TaxTMI 
TaxTMI 
2024 (9) TMI 1777
X X X X Extracts X X X X
X X X X Extracts X X X X
....ed on 27 March 2024) passed by the learned Principal Commissioner of Income tax. PCIT, Mumbai-3 [hereinafter referred to as the learned PCIT] under section 263 of the Income-tax Act, 1961 ('the Act'), the present appeal is being preferred on the following grounds which, it is prayed, may be considered without prejudice to one another. On the facts and in the circumstances of the case and in law, the learned PCIT: Order passed u/s 263 of the Act is bad in law and without jurisdiction 1. erred in setting aside the assessment completed u/s 143(3) r.w.s. 147 r.w.s. 144B of the Act by the Faceless assessing officer as erroneous and prejudicial to the interest of revenue without appreciating that such an action can be taken only ....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... 27.12.2018 accepting the return of income. Subsequently, It was noticed that an amount of Rs. 9,10,00,000/- towards expenses of Corporate Social Responsibility (CSR) activities was added back in the computation of income, however, the assessee claimed deduction of Rs. 4,55,00,000/- being 50% of the CSR expenses u/s 80G of the Act. It was observed that CSR expenditure was not allowable expenditure u/s 37(1) of the Act therefore assessee was not eligible to claim deduction u/s 80G of the Act. Accordingly, the case of the assessee was reopened u/s 147 of the Act by issuing notice u/s 148 and re-assessment order passed u/s 143(3) r.w.s. 147 of the Act without making any such disallowance on the basis of which the case was reopened. I....
X X X X Extracts X X X X
X X X X Extracts X X X X
....e proceedings before us, the ld. Counsel referred the detailed submission made by the assessee before the ld. PCIT as reproduced at para 8 in the order passed u/s 263 of the Act. The ld. Counsel submitted that the case of the assessee was particularly reopened on the issue of allowability of deduction u/s 80G in respect of CSR expenditure incurred by the assessee during the year under consideration. However, after verification/examination of the detailed submission of the assessee, the assessing officer has accepted the claim of the assessee for deduction u/s 80G of the Act without making any disallowance. He further submitted that during the course of assessment proceeding, the AO has made detailed enquiry and assessee has made relevant su....
X X X X Extracts X X X X
X X X X Extracts X X X X
....mount spent for CSR activities. The relevant extract of the query raised by the ld. AO is as under: "2. As per explanation 2 below section 37 of the Income Tax Act, 1961, the amount spent on CSR activities under section 135 of the Companies Act is not an allowable as expenditure incurred for business and profession. Thus, the expenditure on CSR is not an allowable deduction from AY 2015-16. It was seen from the perusal of records that the assessee had debited an amount of Rs. 9,10,00,000/- towards Corporate Social Responsibility (CSR) which was added back in the computation of income statement. However, assessee has claimed deduction under 80G of Rs. 4,55,00,000/- on above CSR expenditure, which is not an allowable deduction. Th....
X X X X Extracts X X X X
X X X X Extracts X X X X
....0G for donations made pursuant to CA 2013 obligations. Also, in the Memorandum, it has been clarified that CSR expenses which fall for consideration under sections 30 to 36 of the IT Act are allowable. Thus, a position emerges that the intent of the Legislature was not to blanketly disallow CSR expenses. e) The Ministry of Corporate Affairs (MCA)) has issued Frequently Asked Questions (FAQ) through General circular no. 01/2016 dated January 12, 2016 (FAQ No. 6) has clarified that as follows: "Question No. 6: What tax benefits can be availed under CSR? Answer: No specific tax exemptions have been extended to CSR expenditure per se. The Finance Act, 2014 also clarifies that expenditure on CSR does not form part of business ....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... Reliance Foundation. The assessee vide letter dated 25.03.2023 made detailed submission and submitted that there is no co-relation between section 37(1) and section 80G of the Act and deduction u/s 80G is available to the extent it is allowable. Similarly, the assessee has also referred the submission dated 15.11.2018 in the original assessment proceedings made u/s 143(3) wherein the assessee has explained that it had incurred CSR expenditure and also made submission that deduction u/s 80G was also claimed at 50% u/s 80G of the Act. We have also perused the copy of various decisions placed in the paper book filed by the assessee on the proposition that where the assessing officer during the course of assessment proceedings issued notices a....