TaxTMI 
TaxTMI 
2025 (9) TMI 1308
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.... ld. CIT(A) as well as the ld. AO has erred in not appreciating the fact that the donation was given to PM Cares Fund and jurisdictional decisions of the Hon'ble ITAT in respect of allowance of CSR expenses as deduction u/s 80G. 3. The appellant craves leave to add, amend, alter or delete the said ground of appeal." 3. The brief facts of the case are that the assessee company is engaged in the business of manufacture and sale of industrial gases. The assessee company filed its return of income for the assessment year 2020-21 on 30.12.2020 declaring total income of Rs. 63,79,50,730/-. Subsequently, the case of the assessee company was selected for scrutiny assessment under the e-Assessment Scheme, 2021 on the issue of "deduction from total income under Chapter-VIA". Thereafter, notices u/s 143(2) as well as 142(1) of the Act were issued from time to time and the assessee had filed its E-submission electronically. 3.1 The AO on perusal of the Profit & Loss account and computation of total income and details submitted by the assessee, found that the assessee has debited an amount of Rs. 1,00,00,000/- towards Corporate Social Responsibility ("CSR") expenditure in profit ....
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....t of total income u/s 37 of the Act while computing the taxable income. The contention of the AO is that the assessee has claimed the donation both under CSR and u/s 80G of the Act and it is not a voluntary donation but a legal obligation. 10.1 In the similar facts and circumstances, the coordinate bench of this Tribunal in the case of M/s. Peak XV Partners Advisors Pvt. Ltd., Bangalore in ITA No.2045 & 2046/Bang/2024 vide order dated 3.3.2025 held as under: "5.1 As can be seen above, the existing approval u/s 80G(5)(vi) of the Act expiring on or after 1st October, 2009 shall be deemed to have been extended in perpetuity unless specifically withdrawn. Further, any new approval obtained u/s 80G(5) of the Act on or after 1.10.2009 would be a onetime approval, which would be valid till it is withdrawn. Therefore, in view of the above circular, we are of the opinion that this ground of the ld. CIT(A)/NFAC is not tenable. 5.2 Further, we take a note of the fact that section 37(1) of the Act pertains solely to the computation of income from business or profession and its scope is confined to allowing or disallowing expenditure incurred for business purposes. On the o....
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....) of the Act provide that deduction for any expenditure, which is not mentioned specifically in section 30 to section 36 of the Act, shall be allowed if the same is incurred wholly and exclusively for the purposes of carrying on business or profession. As the CSR expenditure (being an application of income) is not incurred for the purposes of carrying on business, such expenditure cannot be allowed under the existing provisions of section 37 of the Income-tax Act. Therefore, in order to provide certainty on this issue, it is proposed to clarify that for the purposes of section 37(1) any expenditure incurred by an assessee on the activities relating to corporate social responsibility referred to in section 135 of the Companies Act, 2013 shall not be deemed to have been incurred for the purpose of business and, hence, shall not be allowed as deduction under section 37. However, the CSR expenditure which is of the nature described in section 30 to section 36 of the Act shall be allowed deduction under those sections subject to fulfilment of conditions, if any, specified therein." 13. From the above it is clear that under Income tax Act, certain provisions explicitly ....
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....he head, 'Income form Business and Profession", whereas monies spent under section 80G are claimed while computing "Total Taxable income" in the hands of assessee. The point of claim under these provisions are different. 15. Further, intention of legislature is very clear and unambiguous, since expenditure incurred under section 30 to 36 are excluded from Explanation 2 to section 37(1) of the Act, they are specifically excluded in clarification issued. There is no restriction on an expenditure being claimed under above sections to be exempt, as long as it satisfies necessary conditions under section 30 to 36 of the Act, for computing income under the head, "Income from Business and Profession". 16. For claiming benefit under section 80G, deductions are considered at the stage of computing "Total taxable income". Even if any payments under section 80G forms part of CSR payments (keeping in mind ineligible deduction expressly provided u/s. 80G), the same would 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 a....