TaxTMI 
TaxTMI 
2023 (6) TMI 1515
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....or deduction u/s. 36(1)(va) of the Act in respect of delay in deposit of employees contribution towards PF and ESIS under the relevant Acts. The ld. Departmental Representative submitted that in the light of law explained by Hon'ble Apex Court, there is a mistake apparent in the order of Tribunal dated 18/05/2022 that needs to be rectified. To further support his submissions, he placed reliance on the decision of Tribunal in the case of Salasar Balaji Ship Breakers Pvt. Ltd. vs. ACIT, in ITA No. 1947/Mum/2021 decided on 12/04/2023. 3. Per contra, Shri Anadi Verma appearing on behalf of the assessee vehemently opposed the Miscellaneous Application. The ld. Counsel for the assessee submits that there is no mistake apparent on record as alleged by the Revenue in the Tribunal order, hence, no rectification is required. The ld. Counsel for the assessee pointed that the decision of Hon'ble Apex Court in the case of Checkmate Services Pvt. Ltd. (supra) was passed on 12/10/2022, whereas the Tribunal order is dated 18/05/2022. The order of Tribunal is prior to decision of Hon'ble Apex Court. It is not a case where at the time of passing of the Tribunal order any decision pass....
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.... the case of ACIT vs. Saurashtra Kutch Stock Exchange Ltd., 305 ITR 277, the Hon'ble Apex Court has reiterated philosophy of doctrine of prospective overruling expounded in the case of I.C Golaknath & Another (supra). 4. We have heard the submissions made by rival sides. The Revenue by way of this Miscellaneous Application is seeking rectification/recalling of the Tribunal order dated 18/05/2022. The Revenue is seeking rectification in the decision of Tribunal whereby assessee's claim of deduction u/s. 36(1)(va) in respect of Employees contribution towards PF and ESIS beyond "due date" under the relevant Acts, i.e. Provident Fund Act and Employees State Insurance Act, respectively has been allowed. 4.1 After passing of the aforesaid order, the Hon'ble Apex Court in the case of Checkmate Services Pvt. Ltd. (supra) held as under:- "52. When Parliament introduced section 43B, what was on the statute book, was only employer's contribution (Section 34(1)(iv)). At that point in time, there was no question of employee's contribution being considered as part of the employer's earning. On the application of the original principles of law it could have been tre....
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....ondition for allowing the expenditure. 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 satisfied i.e., depositing such amount received or deducted from the employee on or before the due date. In other words, 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 is deemed an income, by definition, since it is the deduction from the employees' income and held in trust by the employer. This marked distinction has to be borne while interpreting the obligation of every assessee under section 43B. 54. In the opinion of this Court, the reasoning in the impugned judgment that the non-obstante clause would not in any manner dilute or override the employer....
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....n in the case of Checkmate Services Pvt. Ltd. (supra). In other words, the decision would apply retrospectively? 6. This doctrine of prospective overruling was first introduced to the Indian jurisprudence in Golaknath's case (supra). The said doctrine was drawn from American jurisprudence. The Indian legal system has always been following Blackstonian theory i.e. duty of the Court was " not to pronounce a new rule but to maintain and expand the old one". In other words, it was always said that the Judges does not make the law but only discovers or find the true law. The law has always been the same. If subsequent decision changes the earlier one, the later decision does not make law but only discover the correct principle of law. In contrast to the old school Blackstonian theory, the doctrine of "prospective overruling" expounded by American Jurists suggested, a Court should recognize a duty to announce a new and better rule for future transactions whenever the Court has reached the conviction that an old rule (as established by the precedence) is unsound even though the feeling compelled by stare decisis to apply the old and condemned rule to the instant case and to transaction....
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.... the foregoing discussion, the assessee appeals fail. It is however clarified that their claim for approval or registration would have to be considered in the light of subsequent events, if any, disclosed in fresh applications made in that regard. This court is further of the opinion that since the present judgment has departed from the previous rulings regarding the meaning of the term 'solely', in order to avoid disruption, and to give time to institutions likely to be affected to make appropriate changes and adjustments, it would be in the larger interests of society that the present judgment operates hereafter. As a result, it is hereby directed that the law declared in the present judgment shall operate prospectively. The appeals are hereby dismissed, without order on costs" Thus, from the decisions rendered by Hon'ble Apex Court, where the doctrine of prospective overruling was put into operation, it can be deduced that retrospective application of the decision rendered by Hon'ble Apex Court is a rule and prospective overruling is an exception. Wherever, the Hon'ble Court intended that the law explained by it would apply prospectively, it specifically s....