National Building Construction Corporation Ltd., New Delhi V. AddlCIT, Special Range-6, Neww Delhi

ITA 3819/DEL/2018

• Counselvise Citation: [2021] 107 COUNSELVISE.COM (IT) 8209 (ITAT-DELHI)
• Duration Of Justice: 3 year(s) 2 month(s) 20 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-08-2021
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: E
• Assessment Year: 2014-2015
• Appeal Filed On: 22-05-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Business expenditure; Rule of consistency
• Section: 37(1); 80G; 37

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, DELHI BENCH: E NEW DELHI BEFORE SHRI O.P. KANT, ACCOUNTANT MEMBER AND SHRI K.N. CHARY, JUDICIAL MEMBER [THROUGH VIDEO CONFERENCING] ITA NO.3819/DEL/2018 ASSESSMENT YEAR: 2014-15 NATIONAL BUILDING CONSTRUCTION CORPORATION LTD., NBCC BHAWAN, LODHI ROAD, NEW DELHI VS. ADDL. CIT, SPECIAL RANGE-6, NEW DELHI PAN :AAACN3053B (APPELLANT) (RESPONDENT) ORDER PER O.P. KANT, AM: THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST OR DER DATED 26/03/2018 PASSED BY THE LD. COMMISSIONER OF INCOME - TAX (APPEALS)-28, NEW DELHI [IN SHORT THE LD. CIT(A)] FOR ASSESSMENT YEAR 2014-15, RAISING FOLLOWING GROUNDS: APPELLANT BY SH. VED JAIN, ADV. RESPONDENT BY SH. VIPUL KASHYAP, SR.DR DATE OF HEARING 11.08.2021 DATE OF PRONOUNCEMENT 11.08.2021 2 ITA NO.3819/DEL/2018 1. ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE ORDER PASSED BY LEARNED COMMISSIONER OF INCOME TAX (APPEALS) [CIT(A )] IS BAD BOTH IN THE EYE OF LAW AND 2. (I) ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE ID. CIT(A) HAS ERRED, BOTH ON FACTS AND IN LAW, IN CONFIRMING THE DISALLOWANCE MADE BY THE ID. AO OFRS.572,32,442/- ON ACCOUNT OF EXPENSES INCURRED ON CORPORATE SOCIAL RESPONSIBILITY. (II)THAT THE CIT(A) HAS ERRED IN CONFIRMING THE DIS ALLOWANCE MADE BY LD. AO, REJECTING THE CONTENTION OF THE ASSESSEE THAT EXPLANATION 2 TO SECTION 37(1) HAVING BEEN INSERTED WITH EFFECT FROM 01.04.2015 THE SAME IS NOT APPLICABLE IN THE R ELEVANT ASSESSMENT YEAR. (III)THAT THE DISALLOWANCE HAS BEEN CONFIRMED DESPI TE THE EXPENSES HAVING BEEN INCURRED WHOLLY AND EXCLUSIVEL Y FOR THE PURPOSE OF BUSINESS, OTHERWISE ALLOWABLE UNDER THE INCOME TAX ACT. 3. ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LEARNED CIT(A) HAS ERRED BOTH ON FACTS AND IN LAW, IN CONFIRMING T HE ACTION OF THE AO OF CHARGING THE INTEREST UNDER SECTIONS 234A, 23 4B, 234C AND 234DOF THE ACT. 4. ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LEARNED CIT(A) HAS ERRED BOTH ON FACTS AND IN LAW, IN CONFIRMING T HE ACTION OF THE AO OF WITHDRAWING THE INTEREST U/S 244A. 5. THE APPELLANT CRAVES LEAVE TO ADD, AMEND OR ALT ER ANY OF THE GROUNDS OF APPEAL. 