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The Tax PublishersITA Nos. 890, 891, 985 & 986/Kol/2019
2020 TaxPub(DT) 3887 (Kol-Trib)INCOME TAX ACT, 1961
Section 37(1), Expln. 2
Amendment in section 37(1) had been introduced with effect from 1-4-2015 and did not apply on the facts of case and the disabling provision as stated in Explanation 2 to section 37(1) which refers only to such corporate social responsibility expenditure as under section 135 of Companies Act, 2013 could not be held to be retrospective in operation. Therefore, disallowance of CSR expenses during the concerned year, could not be sustained.
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Business expenditure - Corporate social responsibility expenses - Applicability of Expln. 2 to section 37(1) -
Assessee was a Public Sector Undertaking and its accounts were audited by the CAG. It claimed deduction of CSR expenses. AO disallowed deduction in view of amendment in section 37(1) and Expln. 2 to section 37(1). Held: Amendment in section 37(1) had been introduced with effect from 1-4-2015 and did not apply on the facts of case and the disabling provision as stated in Explanation 2 to section 37(1) refers only to such corporate social responsibility expenditure as under section 135 of the Companies Act, 2013 and as such it could not have any application for the period not covered by the statutory provision which itself came into existence in the year 2013. And any way this disabling provision cannot be held to be retrospective in operation. Therefore, disallowance of CSR expenses could not be sustained.
REFERRED :
FAVOUR : In assessee's favour.
A.Y. : 2009-10 & 2012-13
IN THE ITAT, KOLKATA BENCH
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