TaxTMI 
TaxTMI 
TaxTMI 
2025 (9) TMI 637
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....ther erroneous nor prejudicial to the interests of the revenue. The revision order u/s 263 therefore, requires to be quashed in appeal. 2. Ground no. 2:- On facts and circumstances of the case and in law, the learned Principal Commissioner, more particularly, erred in directing revision of the aforesaid assessment order on a debatable issue, which action was not permissible under his powers u/s 263. The revision order u/s 263 therefore, requires to be quashed in appeal." 2. After perusing the assessment order passed by Ld. AO, it is observed that the appellant company claimed 80G deduction on the part of Companies Social Responsibility (CSR) expenses and the same was allowed while completing the assessment under section 143(3) of the....
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....under section 80G of the Act. Accordingly, the Ld. PCIT has set aside the order passed by Ld. AO to enquire the claim of section 80G deduction out of CSR and modify the assessment order as per the findings of this 263 order. 3. Aggrieved by the order of Ld. PCIT under section 263 of the Act, the appellant company filed an appeal with the grounds of appeal mentioned in page 1 of this order. 4. During the proceedings before the ITAT, the Ld. AR of the appellant has argued that L. PCIT is incorrect in setting aside the order of Ld. AO and relied on the decision of ITAT in the case of FDC Ltd. (ITA No. 1031/Mum/2023 dated 2.8.2023). 5. Per contra, Ld. DR has argued that the Ld. PCIT has correctly assumed revisionary jurisdiction under sectio....
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....med under Section 80G in respect of CSR expenditure was a possible legal view supported by judicial precedents, and merely because the PCIT holds a contrary view does not render the assessment erroneous. Thus, it was submitted that the revision order passed u/s 263 is invalid in law and is liable to be quashed. 3. Assessee's Claim The assessee claimed that although CSR expenses are not allowed as business expenditure under Section 37, a part of those expenses amounting to Rs. 16,21,276/- was eligible for deduction under Section 80G, as the donations were made to approved institutions. The assessee argued that Section 80G operates independently and allows such deductions if the specified conditions are met, regardless of whether the ....
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....is allowed for CSR contributions, as these are made to comply with a legal requirement under Section 135 of the Companies Act and are not voluntary in nature. Voluntariness is a key condition for claiming deduction under Section 80G, as also held by the Supreme Court in PVG Raju, Rajah of Vizianagaram. Hence, CSR expenses, being mandatory, do not qualify as donations under Section 80G. III. The assessee has referred to some Tribunal decisions where similar deductions were allowed. However, in the present case, the Assessing Officer did not look into this issue at all or give any reasons for allowing the claim. There was no examination or discussion about whether the deduction for CSR expenses under Section 80G was actually allowable. So, ....
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....the Ld. AO took a view. But, in this case, Ld. PCIT has observed that the Ld. AO has not discussed anything nor applied his mind on the issue of 80G and still the deduction under section 80G of the Act was allowed by the Ld. AO as claimed by the appellant. Hence, the Ld. PCIT has correctly assumed the revisionary jurisdiction under section 263 and set aside the order of Ld. AO for the purpose of limited verification of this issue and pass the order. There is considerable force in the argument of Ld. DR where it was submitted in his written submission that the appellant referred to some Tribunal decisions where similar deduction are allowed, but the Ld. AO did not look into this issue at all or give any reasons for allowing the claim. There ....
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....f Revenue and upheld the Revisionary Jurisdiction of CIT. During the course of hearing, the Ld. AR of the appellant has relied on the case of FDC Ltd. (ITA No. 1031/Mum/2023, A.Y. 2018-19 dated 2.8.2023), where the issue of CSR expense vis-à-vis deduction under section 80G of the Act was discussed and held in favour of the appellant. But, what is to be seen in that case is that the Ld. AO took a view which was reversed by ITAT whereas in our case, the Ld. AO has not applied his mind to the issue of deduction under section 80G at all. In this case of FDC Ltd. (supra) itself, the ITAT took a decision that the Revision order of Ld. PCIT under section 263 of the Act as correct when the Ld. AO has allowed the claim of appellant without ca....