Yadvendra Dhabhai Vs ITO (ITAT Jodhpur)
The assessee appealed against the order of the Commissioner of Income Tax (Appeals), dated 21.07.2025, relating to AY 2021-22. The dispute concerned the rejection of the assessee’s rectification application under Section 154 by the Centralized Processing Centre (CPC), which had treated employees’ contribution towards PF and ESI amounting to Rs. 1,85,03,917 as delayed deposits.
The assessee submitted that while processing the return under Section 143(1), CPC made an addition on account of delayed deposit of employees’ contribution as per the due dates prescribed under the respective Acts, even though the amounts had been deposited before the due date for filing the return under Section 139(1). The assessee’s rectification application under Section 154 was rejected, and the CIT(A) upheld the addition relying on the Supreme Court decision in Checkmate Services Pvt. Ltd. v. CIT.
The assessee argued that the delay occurred due to the severe disruptions caused by the COVID-19 pandemic, which adversely affected business operations and liquidity. It was pointed out that the Employees’ Provident Fund Organisation (EPFO), through Circular No. C-I/Misc./2020-21/Vol.I/1112 dated 15.05.2020, had granted relaxation from levy of damages and penalties for delayed deposits during the lockdown period. According to the assessee, the failure to consider this relaxation constituted a mistake apparent from the record. It was further contended that the issue remained debatable and was under consideration before the Supreme Court.
