HO No.C-II/20/76/Misc./2020/CBE/TN/1027 dated 14/02/2020
कर्मचारी भविष्य निधि संगठन
(श्रम एवं रोजगार मंत्रालय, भारत सरकार) EMPLOYEES' PROVIDENT FUND
ORGANISATION (Ministry of Labour & Employment, Govt. of India)
मुख्य कार्यालय / Head Office sfera
P A , 14- AT WA, -110 066.
Bhavishya Nidhi Bhawan, 14, Bhikarji Cama Place, New Delhi - 110 066.
Bhavishya Nidhi Bhawan, 14, Bhikarji Cama Place, New Delhi - 110 066.
No.C-11/20/76/Misc./2020/CBE/TNI 1027
Date:14.02.2020
All Addl. Central PF Commissioners (Zones),
All Regional PF Commissioners of Regional Offices,
All Officers-in-charge of District Offices
Subject: - Guidelines for initiation of inquiries u/s 7A of the Act
Madam/Sir,
It is noticed that the Assessing Officers follow different yardstick as
they deem fit for initiation of inquiries u/s 7A of the Act. In many
cases inquiries are initiated for wholly insufficient and untenable
reasons and even without ascertainment of sufficient grounds which leads
to general resentment among employers on one hand and prolonged
pendency of such inquiries on the other.
Section 7A of the Act predicates the statutory mandate of resolution of
applicability disputes or determination of amounts due from employers
and, for this purpose, also clothes the authorities with the trappings
of a Court under the Code of Civil Procedure. The duty to act
judicially, fairly and equitably is copiously discernable from the
statutory mandate.
In order to bring uniformity in the procedure for initiation of
inquiries u/s 7A and in supersession of the earlier instructions, the
following instructions are issued in reiteration of the laid down law on
this issue:
1. Inquiries u/s 7A shall not be initiated for any purpose extraneous to
the statutory mandate of section 7A i.e dispute of applicability or
determination of dues. Therefore grounds such as non-submission of
returns, non-production of records, non-cooperation in inspections etc.
are not reasons within the sweep of section 7A and do not, therefore,
constitute a sufficient basis for initiating proceedings under section
7A.
2. The minimum standard of evidence for commencement of any legal
proceedings is "existence of a prima-facie case" and the same applies to
proceedings u/s 7A as well. Any inquiry or legal proceeding initiated
without a prima- facie case is of the nature of fishing and roving
inquiry and the same is impermissible in law. Such inquiries are a
nullity in the eyes of law and are non-est ab-initio. Therefore the
Assessing Officers shall record reasons in file, on the basis of
evidence available on record, regarding existence of a prima-facie case
of default, or of an applicability dispute, before initiating process
u/s 7A.
3. A mere complaint in itself does not constitute prima-facie evidence,
sufficient to initiate an inquiry u/s 7A as complaint is only a source
of information and not a legal proof of the allegations. Therefore, any
complaint is required to be investigated by an Enforcement Officer under
section 13 (1) of the Act and substantiated on the basis of admissible
evidence gathered during investigation. The tendency to initiate
inquiries on the basis of complaints alone is legally untenable and must
be avoided as it lead to surpassing the investigations required under
law before initiation of any inquiry.
4. Sometimes the inquiries are initiated for prolonged durations such as
5 to 20 years without any evidence of such prolonged default. This
practice is legally untenable and must be eschewed. Therefore, before
initiating the inquiry, the assessing officer shall record in writing
proximate nexus with the evidence of default available on record and the
period for which the inquiry is intended to be held.
5. Once an inquiry is initiated for specific reasons and period, the
scope thereof cannot be extended beyond the fact-in-issue. The scope of
the inquiry need not travel beyond the issues identified at the stage of
its initiation. For any new reason or period separate notice must be
issued. The records summoned from the employer, therefore, must have
reasonable linkage with the subject matter of determination and the
period. The practice of summoning unrelated records for prolonged period
amounts to conducting a fishing and roving inquiry which is not
permissible in law.
6. Wherever the inquiries are intended to be initiated on the basis of
credible evidence and meeting the requirements of principles narrated
above, reasons for initiation of inquiry must be recorded in writing and
a copy of all documents forming basis for initiation of inquiry must be
supplied to the concerned parties along with the notice u/s 7A.
7. The notice initiating inquiry shall be assigned a computer generated
diary number from Compliance e-Proceedings portal and any notice issued
without case number generated from Compliance e-Proceedings portal shall
be treated as non-est.
The above instructions may be scrupulously followed by all officers.
[This issues with the approval of the Central P.F. Commissioner]
Yours faithfully,
Pankaj Řaman
Addl. Central PF Commissioner (Compliance)
Copy for information:
1. PS to CPFC
2. PS to FA&CAOI CVOI All Addl. CPFCs (HQ) at Head Office.
3. Director PDNASS
4. Hindi Cell for Hindi Translation.
5. NDC for web circulation.
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