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2022 (12) TMI 759 - HC - Income TaxCorporate Social Responsibility (CSR) expenditure u/s 37 - HELD THAT:- The Tribunal has opined, that Explanation 2 inserted in Section 37(1) was prospective in nature, and therefore was not applicable in the assessment years in issue. It is required to be noticed, that Explanation 2 was inserted in Section 37 via Finance (No.2) Act, 2004 w.e.f. 01.04.2015. Furthermore, what emerged during the course of the hearing was, that the memorandum which was published along with Finance (No.2) Bill 2014 clearly indicated that the amendment would take effect from 01.04.2015 and, accordingly, would apply in relation to assessment year 2015-2016 and the subsequent years. If there was any doubt, the same has been removed both by the memorandum issued along with the Finance Bill, as well as the aforementioned circular issued by the CBDT. It is well established that circulars are binding on the revenue. [See: Catholic Syrian Bank [2012 (2) TMI 262 - SUPREME COURT]] Therefore, for the appellant/revenue to contend in the aforementioned appeals, that the Tribunal had erred in law in sustaining the deduction claimed by the respondents/assessees u/s 37(1) of the Act is an argument, which cannot be accepted. Accordingly, the question of law is decided against the appellant/revenue and in favour of the respondents/assessees.
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