Rajendra Kumar Shrivastava Vs ITO (ITAT Raipur)
Delay Can’t Shut the Door—ITAT Raipur Restores Time-Barred NFAC Appeal on PF/ESI Disallowance for Fresh Consideration
ITAT Raipur SMC Bench set aside the order of the CIT(A)/NFAC which had dismissed the appeal in limine on the ground of nearly three-year delay and restored the matter for fresh adjudication, granting the Assessee one final opportunity.
The dispute arose from an adjustment made u/s 143(1) by CPC, disallowing employees’ contribution to PF & ESI amounting to ₹7.69 lakh on the ground of delayed payment under the respective labour laws. The Assessee contended that the payments were made before the due date u/s 139(1) and relied on pre-Finance Act 2021 jurisprudence, asserting that Explanation 2 to section 36(1)(va) was prospective. The Assessee also sought rectification u/s 154, alleging non-disposal within the prescribed period.
However, at the first appellate stage, the CIT(A)/NFAC dismissed the appeal solely on limitation, noting that it was filed almost three years late and that no application for condonation of delay u/s 249(3) had been filed.
The Tribunal held that principles of natural justice required that the Assessee be given a final opportunity to explain the delay. The matter was therefore remanded to the CIT(A)/NFAC with directions to first decide the condonation issue on merits. Only if the delay is condoned, the CIT(A) shall examine the substantive issue of PF/ESI disallowance, keeping in view the Supreme Court ruling in Checkmate Services (P.) Ltd. If the facts are found to be squarely covered by Checkmate, the addition would sustain; otherwise, relief may follow.
The appeal was allowed for statistical purposes
FULL TEXT OF THE ORDER OF ITAT RAIPUR
