Vinod Malik Vs ADIT (ITAT Delhi)
The appeal before the Income Tax Appellate Tribunal (ITAT), Delhi, was filed by the assessee against the order of the National Faceless Appeal Centre (NFAC) dated 04.08.2021. The assessee raised two primary grounds: first, that the employees’ contribution to ESIC and EPF amounting to Rs. 5,70,838, having been paid before the due date of filing the return under Section 139(1), should not be disallowed; and second, that such disallowance could not be made through an intimation under Section 143(1)(a) without providing an opportunity to establish the claim.
On the first issue, the Tribunal noted that the matter had already been settled against the assessee by the Supreme Court in the case of Checkmate Services Pvt. Ltd. Accordingly, the Tribunal held that the disallowance of employees’ contribution to PF/ESIC was valid, and this ground of appeal was dismissed.
The second issue concerned the procedural validity of the adjustment made by the Centralized Processing Centre (CPC) under Section 143(1)(a). The Tribunal examined the statutory provisions, which clearly mandate that before making any adjustment, an intimation must be given to the assessee either in writing or through electronic mode. Further, the assessee must be given an opportunity to respond, and such response, if any, must be considered before finalizing the adjustment.
