Relief from EPF penal damages for delay in deposit of dues in Lockdown

Relief to establishments and factories covered under EPF Act from levy of penal damages for delay in deposit of dues during Lockdown to prevent COVID-19

EMPLOYEES’ PROVIDENT FUND ORGANISATION
(Ministry of Labour & Emplovment, Govt. of India)
Head Office
Bhavishya Nidhi Bhawan1 14, Bhikaiji cama Place, New Delhi – 110 066

No. C-I/Misc./2020-21/Vol. 1/1112

Date: 15.05.2020

To,
All Addl. CPFCs in charge of Zones
All RPFCs in charge of Regional Offices
All OICs in charge of District Offices

Sub: Relief to establishments and factories covered under EPF and MP Act, 1952 from levy of penal damages for delay in deposit of dues during Lockdown to prevent COVID-19.

Sir,

In view of the prolong lockdown announced by the Government to control the spread of COVID-19 pandemic and other disruptions due to Pandemic situation, the establishments covered under EPF & MP Act, 1952 are distressed and not able to function normally.

The Hon’ble Apex Court of India in Mcleod Russel India Limited Vs  RPFC (2014)15 SCC 263 has underlined the broad contours and essential elements of section 148 of the Act and held that mens rea, or culpable state of mind of the employer, is a sine-qua­ non for inviting damages under section 148. In other words, the provisions of section 148 would get attracted only when there is a positive evidence of mens rea on the part of the employer while committing default in timely remittances. This legal position has later been reaffirmed in Assistant Provident Fund Commissioner vs. Management of RSL Textiles . (CA 96-97 of 2017)

Considering the difficulty faced by the establishments in timely deposit of contributions during the period of lockdown due to operational and economic reasons, it is evident that such delays are without mens rea of the employer. Thus, the delay in deposit of contributions during the period of lockdown announced in terms  of the Disasters Management Act, 2005 cannot be attributed to any culpable state of mind of the employer and will not, therefore, attract the provisions of section 148 of the EPF Act.

Therefore, for any delay in payment of any contributions or administrative charges due for any period during the lockdown , no proceeding should be initiated for levy of penal damages in such cases.

(This issues with the approval of the Central P F Commissioner)

Yours faithfully,

(Jan Mohan)
Addl. CPFC (Hqrs.) Compliance & Legal

Copy to: FA & CAO, CVO, All Addl. CPFC (Hqrs) at HO, Director, PDNASS, Addl. CPFC (IS)

Download Order Click Here >> 

• Object of assessment proceedings is not to find empirically correct solution on every fact issue – HC
• Penalty u/s 270A deleted as assessee filed revised computation during scrutiny
• Penalty u/s 271B for unfilled column 40 in Tax Audit Report Form 3CD deleted by ITAT
• Merely ex-parte rectifying computation without amending assessment order not make it nullity- ITAT
• Once assessee discharges primary onus, it shifts to AO to bring evidence to contrary – ITAT