Employees' contribution deduction depends on timely deposit to the fund; delayed payment was held ineligible and the per incuriam challenge failed.

Employees' contributions to provident fund and ESI are deductible only when credited to the relevant fund on or before the statutory due date under section 36(1)(va), read with section 2(24)(x), and the time limit is to be applied with reference to the month in which wages are payable and the deduction liability arises. On that reading, deposits made after the prescribed date did not qualify for deduction. The challenge that an earlier coordinate Bench view was per incuriam was rejected because that view was treated as consistent with the governing legal position and no contrary binding principle was shown. The claimed deduction was therefore disallowed.

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Issues: Whether the assessee was entitled to deduction of employees' contribution to provident fund and ESI though the amounts were deposited beyond the prescribed time, and whether the earlier coordinate Bench view could be treated as per incuriam.

Analysis: The appeal turned on the interpretation of section 36(1)(va) of the Income-tax Act, 1961, read with section 2(24)(x), under which employees' contributions are deductible only if credited to the relevant fund on or before the due date. The Court held that the phrase requiring payment within fifteen days of the close of every month must be understood with reference to the month in which the wages are payable and the deduction liability arises, not the succeeding month in which salary is actually disbursed. The contention that earlier decisions were per incuriam was rejected, as the earlier view was found to be consistent with the governing legal position and no contrary binding principle was shown.

Conclusion: The assessee was not entitled to the claimed deduction, and the appeal failed.

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