by the decision which has been expressly overruled. The above reasoning stems from the principle that when a court decides a matter, it is not as if it is making any new law but it is as if it is only restating what the law has always been. The reliance in this respect can be placed on the decision of the Hon’ble Supreme Court in the case of “Ramdas Bhikaji and Choudhary vs. Sadananda” (1980) 1 SCC 550 and on the recent decision of the Hon’ble Supreme Court in the case of “Manoj Parihar and Ors. Vs. State of Jammu & Kashmir and Ors” SLP(C) No.11039 of 2022 vide order dated 27.06.2022; “PV Goerge vs. State of Kerala” (2007) 3 SCC 557; Assistant Commissioner vs. Saurashtra Kutch Stock Exchange Ltd. Assessment Year: 2019-20 Itesh Bordoloi (2008) 14 SCC 171, wherein, the Hon’ble Supreme Court has held that judges do not make law, they only discover and find the correct law. Even, that where an earlier decision of the court operate for quite some time, the decision rendered later on would have retrospective effect clarifying the legal position which were earlier not correctly understood.
In view of the above stated legal position, the law declared by the Hon’ble Supreme Court will be retrospectively applicable and it will be treated that earlier decisions of different High Court favouring the assessee would be of no benefit of assessee at this stage as the said decisions of the High Courts are treated to be never existed or to say are wiped out by the aforesaid decision of the Hon’ble Supreme Court.
In view of above discussion, we do not find any merit in the appeal of the assessee and the same is hereby dismissed.
In the result, the appeal of the assessee stands dismissed.
More judgments on Section 36(1)(va)
- Vco Consulatatns and Sevices Private… vs ITO, Corporate Ward 3(3), ChennaiITA 2145/CHNY/2025[2019-20]Status: Disposed16 Oct 2026AY 2019-20
- R K Swamy Limited, Chennai vs DCIT Non Corporate Circle 10(1), ChennaiITA 504/CHNY/2026[2018-19]Status: Disposed14 Oct 2026AY 2018-19
- M/S. R.K. Swamy Ltd., Chennai vs DCIT, Ncc-10(1), ChennaiITA 2822/CHNY/2025[2020-21]Status: Disposed14 Oct 2026AY 2020-21
- Rajesh Maru, Mhow vs ITO-5(1), IndoreITA 839/IND/2025[2023-2024]Status: Disposed12 Oct 2026AY 2023-2024
- Rajesh Maru, Mhow vs ITO-5(1), IndoreITA 838/IND/2025[2022-2023]Status: Disposed12 Oct 2026AY 2022-2023
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