GEETA SHARMA,BALLABGARH vs. THE INCOME TAX OFFICER, WARD -35(1), DELHI, NEW DELHI

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ITA 3818/DEL/2026Status: DisposedITAT Delhi17 July 2026AY 2017-183 pages

In favour of the assessee: the assessee's appeal was allowed. From the AI summary of this appeal.

AI SummaryAllowed

What did the Tribunal hold?

The Tribunal noted the conflicting judicial precedents on the permissibility of PF and ESI disallowances under section 143(1)(a). In the absence of jurisdictional High Court guidance, the Tribunal adopted the view favoring the assessee.

What were the facts?

The assessee's appeal concerns an adjustment of Rs. 14,78,954/- for PF and ESI made under section 143(1)(a) of the Income Tax Act. There were divergent judicial views on whether such an adjustment is permissible during section 143(1) processing.

What were the issues?

Whether disallowances/adjustments for PF and ESI can be made during the 'processing' stage under section 143(1)(a) of the Income Tax Act.

Which sections of the Income-tax Act were involved?

Section 143(1)(a),Section 147,Section 144B

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, DELHI BENCH “SMC” NEW DELHI

Before: SH. SATBEER SINGH GODARA

Hearing: 02.06.2026Pronounced: 02.06.2026

This assessee’s appeal for Assessment Year: 2017-18, arises against the Commissioner of Income Tax, Appeals Addl./JCIT(A)-2, Lucknow [in short, the Addl./JCIT(A)”], Lucknow DIN and Order No. ITBA/APL/S/250/2025- 26/1086473933(1), dated 24.02.2026 involving proceedings under section 147 r.w.s. 144B of the Income Tax Act, 1961 (hereinafter referred to as the ‘the Act’).

Heard both the parties. Case file perused.

2 I.T.A. No. 3818/Del/2026 2. Learned counsel representing the assessee raises his first and foremost substantive ground that the impugned section 143(1)(a) adjustment of PF and ESI impugned disallowance/adjustment/year amounting to Rs. 14,78,954/- could not have been made in section 143(1) proceedings going by Raj Kumar Bothra v. DCIT (2025) 174 taxmann.com 1199 (Chhattisgarh). The Revenue on the other hand places strong reliance on (2022) 143 taxmann.com 278 (SC) on legality and Woodland (Aero Clubs) Pvt. Ltd. v/s ACIT (2025) 178 taxmann.com 207 (Delhi) qua applicability of section 143(1)(a) “processing” in such an instance.

3.

That being the clinching factual position, it is crystal clear that the aforesaid line of judicial precedents has taken divergent views on the issue as to whether or such a PF and ESI disallowance/adjustment could be made in section 143(1)(a) “processing” or not. No valuable guidance has admittedly come from the Hon’ble jurisdictional high court of Punjab & Haryana at Chandigarh. This tribunal therefore adopts the view favouring the assessee in these facts and circumstances to quash the impugned section 143(1)(a) “processing” making ESI and PF disallowances herein in very terms

4.

This assessee’s appeal is allowed.

Order pronounced in the open court as on 02.06.2026

Sd/- (SATBEER SINGH GODARA) JUDICIAL MEMBER Dated 17th July, 2026

3 I.T.A. No. 3818/Del/2026

*GP/Sr.PS* Copy of the order forwarded to: (1) Appellant: (2) Respondent: (3) CIT (4) CIT (Appeals) (5) DR, I.T.A.T. Assistant Registrar

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