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2023 (6) TMI 516 - AT - Income TaxRectification u/s 254 - Rectification of earlier orders passed by the ITAT based on subsequent judgment of Supreme Court - Delayed payment of employee’s contribution to ESI and PF - Addition u/s 36(1) r.w.s. 43B - Whether judgment be given a prospective applicability? - Delayed deposit of employee’s share of contributions towards labour welfare funds [Employee’s Provident fund (EPF) and Employee’s State Insurance (ESI)] addition deleted by Tribunal - as per department that orders of the Tribunal are not found to be in conformity with the recent judgement of the Hon’ble Supreme Court in the case of Checkmate Services Pvt. Ltd.[2022 (10) TMI 617 - SUPREME COURT] thus, the same suffers from a mistake which being glaring, apparent, patent and obvious from record HELD THAT:- We are unable to persuade ourselves to subscribe to the claim of the Ld. AR’s that the Hon’ble Apex Court in the case of Mepco Industries Ltd. [2009 (11) TMI 24 - SUPREME COURT] had held that an order passed by the Tribunal which is not found to be in conformity with the ratio decidendi of a subsequent judgment of the Hon’ble Apex Court cannot be rectified under sub section (2) of Section 254 of the Act. The issue leading to filing of the present miscellaneous applications by the department, i.e. as to whether an order passed by the Tribunal while disposing off an appeal can be rectified u/s. 254(2) of the Act for the purpose of bringing the same in conformity with a subsequent judgment of the Hon’ble Apex Court or that of the Hon’ble Jurisdictional High Court is squarely covered by the judgments in the case of ACIT Vs. Saurashtra Kutch Stock Exchange Ltd. [2008 (9) TMI 11 - SUPREME COURT] and S.A.L Narayana Row, CIT Vs. Model Mills Nagpur Ltd [1966 (10) TMI 2 - SUPREME COURT] and thus, is no more res-integra. Article 141 of the Constitution of India provides that the law declared by Supreme Court shall be binding on all courts within the territory of India. The law laid down by Supreme Court operates retrospectively and is deemed to the law as it has always been unless, the Supreme Court, says that its ruling will only operate prospectively. Tribunal had observed that even if the Hon’ble Apex Court renders a judgment after passing of the order sought to be rectified, the same is to be strictly followed, as the judgment of the Hon’ble Apex Court is always understood from the inception of the provision and it is never considered as a prospective ruling unless so specified As and where the Hon’ble Apex Court had intended that its judgment be given a prospective applicability, a specific rider to the said effect as in the case of M/s New Noble Educational Society [2022 (10) TMI 855 - SUPREME COURT] had been provided. However, we are afraid that no such rider is found in the judgment of the Hon’ble Apex Court in the case of Checkmate Services Pvt. Ltd. Vs. Commissioner of Income Tax-I (supra), which means that the same would have a retrospective application. As stated by the department in its miscellaneous application and, rightly so, as the view taken by the Tribunal in the captioned appeals is not found to be in conformity with the judgment of the Hon’ble Apex Court in the case of Checkmate Services Pvt. Ltd. Vs. Commissioner of Income Tax-I (supra), therefore, the same had rendered the orders passed while disposing off the respective appeals as suffering from a mistake, which being apparent from record had therein made those amenable for rectification under sub-section (2) to Section 254 of the Act. There is a mistake apparent on record in view of the decision of the Hon’ble Supreme Court in the case of Checkmate Services Pvt. Ltd. [2022 (10) TMI 617 - SUPREME COURT] though rendered subsequent to the order passed by the Tribunal and has to be rectified by holding that the disallowance made by the revenue authorities u/s.36(1)(va) of the Act was justified. Decided against assessee.
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