2026 (2) TMI 708

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....44B of the Income Tax Act. 2. The brief facts of the case are that the assessee had filed its return of income for the Assessment Year (A.Y.) 2020-21 on 29.01.2021 declaring total income of Rs. 160,81,00,830/-. The case was selected for scrutiny under CASS. In the course of assessment, the AO noticed that the assessee had claimed deduction of Rs. 29,10,000/- u/s 80G of the Act, in respect of CSR expense. According to the AO, the CSR expense was not eligible for deduction under the provision of the Act. Accordingly, the deduction claimed u/s 80G in respect of CSR expense was disallowed. Further, the AO had also made the addition of Rs. 15,42,24,483/- u/s 14A read with Rule 8D of IT Rules. The assessment was completed u/s. 143(3) on 29.02.....

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....ule 8D was made by the assessee. In the course of assessment, the AO had made addition of Rs. 15,42,27,483/- being 1% of annual average of investment towards administrative expense, in accordance with the provision of Rule 8D of the IT Rules. He submitted that the Ld. CIT(A) was not correct in deleting the addition made by the AO. 6. Per contra Shri Dhrunal Bhatt, the Ld. A.R of the assessee submitted that the assessee did not earn any exempt income during the year. Under the circumstances, no disallowance u/s. 14A r.w. Rule 8D was called for. In this regard He relied upon the following decisions. i. Chettinand Logistics Pvt Ltd [2018] 95 taxmann.com250 (SC) ii. Adani Green Technology Ltd. in ITA No. 446/Ahd/2025 (ITAT)....

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....see did not earn any exempt income during the year. The provision of Section 14A of the Act was amended and an Explanation was inserted w.e.f. 01.04.2022, as per which the disallowance under Section 14A of the Act can be made, even if no exempt income is earned during the year. The Hon'ble Guwahati High Court in the case of Williamson Financial Services Limited vs. CIT (supra) has held that the Explanation inserted to Section 14A of the Act vide Finance Act, 2022 w.e.f 01.04.2022 is prospective in nature and cannot be presumed to have retrospective effect and applied to assessment years prior to 01.04.2022. Respectively following the judgement of Hon'ble Guwahati High Court, we are of the considered opinion that the Ld. CIT(A) had rightly d....

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....ation to these two funds, there is no restriction in respect of donation made to any other fund. In the present case, the donation was not made to Swachh Bharat Kosh and Clean Ganga Fund. Therefore, there was no bar on the assessee to claim the deduction under Section 80G of the Act. The Co-ordinate Bench of Kolkata Tribunal in the case of JMS Mining Pvt. Ltd. vs. DCIT, (130 taxmann.com 118) has held that Explanation-2 to section 37(1) of the Act which denies deduction for CSR expenses by way of business expenditure is applicable only to the extent of computing 'Business Income' under Chapter IV-D of the Act. The said Explanation cannot be extended or imported to CSR contributions which is otherwise eligible for deduction under any ....