Delayed PF and ESI employee contributions remain disallowable, and the return-processing adjustment was upheld.

Employees' contribution to PF and ESI deposited after the due date under the relevant welfare statutes was held disallowable under section 36(1)(va), and the adjustment was validly made while processing the return under section 143(1)(a). The ruling followed the settled position that timely deposit is a condition for allowance of employees' contributions, and delayed payment attracts disallowance. The assessee's challenge to the intimation was rejected and the disallowance was upheld.

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Issues: Whether the disallowance of employees' contribution towards PF/ESI, made for non-deposit within the due date prescribed under the respective welfare statutes, was sustainable in an intimation under section 143(1) of the Income-tax Act, 1961.

Analysis: The adjustment was held to be covered by the settled position that employees' contribution to EPF/ESI is allowable only if deposited within the due date prescribed under the relevant statute. The issue was treated as no longer res integra in view of the binding decisions holding that such delayed payment attracts disallowance under section 36(1)(va), and that the adjustment can be made while processing the return under section 143(1)(a).

Conclusion: The disallowance was upheld and the assessee's appeal was dismissed.

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