NPS contribution paid before return deadline cannot be disallowed in return processing and remains allowable under tax law.

NPS contributions paid before the return-filing due date were held not liable to disallowance in section 143(1) processing where the governing pension framework prescribes no separate remittance deadline. The Tribunal treated the payment as allowable under section 43B(b) and held that the CPC could not disregard the assessee's explanation while making the adjustment. It also noted that the PFRDA framework supports the distinct treatment of National Pension System payments from employees' contribution disallowance under section 36(1)(va). The return-processing adjustment was therefore deleted.

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Issues: Whether the employees' contribution to the National Pension Scheme paid before the due date for filing the return could be disallowed in processing under section 143(1); and whether such payment was governed by the disallowance rule applicable to employees' contribution under section 36(1)(va) or was otherwise allowable.

Analysis: The assessee's payment was towards the National Pension System, which is regulated by the PFRDA Act, 2013. The order notes that no due date is prescribed under the PFRDA framework for remittance to the NPS account, and that the contribution had in fact been made before the due date for filing the return under section 139(1) of the Income-tax Act, 1961. The Tribunal also treated the amount as allowable under section 43B(b) of the Income-tax Act, 1961 and held that the CPC could not ignore the assessee's explanation while making an adjustment in section 143(1) proceedings. The order further records that section 12(3)(iii) of the PFRDA Act, 2013 supports the distinct character of NPS payments.

Conclusion: The disallowance of the NPS contribution was not sustainable, and the assessee succeeded on this issue.

Final Conclusion: The adjustment made in processing the return was deleted and the appeal was allowed.

Ratio Decidendi: Where an NPS contribution is paid before the return-filing deadline and the governing pension law prescribes no separate due date, the amount cannot be disallowed as delayed employees' contribution in section 143(1) processing and is allowable under section 43B(b).

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