2. BRIEFLY STATED FACTS OF THE CASE ARE THAT THE ASSE SSEE IS A GOVERNMENT OF INDIA UNDERTAKING, ENGAGED IN EXECUTI ON OF CIVIL /ELECTRICAL PROJECTS. THE ASSESSEE FILED RETURN OF INCOME FOR THE YEAR UNDER CONSIDERATION ON 25/09/2014, DECLARING T OTAL INCOME OF 293,47,00,300/-, WHICH WAS REVISED TO 293,58,51,230/- ON 31/03/2016. THE RETURN OF INCOME FILED BY THE ASSES SEE WAS SELECTED FOR SCRUTINY ASSESSMENT. THE SCRUTINY ASSE SSMENT HAS BEEN COMPLETED 13/12/2016 IN TERMS OF SECTION 143(3 ) OF INCOME- TAX ACT, 1961 (IN SHORT THE ACT) AFTER MAKING CER TAIN DISALLOWANCES. ON FURTHER APPEAL BY THE ASSESSEE, T HE LD. CIT(A) ALLOWED PARTLY IN FAVOUR OF THE ASSESSEE AND SUSTAI NED THE DISALLOWANCE IN RESPECT OF CORPORATE SOCIAL RESPONS IBILITY 3 ITA NO.3819/DEL/2018 EXPENSES. AGGRIEVED, THE ASSESSEE IS IN APPEAL BEFO RE THE TRIBUNAL, RAISING THE GROUNDS AS REPRODUCED ABOVE. 3. WE HAVE HEARD BOTH THE PARTIES, WHO APPEARED THROU GH VIDEO CONFERENCING FACILITY AND PERUSED THE MATERIAL AVAILABLE ON RECORD AS WELL AS FILED BY THE PARTIES THROUGH EMAI L. 3.1 THE GROUND NO.1 OF THE APPEAL BEING GENERAL IN NAT URE, WE ARE NOT REQUIRED TO ADJUDICATE UPON SPECIFICALLY AN D SAME IS DISMISSED AS INFRUCTUOUS. 3.2 THE GROUND NO. 2 OF THE APPEAL IS REGARDING DISALL OWANCE OF 5,72,32,442/- ON ACCOUNT OF EXPENSES INCURRED ON CO RPORATE SOCIAL RESPONSIBILITY. 3.3 BEFORE THE ASSESSING OFFICER, THE ASSESSEE SUBMITT ED THAT CORPORATE SOCIAL RESPONSIBILITY EXPENSES WERE INCUR RED FOR THE PURPOSE OF PROTECTING ITS BUSINESS AND SAID EXPENDI TURE WAS INCURRED IN ACCORDANCE WITH THE GUIDELINES OF THE M INISTRY OF HEAVY INDUSTRY AND PUBLIC ENTERPRISES. ACCORDING TO THE ASSESSEE, THE EXPENSES HAS ENHANCED THE BRAND IMAGE OF THE COMPANY WHICH IN TURN HAS GOT A POSITIVE LONG-TERM IMPACT ON THE BUSINESS OF THE ASSESSEE. IN VIEW OF THE ASSESSING OFFICER, THE EXPLANATION -2 TO SECTION 37(1) HAS PROHIBITED ALLO WANCE OF CORPORATE SOCIAL RESPONSIBILITY EXPENSES. ACCORDING TO THE ASSESSING OFFICER, SAID EXPLANATION BEING CLASSIFIC ATORY IN NATURE, IT WAS APPLICABLE IN THE YEAR UNDER CONSIDERATION A LSO. THE LD. CIT(A) ALSO UPHELD THE FINDING OF THE ASSESSING OFF ICER OBSERVING AS UNDER: 6.2 I HAVE CONSIDERED THE FACTS OF THE ISSUES, BAS IS OF DISALLOWANCE MADE BY AO AND SUBMISSIONS OF THE APPELLANT. IT CAN BE SEEN FROM 4 ITA NO.3819/DEL/2018 THE FACTS THAT THE APPELLANT HAS CLAIMED CSR EXPENS ES OF RS. 575,32,442/- AS EXPENDITURE INCURRED FOR THE PURPOS E OF BUSINESS AND PROFESSION AS PER PROVISIONS OF SECTION 37(1) O F THE IT ACT. HOWEVER, IT WAS CLARIFIED BY THE LEGISLATURE BY INS ERTING EXPLANATION-2 IN THE SAID SECTION WITH THE INITIAL WORDS 'FOR THE REMOVAL OF DOUBTS, IT IS HEREBY DECLARED....' WHICH MEANS THAT CLARIFICATION HAS BEEN ISSUED BY THIS