2024 (11) TMI 1589

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....hereinafter referred to as the 'CIT(A)'] whereby the Ld. CIT(A) had disposed off the appeal preferred by the Assessee against the Assessment Order, dated 29/09/2022, passed under Section 143(3) read with Section 144B of the Income Tax Act, 1961 [hereinafter referred to as 'the Act'] for the Assessment Year 2020-2021. 2. The Appellant has raised following grounds of appeal : "Ground No.1: On the facts and in the circumstances of the case and in law, the learned CIT(A) erred by not allowing the eligible deduction of donation amounting to INR.67,15,972/- in accordance with section 80G of the Income Tax Act, 1961 (the Act). Ground No.2: The learned CIT(A) has erred in facts and law by holding that the dona....

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....t profits of the preceding three years on CSR activity. Thus the required-to- spend amount is perceived by the legislature to be mandatory in nature and not voluntary. The Assessee could also have very well made payment to an entity not covered by Section 80G or it could have directly incurred the expenditure for the specified purpose, but it chose to spend only in those areas where it could claim deduction u/s 80G of the Act. Therefore, the sum paid by the Assessee cannot be considered as a 'donation' for the purpose of Section 80G of the Act as the element of charity is missing in it. The main characteristic of charity is that it is purely voluntary and there is no legal obligation to make that contribution. The amounts s....

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.... (Addition: Rs. 67,15.972/-)" 4. Being aggrieved, the Assessee carried the issue in appeal before the CIT(A). However, the CIT(A) agreed with the Assessing Officer and declined to grant any relief to the Assessee on this issue. 5. Being aggrieved, the Assessee had preferred the present appeal. Both the grounds raised by the Assessee are directed against the order of CIT(A) confirming the disallowance made by Assessing Officer under Section 80G of the Act. 6. We have heard both the sides, perused the material on record and have taken into consideration the written synopsis filed in support of the oral submissions. 7. The primary contention advance on behalf of the Assessee that apart from the Explanation to 2 to Section 37(1) ....

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....r provided any reasons for the conclusion arrived; and nor did it take into consideration other decision of the co-ordinate bench of the Tribunal which wherein this issue was decided in favour of the Assessee. It was further submitted that the Circular issued by Ministry of Corporate Affairs was irrelevant for the reason that the same was not binding upon the Assessee. It was further contended that while making donations an assessee may be guided by other motives in addition to philanthropic considerations, however, the same would not disentitle such assessee from claiming deduction under Section 80G of the Act. The charitable organizations had received donation which was categorized as CSR Expenditure without any consideration, and for tha....

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....of CSR Expenses includes implementation of CSR projects through 'Implementing Agencies' registered under Section 12A & 80G of the Act. Answer to FAQ at Sl. No. 3.10 of the Circular clearly provides that amount spent towards CSR Expenses cannot be claimed as 'business expenditure'. Further, Answer to FAQ at Sl. No. 3.11 of the Circular specifically provides that no specific tax exemptions have been extended to CSR expenditure. However, in our view, the answers to the aforesaid FAQs do not indicate any intention on the part of the legislature to bar an assessee from claiming deduction Section 80G of the Act in case the same is otherwise available in respect of CSR Expenses. We find merit in the contention advance on behalf of the Assessee tha....

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....ganization which were eligible for deduction under Section 80G of the Act would not cease to be eligible for such deduction merely on account of the fact that the Assessee chooses to include the same in the category of CSR Expenditure unless there is a specific provision in the Act which so provides. Identical view has been taken by the Co-ordinate benches of the Tribunal in a number of cases cited on behalf of the Assessee including the following- (a) Societe Generale Securities India P. Ltd. Vs. PCIT [204 ITD 796] (b) Interglobe Technology Quotient P. Ltd. Vs. ACIT [163 taxmann.com 542] (c) SBI DFHI Ltd. Vs. ACIT for A.Y. 2018-19 in ITA No. 1431/Mum/2023 dated 27/06/2023. 11. Thus, adopting the view taken by the Co-ordinate Bench of th....