TaxTMI 
TaxTMI 
TaxTMI 
2025 (8) TMI 203
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....uently the assessee company filed a revised return on 29.03.2019 declaring total income of Rs. 914,04,90,300/- as per normal computation and book profit u/s 115JJB of the IT Act, 1961 at Rs. 2252,55,55,273/-. The Assessing Officer completed the assessment u/s 143(3) r.w.s. 144C(13) of the Act determining the total income of the assessee at Rs. 2559,32,51,650/- under the normal provisions and the book profit at Rs. 2252,55,55,273/-. 4. Subsequently the Ld. PCIT called for examining the record and noted that the Assessing Officer has allowed deduction of Rs. 8,10,85,470/- u/s 80G of the Act which includes deduction in respect of expenditure on account of Corporate Social Responsibility (CSR). According to the Ld. PCIT, deduction u/s 80G is allowable on donations made voluntarily whereas in the case of the assessee the expenditure on account of CSR is a compulsion under the provisions of section 135 of the Companies Act. Hence, such expenditure cannot be considered to be eligible for deduction u/s 80G of the Act. Further, according to him by claiming such expenditure as deduction u/s 80G the assessee has indirectly claimed the same as business expenditure to that extent which is not ....
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....d by the assessee that 'during the year an amount of Rs. 160,525,674/- was incurred towards CSR activity. Out of this expenditure, an amount of Rs. 8,10,85,470/- is the deduction claimed u/s 80G of the Act. Copy of the receipts are attached as per Annexure 4A till 4G for your reference'. However, it is seen from the records that, the AO has not conducted any examinations or verifications or enquiries in respect of details submitted by the assessee in respect of deduction claimed u/s 80G of the Act. The AO did not undertake any efforts to examine whether the payments for donations made and claimed as deduction u/s 80G of the Act, were in order or it also included in the CSR expenses incurred by the assessee. It is also very pertinent to note that, the AO had not called for any details in respect of CSR expenses incurred by the assessee in the relevant year. This goes to prove that the AD failed to take following actions in order to examine the issue of allowability of deduction u/s 80G of the Act in respect of expenses which are also shown as CSR expenses. (i) Verifying/examining the expenses claimed as deduction u/s 80G (ii) Calling for the details of expenses claimed a....
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....x expenditure. The legislative intention was to ensure that companies with certain strong financials make the expenditure towards this purpose and by allowing deduction, the Government would be subsidizing one third of it by way of revenue foregone. It is also worthwhile to mention that this approach can develop into large scale modus operandi by the assessee and the entire effort of the legislature to treat CSR expenditure as appropriation of profit after tax (w.e.f. AY 2015-16) would be wasted if the same expenditure is allowed twice. 7.3 In view of the above discussion and also the facts mentioned in the earlier paragraphs, the expenses considered by the assessee for the purpose of claiming deduction under section 80G which were also part of the CSR expenses cannot be said to be voluntary since the same were incurred only under the compulsion of law. Since the element of voluntariness is missing in this case, the said spending does not fall in the ambit of section 80G of the Act. The assessee cannot claim compliance of the provisions under section 135 of the Companies Act at the same time, when such payments are claimed as donations under section 80G of the Income Tax Act. 7....
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.... the Act. Copy of the receipts are attached as Annexure 4A till 4G for your reference." 8. Referring to paras 87 to 131 of the paper book he drew the attention of the Bench to the 80G Receipts and submitted that the Assessing Officer after examining the issue thoroughly has allowed the claim of deduction u/s 80G of the Act. Referring to the decision of the Pune Bench of the Tribunal in the case of Advik Hi Tech (P.) Ltd. Vs. DCIT (2024) 168 taxmann.com 587 (Pune-Trib.), he submitted that the Tribunal in the said decision has held that the deduction u/s 80G on account of CSR expenses deserves to be allowed. 9. Referring to the decision of the Pune Bench of the Tribunal in the case of Dana Anand India (P.) Ltd. Vs. DCIT (2025) 174 taxmann.com 458 (Pune-Trib.), he submitted that the Tribunal in the said decision has held that the deduction claimed by the assessee u/s 80G on account of CSR expenses deserves to be allowed. 10. Referring to the decision of the Mumbai Bench of the Tribunal in the case of Dalal and Broacha Stock Broking (P.) Ltd. Vs. PCIT (2025) 175 taxmann.com 984 (Mumbai-Trib.), he submitted that the Tribunal in the said decision has held that where the assessee claim....
