Employee welfare contribution deductions allowed when paid before return filing, despite missing the welfare-law due date.

Employees' contributions to provident fund and ESI, though deposited after the welfare-law due date, were treated as deductible where payment was made before filing the return of income. The article relies on the jurisdictional High Court's application of Supreme Court authority in Alom Extrusions, noting that such contributions are income under section 2(24)(x) but the deduction question is governed by section 36(1)(va) read with section 43B. It also states that the Finance Act, 2021 amendment was applied only from assessment year 2021-22 and did not affect the year under discussion.

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Issues: Whether employees' contribution to provident fund and employees' state insurance, deposited after the due date under the relevant welfare laws but before filing the return of income, was allowable as a deduction under the Income-tax Act.

Analysis: The issue was treated as covered by the jurisdictional High Court decision following the Supreme Court ruling in Alom Extrusions. The reasoning proceeded on the basis that employee contributions received by the employer fall within income under section 2(24)(x), but deduction is governed by section 36(1)(va) read with section 43B. The order also noted that the jurisdictional High Court had held that section 43B applies to such contributions when payment is made before filing the return under section 139(1), and that the later Finance Act, 2021 amendment was applied from assessment year 2021-22 onwards and did not govern the year under appeal.

Conclusion: The delayed deposits, having been made before filing the return, were held deductible and the disallowance was deleted.

Ratio Decidendi: For the relevant assessment year, employees' contributions deposited before filing the return of income were allowable where the jurisdictional precedent applied section 43B to the deduction claim notwithstanding the due date under the welfare statutes.

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