HC rules out applicability of sec. 43B to employees’ contribution to PF; no deduction if paid after due date of PF Act

Due date under section 43B, i.e., due date of filing income-tax return, is not applicable under section 36(1)(va) to employees' contributions to PF/ESI, etc.

The High Court held as under:

1) Sum received by the assessee from any of his employees as contribution to PF/ESI, shall not be entitled to deduction if such sum is not credited by the assessee to the employees' account in the relevant fund or funds on or before the due date as per Explanation to section 36(1)(va) of the Act;

2) Merely because Second Proviso to Section 43B of the Act in which there is a reference to due date as defined in Explanation below clause (va) of sub-section (1) of section 36, it can’t be held that even section 36(1)(va) has been amended and/or even Explanation below clause (va) of sub-section (1) of section 36 has also been deleted;

3) If employee’s contribution received by the assessee is not credited to the employees' account in the relevant fund, on or before the due date specified under PF Act, ESI Act or any other law, the assessee shall not be entitled to deduction of such amount even if contributions have been deposited on or before due date under section 43B, i.e., due date for filing of income-tax return – CIT v. Gujarat State Road Transport Corporation [2014] 41 taxmann.com 100 (Gujarat)