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Aggrieved by the order of assessment, the appeal was filed before the Presiding Officer, Employees' Provident Fund Appellate Tribunal. The reasoning given in appeal is that though two or more establishments can be treated as one when there is financial, managerial or functional integrality between the two separate juristic entities but such a finding is not recordable on the material on record. The Appellate Authority has returned its findings as follows:-

"In the case in hand, it is mentioned in the impugned order that all the establishments are owned by one group. Except this there is no specific findings about the functional, financial and managerial integrity. It is only stated that there was possibility of transfer of finance and control. (page 6 of the order). This averment shows that there is no specific finding regarding the functional and financial integrity between the establishments.
In this case, the order does not indicate any financial and functional integrity between the establishments. So, it is not proper to club the appellant with other establishments."

Still further, it has been held as follows:-

"In this case the appellant categorically stated that he gave the contract for service i.e. for stitching and that the contractors were independent entities. It is stated in the impugned order that the Enforcement Officer reported that the stitching work was done by the independent entities. (page 4 of the order) This averment in the order itself shows that the appellant gave the contract for service and the contractor were independent establishments.

On the above reasoning, the Appellate Authority had allowed the appeal and set aside the order passed by the Provident Fund authority under Section 7-A of the Act directing the respondents to deposit the dues found outstanding. In the absence of clear and categorical findings with regard to functional integrality between the respondent and the other sister companies, there is no warrant for interfering in the order dated 10.02.2011 (P-4) passed by the Appellate Authority which has given liberty to the authority to verify whether the contractors deposited the contribution for employees engaged by them or not. Though liberty has been granted yet the matter has not been remanded in specific words to the assessing authority on the issue of stitching work carried out by contractors and its effect and impact on assessment proceedings under Section 7-A of the Act as well as the issue of applying tests of financial, managerial or functional integrality. The primary assessing authority is still free to re-examine the matter and probe the inter se status of and between the companies and their contractors viv a vis contributions under the Act for the relevant period for purposes of clubbing and infancy protection. The impugned order ought to be treated in effect as a remand order for purposes of fresh assessment and not a final order.