AI OCR 
TaxTMI 
TaxTMI 
TaxTMI 
2023 (9) TMI 474
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.... business income plans with the requirement of proviso to section 37(1) of the Act. Later on, assessee claimed the contribution under section 80G of the Act. Assessee pleaded before the authorities below that in compliance with section 37(1) of the Act, assessee had suo moto disallowed the same while computing the business interest, but since there is no bar or restriction on deduction under section 80G of the Act, the assessee is entitled to claim such contribution as deduction under section 80G of the Act. 3. Both the authorities below rejected the contention of the assessee. According to them there is no element of voluntariness of this contribution, because it was paid under the compulsion of law under section 135 of the Companies Act, the assessee is not entitled to claim the contribution as a deduction under section 80G of the Act. According to the learned CIT(A) also the specific bar contained in the proviso to section 37(1) of the Act says that for the purpose of the section any expenditure incurred by the assessee on the activities relating to CSR referred to in section 135 of the Companies Act, 2013 shall not be deemed to be an expenditure incurred by the assessee for th....
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...., such spending cannot be said as voluntary and it is only under the compulsion of law. Since the element of voluntariness is missing in this case, the said spending does not fall in the ambit of section 80G of the Act. He further submitted that the assessee cannot claim compliance of the provisions under section 135 of the Companies Act at the same time, when such payments are claimed as donations under section 80G of the Act. If such a plea is accepted, the purpose and philosophy behind the CSR under section 135 of the Companies Act will be defeated and every assessee will claim double benefit of the same amount spent, showing it under compliance with section 135 of the Companies Act and also claiming benefit under section 80G of the Act. Learned DR further submitted that when the letter of law is clear and does not warrant any interpretation, no aid need be sought from any other source. 8. We have gone through the record in the light of the submissions made on either side. Insofar as the payments made to the PM Relief Fund and to the institutions enumerated by the learned AR are concerned, it is a matter of verification. Learned Assessing Officer disallowed such a deduction not....
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....ent to satisfy the requirement of section 135 of the Companies Act, the benefit gets exhausted and such an amount is no more available for the purpose of claiming deduction under section 80G of the Act. 12. Coming to the Income Tax Act, 1961, there is no express provision to support the contention of Revenue. On the other hand, section 80G(2)(iiihk) and (iiihl) of the Act expressly provide that such sums donated for Swatch Bharath Kosh and Clean Ganga Fund shall be the amounts other than the sums spent by the assessee in pursuance of CSR, meaning thereby the donations made towards Swatch Bharath Kosh and Clean Ganga Fund spent as a part of CSR are not qualified for deduction under section 80G of the Act. Out of so many entries under section 80G(2) of the Act, only donations in respect of two entries are restricted if such payments were towards the discharge of the CSR. The Legislature could have put a similar embargo in respect of the other entries also, but such a restriction is conspicuously absent for other entries. The irresistible conclusion that would flow from it is that it is not the legislative intention to bar the payments covered by section 80G(2) of the Act which were ....
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....duction u/s. 80G of the Act is not allowable, which can be illustrated by giving certain examples (infra). However, in a case scenario, wherein the assessee expends the mandatory expenditure and gives donation to these two projects i.e. over and above the mandatory CSR expenditure u/s. 135 of Companies Act, that sum donated to Swach Bharat Kosh & Clean Ganga Fund will be eligible for 100% deduction u/s. 80G of the Act [refer section 80G (1)(i) and subject to section 80G (4)]. However, such a restriction in respect of expenditure made by an assessee to any other fund or institution as referred to in sub clause (iv) of clause (a) of sub-section 2 of section 80G of the Act had not been placed by the Legislature. And if the Parliament desired, it could have been made such kind of restriction or any restriction like in the case of donation to Swach Bharat Kosh & Clean Ganga Fund. So the assertion of Ld. PCIT that AO could not have allowed deduction u/s 80G of the Act to an assessee on the CSR expenditure/donation to an institution u/s 80G(2)(a)(iv) which is enjoying certificate 80G(5)(vi) of the Act, is erroneous and therefore cannot be accepted. For this, we rely on the interpretation ....
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.... disallowed and added back in terms of Explanation 2 to Section 37(1) of the Act. In terms of Section 135(5) of the Act read with Section 80G(iiihk) the donation of Rs.l crores made to Swach Bharat Kosh is not eligible for deduction u/s 80G of the Act. The company can claim deduction of fifty percent of the donation of Rs. 1 crores paid to any other registered charitable trust u/s 80G(2)(iv) read with Section 80G(1)(ii) of the Act. Situation 4 : The company has contributed Rs.1 crore to Prime Minister's National Relief Fund and Rs. 1 crore to any other charitable trust registered u/s 80G(5) of the Act. Tax Treatment: The entire CSR expenditure of Rs.2 crores is to be disallowed and added back in terms of Explanation 2 to Section 37(1) of the Act. The company can claim deduction for hundred percent of the donation of Rs. 1 crores paid to Prime Minister's National Relief Fund u/s 80G(2)(iiia) read with Section 80G(1)(i) of the Act. The company claim deduction to the extent of fifty percent of the donation of Rs. 1 crores paid to any other registered charitable trust u/s 80G(2)(iv) read with Section 80G(1)(ii) of the Act. 23. As discussed supra, we concur with the co....