YADVENDRA DHABHAI,UDAIPUR, RAJASTHAN vs. ITO , UDAIPUR RAJASTHAN

IN THE INCOME TAX APPELLATE TRIBUNAL JODHPUR BENCH, JODHPUR BEFORE DR. MITHA LAL MEENA, HON’BLE ACCOUNTANT MEMBER AND SHRI SUDHIR PAREEK, HON’BLE JUDICIAL MEMBER ITA No. 806/Jodh/2025 (Assessment Year – 2021-22) Yadvendra Dhabhai ITO, Ward-2 (1) 165, Salumber Ki Haveli, Udaipur - 313001 Udaipur - 313001 PAN No. AKZPD 8234 E Assessee by Shri Deepak Patel, CA (Virtual) Smt. Swapnil Parihar, JCIT (Virtual) Revenue by Date of Hearing 29.04.2026. Date of Pronouncement 21.05.2026. ORDER DR. MITHA LAL MEENA, A.M.: This appeal by assessee is filed against the order of Ld. Commissioner of Income Tax Appeal ADDL/JCIT (A)-9 Delhi [hereinafter referred to JCIT(A)] dated 21.07.2025 with respect to Assessment Year 2021-22 challenging therein rejection of its application by CPC filed u/s 154 treating employees contribution to PF and ESI amounting to Rs. 1,85,03,917/- as delayed deposit.

2 ITA No. 806/Jodh/2025 Asst. Year: 2021-22 respective Acts, though such payments were admittedly deposited before the due date of filing the return of income u/s 139(1). He further submitted that the CPC has rejected its application filed u/s 154 of the Income Tax Act, 1961 dated 29.12.2022. The Ld. CIT(A) has upheld the addition relying on the decision of Hon’ble Supreme Court in the case of Checkmate Services Pvt. Ltd. Vs. CIT 448 ITR 519 (SC).

3 ITA No. 806/Jodh/2025 Asst. Year: 2021-22 deposit of PF and ESI during the lockdown period. A copy of relevant notification is filed for reference on the record which reads as under:

4 ITA No. 806/Jodh/2025 Asst. Year: 2021-22 5. Thus, the Ld. AR has contended that the EPFO has issued the above circular No. C-I/Misc./2020-21/Vol.I/1112 dated 15.05.2020 in view of the prolonged lockdown announced by Government to control the spread of COVID-19 pandemic and that any delay in payment of any employer contribution or administrative charge due for any period during the lockdown, no proceedings be initiated for levy of penal damages in such cases. The appellant’s said delay has been covered under exempted period for which relaxation has been granted by EPFO from levy of damages and penalties for any delayed deposits of PF and ESI during the lockdown period under the PF and ESI Act. He accordingly, pleaded that it is a prima facie mistake, in not considering the COVID period and that it is being a debatable issue yet pending under review before the Hon’ble Apex Court for consideration. The AR pleaded that the addition made may be deleted, in support, he placed reliance on the following judgments:

 ACIT Vs. Ashiana Housing Ltd.  Maria Fernandes Cheryl Vs. ITO  Kishore Hira Bhandari Vs. ITO  Kalpesh Synthetics Pvt. Ltd. Vs. DCIT (ITAT Mumbai)  Mohangarh Engineers & Construction Company Vs. CPC (ITAT Jodhpur)  Crescent Roadways Pvt. Ltd. Vs. CPC (ITAT Kolkata)

5 ITA No. 806/Jodh/2025 Asst. Year: 2021-22 6. The Ld. DR on the other hand placed reliance on the impugned order. He submitted that although no penalty proceedings were initiated by the PF and ESI Department but the due dates were not extended. She pleaded that the impugned order may be sustained.

6 ITA No. 806/Jodh/2025 Asst. Year: 2021-22 8. Considering the EPFO aforesaid circular on granting relaxation from levy of damages and penalty for delay deposit during the lockdown period and that the issue being subjudice for review before the Supreme Court, shows that it is an issue which involves interpretation of law at the level of Hon’ble Apex Court which is out of the scope of the provisions of Section 143(1) to make prima facie adjustments by CPC to the return of income of the assessee. It is further emphasized that the EPFO vide circular dated 15.05.2020, the due dates were extended as also observed by the Ld. CIT(A) that no penalty proceedings were initiated as the due dates were extended. In our view, the relaxation from penalties makes is apparently clear that the EPFO authorities has acknowledged genuine hardship hence intended to grant relief to the appellant assessee from levy of penalty amount on acceptance of delayed payments under the exceptional circumstances like COVID-19 pandemic. Meaning thereby that the relaxation of penalty by the competent authority from Employees Fund Organization, Ministry of Labour and Employees, Government of India, acknowledges the genuine hardship and intended to grant relief. In such circumstances of COVID-19 pandemic, the non-levy of penalty tantamount to acceptance of delay under exceptional circumstances the absence of formal extension of due date does not

7 ITA No. 806/Jodh/2025 Asst. Year: 2021-22 negate the intent of relief. Therefore, such delays during the COVID-19 pandemic are deserves to be viewed pragmatically and not in a strict technical manner. Accordingly, we hold that the impugned order of the Ld. CIT(A) in rejecting the application of the assessee filed u/s 154 of the Income Tax Act is perverse to the facts on record by not appreciating the genuine hardships of COVID-19 period as duly acknowledged by EPFO authorities.

Order pronounced in the open court on 21/05/2026.

Sd/- Sd/- (SUDHIR PAREEK) (DR. MITHA LAL MEENA) JUDICIAL MEMBER ACCOUNTANT MEMBER Dated : 21/05/2026. Nimisha Sr. PS True Copy

8 ITA No. 806/Jodh/2025 Asst. Year: 2021-22 Copies to : (1) The appellant. (2) The respondent. (3) CIT (4) CIT(A) (5) Departmental Representative (6) Guard File BY ORDER,