R. K. & Company Manpower Pvt. Ltd. Vs DCIT (ITAT Delhi)
Summary: The Delhi ITAT allowed three appeals for A.Ys. 2018-19, 2019-20 and 2020-21 concerning disallowances of employees’ PF/ESI contributions under Section 36(1)(va) made while processing returns under Section 143(1). In the lead appeal, an addition of Rs.2,38,15,146/- had been made for A.Y. 2018-19. The assessee contended that the adjustment was beyond the scope of Section 143(1), particularly as the relevant assessment year preceded the Supreme Court’s decision in Checkmate Services (P) Ltd. Vs. CIT, and relied upon several co-ordinate Bench decisions. The Revenue relied upon Checkmate Services. The Tribunal observed that the additions under Section 143(1) related to assessment years prior to the Supreme Court decision and held that the impugned addition was outside the scope of adjustments permissible under Section 143(1). It accordingly deleted the addition of Rs.2,38,15,146/- under Section 36(1)(va) and allowed the appeal. The Tribunal directed that the same decision would apply mutatis mutandis to A.Ys. 2019-20 and 2020-21. Consequently, all three appeals were allowed.
Assessment Years 2018-19 to 2020-21 – PF/ESI Disallowance under Section 143(1)
The above captioned appeals in ITA Nos. 6600, 6601 & 6602/Del/2025 were preferred by the assessees against the order dated 20.08.2025, passed by Ld. CIT(A)/Addl./JCIT(A)-1, Surat u/s 250 of the Income Tax Act, 1961 for A.Ys. 2018-19, 2019-20 & 2020-21, respectively.
