The Employees’ Provident Fund Organization (“EPFO”) has issued a circular, dated February 14, 2020 (“Circular”), setting out guidelines for initiation of inquiries under Section 7A of the EPF Act.

The Circular sets out guidelines with the intention to bring uniformity and transparency in the procedure being followed by the Assessing Officers to initiate inquiries and avoid the prolonged pendency of such inquiries. Broadly, it clarifies that the inquiries under Section 7A can be initiated only on 2 grounds, i.e. (i) the dispute of applicability or (ii) determination of dues.  The proceedings under Section 7A can be initiated only when there is a prima-facie case, which means that a complaint that is filed must be investigated by an Enforcement Officer and substantiated on the basis of admissible evidence gathered during such investigation. The Assessing Officer must record (in writing) a close link of the said inquiry with the available evidence of default and the time period for which the inquiry is intended to be conducted. Upon initiation of an inquiry, a separate notice is required for change of scope or extension of the time period of the inquiry.

We have attached a copy of the Circular, for your reference.