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2022 (8) TMI 603 - AT - Income TaxDisallowance of Employees Contribution to PF u/s 36(1)(va) - scope of amendment to Section 43B - HELD THAT:- As there was a delay in depositing employee’s as well as employer’s contribution to the Employee’s Provident Fund/ESI fund. However, the amount was deposited before the due date of the filing of the return. We find that the issue is covered in favour of the assessee as the assessment year involved is AY 2017-18 and the Explanation- 5 inserted by Finance Act, 2021 to Section 43B w.e.f. 01.04.2021 is not applicable to the assessment year under consideration. - Decided in favour of assessee. Disallowance of corporate social responsibility (CSR) expenses u/s 37 - expenditures incurred by the assessee company for the purpose of business or not? - HELD THAT:- As per provisions of Section 135 of the Companies Act, a company, having net worth of Rs. 500 Cr. or more, or turnover of Rs. 1000 Cr. or more, or net profit of Rs. 5 Cr. or more during any financial year, is obliged to spend at least 2% of the average net profits of the company made during the three immediate preceding financial years on Corporate Social Responsibility. There is no pleading that the company has spent more than the amount as it was required to spend as per the provisions of Section 135 of the Companies Act in an earlier years which, as per the provisions of sub-Section 5 to Section 135 of the Companies Act, can be set off against the requirement of Corporate Social Responsibility in succeeding three financial years. Hence, there is nothing on the file to show that the assessee had incurred more than the required expenditure on CSR in earlier years which could have been set-off against the liability on CSR of the current year. Even otherwise, there is nothing on record to show that the assessee company was exempt from spending any amount on Corporate Social Responsibility as required under Section 135 of the Companies Act. The matter is restored to the file of the ld. AO to verify the aforesaid contention of the assessee that the assessee was not required to spend any amount under Section 135 of the Companies Act on Corporate Social Responsibility and, further, that whether the amount spent by the assessee on Corporate Social Responsibility during the year was over and above its statutory liability under Section 135 of the Companies Act. As if it is found that the aforesaid plea of the assessee that the Corporate Social Responsibility expenditure was over and above its statutory obligation under Section 135 of the Companies Act is wrong and false then the finding of the ld. AO disallowing the aforesaid expenditure being hit by the provisions of Explanation 2 to Section 37 of the Act will stand affirmed. Appeal of the assessee is treated as allowed for statistical purposes.
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