Supreme Court of India

Checkmate Services P. Ltd. v. Commissioner of Income Tax-1

Neutral citation
Reported as [2022] 10 S.C.R. 1065
Bench Uday Umesh Lalit CJI, S. Ravindra Bhat and Sudhanshu Dhulia JJ.
Decided 12 October 2022

INSC stands for INDIAN SUPREME COURT. A neutral citation scheme assigned by the Court itself, so a judgment can be cited without depending on a commercial law reporter. INSC is the neutral citation scheme assigned by the Supreme Court, so a judgment can be cited without depending on a commercial law reporter.

What the Court ordered

We hold that Finance Act, 2003 will operate retrosp ectively with effect from 1st April, 1988 [when the first proviso stood inserted]. Lastly, we may point out the hardship an d the invidious discrimination which would be caused to t he assessee(s) if the contention of the Department is to be accepted that Finance Act, 2003, 2003, to the above ext ent, operated prospectively.

Judgment, page 33

From the headnote

Income Tax Act, 1961 – s.36(1)(va) and s.43B – Allo wable deductions – Assessee-appellants had belatedly depo sited their employees’ contribution towards the EPF and ESI, consideri ng the due dates under the relevant acts and regulations – Whether by virtue of s.36(1)(va) r/w s.2(24)(x), such sums received b y appellants constituted “income” and could not be allowed as ded uctions u/ s.36(1)(va) when the payment was made beyond the re levant due date under the respective acts – Held: The essential c haracter of an employees’ contribution, i.e., that it is part o f the employees’ income, held

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