TaxTMI 
TaxTMI 
2022 (11) TMI 1514
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....s as well as on law, Ld. CIT(A) has erred in confirming disallowance of Rs. 2,02,04,000/- on account of expenses on Corporate social Responsibility and Sustainable Development merely on the ground that CSR & SD expenses are not incidental to the business & are incurred for non-business purpose, CSR & SD expenses are application of income & are not expenses at all without considering the facts & circumstances of the case. ii. That on facts as well as on law, the ld. CIT(A) has erred in not giving the direction to the Assessing Officer for necessary rectification/refund of Rs. 1,37,12,989/- which is deducted/adjusted on account of Dividend Distribution Tax in computation of tax liability and amount refundable without considering the ....
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....As per Explanation 2, for the purposes of section 37(1) any expenditure incurred by an assessee on the activities relating to corporate social responsibility referred to in section 135 of the Companies Act, 2013 shall not be deemed to be an expenditure incurred by the assessee for the purpose of the business or profession from the AY 2015-16 onward. Therefore, this is not applicable for AY 2013-14 under scrutiny assessment. MECON has allocated fund of Rs. 202.04 lakhs during the financial year 2013-14 for CSR activities/programmes etc. in compliance with the guidelines issued by Department of Public Enterprises, Govt. of India on Corporate Social Responsibility for all Central Public Sector Enterprises. This expenses incurred on CSR was all....
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....o the claim of the expenditure and disallowed the same. On appeal, the ld. CIT(A) also concurred with the AO, we note that genuineness of the expenditure made by the assessee on account of CSR which is mandatory as per section 135 of the Companies Act, 2013 was not doubted by the AO as well as ld. CIT(A). However, the claim was disallowed only on the ground that the expenditure is not wholly and exclusively incurred for the purpose of the business expenditure. The ld. AR drew our attention to the coordinate bench decision in ACIT vs Jindal Power Ltd. (ITAT Raipur) in ITA No. 99/BLPR/2012 for A.Y. 2008-09 dated 23.06.2016 wherein on similar facts and law, the Tribunal while allowing the expenditure under CSR held as under: "ii) The ....
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.... 466 (SC)], the legal position in this regard has been very succinctly summed up by observing that "Of the various rules guiding how legislation has to be interpreted, one established rule is that unless a contrary intention appears, legislation is presumed not to be intended to have a retrospective operation. The idea behind the rule is that a current law should govern current activities. Law passed today cannot apply to the events of the past. If we do something today, we do it keeping in view the law of today and in force and not tomorrow's backward adjustment of it. Our belief in the nature of the law is founded on the bed rock that every human being is entitled to arrange his affairs by rely on the existing law and should not find ....
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....anies Act 2013, and there is thus now a line of demarcation between the expenses incurred by the assessee on discharging corporate social responsibility under such a statutory obligation, and under a voluntary assumption of responsibility. As for the former, the disallowance under Explanation 2 to Section 37(1) comes into play, but, as for latter, there is no such disabling provision as long as the expenses, even in discharge of corporate social responsibility on voluntary basis, can be said to be "wholly and exclusively for the purposes of business". There is no dispute that the expenses in question are not incurred under the aforesaid statutory obligation. For this reason also, as also for the basic reason that the Explanation 2 to Sectio....