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Issues: Whether employees' contributions to provident fund and ESI, paid before the due date for filing the return of income, were liable to disallowance under section 43B of the Income-tax Act, 1961.
Analysis: The payments towards provident fund and ESI were made within the financial year and before the due date prescribed for filing the return under section 139(1) of the Income-tax Act, 1961. The Tribunal relied on CBDT Circular No. 22/2015 dated 17.12.2015 and the settled position that, in view of the curative and retrospective amendment to section 43B, no disallowance is warranted where the employer deposits the contributions before the due date of filing the return.
Conclusion: The disallowance of employees' contributions to provident fund and ESI was not sustainable, and the addition was directed to be deleted in favour of the assessee.
Ratio Decidendi: Where employees' welfare contributions are actually paid before the due date for furnishing the return of income under section 139(1), they are allowable and cannot be disallowed under section 43B.
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