EPFO issues guidelines for initiation of inquiries under EPF Act, 1952

Feb 18, 2020 | by Avantis RegTech Legal Research Team

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Labour Compliance

The Employees’ Provident Fund Organisation (EPFO) on February 14, 2020, issues guidelines for initiation of inquiries under Section 7A of the Employees’ Provident Funds and Miscellaneous Provident Act, 1952. Section 7A predicts the statutory mandate of resolution of applicability disputes or determination of moneys due from employers. It had been noticed that the Assessing Officers were not following the procedures for initiation of inquires, thus to bring uniformity in the procedure, the following instructions are specified:-

1. Inquiries under Section 7A shall not be initiated for any purpose extraneous to the statutory mandate that is 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 the reasons and do not, therefore, constitute a sufficient basis for initiating proceedings.

2. The Assessing Officers shall record reasons in file, on the basis of evidence available on record, regarding existence of prima-facie case of default, or of an applicability dispute, before initiating process under Section 7A.

3. A mere complaint in itself does not constitute prima-facie evidence and thus not sufficient to initiate an inquiry. Therefore, any compliant is required to be investigated by an Enforcement Officer 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. The inquiries which 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. Thus, the assessing 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 the 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. The records summoned from the employer must have a reasonable linkage with the subject matter of determination and the period. The practice of summoning unrelated records 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, reasons for initiation of inquiry must be recorded in writing and a copy of all the documents must be supplied to the concerned parties along with the notice.

7. The notice initiating inquiry shall be assigned a computer generated diary number for compliance e-proceedings portal and any notice without case number generated from Compliance e-proceedings portal shall be treated as non-est.

[Circular No. C-II/20/76/Misc./2020/CBE/TN/1027]


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