Provident fund deduction turns on payment before return due date, with section 43B(b) supporting employees' contribution relief.

Employees' contribution to provident fund is treated as deductible where the amount is paid before the due date for filing the return of income, even if paid after the due date under the provident fund law. The analysis reads section 36(1)(va) with section 43B(b) of the Income-tax Act, 1961 and treats the statutory payment provision as allowing deduction on actual payment within the return-filing deadline. Where competing judicial views exist, the construction favourable to the assessee is preferred, and the corresponding disallowance is deleted.

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

Analysis: The assessee's contribution was considered in the light of the interaction between section 36(1)(va) and section 43B(b) of the Income-tax Act, 1961. The reasoning proceeded on the basis that provident fund contributions are governed by a common statutory scheme, and that the expression 'contribution' is wide enough to cover both employer and employee shares. The provision in section 43B(b) allowing deduction on actual payment up to the due date for filing the return was applied, and where conflicting judicial views existed, the construction favourable to the assessee was preferred.

Conclusion: The delayed employees' contribution was held allowable because it was paid before the due date under section 139(1), and the disallowance was deleted.

Ratio Decidendi: Employees' contribution to provident fund is deductible if paid before the due date for filing the return of income, and section 43B(b) prevails to permit deduction on actual payment within that extended time limit.

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