Employer’s part of PF will be allowed as an expense U/s. 43B if deposited before the due date of filing of Income tax return

  • The CBDT has issued Circular No. 22/2015 dated 17.12.2015 pointing out that in CIT vs. Alom Extrusions Ltd, [2009} 185 TAXMAN 416 (SC), the Apex Court has held that the amendments made in section 43B of the Act by way of deletion of the second proviso and amendment in the first proviso are curative in nature and should be retrospectively applicable from 1.04.1988.
  • It is noted that the Supreme Court has further held that by deleting the second proviso to section 43B of the Act and amending the first proviso, the contribution to welfare funds have been brought at par with the other duty, cess, fee, etc.
  • Thus, the proviso is equally applicable to the welfare funds also.
  • Therefore the deduction is allowable to the employer assessee if he deposits the contributions to welfare funds on or before the ‘due date’ of filing of return of income.
  • The CBDT has explained that the law is now well settled that if the assessee deposits any sum payable by it by way of tax, duty, cess or fee by whatever name called under any law for the time being in force, or any sum payable by the assessee as an employer by way of contribution to any provident fund or superannuation fund or gratuity fund or any other fund for the welfare of employees, on or before the ‘due date’ applicable in his case for furnishing the return of income under section 139(1) or the Act, no disallowance can be made under section 43B of the Act.
  • The CBDT has directed that no appeals should henceforth be filed on this ground by the officers of the Department and appeals already filed, if any, on this ground before Courts/Tribunals should be withdrawn / not pressed upon.


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