JUDGMENT :

S. RAVINDRA BHAT, J.

1. Leave granted. Berger Paints India Ltd. vs. Commissioner of Income Tax, Kolkata-IV and Another, Civil Appeal No. 2830 of 2016 was the lead matter while hearing this batch of appeals. However, the parties agreed to treat Checkmate Services Pvt. Ltd. vs. Commissioner of Income Tax, C.A. No. 2383 of 2016, as the lead appeal, for convenience. In all these appeals, the common question involved is with respect to the interpretation of Section 36(1)(va) and Section 43B of the INCOME TAX ACT , 1961 (hereinafter “IT Act”) and whether the appellant assessees are entitled to deduction of amounts deposited by them towards contribution in terms of The Employees’ Provident Funds and Miscellaneous Provisions Act, 1952 (hereinafter “EPF Act”), The Employees’ Provident Funds Scheme, 1952 (hereinafter “EPF Scheme”), The Employees’ State Insurance Act, 1948 (hereinafter “ESI Act”), The Employees’ State Insurance (Central) Regulations, 1950 (hereinafter “ESI Regulations”) or any other provident or superannuation fund.

2. In the years under consideration, the Assessing Officers (hereinafter “AO”) had ruled that the appellants had belatedly deposited their employees’ contribution towards the EPF and ESI, considering the due dates under the relevant acts and regulations. Consequently, the AO ruled that by virtue of Section 36(1)(va) read with Section 2(24)(x) of the IT Act, such sums received by the appellants constituted “income.” Those amounts could not have been allowed as deductions under Section 36(1)(va) of the IT Act when the payment was made beyond the relevant due date under the respective acts. In other words, as per the AO, as such sums were paid beyond the due dates as prescribed under the respective acts, the right to claim such sums as allowable deduction while computing the income was lost forever. The assessees’ pleas were unsuccessful before the Income Tax Appellate Tribunal (hereafter “ITAT”). Ultimately, in the case of the impugned judgment, the Gujarat High Court too rejected its pleas. [Commissioner of Income Tax vs. Checkmate Services Pvt. Ltd. Tax Appeal No. 680 of 2014, dated 14.10.2014]

3. Noticing a division of opinion on the issue, with the High Courts of Bombay, Himachal Pradesh, Calcutta, Guwahati and Delhi favouring the interpretation beneficial to the assesses on the one hand, and the High Courts of Kerala and Gujarat preferring the interpretation in favour of the Revenue on the other, this court granted special leave to appeal in all these cases.

The relevant statutory provisions of the IT Act

4. The relevant provisions of the IT Act, with amendments, made from time to time, are as extracted below:

“Section 2. Definitions

In this Act, unless the context otherwise requires:

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(24) “income” includes:

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(x) any sum received by the assessee from his employees as contributions to any provident fund or superannuation fund or any fund set up under the provisions of the Employees' State Insurance Act, 1948 (34 of 1948), or any other fund for the welfare of such employees.......”¹ [Inserted by the FINANCE ACT , 1987 (11 of 1987) w.e.f. 01.04.1988]

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“Section 36. Other deductions

(1) The deductions provided for in the following clauses shall be allowed in respect of the matters dealt with therein, in computing the income referred to in section 28:

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(iv) any sum paid by the assessee as an employer by way of contribution towards a recognized provident fund or an approved superannuation fund, subject to such l