TaxTMI 
TaxTMI 
2025 (9) TMI 711
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....sallowance of deduction claimed under section 80-G of the Act. 2. The Id. PCIT erred in not appreciating that there is no restriction under section 80-G of the Act to claim a deduction in respect of contributions made to institutions approved under section 80-G of the Act out of CSR contributions covered under Section 135 of the Companies Act, 2013 except to the Swachh Bharat Kosh, and the Clean Ganga Fund, referred to in clauses (iiihk) and iiihl) of clause (a) of subsection (2) of Section 80-G of the Act and as such the deduction claimed by the appellant under section 80-G of the Act in respect of contributions to approved institutions other than the above two funds was correctly allowed by the Assessing officer in the assessment made under section 143 (3) of the Act. 3. The Id. PCIT erred in not appreciating that the AO has made detailed inquiry in respect of claim of the appellant under section 80-G of the Act in terms of his notice under section 142 (1) of the Act dated 08-10-2022 and only after satisfying himself, allowed a deduction under section 80-G of the Act and as such the assessment order passed by the AO cannot be termed as erroneous and consequently....
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.... The, the Ld. AR of the appellant placed heavy reliance on the jurisdictional High Court decision of Castrol India Ltd. Vs. DCIT (2024) 161 taxmann.com 75 (Bom), where it was held as follows :- "12. It is seen that prior to the passing of the original assessment order, AO has raised queries vide notices dated 5th April 2019 and 12th September 2019, each of which were duly responded by Petitioner. Petitioner has explained that no deduction was claimed by it except that under section 80G of the Act. Copies of receipts of donations were also provided as proof of donation. All these details were also included in the computation of income. Petitioner has, thus, submitted detailed explanation along with supporting documents. It is also seen that Petitioner has claimed deduction for eligible donation as detailed in Schedule. We agree with Mr. Pardiwalla's submission that as far as donations given to eligible trust is concerned, it would still Qualify as deduction under section 80G of the Act even if the contribution is out of the CSR funds. The AO has examined all these aspects while passing the original assessment order." 3. Ld. AR of the appellant had argued that they ha....
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....oneous and prejudicial to the interest of the Revenue. 2. Ground Taken By The Assessee: The appellant challenges the revision order under Section 263, arguing that the assessment under Section 143(3) r.w.s. 144B was neither erroneous nor prejudicial to Revenue. It is contended that donations made under CSR, except to Swachh Bharat Kosh and Clean Ganga Fund, are eligible for deduction under Section 80G, and the AO had duly examined and allowed the claim after inquiry. The appellant also relies on the Bombay High Court ruling in Castrol India Ltd. v. DCIT [2024] 161 taxmann.com 75, which supports its position. 3. Assessee's Claim The assessee claimed deduction of Rs. 15,00,000 under Section 80G for donations made to institutions approved under that section, even though the payments formed part of CSR expenses. It submitted that such deduction is allowable under Chapter VI-A and not restricted unless the donation is to Swachh Bharat Kosh or Clean Ganga Fund. The AO had verified the claim during assessment and allowed it after due inquiry. The assessee relied on judicial precedents, including Castrol India Ltd. (Bom HC), to argue that the assessm....
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....ontributions do not qualify for deduction under Section 80G, even if made to approved institutions, because such payments are driven by a statutory mandate and lack the element of voluntariness. This view is further supported by the principle laid down by the Hon'ble Supreme Court in PVG Raju, Rajah of Vizianagaram, where it was emphasized that only voluntary contributions are eligible for deduction under Section 80G. IV. Further, the PCIT rightly noted that allowing such a claim results in the State indirectly subsidizing a portion of the mandatory CSR expenditure, which defeats the very purpose of CSR legislation. The claim made by the assessee included institutions other than the PM CARES Fund and went beyond the scope of allowable deduction prescribed under clauses (iiihk) and (iiihl) of Section 80G(2), which clearly exclude CSR- related contributions to Swachh Bharat Kosh and Clean Ganga Fund. The PCIT also correctly pointed out that the assessment order passed by the AO was cryptic and did not reflect any detailed inquiry or reasoning on this crucial legal issue, thereby attracting the twin conditions under Section 263-viz., that the order is both erroneous and p....