The issues involved in all the appeals is the challenge of relief given by Ld. CIT(A) to the assessee with regard to the deletion of addition made by Assessing Officer on account of delayed deposit of the EPF/ESI share of the employees.


Counsels for assessee have mentioned that the tax effect in the appeals is below 50 lakhs so the same makes the appeals not maintainable.

DR however, submitted that when report was sought from the Ld. AO for the reasons for preferring and contesting the appeals, inspite the fact that the appeals fall into the category of low tax effect and upon which the Board Circular dated 08.08.2019 is specifically applicable, the DR has submitted that the Ld. AO in their wisdom have pointed out that the dispute involved in the appeals fall in the exception mentioned in the Circular, as the appeal involves a case where the Constitutional validity of the provisions of any legislation has been challenged.


The two member bench of G.S.PANNU, PRESIDENT AND ANUBHAV SHARMA, JUDICIAL MEMBER said that Sub-Section (2) of Section 253 of the Act, which gives jurisdiction to the Tribunal to hear the appeals restrict the scope of remedy of Appeal to the Revenue, as the Principal Commissioner or Commissioner only may direct the Assessing Officer to appeal before Tribunal against the order, if Pr. CIT objects to any order of First Appellate Authority. As CIT(A) cannot decide the question of Constitutional validity of provisions of any legislation, certainly then, with regard to the question of Constitutional validity of provisions of any legislation, the PrCIT cannot approach the Tribunal u/s 253(2) of the Act.

The tribunal observed that the grounds raised by the Ld. AO in the appeals before us, there is no mention of the fact as to which provision of the Act or any other legislation lacks Constitutional validity and for which Ld. PCIT, Delhi-1, New Delhi, has given the authorization for filing the Appeal. In the present cases, the appeals decided u/s 250 of the Act by Ld. CIT(A) merely dealt with the issue of delayed deposited ESI and PF contributions, as a valid deduction, in terms of Section 36(1)(va) of the Act. No question of validity of any provision of the Act was disputed by assessee so as to be decided against the Revenue so as to challenge the same here in Tribunal.

The bench opinion that on the basis of a challenge of Constitutional validity of the provisions of any legislation, no exception can be taken by the Revenue, before the Tribunal, so as to file or contest the appeals suffering with low tax effect. Accordingly, the appeals of Revenue are dismissed and barred by CBDT Circular.

Case title: ITO v/s M/s. Broad Ways Security and Detective Pvt. Ltd. 

Citation: ITA No.2707/Del/2022, A.Y. 2018-19 

Amit Sharma

Author of Tax Concept

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