EXPLANATION T HAT THE EXPENSES INCURRED ON CSR ACTIVITIES SHALL NOT BE DEEMED TO B E AN EXPENDITURE INCURRED FOR THE PURPOSE OF BUSINESS AND PROFESSION . IT HAS TO MENTION HERE THAT THE SAID EXPLANATION IS NOT AN AM ENDMENT TO LAW WHICH WOULD BE EFFECTIVE PROSPECTIVELY, RATHER, IT IS CLARIFICATION TO PROVISIONS OF LAW AS IT WAS BROUGHT IN STATUTE ORIG INALLY AND THEREFORE WOULD BE EFFECTIVE FROM THE DATE OF ENACT MENT OF LAW. IN VIEW OF THIS, SINCE THE EXPLANATION HAS BEEN INSERT ED TO CLARIFY THE POSITION OF LAW IN RESPECT OF SECTION 37(1) OF THE IT ACT, ANY EXPENDITURE INCURRED UNDER THIS HEAD IN ANY OF THE YEARS SHALL NOT BE DEEMED TO BE AN EXPENDITURE INCURRED FOR THE PUR POSE OF BUSINESS AND PROFESSION. SINCE THE CSR EXPENSES ARE NOT ALLO WABLE U/S 37(1) OF THE IT ACT BEING NOT FOR THE PURPOSE OF BUSINESS OR PROFESSION AND THERE ARE NO OTHER PROVISIONS UNDER THIS STATUE UND ER WHICH CSR EXPENSES COULD BE CLAIMED AS GENUINE ALLOWABLE BUSI NESS EXPENDITURE, THE SAME ARE TO BE DISALLOWED IF CLAIM ED BY ANY ASSESSEE. IN VIEW OF THIS, I UPHOLD THE CONCLUSION DRAWN BY AO AND ADDITION MADE BY HIM AND DISMISS THE GROUND TAKEN B Y THE APPELLANT. 3.4 BUT, WE FIND THAT TRIBUNAL IN THE CASE OF ADDL. CIT VS RITES LIMITED (ITAT DELHI) IN ITA NO.6447/DEL/2017 AND ITA NO. 6448/DEL/2017 FOR AY 2013-14) HAS HELD THAT SAID EXPLANATION IS PROSPECTIVE IN NATURE AND APPLICABLE FROM ASSESS MENT YEAR 2015-16. THE RELEVANT FINDING OF THE TRIBUNAL (SUPR A) IS REPRODUCED AS UNDER: 17. AO HAS DISALLOWED CLAIM OF THE ASSESSEE COMPAN Y QUA CSR EXPENDITURE BY MISINTERPRETING THE PROVISIONS CONTA INED UNDER SECTION 37(1) OF THE ACT BY OBSERVING THAT SINCE CSR EXPEND ITURE IS NOT INCURRED FOR THE PURPOSE OF CARRYING ON THE BUSINESS, SUCH E XPENDITURE CANNOT BE ALLOWED UNDER THE EXISTING PROVISIONS OF SECTION 37 OF THE ACT. EVEN EXPLANATION 2 TO SECTION 37(1) OF THE ACT IS PROSPE CTIVE IN NATURE TO BE EFFECTIVE FROM 01.04.2015 AND IS APPLICABLE TO THE EXPENSES INCURRED WITH REFERENCE TO SECTION 135 OF THE COMPANIES ACT, 2013 THAT TOO AFTER 01.04.2015, SO EXPLANATION (2) TO SECTION 37(1) OF THE ACT IS NOT APPLICABLE TO THE PRESENT CASE ALSO. MOREOVER, EXPE NSES CLAIMED BY THE 5 ITA NO.3819/DEL/2018 ASSESSEE COMPANY HAVE BEEN INCURRED AS PER GUIDELIN ES OF THE MINISTRY CONCERNED WITH APPROVAL OF THE BOARD TO THE BEST BU SINESS INTEREST OF THE ASSESSEE COMPANY. SO AO, WITHOUT EXAMINING THE NATU RE OF THE EXPENSES, DISALLOWED THE CLAIM MECHANICALLY EVEN BY IGNORING THE RULE OF CONSISTENCY. 