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...., the details of which have already been reproduced in the preceding paragraphs. We find after considering the claim of deduction u/s 80G of the Act, the Assessing Officer allowed the same and passed the order u/s 143(3) of the Act. Under these circumstances, we have to see as to whether the Ld. PCIT can invoke jurisdiction u/s 263 of the Act on account of order passed by the Assessing Officer allowing the claim of deduction u/s 80G of the Act out of such CSR expenditure. 14. We find the Mumbai Bench of the Tribunal in the case of Dalal and Broacha Stock Broking (P.) Ltd. Vs. PCIT (supra) under identical circumstances has quashed the 263 proceedings by observing as under: "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 institution, however the assessing off....
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....mounts 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 37(1) should also have been made under section 80G of the Act. In the ....
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....23 is also dismissed. 9. In the result, appeals of the revenue are dismissed." 7. Considering the fact that view taken by assessing officer while allowing 50% of donation under section 80G out of CSR expenses are in accordance with the decisions of various benches of Tribunal. Thus, the view taken by assessing officer cannot be said to be erroneous. Thus, the pre-requisite twin conditions for exercising jurisdiction under section 263 has not meet out in the present case hence we quash / set aside the order of Pr. CIT dated 17.03.2025. In the result, grounds of appeal raised by assessee are allowed." 15. We find the Co-ordinate Bench of the Tribunal in the case of Advik Hi Tech (P.) Ltd. Vs. DCIT (supra) has held that the deduction u/s 80G on account of CSR expenses deserve to be allowed. 16. We find following the above decision, the Pune Bench of the Tribunal in the case of Dana Anand India (P.) Ltd. Vs. DCIT (supra) has held that the deduction claimed by the assessee u/s 80G of the Act on account of CSR expenditure deservers to be allowed. The relevant observations of the Tribunal from para 7 onwards read as under: "7. After hearing both sides we find the assessee made CSR....
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....Donations are made are duly registered under section 80G(5) of the Act * The CSR expenditure is not allowed only for the purpose of section 37 for computing business income. If such expenditure is otherwise allowable as deduction under other provisions of the Act, the same cannot be disturbed. * The donations/expenditure made by the Appellant is towards women empowerment, education, environmental research etc. and forms part of CSR expenditure as per Schedule VII of the Companies Act, 2013. * The legislature has restricted the benefit only in two specific cases being 'Swachh Bharat Kosh' ('SBK') and 'Clean Ganga Fund' ('CGF') as per subclause (iiihk) and (iiihl) of section 80G(2)(a) of the Act, thereby implying that CSR contribution to other eligible institution qualifies for deduction under section 80G of the Act. The Appellant has made CSR contribution to funds other than SBK and CGF, thus, claim under section 80G of the Act shall be allowed. * The said claim, as discussed above, is supported by the Explanatory Memorandum to Finance Bill 2014 with restriction placed only in relation to specified funds under section 80G, clarification issued by MCA and multiple favourable ....
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....ld 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. 17. We therefore do not agree with arguments advanced by Ld.Sr.DR. 18. 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, "Income from Business and Profession". It has been submitted that some payments forming part of CSR were claimed as deduction under section 80G of the Act, for computing "Total taxable income", which has been disallowed by authorities below. In our view, assessee cannot be denied the benefit of claim under Chapter VI A, which is considered for computing 'Total Taxable Income". If assessee is denied this benefit, merely because such payment forms part of CSR, would lead to double disallowance, which is not the intention of Legislature. 19. On the basis of above discussion, in our view, authori....
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....e law of various judicial forums (supra) already accepting the very issue in assessee's favour and against the department. We thus adopt judicial consistency herein as well to uphold the Ld. CIT(A)'s detailed discussion accepting the assessee's sec.80G deduction claim. Rejected accordingly." 9. Respectfully following the decision of the Co-ordinate Bench of Pune Tribunal in the case of Credit Suisse Services (India) Private Limited (supra) and in the absence of any contrary material brought on record by the Revenue to take a different view, we set aside the order of Ld. CIT(A) on the issue and allow the appeal of the assessee." 9. Respectfully following the decision of the Co-ordinate Bench of the Tribunal in the case of Advik Hi Tech (P.) Ltd. vs. DCIT (supra) which in turn has followed the decision of the Tribunal in the case of DCIT Vs. Credit Suisse Services (India) Private Limited vide ITA No.44/PUN/2024 order dated 15.05.2024 for assessment year 2020-21 and in absence of any contrary material brought to our notice by the Ld. DR, we hold that the Assessing Officer is not justified in denying the claim of deduction u/s 80G of the Act. We, therefore, direct the Assessing....