Tribunal dismisses appeal on CSR expenditure, interest payment, and interest charges, upholding Commissioner's decision.

The Tribunal upheld the disallowance of Corporate Social Responsibility expenditure and interest payment for late TDS deposit. The appeal challenging the Commissioner's order was dismissed, affirming the lower authorities' decisions. The Tribunal also rejected the contention regarding interest charges under sections 234B and 234C, deeming them consequential. The overall appeal by the assessee was dismissed, and the Tribunal's decision was rendered on 03/08/2021.

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Issues Involved:
1. The legality of the order passed by the Commissioner of Income Tax (Appeals).
2. Disallowance of Rs. 4,74,192/- as periphery expenses (Corporate Social Responsibility expenditure).
3. Disallowance of Rs. 1,28,233/- as interest payment for late deposit of TDS.
4. Non-adjudication of grounds related to interest charge under sections 234B and 234C of the Income Tax Act, 1961.

Detailed Analysis:

1. The legality of the order passed by the Commissioner of Income Tax (Appeals):
The first issue raised by the assessee was that the order of the learned Commissioner of Income Tax (Appeals) is bad in law and against the facts and circumstances of the case. This ground was deemed general in nature and was dismissed by the Tribunal without further deliberation.

2. Disallowance of Rs. 4,74,192/- as periphery expenses (Corporate Social Responsibility expenditure):
The assessee incurred Rs. 4,74,192/- as CSR expenditure at the instance of the Government of Odisha. The Assessing Officer (AO) disallowed this expenditure, stating it was not related to the business activities of the assessee, a company engaged in manufacturing and sale of machinery. The CIT(A) upheld the disallowance, noting that the expenditure did not meet the conditions prescribed under section 37(1) of the Income Tax Act. The Tribunal agreed with the lower authorities, stating that the expenditure did not satisfy the criteria under section 37(1) and was not allowable. Consequently, the appeal on this ground was dismissed.

3. Disallowance of Rs. 1,28,233/- as interest payment for late deposit of TDS:
The AO disallowed Rs. 1,28,233/- paid as interest on late deposit of TDS, which was upheld by the CIT(A). The Tribunal referenced the decision of the Hon’ble Madras High Court in Commissioner Of Income-Tax vs Chennai Properties, which held that interest paid under section 201(1A) of the Income-tax Act is not deductible as business expenditure under section 37. The Tribunal confirmed the lower authorities' action, dismissing the appeal on this ground.

4. Non-adjudication of grounds related to interest charge under sections 234B and 234C of the Income Tax Act, 1961:
The assessee contended that the CIT(A) erred in not adjudicating grounds related to the charge of interest under sections 234B and 234C. The Tribunal noted that these charges are consequential in nature and dismissed this ground of appeal as well.

Conclusion:
The Tribunal dismissed the appeal filed by the assessee, upholding the disallowances made by the AO and confirmed by the CIT(A). The order was pronounced in the open court on 03/08/2021.

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