Section 43B payment before return due date protects provident fund and ESI contributions from disallowance.

Employees' state insurance and provident fund contributions covered by section 43B are allowable where the amounts are actually paid before the due date for furnishing the return under section 139(1). The text treats the second proviso to section 43B as clarificatory and retrospective, so its omission by the Finance Act, 2003 extends the benefit of the first proviso to such covered payments. On that basis, the statutory condition for disallowance was not met, and the addition was deleted in favour of the assessee.

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Issues: Whether the disallowance of employees' state insurance and provident fund contributions under section 43B of the Income-tax Act, 1961 was justified when the amounts were paid before the due date for filing the return.

Analysis: The second proviso to section 43B had been treated as clarificatory and retrospective, and its omission by the Finance Act, 2003 was read as extending the benefit of the first proviso to all covered payments, including provident fund and ESI contributions. Since the entire sum had been actually paid before the due date for furnishing the return under section 139(1), the statutory condition for disallowance was not attracted.

Conclusion: The disallowance under section 43B was not sustainable, and the addition was rightly deleted in favour of the assessee.

Ratio Decidendi: A sum covered by section 43B is allowable where it is actually paid before the due date for furnishing the return under section 139(1), and a proviso treated as clarificatory applies retrospectively to pending proceedings.

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