As per section 36(1)(va) of the Act, if any sum received by the assessee from any of his employees to which the provisions of sub-clause (x) of clause (24) of section 2 apply, if such sum is credited by the assessee to the employee’s account in the relevant fund or funds on or before the due date.

In simple words, if any assessee has not deposit the employee’s contribution of PF/ESI or any other fund before the due date of the relevant fund under any act, employee contribution which was not deposited to be added back in the computation of income.

In respect to the above, we have landmark judgement passed by the Hon’ble Supreme Court in the case of CIT vs. Alom Extrusions Ltd. [(2009) 185 Taxman 416 (SC)] wherein it was held that the ‘due date’ means the due date of return of income as per section 139(1) not as per respective fund due date.

 It’s clear from the above SC judgement, if employee’s contribution towards the PF and ESI deposited on or before the due date of filing the Income Tax Return as prescribed under section 139(1) will be an allowable expense.

Further, the Hon’ble Delhi HC also stated that in the case of CIT vs. Aimil Ltd. [(2010) 188 Taxman 265(Delhi)] ‘due date’ means the due date of return of income as per section 139(1) not as per respective fund due date.

If any queries/doubt feel free to contact at [email protected]

Disclaimer: The contents of this article are solely for information and knowledge and do not constitute any professional advice or recommendation.

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7 Comments

  1. G SRI SURYA TEJA says:

    Sir, I think above mentioned supreme court judgement is only for 43B not for S.36 (1)(va). so I think relaxation to pay before due date of IT return filing is only for employer contribution only u/s 43B not for employee contribution which is covered under S.36(1)(va). Correct me If I am wrong.

  2. Suhas Yadav says:

    On basis of details in audit report CPC has proposed addition of late deposited pf under that Act, though before due date u/s. 139(1).
    How to meet compliance?
    Same question from my side. we have also received the same notice.

  3. Prakash Kochar says:

    On basis of details in audit report CPC has proposed addition of late deposited pf under that Act, though before due date u/s. 139(1).
    How to meet compliance?

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