Employee ESI/PF contribution disallowance under return processing upheld, with remand for factual verification of salary-disbursement date.

Employee's contribution to ESI/PF is described as deductible only if credited by the due date under the relevant welfare statute, not merely by the return-filing due date under section 139(1), and the adjustment is treated as permissible in processing under section 143(1)(a). The text also notes that the actual date of monthly salary disbursement was not examined below and was therefore sent back for limited factual verification, since that date may bear on compliance with the statutory payment requirement.

---

---

Issues: (i) Whether the disallowance of employee's contribution to ESI/PF under section 36(1)(va) could be sustained in processing under section 143(1) of the Income-tax Act, 1961. (ii) Whether the matter required restoration for factual verification of the actual date of monthly salary disbursement.

Issue (i): Whether the disallowance of employee's contribution to ESI/PF under section 36(1)(va) could be sustained in processing under section 143(1) of the Income-tax Act, 1961.

Analysis: The binding legal position was treated as settled that employee's contribution to ESI/PF must be credited on or before the due date prescribed under the relevant welfare statute and not merely by the due date for filing the return under section 139(1). The adjustment was also regarded as permissible in processing under section 143(1)(a).

Conclusion: The disallowance was upheld in principle and the assessee's challenge failed on the substantive legal issue.

Issue (ii): Whether the matter required restoration for factual verification of the actual date of monthly salary disbursement.

Analysis: The factual aspect of the actual date of salary disbursement had not been adjudicated by the lower authorities, and that date was relevant to examination of compliance with the statutory requirement. The matter was therefore sent back for fresh verification by the Assessing Officer.

Conclusion: The issue was remanded for limited factual verification.

Final Conclusion: The appeal succeeded only to the limited extent of remand for factual verification, while the legal challenge to the disallowance did not succeed.

Ratio Decidendi: Employee's contribution to ESI/PF is deductible only if deposited within the due date prescribed under the relevant statute, and the adjustment may be made during processing under section 143(1)(a), subject to necessary factual verification where the date of salary disbursement is material.

---