Provident fund contribution deduction allowed where payment was made before the income-tax return filing due date.

Employees' provident fund contributions paid after the due date under the provident fund law but before the return-filing due date were treated as deductible, because the Tribunal applied section 43B on actual payment up to the due date under section 139(1) and followed its view that no material distinction should be drawn between employer and employee contributions for this purpose. Applying the construction favourable to the assessee where judicial views diverge, it held that the disallowance was not sustainable and the deduction was allowable.

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Issues: Whether employees' contribution to provident fund, paid after the due date under the relevant provident fund law but before the due date for filing the return of income, is allowable as a deduction.

Analysis: The Tribunal followed its earlier coordinate bench view that there is no material distinction, for the purpose of deduction, between employer and employee contributions where the total provident fund contribution is remitted before the due date prescribed under section 139(1). It relied on the interpretation that section 43B permits deduction on actual payment up to the return-filing due date and applied the assessee-favouring construction where divergent judicial views exist.

Conclusion: The disallowance was not sustainable and the deduction was allowable.

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