2025 (6) TMI 1712

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.... u/s 80G of Rs. 19,07,500/- was rightly claimed by the appellant. 3. The Ld. Pr. Commissioner of Income Tax has erred in law and in facts in directing the Ld. Assessing Officer to enquire the claim of deduction u/s 80G of the Act w.r.t. CSR expenses and modify the assessment order. 4. The appellant craves leave of your Honour to add to, alter, amend and/or delete all or any of the foregoing grounds of appeal." 2. Brief facts of the case are that assessee is a company engaged in the business of share broking and share trading. The assessee filed its return of income for AY 2020-21 declaring income of Rs. 12.274 crore. Case was selected for complete scrutiny. On the issue for selection was large deduction of claim under section 80G. The assessing officer after issuing show cause notice and seeking of reply of assessee and consideration thereof, disallowed deduction of donation under section 80G in respect of certain donation in his order dated 27.09.2022. The assessment order was revised by ld. Pr. CIT in his order dated 07.03.2025 by invoking his jurisdiction under section 263. Before passing the order under section 263, the ld. Pr. CIT issued show cause notice ....

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....nder section 80G cannot be allowed for expenses claimed under CSR. The ld. Pr. CIT held that assessing officer has disallowed donation under section 80G only in respect of Urvashi Foundations for which approval under section 80G was not furnished and balance of claim under section 80G was allowed by ld. Assessing Officer without discussing anything about the claim of expenses under CSR head vis-à-vis donation under section 80G. The ld. CIT(A) held that from the order of assessing officer, it is apparent that assessing officer has not examined the issue of CSR expenses vis-à-vis section 80G donation, therefore, the order passed by assessing officer is erroneous and so far as prejudicial to the interest of revenue. The assessment order was set aside and ld. Assessing Officer was directed to enquire the claim of section 80G deduction out of CSR expenses and passed the assessment order as per finding of the order of ld. Pr. CIT. Aggrieved by the order of ld. Pr. CIT, the assessee has filed present appeal before Tribunal. 4. We have heard the submission of learned Authorised Representative (ld. AR) of the assessee and learned Commissioner of Income Tax/Departmental Repr....

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....CIT (166 taxmann.com 91), * DCIT vs. Gabriel India Ltd. (173 taxmann.com 219). 5. On the other hand, learned Commissioner of Income Tax/Departmental Representative (CIT-DR) for the revenue supported the order of ld. Pr. CIT. The ld. CIT-DR for the revenue submits that there is no reference in the assessment order except for reference of disallowance of donation to Urvashi Foundations. Since the assessing officer has not discussed anything about the issue of donation under section 80G vis-à-vis CSR in the assessment order and it was allowed without making proper examination of facts, therfore, the assessment order is erroneous and in so far as prejudicial to the interest of revenue. 6. We have considered the rival submissions of both the parties and have gone through the orders of lower authorities carefully. On careful perusal of assessment order, we find that case was selected for scrutiny on the issue of large amount of donation. No doubt that the assessing officer during the assessment examined the issue and disallowed donation under section 80G to Urvashi Foundations. Though, there is no discussion about the donation to other charitable trust or institutio....

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....he CSR initiative of the assessee company which amounts to INR 22,81,29,964/-. It is observed that the assessee has duly disallowed CSR expenditure of INR 22,81,29,964/-debited to the statement of profit and loss under section 37 of the Act. DRP rejected the claim of the assessee by saying that the donation is pursuant to the CSR policy of the company and lacks the test of voluntariness as required under section 80G. The AO has disallowed the claim on the ground that anything donation over and above the CSR u/s 80G will be only allowed as the CSR expense is not an allowable expense u/s 37 of the Act. Ld. Counsel of the assessee placed reliance on the following decisions :- JMS Mining (P.) Ltd. v. PCIT [2021] 130 taxmann.com 118/190 ITD 702/91 ITR(T) 80 (Kolkata - Trib.) Goldman Sachs Services (P) Ltd. v. JCIT (2020) ([2020] 117 taxmann.com 535 (Bangalore - Trib.) ) (ITAT Bangalore) (iii) First American (India) Pvt. Ltd. (ITA No. 1762/Bang/2019) Allegis Services (India) Pvt. Ltd. (ITA No. 1693 /Bang/ 2019) Ld. Counsel further submitted that if the intention was to deny deduction of CSR expenses under section 80G, appropriate amendments on lines of section ....