The Employees’ Provident Fund Organization has issued a Circular dated February 14, 2020, setting out guidelines for initiation of inquiries under Section 7A of the Employees Provident Funds and Miscellaneous Provisions Act, 1952 (‘EPF Act’). Its key provisions are:

i.     The inquiries must be initiated only on the following grounds: (a) dispute of applicability of the EPF Act; and (b) determination of adequacy of dues from an employer;

ii.   The proceedings under Section 7A can be initiated only where there is a prima facie case, the reasons for which the assessing officer is required to record before initiation of the inquiry. A mere complaint will not be sufficient to initiate such an inquiry;

iii.   In order to avoid prolonged proceedings, the assessing officer, before commencing an inquiry, is required to record (in writing) the time period for which the inquiry is intended to be conducted; and

iv.    The reasons for initiation of the inquiry must be recorded in writing by the assessing officer, and shared with all relevant parties along with the notice of inquiry; and

v.     The scope of an inquiry must be restricted to the issues and time period recorded by the assessing officer. A separate notice must be issued for conducting an inquiry into any unconnected issues or if the period of the inquiry extends beyond the time period originally indicated.