18. MOREOVER, CSR EXPENSES HAVE BEEN INCURRED BY TH E ASSESSEE ON THE DIRECTION OF THE GOVERNMENT OF INDIA AND IDENTICAL ISSUE HAS BEEN DECIDED BY THE COORDINATE BENCH OF THE TRIBUNAL IN CASE OF M/S. HLL LIFECARE LTD. VS. ACIT IN ITA NO.123/COCH/2017 FOR AY 2012-13 ORDER DATED 11.06.2018 BY RETURNING FOLLOWING FINDINGS :- 9.5 THE CSR EXPENSES HAS BEEN INCURRED AS PER THE DI RECTIONS OF GOVERNMENT OF INDIA. THE HONBLE KERALA HIGH COURT IN THE CASE OF TRAVANCORE TITANIUM PRODUCTS LTD. (SUPRA) HAD HEL D THAT A GOVERNMENT UNDERTAKING IS DUTY BOUND TO COMPLY WITH GOVERNMENTAL ORDERS. THE RELEVANT FINDINGS OF THE H ONBLE JURISDICTIONAL HIGH COURT READS AS FOLLOWS :- BEING A COMPANY UNDER THE CONTROL OF THE GOVERNMENT , IT IS BOUND TO COMPLY WITH ALL THE GOVERNMENT ORDERS AND THE BOARD OF DIRECTORS ITSELF IS CONSTITUTED WITH THE GOVERNM ENT SECRETARIES AND OTHER NOMINEES AS MEMBERS. THEREFORE, THE CLAIM OF DEDUCTION HAS TO BE CONSIDE RED WITH REFERENCE TO THE PECULIAR CIRCUMSTANCES OF THE COMPA NY WHICH HAS NO DISCRETION IN REGARD TO THE PAYMENT OF THE S ERVICE CHARGES TO THE GOVERNMENT AS IT IS BOUND TO COMPLY WITH THE GOVERNMENT ORDERS. SO MUCH SO, WE ARE OF THE VIEW THAT THE PARA METERS APPLICABLE IN THE CASE OF A PRIVATE COMPANY THAT TOO WITH RESPECT TO THE CLAIM FOR BUSINESS EXPENDITURE, ARE EXACTLY N OT APPLICABLE IN THE CASE OF PUBLIC SECTOR COMPANY WHETHER IT IS U NDER THE CONTROL OF THE STATE GOVERNMENT OR CENTRAL GOVERNME NT. IN FACT, MANY PUBLIC SECTOR COMPANIES ARE NOT FORMED JUST TO MAKE PROFIT ALONE BUT ARE SUPPOSED TO ACHIEVE LARGE R OBJECTIVES FOR THE SOCIETY AND THE STATE. BY MAKING PAYMENT OF SERVICE CHARGE, THE RESPONDENT C OMPANY HAS DISCHARGED ONLY THE OBLIGATION UNDER GOVERNMENT ORDERS. IT CANNOT CARRYON BUSINESS BY VIOLATING GOVERNMENT ORD ERS AND REMAIN AS A DEFAULTER TO THE GOVERNMENT. 9.6 THE ITAT MUMBAI BENCH IN THE CASE OF HINDUSTAN PETROLEUM CORPORATION LTD. (96 ITD 186) HAD HELD CSR EXPENDITU RE INCURRED BY GOVERNMENT UNDERTAKING IS AN ALLOWABLE DEDUCTION . THE RELEVANT FINDING OF THE ITAT MUMBAI BENCHES READS A S FOLLOWS:- EXPENDITURE INCURRED BY ASSESSEE, A COMPANY OWNED BY THE GOVERNMENT OF INDIA AND WORKING UNDER ITS CONTROL A ND DIRECTIONS, TOWARDS IMPLEMENTATION OF 20 POINTPROGRAM ME AS PER SPECIFIC DIRECTIONS OF THE GOVERNMENT THOUGH VOL UNTARY IN 6 ITA NO.3819/DEL/2018 NATURE AND NOT FORCED BY ANY STATUTORY OBLIGATION, IS ALLOWABLE AS BUSINESS EXPENDITURE. MERELY BECAUSE AN EXPENDITURE IS IN THE NATURE OF D ONATION, IT DOES NOT CEASE TO BE AN EXPENDITURE DEDUCTIBLE UNDER S. 37(1). 