2014 (2) TMI 127 - KARNATAKA HIGH COURT

Benefit of amendment of section 43B of the Act - Whether the benefit of the amendment of Section 43B of the Income Tax Act equally applies to the employees’ contribution of provident fund – Held that:- The contributions payable by the employer under the scheme shall be at the rate of 10% of the basic wages, Dearness Allowance - The contribution payable by the employee shall be equal to the contribution payable by the employer in respect of such employee - the payment of contribution by the employer to the fund under the scheme means both employer’s contribution and employee’s contribution - Whether he deducts the employee’s contribution from the salary or not, in law, he is liable to pay the said amount –thus, Section 2(24)(x) of the Act makes it clear that the employee’s contribution which the employer deducts from his salary before it is paid into the fund, is treated as the income of the employer, and the employer by contributing can get the deduction.

The payment must be made within the due date i.e. the due date prescribed under Section 139(1) of the Act – Relying upon Commissioner of Income Tax Versus M/s. Alom Extrusions Limited [2009 (11) TMI 27 - SUPREME COURT] - Though such contributions are not paid within the time prescribed under the relevant act, if those contributions are paid before the due date prescribed under Section 139(1) of the Act, the employer shall be entitled to the deductions as provided under Section 36(1) of the Act - it is for the simple reason, under the provident fund scheme, an employer has to pay both the contribution and then recover from the salary of the employee – Decided against Revenue.