Timely PF and ESI payment before return filing due date keeps employees' contributions deductible under section 43B.

Employees' contribution to PF and ESI, though remitted after the welfare statute due date, remained deductible where payment was made before the due date for filing the return under section 139(1). The Tribunal applied its coordinate-bench view that section 43B governs such timely payments and does not require a separate distinction, for this purpose, between employer's and employees' contributions. On that basis, the disallowance made under sections 2(24)(x), 36(1)(va) and 43B was unsustainable, and the addition was deleted.

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Issues: Whether employees' contribution to PF and ESI, remitted after the due date under the welfare statute but before the due date for filing the return under section 139(1), is allowable as a deduction and not liable to disallowance under sections 2(24)(x), 36(1)(va) and 43B of the Income-tax Act, 1961.

Analysis: The Tribunal followed its earlier coordinate-bench view that the relevant contribution, once deposited before the due date for filing the return, is governed by the beneficial operation of section 43B. It held that the statute does not warrant a distinction, for this purpose, between employer's and employees' contribution where the payment is made within the return-filing due date. On that basis, the disallowance made by the Assessing Officer was found unsustainable.

Conclusion: The issue was decided in favour of the assessee and the addition was directed to be deleted.

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