NDLI: Checkmate Services P. Ltd. Vs. Commissioner of Income Tax-1

Content Provider	Supreme Court of India
e-ISSN	30484839
Language	English
Access Restriction	NDLI
Subject Keyword	Income Tax Act 1961 – s.36(1)(va) and s.43B – Allowable deductions – Assessee-appellants had belatedly deposited their employees’ contribution towards the EPF and ESI considering the due dates under the relevant acts and regulations
Content Type	Text
Resource Type	Law Judgement
Jurisdiction	India
Case(s) Referred	Referred Case 0 Referred Case 1 Referred Case 2 Referred Case 3 Referred Case 4 Referred Case 5 Referred Case 6 Referred Case 7
Case Type	Appeal
Court	Supreme Court of India
Disposal Nature	Appeal Dismissed
Headnote	Income Tax Act, 1961 – s.36(1)(va) and s.43B – Allowable deductions – Assessee-appellants had belatedly deposited their employees’ contribution towards the EPF and ESI, considering 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 by appellants constituted “income” and could not be allowed as deductions u/ s.36(1)(va) when the payment was made beyond the relevant due date under the respective acts – Held: The essential character of an employees’ contribution, i.e., that it is part of the employees’ income, held in trust by the employer is underlined by the condition that it has to be deposited on or before the due date – There is distinction between an employer’s contribution which is its primary liability under law – in terms of s.36(1)(iv), and its liability to deposit amounts received by it or deducted by it (s.36(1)(va)) – The former forms part of the employers’ income, and the later retains its character as an income (albeit deemed), by virtue of s.2(24)(x) - unless the conditions spelt by Explanation to s.36(1)(va) are satisfied i.e., depositing such amount received or deducted from the employee on or before the due date – There is thus a marked distinction between the nature and character of the two amounts – This marked distinction has to be borne while interpreting the obligation of every assessee under s.43B – The non-obstante clause u/s.43B or anything contained in that provision would not absolve the assessee from its liability to deposit the employee’s contribution on or before the due date as a condition for deduction – Employees’ Provident Funds and Miscellaneous Provisions Act, 1952 – Employees’ Provident Funds Scheme, 1952 – Employees’ State Insurance Act, 1948 – Employees’ State Insurance (Central) Regulations, 1950 Interpretation of Statutes – Tax statute – Deduction or exemption, when available – Held: If a deduction or exemption is available on compliance with certain conditions, the conditions are to be strictly complied with – Deductions are to be granted only when the conditions which govern them are strictly complied with.
Judge	Hon'ble Mr. Justice S. Ravindra Bhat
Neutral Citation	2022 INSC 1069
Petitioner	Checkmate Services P. Ltd.
Respondent	Commissioner Of Income Tax-1
SCR	[2022] 10 S.C.R. 1065
Judgement Date	2022-10-12
Case Number	2833

Sl.	Authority	Responsibilities	Communication Details
1	Ministry of Education (GoI), Department of Higher Education	Sanctioning Authority	https://www.education.gov.in/ict-initiatives
2	Indian Institute of Technology Kharagpur	Host Institute of the Project: The host institute of the project is responsible for providing infrastructure support and hosting the project	https://www.iitkgp.ac.in
3	National Digital Library of India Office, Indian Institute of Technology Kharagpur	The administrative and infrastructural headquarters of the project	Dr. B. Sutradhar bsutra@ndl.gov.in
4	Project PI / Joint PI	Principal Investigator and Joint Principal Investigators of the project	Dr. B. Sutradhar bsutra@ndl.gov.in Prof. Saswat Chakrabarti will be added soon
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