2024 (8) TMI 1496

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...., disallowance of 80G claim of Rs. 12,50,000/- being 50% of Rs. 25,00,000/- donation paid to Saint Francies Home (Regd.) Society, Pathankot out of CSR funds is absolutely illegal and uncalled for in law as well as on facts." 2. Briefly stated, facts are that the assessee paid Rs. 25,00,000/- to a trust named Saint Francis Home (Regd.) Society Pathankot. The amount of Rs. 25,00,000/- paid out of CSR obligation was claimed as deduction u/s. 80G of the Act. On such payments of Rs. 25,00,000/-, the assessee claimed deduction u/s. 80G of the Act. The Assessing Officer did not allow the deduction u/s. 80G as it was CSR expenditure which is not allowable under the Act. 3. Aggrieved with the above order of the AO, the assessee preferred appea....

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....be Technology Quotient Private Limited, wherein the Coordinate Bench has held as under:- "7. Learned DR has failed to bring forth any decision to the contrary. Thus, we accept the plea of learned counsel on the basis of case law cited, denial of CSR expenditure u/s 37(1) of the Act is not embargo to claim deduction u/s 80G of the Act. 7.1 Further, we like to observe that as a matter of fact as per Section 135 of the Companies Act, 2013 ('CA 2013), the qualifying Companies as mentioned therein are required to spend certain percentage of profits of last three years on activities pertaining to Corporate Social Responsibility (CSR). The expenditure on CSR, could be by way of expenditure on projects directly undertaken by s....

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....iament in bringing the aforesaid provision is given in the Explanatory Memorandum to the Finance (No.2) Bill, 2014 and is reproduced as under ; "CSR expenditure, being an application of income, is not incurred wholly and exclusively for the purposes of carrying on business, As the application of income is not allowed as deduction for the purposes of computing taxable income of a company, amount spent on CSR cannot be allowed as deduction for .computing the taxable income of the company, Moreover, the objective of CSR is to share burden of the Government in providing social services by companies having net worth/turnover/profit above a threshold. If such expenses are allowed as tax deduction, this would result in subsidizing of arou....