Rajesh Kumar Garg Vs ACIT (ITAT Delhi)
Pre-Checkmate Relief & Post-Checkmate Pain – PF/ESI Delay Split by ITAT Delhi- Employees’ PF & ESI: Intimation Cannot Cross Debate Before Checkmate – No 143(1) Disallowance before SC Ruling, Post-Ruling AO gets Green Signal
Delhi ITAT examined disallowances of employees’ PF & ESI contributions made during intimation u/s 143(1).
Assessee had filed his ITRs within time, but CPC while processing the returns treated delayed payments of employees’ contributions to PF & ESI as deemed income u/s 2(24)(x) & disallowed them u/s 36(1)(va). CIT(A) upheld the action of CPC by order dated 20.06.2024.
Assessee contended that disallowance of employees’ contribution could not be made at the stage of processing u/s 143(1)(a) since the issue was highly debatable prior to the judgment of Hon’ble Supreme Court in Checkmate Services Pvt. Ltd. pronounced on 12.10.2022. It was submitted that only apparent errors can be adjusted at the stage of intimation & reliance was placed on the decision of Chhattisgarh High Court in Raj Kumar Bothra as well as several Delhi ITAT rulings which had consistently held that prior to Checkmate, the matter was debatable & outside the limited scope of 143(1)(a).
Revenue argued that for AY 2022-23 the processing of return was done on 01.02.2023, i.e. after Checkmate, when the law had already been settled by the Apex Court. Hence, disallowance of delayed employees’ contributions was justified in principle.
