TaxTMI 
TaxTMI 
2025 (12) TMI 1805
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....sessment proceedings, the Ld. Assessing Officer ("AO") found that the assessee had debited an amount of Rs. 8,28,36,334/- on account of Corporate Social Responsibility ("CSR") in its P & L Account and added back the said amount of Rs. 8,28,36,334/- to its income being inadmissible expenses as per the provisions of section 37 of the Act. However, the assessee claimed deduction of Rs. 9,49,88,101/- u/s 80G out of total deduction of Rs. 18,99,76,201/- (50% of Rs. 18,99,76,201/-). Accordingly, the Ld. AO issued show cause notice to the assessee to justify the claim of deduction u/s 80G of the Act. The assessee filed its reply before the Ld. AO contending that there is no restriction imposed on claiming deduction under 80G of the Act, even if the expenses have been incurred for the purposes of the CSR activity, provided the payment is made to eligible entities as listed in section 80G of the Act. The assessee has donation/CSR spend which is not an allowable business expense and hence the same has been disallowed suo-moto in the computation of income. The reply of the assessee was not found to be convincing by the Ld. AO. According to the Ld. AO there is no final....
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..... (vi). As the contributions made to an organization registered u/s 80G of the Act towards CSR activity in compliance with the Companies Act, 2013 benefit general public at large, it can be said that the object of such donations remains charitable and thus, such contributions qualify as donations for the purpose of Section 80G of the Act. 5.7 In support of its contentions, the appellant submitted copies of donation receipts, Section 80G certificates and other supporting documents. 5.8 The issue involved in the instant case is whether expenses made towards Corporate Social Responsibility (CSR) u/s 135(5) of the Companies Act, 2013 are eligible for deduction u/s 80G of the Act if such expenses are incurred towards contributions to eligible funds/institutions u/s 80G of the Act. Apart from the judgements relied upon by the appellant, this issue has been adjudicated in the following judgments: Cheil India (P.) Ltd. vs. DCIT [2024] 169 taxmann.com 507 (ITAT Delhi) L&T Finance Ltd. vs. DCIT [2024] 167 taxmann.com 503 (ITAT Kolkata) Interglobe Technology Quotient (P.) Ltd. vs. ACIT [2024] 163 taxmann.com 542 (ITAT Delhi) Erics....
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....e above ground of appeal during the course of appellate proceedings before the Hon'ble Tribunal." 5. The Ld. DR relied on the order of the Ld. AO. The Ld. DR admitted that the impugned issue is covered in favour of the assessee by various decisions of the Tribunals but the Department has not accepted this position and is in appeal before the Hon'ble High Court. 6. The Ld. AR, on the other hand, strongly supported the order of the Ld. CIT(A)/NFAC. Relying on the following decisions, he submitted that the impugned issue stands squarely covered in favour of the assessee and hence the order of the Ld. CIT(A)/NFAC should be upheld : i. Advik Hi Tech (P.) Ltd. v. Deputy Commissioner of Income-tax [2024] 168 taxmann.com 587 (Pune - Trib.); ii. Dana Anand India (P.) Ltd. v. Deputy Commissioner of Income-tax [2025] 174 taxmann.com 458 (Pune - Trib.); iii. Deputy Commissioner of Income-tax v. Gabriel India Ltd. [2025] 173 taxmann.com 219 (Mumbai - Trib.); iv. Deputy Commissioner of Income-tax v. Hinduja Global Solutions Ltd. [2025] 175 taxmann.com 411 (Mumbai - Trib.); v. Societe Generale Securities India (P.) Ltd. v. Principal Commissio....
