Woodland (Aero Club) Private Limited Director vs. Assistant Commissioner of Income Tax SLP(C) NO. 1532/2026, dated 27th January 2026

The Supreme Court issued notice in an SLP filed by Woodland (Aero Club) Pvt. Ltd., agreeing to examine the long-standing controversy on allowability of deduction for delayed deposit of employees’ contributions to PF and ESI under the Income Tax Act, 1961. The Court noted that the Delhi High Court had held that employees’ contributions covered under Section 36(1)(va) read with Section 2(24)(x) are distinct from employer’s contributions under Section 36(1)(iv), that such amounts constitute income in the hands of the employer, and that deduction is permissible only if deposited within the statutory due date prescribed under the respective welfare laws, with Section 43B being inapplicable. At the same time, the Supreme Court recorded the existence of conflicting High Court judgments, with one line of authority holding that delayed employees’ contributions are disallowable if not deposited within the statutory due date, and another allowing deduction if deposited before the due date of filing the return under Section 139(1). Observing these divergent interpretations and the need for authoritative clarity on the meaning of “due date” under Section 36(1)(va), the Court issued notice to examine the issue on merits.