TaxTMI 
TaxTMI 
2022 (4) TMI 1420
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....ee in its return of income which has been processed by the CPC. 3. According to the Ld. AR Shri P. J. Bhide, the CPC while processing the return of income of the assessee u/s. 143(1)(a) of the Income Tax Act, 1961 (hereinafter referred to as the "Act") has disallowed the club expenditure without issuing any notice which according to him, the CPC could not have done under proviso to section 143(1)(a) of the Act. According to him, the Ld. CIT(A) erred in confirming the disallowance on the ground that the auditor of the assessee in its audit report has flagged the same by stating to have been incurred for personal purpose. According to the Ld. AR, the expenditure has been incurred by the assessee wholly and exclusively for the purpose of its ....
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.... the head 'personal expenditure' (as per the prescribed format). The CPC it is noted is guided by the artificial intelligence which has picked up this particular disclosure in the Tax Audit Report and has taken it as gospel truth and has disallowed the same without notice to assessee. Be that as it may be, before us the Ld. AR of the assessee has brought to our notice that the assessee has incurred this expenditure for the purpose of business and since decades it has been incurring such kind of expenditure and the department has been allowing consistently. However, for the first time this disallowance has been done by CPC. We find this averment as correct. Therefore, applying the rule of consistency as per the decision of Hon'ble Supreme co....
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.... Explanation to section 36(1)(va) and section 43B of the Act and erred in holding it as clarificatory and so, retrospective in nature. Whereas according to Ld.AR, it is only prospective in nature and cannot disturb the binding judicial precedents in favour of assessee. According to the Ld. AR, any way this issue is no longer res integra as held by this Tribunal in the case of Lumino Industries Ltd. vs. ACIT, Circle-5(1), Kolkata in I.T.A. No.365/Kol/2021 for AY 2015-16 order dated 17.11.2021, wherein assessee's favour view was taken by the Tribunal after holding that the amendment brought in by Finance Act, 2021 w.e.f 1.04.2021 is prospective in operation and so will be in force from AY 2021-22 onwards and not retrospective. The relevant po....
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....ion 2 whereby it is clarified that the provision of Section 43B shall not apply and shall be deemed never to have been applied for the purpose of determining the due date under this clause. For ready reference, we reproduce the Explanation-2 to Section 36(1)(va) as under: "Section 36(1)(va) Explanation-2 - For the removal of doubts, it is hereby clarified that the provisions of Section 43B shall not apply and shall be deemed never to have been applied for the purpose of determining the 'due date' under this clause' 18. We find that this amendment has been brought in the Act to provide certainty about the applicability of Section 43B in respect of belated payment of employees' contribution. In order to test whether the amendment bro....
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....lative intent is clear, the amendment brought in by Finance Act, 2021 on this issue as discussed is prospective and Ld. CIT(A) erred in holding otherwise. So till AY 2021-22, the Jurisdictional High Court's view in favor of assessee will hold good and is binding on us. As discussed the decision of the Hon'ble Delhi High Court in Bharat Hotels Ltd. (supra) which was in favor of revenue has not considered the decision of the Co-ordinate Division Bench decision in M/s Aimil Ltd.(supra) which is in favour of assessee. So we note that later decision of the Delhi/Hyderabad Tribunal have followed the decision favouring assessee in the light of the Hon'ble Supreme Court decision in M/s Vegetable Products (supra). In the light of the aforesaid decis....