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Judgment
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.
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.
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
This assessee’s appeal is allowed.