Employees' PF/ESI contribution due dates follow wages becoming due, supporting return-processing disallowance for delayed statutory deposits.

Employees' PF/ESI contributions deposited after the due date under the relevant welfare law are described as disallowable, with adjustment permissible during return processing where the delay is apparent from return material. The notes state that the relevant PF/ESI due date runs from the month in which wages become due, rather than actual salary disbursement, to preserve the welfare purpose of timely deposits. They further state that once an appellate authority adjudicates an appeal on merits, delay is deemed condoned and a later dismissal solely on limitation is unsustainable. A prospective provision under the Income-tax Act, 2025 is described as not affecting earlier assessment years.

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Issues: (i) Whether dismissal of the appeals as time-barred was sustainable after the appellate authority had adjudicated their merits; (ii) Whether delayed employees' PF/ESI contributions could be disallowed under section 36(1)(va) while processing returns under section 143(1); (iii) Whether the PF/ESI due date is to be reckoned from the month in which wages become due or from the month of actual salary disbursement.

Issue (i): Whether dismissal of the appeals as time-barred was sustainable after the appellate authority had adjudicated their merits.

Analysis: Once the appellate authority entertained the appeals and rendered findings on merits, the delay stood deemed to have been condoned. A subsequent dismissal solely on limitation was therefore unsustainable.

Conclusion: The dismissal on the ground of delay was set aside in favour of the assessee.

Issue (ii): Whether delayed employees' PF/ESI contributions could be disallowed under section 36(1)(va) while processing returns under section 143(1).

Analysis: The binding jurisdictional view permits adjustment under section 143(1) where employees' contributions are deposited after the statutory due dates. The Supreme Court ruling governing section 36(1)(va) applies from the inception of the provision and supersedes contrary earlier views. The subsequent provision in section 29(1)(e) of the Income-tax Act, 2025 operates prospectively from 01.04.2026 and does not alter the position for the assessment years concerned.

Conclusion: Disallowance of employees' PF/ESI contributions under section 36(1)(va) in the section 143(1) processing was valid, against the assessee.

Issue (iii): Whether the PF/ESI due date is to be reckoned from the month in which wages become due or from the month of actual salary disbursement.

Analysis: Section 38(1) of the Employees' Provident Funds and Miscellaneous Provisions Act, 1952 requires deposit within fifteen days of the close of the relevant month. This is referable to the month in which wages become due; an interpretation based on actual disbursement could permit delayed payment of wages and defeat the welfare purpose of the legislation. The tax audit report also recorded the contributions as delayed on this basis.

Conclusion: The due date is reckoned from the month in which wages become due, and the contributions deposited beyond that date were disallowable, against the assessee.

Final Conclusion: The limitation objection succeeded, but the challenged PF/ESI adjustments were sustained on the applicable statutory and binding-precedent position.

Ratio Decidendi: Employees' PF/ESI contributions deposited after the due date prescribed under the relevant welfare law are disallowable under section 36(1)(va), and such disallowance may be made in section 143(1) processing where the delay is apparent from the return material.

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