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....he CIT(A)'s impugned detailed discussion allowing the assessee's sec. 80G deduction claim as under : "5. Decision I have carefully perused grounds of appeal, facts of the case, submissions made by the Appellant, assessment order and other evidences on records. 5.1. Ground 1 Vide this Ground, the Appellant has challenged action of the AO in making the disallowance of Rs. 4,55,13,521/- u/s 80G with respect to the donations forming part of Corporate Social Responsibility ("CSR"). In this regard, the Appellant has submitted that : * The amount paid to various funds is without any consideration in return and is in the nature of irrevocable contribution. Thus, such contributions partake the character of donation * Since, all other requisite conditions under section 80G have been satisfied and not in dispute, the Appellant is eligible for deduction under section 80G of the Act. The institution to whom the Donations are made are duly registered under section 80G(5) of the Act * The CSR expenditure is not allowed only for the purpose of section 37 for computing business income. If such expenditure is otherwise allowable....
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....xpenditure incurred under section 30 to 36 are claimed while computing income under the 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 dis....
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....contrary, the stand of the AO stands confirmed. The AO is directed to give effect by passing a speaking order. The Appellant is directed to furnish all relevant details online before the AO for verification. Ground is, thus, allowed for statistical purpose." 4. Mr. Murkunde vehemently argued in favour of the Revenue's pleadings that the Ld. CIT(A)'s herein has erred in law and on facts in accepting the assessee's sec. 80G deduction claim of Rs. 4,55,13,521/- qua "CSR expenditure" not exigible for relief u/sec. 37 of the Act. 5. The assessee has drawn strong support from Ld. CIT(A)'s above extracted detailed discussion. 6. We have given our thoughtful consideration to the foregoing rival stands and find no merit in the Revenue's instant sole substantive grievance. Suffice to say, the Revenue's only argument is that once the impugned expenditure is not allowable u/sec. 37 of the Act; the same is also not exigible to sec. 80G deduction as well. We find no substance in Revenue's instant sole substantive grievance as the Ld. CIT(A)'s detailed discussion has considered a catena of case law of various judicial forums (supra) already accepting th....
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....th the learned representatives next invited our attention to the CIT(A)'s impugned detailed discussion allowing the assessee's sec. 80G deduction claim as under : "5. Decision I have carefully perused grounds of appeal, facts of the case, submissions made by the Appellant, assessment order and other evidences on records. 5.1. Ground 1 Vide this Ground, the Appellant has challenged action of the AO in making the disallowance of Rs. 4,55,13,521/- u/s 80G with respect to the donations forming part of Corporate Social Responsibility ("CSR"). In this regard, the Appellant has submitted that : * The amount paid to various funds is without any consideration in return and is in the nature of irrevocable contribution. Thus, such contributions partake the character of donation * Since, all other requisite conditions under section 80G have been satisfied and not in dispute, the Appellant is eligible for deduction under section 80G of the Act. The institution to whom the Donations are made are duly registered under section 80G(5) of the Act * The CSR expenditure is not allowed only for the purpose of section 37 for computi....
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............................. 14. In our view, expenditure incurred under section 30 to 36 are claimed while computing income under the head, "Income form Business and Profession", where as 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....
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.... the claim of Rs. 4,55,13,521/- has to be allowed. If found contrary, the stand of the AO stands confirmed. The AO is directed to give effect by passing a speaking order. The Appellant is directed to furnish all relevant details online before the AO for verification. Ground is, thus, allowed for statistical purpose." 4. Mr. Murkunde vehemently argued in favour of the Revenue's pleadings that the Ld. CIT(A)'s herein has erred in law and on facts in accepting the assessee's sec. 80G deduction claim of Rs. 4,55,13,521/- qua "CSR expenditure" not exigible for relief u/sec. 37 of the Act. 5. The assessee has drawn strong support from Ld. CIT(A)'s above extracted detailed discussion. 6. We have given our thoughtful consideration to the foregoing rival stands and find no merit in the Revenue's instant sole substantive grievance. Suffice to say, the Revenue's only argument is that once the impugned expenditure is not allowable u/sec. 37 of the Act; the same is also not exigible to sec. 80G deduction as well. We find no substance in Revenue's instant sole substantive grievance as the Ld. CIT(A)'s detailed discussion has considered a catena of....