CSR-linked 80G donations allowed, but delayed provident fund contributions remained disallowable under binding precedent.

Deduction under section 80G was allowable for donations made out of CSR expenditure to approved institutions, because CSR character alone did not create a statutory bar and the payments were supported by account-payee cheques and receipts from recognised donees. The claim for employees' contribution to provident fund paid after the statutory due date was disallowed, as binding precedent treated delayed deposit as not saved by the return-filing date under section 43B. The appeal therefore succeeded only on the CSR-linked 80G claim and failed on the provident fund issue.

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Issues: (i) Whether deduction under section 80G of the Income-tax Act, 1961 is allowable in respect of donations made out of corporate social responsibility expenditure to eligible institutions. (ii) Whether employees' contribution to provident fund paid after the statutory due date is allowable.

Issue (i): Whether deduction under section 80G of the Income-tax Act, 1961 is allowable in respect of donations made out of corporate social responsibility expenditure to eligible institutions.

Analysis: CSR expenditure is not allowable as business expenditure under section 37 in view of Explanation 2, but that by itself does not create a statutory prohibition against deduction under section 80G where the payment is a donation to an institution having valid approval and the prescribed conditions are satisfied. The record showed that the donations were made through account-payee cheques and supported by receipts from recognised donee institutions.

Conclusion: The deduction under section 80G was held allowable on the eligible amount and the issue was decided in favour of the assessee.

Issue (ii): Whether employees' contribution to provident fund paid after the statutory due date is allowable.

Analysis: The claim was covered against the assessee by binding precedent on delayed deposit of employees' contribution, and the payment beyond the relevant statutory due date was not saved by the return-filing date under section 43B.

Conclusion: The disallowance of employees' contribution to provident fund was sustained and the issue was decided against the assessee.

Final Conclusion: The appeal succeeded only on the claim for deduction under section 80G in respect of eligible CSR donations, while the disallowance relating to delayed employees' provident fund contribution was maintained.

Ratio Decidendi: A donation made out of CSR expenditure remains eligible for deduction under section 80G if it is paid to an approved institution and statutory conditions are met, whereas delayed deposit of employees' provident fund contribution is not deductible merely because it is paid before the return-filing due date.

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