IN THE INCOME TAX APPELLATE TRIBUNAL DELHI (DELHI BENCH ‘E’ NEW DELHI)

BEFORE S. RIFAUR RAHMAN, ACCOUNTANT MEMBER AND SHRI YOGESH KUMAR U.S., JUDICIAL MEMBER ITA No. 3255/Del/2025 (A.Y. 2019-20)

Vaks Multiple Service Vs ACIT Plot No. 58-59, D L F Main CGO Complex, NH 4, Market, Sector-11, Faridabad, NIT, Faridabad, Haryana Haryana PAN: AAECV4819M Appellant Respondent Assessee by Sh. Ankit Gupta, CA Revenue by Sh. Dheeraj Kumar Jain, Sr. DR Date of Hearing 03/09/2025 Date of Pronouncement 17/09/2025 ORDER PER YOGESH KUMAR, U.S. JM:

The present appeal is filed by the Assessee against the order of Ld. Commissioner of Income Tax (Appeals/ National Faceless Appeal Centre (‘Ld. CIT(A)/NFAC’ for short), New Delhi dated 17/03/2025 for the Assessment Year 2019-20.

2. Brief facts of the case are that, the assessee filed its return of income for the A.Y.2019-20 having gross total income of Rs. 79,44,337/-. During the processing of ITR u/s. 143(1)(a), the CPC had disallowed Rs. 33,02,357/- on account of delay in payment of employees share of ESI and PF. Being aggrieved with the aforesaid disallowance of Rs. 33,02,357/-, the assessee filed an appeal before National Faceless Appeal Centre (NFAC). The CIT (NFAC) vide order dated 24/06/2022 deleted the said disallowance of Rs.33,02,357/- made u/s 36(l)(va) of the I.T. Act by relying the decision of Hon’ble Delhi tribunal in the case of Raj Kumar &Ors.

3. Thereafter, the AO has filed suo-moto rectification application through rectification module of ITBA against the said appellate order with reason as under:-

“Addition was made by AO on account of late deposit of EPF/ESI. The appeal was allowed by the CIT(A). Now the issue has been decided in favour of the Department in Checkmate Services Pvt. Ltd Vs. Commissioner of Income Tax-1, [2022 Live law (SC)838. The order passed by the CIT(A) NFAC is therefore to be rectified.”

4. The Ld. CIT(A) vide order dated 17/03/2025, allowed the rectification application by rectifying the order dated 24/06/2022 passed u/s.250 of the Act and confirmed the addition/disallowance made by the Assessing Officer on account of late deposit of PF/ESIC contributions under Section 36(1)(va) of the Income Tax Act, 1961. Aggrieved by the order dated 17/03/2025 passed by the Ld. CIT(A), the Assessee preferred the present Appeal.

5. The Ld. Counsel for the Assessee submitted that the Ld. CIT(A) erred in confirming the addition by entertaining the application for rectifying the order of the Ld. CIT(A), wherein the Ld. CIT(A) has decided the first appeal filed by the Assessee on 24/06/2022 based on the law/judicial precedent prevailing as on the date, therefore, the same cannot be construed as error apparent from record to rectify the order of the Ld. CIT(A). Thus, sought for allowing the Appeal.

6. Per contra, the ld. Department's Representative submitted that the Ld. CIT(A) has rightly invoked the jurisdiction to rectify his order as the order of the Ld. CIT(A) 24/06/2022 was contrary to the Judgment ofthe Hon’ble Supreme Court of India in the case of Checkmate Services Pvt. Ltd. Vs. PCIT-1 in Civil Appeal No. 2833 of 2016 dated 12.10.2022. The Ld. Department's Representative relying on the order of the Ld. CIT(A) sought for dismissal of the Appeal.

7. We have heard both the parties and perused the material available on record. In the present case, the return of the Assessee has been processed u/s. 143(1)(a), the CPC by disallowing of Rs. 33,02,357/- on account of delay in payment of employees share of ESI and PF. Aggrieved by the same, the assessee filed an appeal before National Faceless Appeal Centre (NFAC). The CIT (NFAC) vide order dated 24/06/2022 deleted the said disallowance of Rs.33,02,357/- made u/s 36(l)(va) of the I.T. Act by relying the decision of Hon’ble Delhi tribunal in the case of Raj Kumar &Ors. However, based on the application for rectification filed by the A.O. before the Ld. CIT(A), the Ld. CIT(A) vide order impugned herein allowed the rectification applicatio