Delayed provident fund and ESI contributions remain disallowable when the statutory due date runs from the wage month-end.

Delayed employee provident fund and ESI contributions were held disallowable under section 36(1)(va) of the Income-tax Act because the statutory due date is computed from the close of the relevant wage month, not from the month in which salary is actually paid. The court applied the coordinate bench view that the employer must deduct the employee contribution before paying wages and deposit it within fifteen days of the month-end under the EPF scheme. A later salary payment in the following month does not extend the due date, so the assessee's challenge failed and the tax appeal was dismissed.

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Issues: Whether delayed deposit of employees' provident fund and ESI contributions is disallowable under the Income-tax Act, and whether the due date for payment is to be computed with reference to the month in which wages are actually disbursed.

Analysis: The appeal was governed by the earlier coordinate bench decision, which interpreted section 36(1)(va) of the Income-tax Act, 1961 read with section 2(24)(x) and section 38 of the Employees Provident Funds and Miscellaneous Provisions Act, 1952. The statutory scheme requires the employer to deduct the employee's contribution before paying wages and to deposit the amount within fifteen days of the close of the relevant month. The expression "due date" was held to relate to the month for which wages are payable, not the month in which salary happens to be paid. A later salary payment in the following month does not defer the liability by another month.

Conclusion: The delayed employee contributions were liable to disallowance, and the assessee's contention on computation of the due date was rejected.

Final Conclusion: The appeal was not entertained on any distinct legal ground and the revenue position was upheld, resulting in dismissal of the assessee's tax appeal.

Ratio Decidendi: Employee contributions to provident fund and ESI must be deposited within the statutory due date computed from the close of the relevant wage month, and a delayed deposit attracts disallowance under section 36(1)(va) of the Income-tax Act, 1961.

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