Provident fund contribution deduction allowed for payments made within the grace period despite delay under Section 43B rules.

Employer's contributions to provident fund and family benefit fund paid within the permissible grace period remained deductible, even though the payments were not made within the time specified in the second proviso to Section 43B read with the Explanation to Section 36(1)(va). The Madras HC applied the existing binding view on the point and held that deduction was allowable to the extent the contributions were remitted within the grace period, resolving the issue in favour of the assessee.

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Issues: Whether the assessee was entitled to deduction of employer's contribution to provident fund and family provident fund when payment was made within the grace period but not within the time specified in the second proviso to Section 43B read with the Explanation below Section 36(1)(va).

Analysis: Contributions to employees' provident fund and family benefit fund paid within the permissible grace period are eligible for deduction. The first referred question was answered by applying the existing binding view on the point.

Conclusion: The deduction was allowable to the extent the payments were made within the grace period, and the issue was answered in favour of the assessee.

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