9.7 THE COMMISSIONER OF INCOME TAX HAD MENTIONED IN HIS ORDER THAT THE APEX COURT (313 ITR 334 SC) CIT VS MADRAS REFINERIES LTD., WHILE HEARING THE ALLOWABILITY OF CSR EXPENSES OBSERVED THAT NEITHER THE HIGH COURT NOR THE TRIBUNAL CONCER NED HAD GIVEN SPECIFIC FINDING TO THE EFFECT THAT THE SAID C SR EXPENDITURE IS ALLOWABLE AS BUSINESS EXPENDITURE . IN THE ABOVE MENTIONED CASE, THE APEX COURT HAS NOT GIVEN ANY DECISION ON M ERITS OF THE CASE. IT HAD ONLY GIVEN AN OBSERVATION AND REMITTED THE ISSUE BACK TO THE TRIBUNAL TO GIVE SPECIFIC FINDING TO THE EFFECT THAT THE SAID CSR EXPENDITURE IS ALLOWABLE AS BUSINESS EXPENDI TURE. 9.8 SINCE, THE ASSESSEE HAD INCURRED CSR EXPENSES TO COMPLY WITH THE DIRECTIONS OF GOVT. OF INDIA, FOLLOWING TH E ABOVE OBSERVATIONS MADE BY HIGH COURT OF KERALA AND ITAT, MUMBAI BENCH, THE EXPENDITURE INCURRED IS INCIDENTAL TO TH E ASSESSEES BUSINESS AND OUGHT TO BE ALLOWED AS DEDUCTION U/S 3 7 OF THE I.T.ACT. 19. IDENTICAL ISSUE HAS ALSO BEEN DECIDED BY THE CO ORDINATE BENCH OF THE TRIBUNAL IN HINDUSTAN PETROLEUM CORPORATION LTD. VS . DCIT (2005) 96 ITD 186 (MUM.) BY RETURNING FOLLOWING FINDINGS:- IT HAD BEEN HELD BY THE KARNATAKA HIGH COURT IN TH E CASE OF MYSORE KIRLOSKAR LTD. V. CIT [1987J 166 ITR 836/ 30 TAXMAN 467. THAT WHILE THE BASIC REQUIREMENTS FOR INVOKIN G SECTIONS 37(/) AND 80G ARE QUITE DIFFERENT, BUT NONETHELESS THE TWO SECTIONS ARE NOT MUTUALLY EXCLUSIVE. THUS, THERE AR E OVERLAPPING AREAS BETWEEN THE DONATIONS GIVEN BY THE ASSESSEE A ND THE BUSINESS EXPENDITURE INCURRED BY THE ASSESSEE. IN OT HER WORDS, THERE CAN BE CERTAIN AMOUNTS. THOUGH IN THE NATURE OF DONATIONS, AND NONETHELESS, THESE AMOUNTS MAY BE DEDUCTIBLE UN DER SECTION 37(1) AS WELL. THEREFORE, MERELY BECAUSE THE EXPENDI TURE IN QUESTION WAS IN THE NATURE OF DONATION, OR, AS PER T HE WORDS OF THE COMMISSIONER (APPEALS), PROMPTED BY ALTRUISTIC MO TIVES, IT DID NOT CEASE TO BE AN EXPENDITURE DEDUCTIBLE UNDER SECTION 37(1). IN THE CASE OF MYSORE KIRLOSKAR LTD. (SUPRA), THE HIGH COURT HAD OBSERVED THAT EVEN IF THE CONTRIBUTION BY THE A SSESSEE IS IN THE FORM OF DONATIONS, BUT IF IT COULD BE TERMED AS EXPENDITURE OF THE CATEGORY FALLING IN SECTION 37(/), THEN THE RIG HT OF THE ASSESSEE TO CLAIM THE WHOLE OF IT AS A DEDUCTION UN DER SECTION 37(1) CANNOT BE DECLINED. WHAT IS MATERIAL IN THIS CONTEXT IS WHETHER THE EXPENDITURE IN QUESTION WAS NECESSITATE D BY BUSINESS CONSIDERATIONS OR NOT. ONCE IT IS FOUND TH AT THE EXPENDITURE WAS DICTATED BY COMMERCIAL EXPEDIENCIES, THE DEDUCTION UNDER SECTION 37(1) CANNOT BE DECLINED. [ PARA 7] 7 ITA NO.3819/DEL/2018 IN THE INSTANT CASE, THE EXPENDITURE ON 20-POINT PRO GRAMME WAS INCURRED IN VIEW OF SPECIFIC DIRECTIONS OF THE GOVER NMENT OF INDIA. IT COULD NOT BUT BE IN THE BUSINESS INTEREST OF THE ASSESSEE TO ABIDE BY THE DIRECTIONS OF THE GOVERNMENT OF IND IA WHICH ALSO OWNED THE ASSESSEE. FURTHER, THE EXPENDITURE INCURRED FOR THE IMPLEMENTAT ION OF 20- POINT PROGRAMME WAS SOLELY FOR THE WELFARE OF THE O PPRESSED CLASSES OF SOCIETY, FOR WHICH EVEN THE CONSTITUTION OF INDIA SANCTIONS POSITIVE DISCRIMINATION AND FOR CONTRIBUT ION TO ALL AROUND DEVELOPMENT