EMS MEMORIAL CO-OPERATIVE HOSPITAL AND RESEARCH v. EMPLOYEES PROVIDENT FUND ORGANISATION – EPFO

BY ADVS. SRI. ABRAHAM P. MEACHINKARA SRI. CHRISTOPHER ABRAHAM – SC - INCOME TAX DEPARTMENT THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON

11.01.2024, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: WP(C) NO. 9739 OF 2022 2 DINESH KUMAR SINGH, J. -------------------------- W.P.(C) No.9739 of 2022 ------------------------- Dated this the 11th day of January, 2024 JUDGMENT

1. The present writ petition has been filed for the following reliefs; (i) issue a writ of mandamus or any other appropriate writ, order or direction directing the third respondent to consider and pass orders on Ext. P11 and Ext. P12 requests made by the petitioner. (ii) issue any other appropriate writ, order or direction that this Hon’ble Court may deem fit in the facts and circumstances of the case.

2. The petitioner is a Co-operative Society running a Multi Super Specialty Hospital at Perinthalmanna, Malappuram district in the State of Kerala. Petitioner’s hospital is an establishment covered under the provisions of Employees Provident Fund and Miscellaneous Provisions Act,

1952. According to the petitioner, the petitioner had been timely remitting the contribution; both employer’s and employee’s share to the PF account. EPF contribution for the months of April, May and June of the year 2017 could not be made on time because of the technical failure of EPF portal for remitting the contribution. The petitioner had submitted the print outs of such failure as well as news paper cuttings to the effect WP(C) NO. 9739 OF 2022 3 that there were technical glitches and for that reason the contribution could not be remitted. As soon as the said technical glitches on the EPF portal was rectified, the petitioner had remitted the EPF contribution. The Income Tax Department had disallowed the expenditure of Rs. 88,85,529/- in the assessment order passed under Section 143(1)(a) of the Income Tax Act, 1961 and on the said amount, tax of Rs. 8,53,710/- has been determined and demanded from the petitioner. Against the said order, the petitioner has filed an appeal which is pending in respect of the assessment year 2018-19. In respect of the assessment year 2017-18, the petitioner has been issued with notice in Exhibit P-17 for adding an amount of Rs. 82,59,031/- to the returned income on the ground that the petitioner had failed to remit the EPF contribution on time.

3. The learned Counsel for the petitioner submits that the petitioner had produced the relevant evidences to show that there was system failure on the web portal of EPF and for that reason the petitioner could not remit EPF contribution on time. However, the Income Tax Department is requiring the petitioner to submit the certificate of such failure by the EPF Department. He further submits that the petitioner in Exhibits P-11 and P-12 letters had addressed the Officer, National Data Centre, Bhavishyanidhi Bhavan – 14, Bhikaiji Cama Place, New Delhi in that respect. However, no reply has been received. In the absence of the requisite reply from the EPF, the petitioner is facing difficulty and demand of tax which is WP(C) NO. 9739 OF 2022 4 otherwise not liable to be paid by him.

4. The learned Standing Counsel appearing for respondents 1 to 3 submits that the petitioner’s requests shall be considered and after examining the relevant records, necessary communication shall be issued in respect of the requests in Exhibits P-11 and P-12 made by the petitioner.

5. Considering the said aspects of the matter, the present writ petition is disposed of with direction to the respondents 1 to 3 to consider the requests of the petitioner in Exhibits P-11 and P-12 and issue necessary communication within a period of two months from today. For a period of two months, the further proceedings in pursuance to Exhibit p-17 notice shall be kept in abeyance. In respect of the pending appeal against the assessment order for the assessment year 2018-19, the appeals should also be kept in abeyance till such communication is received by the petitioner. Once the said communication is received from respondents 1 to 3, the petitioner should file the said communication before the assessing authority as well as the appellate authority for proceeding with the rectification application as well as appeal in accordance with the law. Sd/- DINESH KUMAR SINGH JUDGE Svn WP(C) NO. 9739 OF 2022 5 APPENDIX OF WP(C) 9739/2022 PETITIONER’S EXHIBITS EXHIBIT P1 TRUE COPY OF THE COMMUNICATION DATED 28.2.2019 RECEIVED FROM THE CENTRALIZED PROCESSING CENTER OF THE INCOME TAX DEPARTMENT EXHIBIT P2 TRUE COPY OF THE EMAIL DATED 2.3.2019 EXHIBIT P3 TRUE COPY OF THE ORDER DATED 17.10.2019 EXHIBIT P4 TRUE COPY OF THE REPLY DATED 27.11.2019 EXHIBIT P5 EXHIBIT P6 TRUE COPY OF THE RELEVANT NEWS PAPER CLIPPING OF THE DESHABHIMANI DAILY DATED 14.1.2017 TRUE COPY OF THE RELEVANT NEWS PAPER CLIPPING OF THE DESHABHIMANI DAILY DATED 19.3.2017 EXHIBIT P7 TRUE COPY OF THE LETTER DATED 13.1.2017 EXHIBIT P8 TRUE COPY OF THE EMAIL DATED 15.3.2017 EXHIBIT P9 TRUE COPY OF THE LETTER DATED 4.4.2019 EXHIBIT P10 TRUE COPY OF THE LETTER DATED 7.5.2019 EXHIBIT P11 TRUE COPY OF THE LETTER DATED 22.5.2019 EXHIBIT P12 TRUE COPY OF THE LETTER DATED 27.11.2019 EXHIBIT P13 TRUE COPIES OF THE REPORT OBTAINED WHILE TRYING TO REMIT THE CONTRIBUTION DURING APRIL, MAY, JUNE AND JULY, 2017 THROUGH THE ONLINE OF EPFO, INCLUDING FAILURE DUE TO ERROR IN THEIR SYSTEM EXHIBIT P14 TRUE COPY OF THE MEMORANDUM OF APPEAL FILED ALONG WITH DELAY PETITION EXHIBIT P15 TRUE COPY OF THE NOTICE DATED 22.1.2021 EXHIBIT P16 TRUE COPY OF THE HEARING NOTE DATED 17.3.2022 EXHIBIT P17 TRUE COPY OF THE NOTICE DATED 2.3.2022 EXHIBIT P18 TRUE COPY OF THE REPLY DATED 11.3.2022 RESPONDENT’S EXHIBITS EXHIBIT R3(A) TRUE COPY OF THE XL PAYMENT SHEET WITH THE DETAILS VIZ; DATE OF REMITTANCE, AMOUNT REMITTED, WAGE MONTH, NUMBER OF EMPLOYEES THROUGH ECR, SINCE JANUARY 2017 BY THE PETITIONER ESTABLISHMENT