TaxTMI 
TaxTMI 
2026 (8) TMI 359
X X X X Extracts X X X X
X X X X Extracts X X X X
....ting corporate social responsibility ("CSR") expenditure under the provisions of Company's Act. 4. That being the case, we note that the instant issue of allowability of the assessee's impugned section 80G deduction is no more res integra in light of Interglobe Technology Quotient (P.) Ltd. Vs. ACIT (2024) 207 ITD 360 (Del.- Trib.) accepting the same against the department as under: "4. Heard and perused the material before us. During the course of hearing nothing was submitted with regard to ground no. 1. As with regard to ground No. 2 to 2.3, the relevant facts are that during the year under consideration, the appellant claimed deduction under section 80G of the Act in respect of the following donations made by it till 30th July, 2020: S. No. Date of Donation Party Amount donated Deduction allowable u/s. 80G (50%) Whether part of CSR expense 1. 15.04.2019 Interglobe Foundation PAN- ACCI2495N 55,00,000 27,50,000 Yes 2. 27.08.2019 55,00,000 27,50,000 Yes 3. 18.03.2020 20,00,000 1,00,000 Yes 4. 17.06.2020 1,10,00,000 55,00,000 No 5. 20.12.2019 Uththaan PAN- AAJU0183G 13,1....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... of claiming deduction under section 80G of the Act, the donations made as part of CSR expenditure were considered. It was submitted that law in this regard is now quite settled. Ld. Counsel submitted that disallowance of deduction claimed under section 80G of the Act will result in double disallowance, which is not provided for by the Legislature. He has placed reliance on Bangalore Bench of the Tribunal judgment in the case of Allegis services (India) Pvt. Ltd. vs ACIT Bangalore: ITA No. 1693/Bang/2019. Relevant extracts of the decision, as relied by him, are reproduced hereunder: "14. In our view, expenditure incurred under section 30 to 36 are claimed while computing income under the head 'Income from Business or Profession", whereas monies spend under section 80G are claimed while computing "Total Taxable Income" in the hands of appellant. 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....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... for deduction of CSR expenses w/s. 80G of the Income Tax Act, 1961. But the assessing officer has rejected the assesses claim without verifying the nature of contributions and observed that it is not a donation, and was not spent voluntarily for the eligibility of claim u/s. 80G of the Act but due to legal obligation prescribed w/s. 135 r.w. Schedule VII of Companies Act, 2013. We find that the A. O has allowed education u/s. 80G of the Act in respect of contribution made to PM Relief Fund which is not disputed. We are of the opinion that the A.O. has not made his observations clear that no CSR expenses are eligible for deduction m/s. 80G of the Act. We consider it appropriate to refer to the Clauses (link) & (d) of sub section 2 of Section 80G of the Act which are read as under: "(link) the Swachh Bharat Kosh, set up by the Central Government, other than the sum spent by the appellant in pursuance of Corporate Social Responsibility under sub-section (3) of Section 135 of the Companies Act, 2013 (18 of 2013): or (iihl) the Clean Ganga Fund, set up by the Central Government, where such appellant is a resident and such sum is other than the sum spent by the appella....
X X X X Extracts X X X X
X X X X Extracts X X X X
....G of the Act ITA No. 1523/Del./2022 subject to satisfying the requisite conditions prescribed for deduction w/s 80G of the Act. For this purpose, the issue is remanded to the file of AO to examine the same whether the payments satisfy the claim of donation's 80G of the Act. We find that the case law is fully applicable to the facts of the case. There is no restriction in the Act that expenditure when disallowed for CSR cannot be considered w/s 80G of the Act, Hence, we remit the issue to the file of AO to verify whether these payments were qualified as donations u/s. 80G of the Act or not, if they qualify as donation u/s. 80G of the Act then the requisite amount deserves to be allowed." (emphasis supplied) 6.3 Ld. Counsel also relied judgment in case of Teradata India Pvt Ltd vs. DCIT: ITA 1248/Del/2022, the co-ordinate Delhi Bench of the Tribunal, where in the bench allowed the deduction claimed under section 80G of the Act in respect of donations made to eligible institutions as part of CSR Expenditure, holding as under; "16. It is not in dispute that contributions made by the assessee are made to eligible institutions which are enjoying exemption u....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ing thereby the donations made towards Swatch Bharath Kosh and Clean Ganga Fund spent as apart of CSR are not qualified for deduction under section 80G of the Act. Out of so many entries under section 80G(2) of the Act, only donations in respect of two entries are restricted if such payments were towards the discharge of the CSR. The Legislature could have put a similar embargo in respect of the other entries also, but such a restriction is conspicuously absent for other entries. The irresistible conclusion that would flow from it is that it is not the legislative intention to bar the payments covered by section 80G(2) of the Act which were made pursuant to the CSR, and other than covered by section 80G(2)(iiihk) and (iiihl) of the Act. As stated above, clue can be had from the restrictions by way of section 80G(2) (iiihk) and (iiihl) of the Act. 15. This aspect has been dealt with by successive Co- ordinate Benches in the cases relied upon by the assessee. While elaborately discussing this issue in the case of JMS Mining (P.) Ltd .... 16. We are in agreement with such observations and findings of the Co-ordinate Bench of the Tribunal and while respectfully follow....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... last three years on activities pertaining to Corporate Social Responsibility (CSR). The expenditure on CSR, could be by way of expenditure on projects directly undertaken by said companies, such as setting up and running schools, social business projects, etc. Such expenditure would include expenditure otherwise falling for consideration under section 37(1) of the Act. On the other hand, companies, instead of undertaking or participating directly in a project, may choose to give donations to institutions that are engaged in undertaking such projects, which is also a recognized way of compliance of CSR obligation. 7.2 The assessing officer and CIT(A) have relied upon General Circular 14/2021 dated 25.08.2021 issued by MCA and "Explanatory Notes to the provisions of the Finance (No. 2) Act, 2014" to hold that donations made as part of CSR expenditure are not allowable as deduction. The foundation of their reasoning being that the donation is voluntary in nature, while CSR expenditures are under statutory obligations. 7.3 As we take notice of the fact that Parliament legislated that CSR expenses would not be eligible for deduction as business expenditure under secti....