OF VILLAGES, WHICH HAS ALWAYS BEE N THE CENTRAL THEME OF GOVERNMENTS DEVELOPMENT INITIATIV ES. AN EXPENDITURE OF SUCH A NATURE CANNOT BUT BE, A CONCR ETE EXPRESSION OF CARE AND CONCERN FOR THE SOCIETY AT LA RGE AND AN EXPENDITURE TO DISCHARGE THE RESPONSIBILITIES OF A GOOD CORPORATE CITIZEN WHICH BRINGS GOODWILL OF WITH THE REGULATOR Y AGENCIES AND SOCIETY AT LARGE, THEREBY CREATING AN ATMOSPHERE IN WHICH THE BUSINESS CAN SUCCEED IN A GREATER MEASURE WITH THE AID OF SUCH GOODWILL. [PARA 9] JUST BECAUSE THE EXPENDITURE WAS VOLUNTARY IN NATURE AND WAS NOT FORCED ON THE ASSESSEE BY A STATUTORY OBLIGATIO N, IT COULD NOT CEASE TO BE A BUSINESS EXPENDITURE. THEREFORE, THE A UTHORITIES BELOW INDEED ERRED IN LAW IN DECLINING DEDUCTION OF THE EXPENDITURE INCURRED ON 20-POINT PROGRAMME WHICH WAS , BEYOND DISPUTE OR CONTROVERSY, AT THE INSTANCE OF THE GOVER NMENT, AND WAS TO DISCHARGE THE ASSESSEE S OBLIGATIONS TOWARDS SOCIETY AS A RESPONSIBLE CORPORATE CITIZEN. [PARA 10] 20. SO, WE FIND NO ILLEGALITY OR PERVERSITY IN THE FINDINGS RETURNED BY THE LD. CIT (A) IN DELETING THE ADDITION MADE BY THE AO ON ACCOUNT OF DISALLOWANCE OF CSR EXPENDITURE FOR AYS 2013-14 & 2 014-15. GROUND NO.2 OF BOTH THE APPEALS FILED BY THE REVENUE ARE D ETERMINED AGAINST THE REVENUE. 3.5 IN THE INSTANT CASE BEFORE US ALSO, THE EXPENSES H AVE BEEN INCURRED ON THE DIRECTION OF THE RELEVANT MINISTRY / GOVERNMENT OF INDIA. FURTHER, NEITHER THE ASSESSING OFFICER NOR T HE LEARNED DR HAS REBUTTED THE CONTENTION OF THE ASSESSEE THAT EX PENSES HAVE BEEN INCURRED FOR ENHANCING BRAND IMAGE OF THE COMP ANY WHICH ARE WHOLLY AND EXCLUSIVELY FOR THE PURPOSE OF THE B USINESS OF THE ASSESSEE. BOTH THE LOWER AUTHORITIES HAVE DISALLOWE D THE EXPENSES ONLY ON THE GROUND THAT EXPLANATION -2 IS CLARIFICA TORY AND RETROSPECTIVE IN NATURE. THUS, RESPECTFULLY FOLLOW ING THE FINDING OF 8 ITA NO.3819/DEL/2018 THE TRIBUNAL(SUPRA) THAT SAID EXPLANATION -2 IS PRO SPECTIVE IN NATURE, WE HOLD THAT EXPENSES INCURRED ON CORPORATE SOCIAL RESPONSIBILITY IN THE YEAR UNDER CONSIDERATION I.E. AY 2014-15, CANNOT BE DISALLOWED INVOKING EXPLANATION-2 TO SECT ION 37(1) OF THE ACT. THE GROUND NO. 2 OF THE APPEAL OF THE ASSE SSEE IS ACCORDINGLY ALLOWED. 4. THE GROUNDS NO. 3 & 4 OF THE APPEAL, BEING CONSEQU ENTIAL IN NATURE, ARE DISMISSED AS INFRUCTUOUS . 5. THE GROUND NO. 5, BEING GENERAL IN NATURE, SAME IS DISMISSED AS INFRUCTUOUS. 6. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALLOWE D. ORDER PRONOUNCED IN THE OPEN COURT ON 11 TH AUGUST, 2021 SD/- SD/- (K.N. CHARY) (O.P. KANT) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 11 TH AUGUST, 2021. RK/- (DTDC) COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR ASST. REGISTRAR, ITAT, NEW DELHI