TaxTMI 
TaxTMI 
2021 (1) TMI 205
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....ies Act. 2013. On this payment deduction u/s. 80G to the extent of Rs. 11,87,500 was claimed. The AO referred to explanatory circular to Finance (No.2) Act, 2014 dt 21.01.2015 and Section l98 of the Companies Act, 2013 and held that deduction under Section 80G of the Act was not available if the donation was part of the CSR expenditure. 4. Before the CIT(Appeals) in the appellate proceedings, the assessee made detailed submissions and argued that there is no restriction in the Act regarding claiming deduction u/s. 80G of the Act, if the expenses have been incurred for the purposes of the CSR activity, provided the payment is made to eligible entities as listed in Section 80G of the Act. Therefore, the assessee submitted that it is eligible to claim deduction and the AO has wrongly disallowed the same. 5. The CIT(Appeals) observed that the provisions of Section 80G of the Act provides that the sums specified in sub-section (1) & (2) are eligible for deduction at the rate of 100% or 50% depending upon the entity to which the sum is paid. Section 80G (2) further reveals that any sum paid by the assessee in the previous year has to be in nature of 'donations' to various entit....
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....claim is concerned, the CIT(Appeals) was of the view that the said decision was on entirely different issue as the expenditure was incurred voluntarily and as such the same was a donation. The issue of CSR expenditure was not there. The reliance of the assessee on Circular No 01/2016 dt 1.2.01.2016 issued by the Ministry of Corporate Affairs (MCA) was held to be misplaced as not relevant to income-tax matters. 7. Therefore, the CIT(Appeals) held that the sum paid by the assessee cannot be considered as a 'donation' for the purpose of Section 80G of the Act and upheld the actin of the AO. 8. The ld. AR reiterated the submissions made before the CIT(Appeals). On the other hand, the ld. DR supported the order of the CITA. 9. After hearing both the parties, we find that similar issue came up for consideration before this Tribunal in ITA No.1693/Bang/2019 in the case of Allegis Services (India) Pvt. Ltd. v. ACIT. The Tribunal by its order dated 29.4.2020 held as under:- "10. Section 135 of Companies Act, 2013 requires companies with CSR obligations, with effect from 01/04/2014. Finance (No.2) Act, 2014 inserted new Explanation 2 to sub-section (1) of section 37, so as to ....
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....nery and furniture * Section 32 provides for depreciation on tangible assets like building, machinery, plant, furniture and also on intangible assets like know-how, patents, trademarks, licenses. * Section 33 allows development rebate on machinery, plants and ships. * Section 34 states conditions for depreciation and development rebate. * Section 35 grants deduction on expenditure for scientific research and knowledge extension in natural and applied sciences under agriculture, animal husbandry and fisheries. Payment to approved universities/research institutions or company also qualifies for deduction. In-house R&D is eligible for deduction, under this section. * Section 35CCD provides deduction for skill development projects, which constitute the flagship mission of the present Government. * Section 36 provides deduction regarding insurance premium on stock, health of employees, loans or commission for employees, interest on borrowed capital, employer contribution to provident fund, gratuity and payment of security transaction tax. Income Tax Act, under section 80G, forming part of Chapter VIA, provides for deductions for computing taxable income as under: * Secti....
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....re claimed as deduction under section 80G of the Act, for computing "Total taxable income", which has been disallowed by authorities below. In our view, assessee cannot be denied the benefit of claim under Chapter VI A, which is considered for computing 'Total Taxable Income". If assessee is denied this benefit, merely because such payment forms part of CSR, would lead to double disallowance, which is not the intention of Legislature. 19. On the basis of above discussion, in our view, authorities below have erred in denying claim of assessee under section 80G of the Act. We also note that authorities below have not verified nature of payments qualifying exemption under section 80G of the Act and quantum of eligibility as per section 80G(1) of the Act. 20. Under such circumstances, we are remitting the issue back to Ld.AO for verifying conditions necessary to claim deduction under section 80G of the Act. Assessee is directed to file all requisite details in order to substantiate its claim before Ld.AO. Ld.AO is then directed to grant deduction to the extent of eligibility. Accordingly grounds raised by assessee stands allowed for statistical purposes." 10. Since the facts and....