AI OCR 
TaxTMI 
TaxTMI 
TaxTMI 
2023 (8) TMI 1469
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....ndia) Private Limited on 12/07/2016. While scrutinizing the return of income for the assessment year 2017-18, the learned Assessing Officer made certain additions which include the disallowance of the deduction under section 80G of the Act, besides TDS short credit and interest under section 234B and 234C of the Act. Apart from these, there were certain other issues including the transfer pricing adjustment qua the provision of IT services. 3. When the assessee filed objections before the learned DRP, learned DRP, while confirming the disallowance of deduction under section 80G of the Act, issued certain directions. Though the assessee filed this appeal on several grounds, many grounds were withdrawn, stating the assessee had relief in respect of some issues in the rectification order dated 03/09/2022 and that there is a bilateral APA. Therefore, what remains to be adjudicated only in respect of deduction under section 80G of the Act, TDS short credit. 4. In so far as the issue relating to the disallowance of deduction claimed under section 80G of the Act qua expenditure incurred in Corporate Social Responsibility ("CSR") is concerned, plea of the assessee is that the assessee do....
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.... and not otherwise, assessee cannot Suo-moto expand the scope of such a law to imply Section 80G of the Act. According to the Learned AR, the assessee duly complied with Explanation 2 to section 37(1) inserted by Finance (No. 2) Act, 2014 and suo moto disallowed CSR expenditure while computing business income. He submitted that Section 80G of the Act provides that any sums paid by the Assessee in the previous year as donations to the specified associations/entities shall be allowable as deduction as per the limits prescribed thereunder; that the restriction provided under section 37(1) of the Act for claiming CSR spends as business expense for the purpose of computation of business income does not override the provisions of section 80G of the Act; that Section 80G applies only where donations have been made to certain specified funds or funds which have been given approval under section 80G of the Act; and that once such condition is met, deduction under section 80G of the Act forming part of Chapter VI-A which is allowable qua gross total income cannot be denied merely for the reason that such payments formed part of CSR expenditure. 7. Learned AR further argued that there is no ....
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....e 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. 10. 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 on the ground of non-payments, but because the assessee claimed such spending incompliance with their legal obligation under section 135 of the Companies Act. According to the learned Assessing Officer, by showing such an amount as spending incompliance with section 135 of the Companies Act, the assessee had the benefit of compliance with such a provision and, therefore, the matter ends there insofar as such payments are concerned. Except the business expenditure covered by section 30 to 36 of the Act as stipulated under section 37(1) of the Act, no other expenditure is allowable and this position is made amply clear by insertion of Explanation-....
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....re 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 made pursuant to the CSR, and other than covered by section 80G(2)(iiihk) and (iiihl) of the Act. As stated above, clue can be had from the restrictions by way of section 80G(2)(iiihk) and (iiihl) of the Act. 15. This aspect has been dealt with by successive Co-ordinate Benches in the cases relied upon by the assessee. While elaborately discussing this issue in the case of JMS Mining (P.) Ltd. (supra), the Kolkata Bench of the Tribunal discussed this issue in the following manner: "22. From a bare reading of the section 80G of the Act we note that deduction under this section has to be made in accordance with and subject to the provisions of t....
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....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 maxim "Expressio Unius Esl Exclusio Alterius" which is a Latin phrase that means "express mention of one thing excludes all others. This is one of the rules used in interpretation of Statutes. The phrase indicates that items not on the list are assumed not to be covered by the Statute. When something is mentioned expressly in a Statute, it leads to the presumption that the things not mentioned are excluded. This is an aid to the construction of Statutes. Applying the legal maxim 'expressio unius est exclusio alterius', it can be safely inferred that when the Legislature in particular has provided for only the above referred two specific exc....
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.... 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 contention of the assessee that since Parliament intended certain restrictions to only CSR expenditure in respect of two donations included by an assessee as CSR expenditure i.e. [Swachh Bharat Kosh and Clean Ganga Fund] has impliedly not made any prohibition/restriction in respect of claim of CSR expenses in other cases if it is otherwise eligible under Section 80G of the Act. In this context we find that the assessee has made donation of Rs. 1.25 crores on 20.01.2016 by RTGS dated 19.01.2016 through UCO Bank which is evident from page 18 of PB which is received by Shree Charity Trust which was 80G(5)(vi) certificate of the Department da....