TaxTMI 
TaxTMI 
2024 (7) TMI 1585
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....he Companies Act, 2013"? 3. Briefly stated, facts of the case are that assessment u/s 143(3) of the Income-tax Act, 1961 (in short 'the Act') was completed on 27.12.2018 wherein the returned income filed by the assessee was accepted. Subsequently, the case was reopened by way of issue of notice u/s 148 of the Act dated 26.02.2021. In response, the assessee filed return of income on 23.04.2021 declaring total income at Rs.598,63,34,620/-. In the reassessment completed u/s 147 r.w.s. 144B of the Act dated 24.03.2023, the Assessing Officer made disallowance of the deduction claimed u/s 80G of the Act amounting to Rs.4,30,00,000/- holding that the same was in the nature of corporate social responsibility (CSR) expenditure incurred by the assessee, which is not allowable. 4. On further appeal, the Ld. CIT(A) deleted the disallowance in view of various decisions of the Co-ordinate Bench relied upon by him. 5. We have heard rival submission of the parties and perused the relevant material on record. In the case, the assessee debited Rs.8,60,00,000/- on account of CSR, which was added back was while computing total income for the purpose of filing return of income. However, the as....
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....of the Income Tax Act, 1961 to the extent of eligibility.. It is further viewed that jurisdictional Hon'ble Mumbai ITAT in the case of M/s. Reliance Industries Ltd. V.DCIT[2023](ITA NO.2587 & 2588/MUM/2022) has followed the decision rendered by Mumbai ITAT in the case of Naik Sea foods P Ltd V.Pr. CIT-2(ITA NO.490/MUM/2021). In the case of Naik Sea foods P Ltd (supra), the co-ordinate bench has followed the decision rendered by Bangalore bench of Tribunal in the case of M/s FNF India P Ltd (ITA No. 1565/Bang/2019 dated 05-01-2021), which in turn followed the decision rendered in the case of Allegis Services (India) Pvt. Ltd. v. ACIT (ITA No. 1693/Bang/2019) and held that the assessee is eligible for deduction u/s 80G of the Act in respect of certain payments included in CSR Expenses. The relevant discussions made by the Tribunal are extracted below:- "15. Considered the rival submissions and material placed on record, we observe from the record that Ld. Pr.CIT while examining the records of the assessment observed that the Assessing Officer has not Verified the expenses claimed by the assessee and allowed by the Assessing Officer ITA NO. 490/MUM/2021 (A.Y: 201....
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.... expenditure cannot be allowed under the existing provisions of section 37 of the Income-tax Act. Therefore, in order to provide certainty on this issue, it is proposed to clarify that for the purposes of section 37(1) any expenditure incurred by an assessee on the activities relating to corporate social responsibility referred to in section 135 of the Companies Act, 2013 shall not be deemed to have been incurred for the purpose of business and, hence, shall not be allowed as deduction under section 37. However, the CSR expenditure which is of the nature described in section 30 to section 36 of the Act shall be allowed deduction under those sections subject to ultillment of conditions, if any, specified therein." 13. From the above it is clear that under Income tax Act, certain provisions explicitly state that deductions for expenditure would be allowed while computing income under the head, 'Income from Business and Profession" to those, who pursue corporate social responsibility projects under following sections. * Section 30 provides deduction on repairs, municipal tax and insurance premium * Section 31, provides deduction on repairs and insurance ....
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.... the Act, they are specifically excluded in clarification issued. There is no restriction on an expenditure being claimed under above sections to be exempt, as long as it satisfies necessary conditions under section 30 to 36 of the Act, for computing income under the head, "Income from Business and Profession ". 3. For claiming benefit under section 80G, deductions are considered at the stage of computing "Total taxable income". Even if any payments under section 80G forms part of CSR payments(keeping in mind ineligible deduction expressly provided u/s.80G), the same would already stand excluded while computing, Income under the head, "Income form Business and Profession". The effect of such disallowance would lead to increase in Business income. Thereafter benefit accruing to assessee under Chapter VIA for computing "Total Taxable Income" cannot be denied to assessee, subject to fulfillment of necessary conditions therein. 4. We therefore do not agree with arguments advanced by Ld. Sr. DR 5. In present facts of case, Ld.AR submitted that all payments forming part of CSR does not form part of profit and loss account for computing Income under the head, "I....