The Assessing Officer disallowed the expenditure incurred under the Corporate Social Responsivity. On appeal the Tribunal held that Explanation 2 was inserted in section 37 by Finance (No.2) Act , 2004 , w.e.f. Ist April , 2015 will apply in relation to the assessment year 2015 -16 and subsequent years , hence the expenditure incurred was allowable as business expenditure . On appeal High Court affirmed the order of the Tribunal . ( ITA No. 268, 269, & 270 of 2022 dt . 29 -10- 2022 ) ( AY. 2013 -14, 2014-15 )
PCIT v. PEC Ltd ( 2023 ) BCAJ – January P. 44( Delhi)( HC)
.37(1): Business expenditure – Corporate Social Responsibility( CSR)- Explanation 2 was inserted in section 37 by Finance (No.2) Act , 2004 , w.e.f. Ist April , 2015 – Apply in relation to the assessment year 2015 -16 and subsequent years – Expenditure allowable as deduction .