Mandatory seeding of Aadhar Number for filing of ECR - Delhi High Court grant relief to employers depositing EPF contributions

Mr. S.K. Gupta, Sr. Associate of legal team of Mr. H.L. Kumar who has put his legal acumen for drafting this writ petition for challenging the circular dated 01.06.2021 (in short “June-Circular”) on the subject: “Mandatory seeding of Aadhar Number for filing of ECR w.e.f. 01.06.2021”. In fact, June-Circular has created a problem for all employers/establishments while generating Electronic Challan cum Return (ECR) for the Month of May' 2021, and so on.

Initially, the Hon’ble Delhi High Court issued notice to the EPFO. Thereafter, after submission of the Counter–reply on behalf of the EPFO, Mr. S.K. Gupta, Advocate has argued the matter by raising the following three points for interim reliefs :

 

First: The PF Contribution for the month of May’2021 got delayed because modification in the EPFO-portal software which was restored as per the old system on 15th June 2021 so there was a delay for few days for remitting the PF Contribution as per paragraph 38 of the Scheme, 1952, and because of this delayed remittance, the employer may face damages /penalty /interest as per Section 14-B, and 7Q of the Act, 1952 respectively.

Second: Because of the “due date” of the statutory payment of the Provident Fund, there will be the adverse impact upon the employers as per Section 36(1)(va) and Section 2(24)(x) of the Income Tax Act,1961 for remittance of PF Contribution after due date. As a result of which, the Employees’ share will be added back to the employer’s profit for the Month of May’2021.

Third: To overcome the above problem of the employers across the country, Mr. S.K. Gupta also prayed for interim relief to grant 5 days grace period for the month of May’2021 for PF remittance, and at least 3-4 months extension be granted to all categories of establishment for seeding Aadhaar with UAN.

Mr. S.K. Gupta, our Senior Associate, vehemently argued, and finally arranged interim reliefs for employers/establishments that

1. For remittance of PF Contribution for the Month May '2021, if remitted by the Employer by 20th June’2021, no coercive action will be taken by the EPFO for such belated remittance of PF Contribution.
2. All establishments will get an extension up to 30.11.2021 for remittance of PF Contribution without seeding Aadhaar with UAN.
3. Grievance Redressal Committee  will be formed by the EPFO for giving assistance to  the Employers, and Employees with respect to seeding Aadhaar with UAN, and a status report will be submitted by the EPFO before the Hon’ble Court, before the next date of hearing.

Now on 16.12.2021, writ petition has been disposed of by granting all reliefs as sought in the writ petition.

Large number of aggrieved employers are grateful to Mr. S.K. Gupta who has argued the petition with great ability.

Case Name - ASSOCIATION OF INDUSTRIES AND INSTITUTIONS v/s UNION OF INIDA & ANR

Order Copy

IN THE HIGH COURT OF DELHI AT NEW DELHI

W.P.(C) 5952/2021 & CM APPLs. 32165/2021, 32239/2021

Petitioner - ASSOCIATION OF INDUSTRIES AND INSTITUTIONS . Through: Mr. Sudhir Kumar Gupta, Advocate 

versus 

Respondents - UNION OF INIDA & ANR....  Through: Mr. Siddharth, Mr. Amit Kumar, Advocates for R-2 

CORAM:
JUSTICE PRATHIBA M. SINGH 

O R D E R

16.12.2021

1. This hearing has been done in physical Court. Hybrid mode is permitted in cases where permission is being sought from the Court.

2. Vide order dated 17th September, 2021, this Court had extended the time for seeding and verification of employees of the Petitioner-Association till 30th November, 2021, and prohibited coercive measures for non-seeding of Aadhaar numbers with Universal Account Number (hereinafter ‘UAN’). The Court had also directed the EPFO to place on record complete data relating to the verification/seeding of Aadhaar. Pursuant to this order, an affidavit was filed by the EPFO recorded in order dated 10th November, 2021, indicating that the number of persons whose UAN had not been seeded with Aadhaar had come down to 23,63,405.

3. Today, a fresh affidavit has been filed by the EPFO giving the latest status of the verification of Aadhaar as under:

“2. The petitioner on 26.11.2021 has submitted a list of 981 establishments that it purports to represent. An affidavit dated 29.11.2021 was submitted by the respondent after a preliminary examination of the PF code numbers submitted by the petitioner. It was found that no PF code was submitted in respect of 164 establishments. For the remaining 817 establishments, data in respect of 254 establishments was cross- checked. These establishments have 16,373 contributory UAN. Of these, Aadhaar verification is pending in only 375 UAN. Within these 375 UAN, Aadhaar number is entered in 158 UAN and only verification is pending.

3. Now, the respondent has cross checked all the 817 establishments having PF code. These establishments have a total of 53,699 UAN. Of this, 51,503 UAN are Aadhaar verified, and only 2196 UAN are yet to be Aadhaar verified. Of these 2196 UAN, 1467 UAN are those that are yet to be seeded with Aadhaar. 729 UAN are those have a mismatch with Aadhaar data seeded with them. The spreadsheet containing this data is annexed as Annexure R-1 (pp. 3-27)”

4. The said supplementary affidavit dated 16th December, 2021, is taken on record.

5.An affidavit has also been filed by Mr. Gupta, ld. counsel for the Petitioner, submitting that in the writ petition, the Petitioner had sought relief for extension in implementation of the impugned order of the EPFO dated 1st June, 2021, by a period of 6 months. The reliefs sought in the writ petition are as under:

“[a] Issue a writ in the nature of mandamus or any other appropriate writ, order or direction in the nature of mandamus or any other writ or order or direction or granting interim relief against the impugned order No. BKG. 27/07/2020- G/Pt. File dated 01.06.2021 passed by the ACC (F & A), Employees’ Provident Found Organisation Delhi.

[b] Or in the alternative, Issue a writ in the nature of mandamus or any other appropriate writ, order or direction commanding the respondents to extend the implementation of Annexure P1 directives by 6 months, enabling remittance of contributions by employers in respect of their employees, under the Employees’ Provident Fund and Miscellaneous Provisions Act 1952, for the period from 01.06.2021 onwards, without liability for interest/ damages or penalty as also without incurring any disentitlement to any benefits under ABRY Scheme and PMRPY Scheme;

[c] Issue a writ in the nature of mandamus or any other appropriate writ, order or direction commanding the respondents to extend the due dates for remittance of contributions under the Employees’ Provident Fund and Miscellaneous Provisions Act 1952 by six months so the provisions of Income Tax 1961 may not give adverse effect as per Section 36(1)(va) read with Section 2(24)(x) of Income Tax Act,1961;

[d] Grant such other and further reliefs as are deemed just and necessary in the facts and circumstances of the case including the costs of this proceedings; as also the following:”

6. Considering the interim orders already passed by this Court, Mr. Gupta submits that no further reliefs are being sought for and the writ petition may be disposed of

7. Vide order dated 17th September, 2021, the Court had also granted a five days grace period to the employers, for the delay in deposit of provident fund dues during the period from 1st June, 2021 to 15th June, 2021. It was accordingly directed that the EPFO shall not take any coercive steps in respect of such belated payments. The said order is made absolute in view of the reasons contained in the said order dated 17th September, 2021.

8. Accordingly, this writ petition stands satisfied in terms of the orders passed previously and the verification status as on today. No further orders are called for in this writ petition

9. The present writ petition, along with all the pending applications, is disposed of in the above terms.

 

PRATHIBA M. SINGH, J.
DECEMBER 16, 2021//Aman/MS