Deduction for donations to approved relief funds remains available despite CSR classification; matter restored to AO for verification.

Whether donations to approved relief funds qualify for a specific deduction was decided by applying strict construction of fiscal statutes: because the statute granting deduction for donations lists express exclusions but contains no general bar against donations made to discharge corporate social responsibility, donations to approved relief funds qualify for the specific deduction subject to statutory conditions; where alternative specific deductions exist they apply subject to their own conditions. Separately, discrepancy between return income and intimation led the Tribunal to restore the matter to the Assessing Officer for factual verification and decision.

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Issues: (i) Whether the assessee is entitled to deduction under section 80G of the Income-tax Act, 1961 in respect of donations made to specified relief funds (Prime Minister's Relief Fund and Maharashtra Chief Minister's Relief Fund) even though such donations form part of corporate social responsibility (CSR) expenditure; (ii) Whether the Assessing Officer ought to consider income as per return filed under section 139(1) instead of the intimation under section 143(1)(a) and whether the matter should be restored for verification.

Issue (i): Entitlement to deduction under section 80G in respect of donations made to specified relief funds where such donations are also claimed as CSR expenditure.

Analysis: Relevant legal framework includes section 80G of the Income-tax Act, 1961 (which lists funds/institutions eligible for deduction), Explanation 2 to section 37(1) (which excludes CSR expenditure from business expenditure), section 135 and Schedule VII of the Companies Act, 2013 and the Companies CSR Rules (including Rule 4 of the 2014 Rules and its 2021 amendment) (which govern CSR obligations and modes of implementation). The statutory text of section 80G contains specific exclusions only for certain funds (clauses (iiihk) and (iiihl)) and otherwise provides deduction subject to its terms. Explanation 2 to section 37(1) renders CSR expenditure non-deductive under section 37 but does not, by its text, bar deduction under other specific provisions of the Act such as section 80G or section 35 where applicable. The CSR rules and amendments prescribe implementation and monitoring requirements and, in the 2021 Rules, additional registration and monitoring obligations for implementing entities; those rules address corporate compliance but do not amend section 80G. The Tribunal applied the principle of strict construction of fiscal statutes and examined whether the Income-tax Act itself expressly bars section 80G deduction for donations made in discharge of CSR obligations; finding no general prohibition in section 80G and only specific exclusions for certain funds, the Tribunal concluded that donations to approved funds listed under section 80G (including Prime Minister's Relief Fund and Maharashtra Chief Minister's Relief Fund) qualify for deduction under section 80G unless expressly barred by that provision. The Tribunal noted that where donations also qualify under other specific deductible provisions (for example, section 35), those provisions may apply subject to their conditions.

Conclusion: Issue (i) is decided in favour of the assessee. Deduction under section 80G of the Income-tax Act, 1961 is allowable in respect of the donations to the approved relief funds in question even though those donations were made in discharge of CSR obligations, subject to compliance with the conditions of section 80G and except where section 80G expressly bars deduction for a particular fund.

Issue (ii): Whether income should be computed as per return filed under section 139(1) rather than as per intimation under section 143(1)(a), and whether the matter should be restored for verification by the Assessing Officer.

Analysis: The contention relates to reconciliation between declared income under section 139(1) and the intimation under section 143(1)(a). The assessee sought restoration to the file of the jurisdictional Assessing Officer for verification of income as per return. No objection was raised by Revenue to restoration for verification. The Tribunal directed the matter be restored to the Assessing Officer for necessary verification and decision in accordance with law, treating the restoration as necessary for factual verification arising from the intimation discrepancy.

Conclusion: Issue (ii) is allowed in favour of the assessee for statistical purposes by restoring the matter to the Assessing Officer for verification and decision in accordance with law.

Final Conclusion: The appeal is partly allowed; the claim for deduction under section 80G is allowed in favour of the assessee and the computation issue is restored to the Assessing Officer for verification, with residual grounds left without substantive adjudication as they were consequential or procedural.

Ratio Decidendi: Where the Income-tax Act expressly provides for deduction in a specific provision (such as section 80G) and does not generally prohibit deductions for donations made in discharge of CSR obligations, such donations to approved funds/institutions qualify for deduction under that specific provision unless that provision itself contains an express bar.

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