Case Law Details
Master Polishers Vs ADIT (ITAT Mumbai)
ITAT Mumbai resorted back the matter to AO with direction to find out from the relevant PF authorities about the term ‘every month’ as mentioned in Clause 38 of the Employees Provident Fund Scheme (EPF Scheme).
Facts– This appeal by the assessee is directed against order dated 15.11.2022 passed by the Commissioner of Income-tax – National Faceless Appeal Centre (NFAC) for assessment year 2020-21 in relation to the rectification order passed by the Assessing Officer under Section 154 of the Income-tax Act, 1961.
The assessee is aggrieved with the disallowance upheld by the CIT(A) in respect of the employee’s contribution to ESI/PF, which was made by the CPC as an adjustment and further sustained in rectification order under Section 154 of the Income Tax Act. The CIT(A) had upheld the disallowance in view of binding precedent of the Hon’ble Supreme Court in the case of Checkmate Services Pvt. Ltd. v. CIT.
Conclusion– It will be appropriate if the term ‘every month’ specified in Provident Fund scheme, whether it is the month for which salary/ wages are due or month of the payment is referred to Relevant Authorities for finding out with reference to any judicial precedent in respect of provisions of the relevant Act. Accordingly, the issue was restored back to the file of the Assessing Officer with the direction to find out from the relevant PF authorities about the term ‘every month’ as mentioned in Clause 38 of the Employees Provident Fund Scheme (EPF Scheme). He was also directed to find out the same from the ESI Authorities.
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