EMSON TOOLS MFG. CORPN. LTD.,LUDHIANA vs. DCIT, CIRCLE 1 LUDHIANA, LUDHIANA

Though the assessee has taken five grounds of appeal in each year but its grievance revolves around a solitary issue, namely, whether disallowance of PF & ESI payments can be & 163/CHD/2025 A.Y.2020-21 & 2021-22 2 made with the aid of Section 36(1)(va) of the Income Tax Act, 1961 while processing the return u/s 143(1) of the Act.

Appeal to the ld.CIT (Appeals) did not bring any relief to the assessee.

The ld. counsel for the assessee submitted that when it has filed the returns and the returns were processed, at that point of time, there are various High Court decisions which were in favour of the assessee propounding therein that if payment in the respective PF & ESI Account is being made before due date of filing of return, then no disallowance is to be made. Thus, according to him, there was no prima-facie case, it was a debatable point and it should have not been disallowed u/s 143(1). In support of his contention, he relied upon judgement of Hon'ble Chhattisgarh High Court rendered in TAXC No. 56 of 2025 in the case of Raj Kumar Bothra Vs & 163/CHD/2025 A.Y.2020-21 & 2021-22 3 DCIT. He placed on record copy of this judgement. By virtue of this judgement, ld. counsel for the assessee sought to contend that judgement of Hon'ble Supreme Court in the case of Checkmate Services P. Ltd. & Ors. VS. CIT & Ors. (2022) 448 ITR 518 (SC) is applicable with prospective effect.

The ld. DR relied upon orders of Revenue Authorities.

On due consideration of the above facts and circumstances, we are of the view that issue in dispute is covered by the Full Bench decision of the Hon'ble Punjab & Haryana High Court rendered in the case of CIT Vs Aruna Luthra reported in 254 ITR 76. The Hon'ble High Court has observed that a Court decides a dispute between the parties. The cause can involve decision on facts, it can also involve a decision on points of law, both may have bearing on the ultimate result of the case. When a Court interprets a provision, it decides as to what is the meaning and effect of the words used by the legislature. It is a declaration regarding the Statute. In other words, the judgement declares as to what the legislature had said at the time of promulgation of the law. The declaration is………….this was the law, this is the law, this is how the provision shall be construed. The law was very & 163/CHD/2025 A.Y.2020-21 & 2021-22 4 much there. The Hon'ble Supreme Court in the case of Checkmate Services P. Ltd. & Ors. Vs. CIT & Ors. (supra) explained the position of law. Thus, when Section 143(1) order was passed by the AO, law was already there. It was wrongly interpreted by various Hon'ble Courts and it attains finality when the Hon'ble Supreme Court decided the issue in the case of Checkmate Services P. Ltd. & Ors. Vs. CIT & Ors. Thus, judgement of the Hon'ble Supreme Court is applicable with retrospective effect. In view of the Full Bench decision of the Hon'ble jurisdictional High Court, we cannot prefer the judgement of Hon'ble Chhattisgarh High Court. Accordingly, we do not find any merit in both the appeals. They are rejected.

In the result, both the appeals are dismissed. Order pronounced on 06.08.2025.