https://www.taxtmi.com/css/info/rss_sitemap/rss_feed.css?v=1746094055 https://www.taxtmi.com Business/Tax/Law/GST/India/Taxation/Policies/Legal/Corporate Tax/Personal Tax/Vat Law/Legal Information/Tax Information/Legal Services/Tax Services Tax Management India. Com / MS Knowledge Processing Pvt. Ltd. All rights reserved. One stop solution for Direct Taxes and Indirect Taxes https://www.taxtmi.com/caselaws?id=755416 https://www.taxtmi.com/caselaws?id=755416 Adjustment in intimation u/s 143(1) - Disallowance u/s. 80G - 50% of the total donation paid by the assessee towards corporate social responsibility (CSR) - HELD THAT:- As observed that against section 143(1) intimation the assessee has filed the rectification application u/s. 154 of the Act before the AO which is pending for disposal. It is evident from the record that the assessee has only challenged the assessment order passed u/s 143(3) of the Act and not the intimation u/s. 143(1) of the Act before the first appellate authority. We are conscious of the fact that section 246A of the Act has specifically provided for an appeal before the ld. CIT(A) against the intimation issued u/s. 143(1) of the Act where the cause of action had arouse and the assessee ought to have filed an appeal against the same. Even before us, the assessee has challenged only the assessment order passed u/s. 143(3) and not the 143(1) intimation. We, therefore, find no merit in the ground raised by the assessee. Hence, ground no. 1 raised by the assessee is hereby dismissed. Disallowance u/s. 80G towards CSR expenses - AO has rejected the claim of the assessee for the reason that the CSR expenses is not a voluntary donation but is merely a statutory obligation u/s. 135 of the Companies Act, 2013 read with Schedule VII of the Companies Rules, 2014 - It is pertinent to point out that the intention of the legislature was clear when the same was clarified by the Finance (No.2) Act, 2014 that CSR expenses will not fall under the business expenditure and also there has been an express bar specified in sub clause (iiihk) and (iiihl) of section 80G(2)(a) of the Act that any sum paid by the assessee as donation to Swatch Bharat Kosh and Clean Ganga Fund will not come under the purview of deduction u/s. 80G of the Act subject to certain conditions. This justifies the fact that the other donations specified u/s. 80G of the Act would be entitled to deduction provided the conditions stipulated u/s. 80G of the Act are satisfied. In the present case in hand, the contributions made by the assessee would not fall under the two exceptions specified above which clearly mandates that the assessee is entitled to claim deduction for the donations contributed during the year under consideration u/s. 80G of the Act. The decision relied upon by the ld. A.O. in the case of PVG Raju [ 1975 (9) TMI 53 - SUPREME COURT] is distinguishable on the facts of the present case where there is no requirement of proving the voluntariness of the donation contributed by the assessee for claiming deduction u/s. 80G of the Act. The amendment brought about by Finance Act, 2015 to section 80G of the Act which had inserted the sub clauses (iiihk) and (iiihl) to be the exception for qualifying a donation for claiming u/s. 80G of the Act could also be an evidencing factor to substantiate that CSR expenditures which falls under the nature specified in section 30 to 36 of the Act are an allowable deduction u/s. 80G of the Act. Assessee is entitled to deduction claimed u/s. 80G of the Act towards the CSR expenditure incurred by it. We, therefore, direct the AO to allow the claim of the assessee subject to the condition that the assessee has satisfied the other requirements warranted u/s. 80G of the Act. We, therefore, direct the ld. A.O. to allow the claim of the assessee subject to the condition that the assessee has satisfied the other requirements warranted u/s. 80G of the Act. Case-Laws Income Tax Mon, 27 May 2024 00:00:00 +0530