Atibari Tea Company Ltd. Vs DCIT (ITAT Kolkata)
The assessee appealed against the order of the JCIT(A) for AY 2024-25 concerning disallowance of employees’ contribution towards PF and ESI. The return was processed under Section 143(1), and by intimation dated 02.06.2025, the Centralized Processing Centre (CPC) disallowed ₹61,35,025 towards employees’ PF and ESI contributions. The JCIT(A) upheld the disallowance by relying on the Supreme Court’s decision in Checkmate Services (P) Ltd. vs. CIT.
The assessee contended that the issue had become debatable because the Supreme Court, in Woodland (Aero Club) Pvt. Ltd. v. ACIT (SLP No. 1532/2026), had taken up the issue for fresh consideration after referring to conflicting judicial views regarding Sections 2(24)(x), 36(1)(va), and 43B of the Income-tax Act. It was submitted that since the issue was pending before the Supreme Court, such a debatable question could not be the subject of an adjustment under Section 143(1). The Revenue supported the orders of the CPC and the JCIT(A).
The Tribunal observed that the Supreme Court in Woodland (Aero Club) Pvt. Ltd. v. ACIT had taken the issue under fresh consideration after noting conflicting judicial opinions. It held that, in the present circumstances, the issue had become debatable. Since a debatable issue is not permissible for adjustment in an intimation issued under Section 143(1), the Tribunal quashed the intimation dated 02.06.2025 relating to the disallowance of employees’ PF and ESI contributions.
