TaxTMI 
TaxTMI 
2025 (9) TMI 1863
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....Income tax Act, 1961 (the Act) and setting aside the Assessment Order passed under section 143(3) of the Act read with section 144B of the Act without fulfilling the twin conditions precedent to invoke the provisions of section 263 of the Act i.e. that the order passed by Assessing Officer is erroneous and the order is prejudicial to the interest of the revenue, therefore the Revision Order passed under section 263 is illegal, null, bad in law and without jurisdiction and ought to be quashed. 2. Without prejudice to what has been stated above, the Principal Commissioner of Income Tax failed to appreciate the fact that the then Assessing Officer had conducted detailed inquiries in respect of appellant's claim of deduction under section 80G of the Act pursuant to donation made under Corporate Social Responsibility during scrutiny proceedings, therefore the Assessment Order passed is neither erroneous nor prejudicial to the interest of the revenue and consequentially the Revision Order passed under section 263 of the Act is bad in law, void ab initio and ought to be quashed. 3. Without prejudice to what has been stated above, the proceedings under section 263 of ....
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....itute a donation, it must satisfy the test of voluntariness. In the present case, the CSR payments made under Section 135 of the Companies Act, 2013, did not fulfill the essential criterion of voluntariness, rendering them ineligible for deduction under section 80G of the Act. He also placed reliance on the case of Agilent Technologies (International) (P.) Ltd. v. ACIT [(2024) 160 taxmann.com 238 (Delhi Trib.)]. He observed that the decision of the Assessing Officer in the instant case was erroneous on merits and the correct interpretation of law in accordance with the intention of the legislature. Therefore, the assessment order was set aside on the issue of claim of deduction under section 80G of the Act of CSR expense amounting to Rs. 20,31,500/-, The AO was directed to make an enquiry in this matter and reassess the income after giving an opportunity of being heard to the assessee. 5. Before us, the ld. DR has relied on the impugned order while ld.AR has contented that deduction was correctly made claiming that as the AO had specifically called for donation/80G receipts. He also placed reliance on the decision of coordinate benches of ITAT where similar claims are being allo....
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....rder prejudicial to the interest of the Revenue "unless the view taken by the Assessing Officer is unsustainable in law". Thus, in our considered view following Apex Court ruling the Revision orders passed by Ld. PCIT are not sustainable in law. Reference could also be made to the decision of the jurisdictional High Court in the case of CIT vs Gabriel India Ltd. (203 ITR 108) (Bom)(HC) with regard to assumption of jurisdiction by the PCIT in the para below: "12. From the aforesaid definitions it is clear that an order cannot be termed as erroneous unless it is not in accordance with law. If an Income-tax Officer acting in accordance with law makes a certain assessment, the same cannot be branded as erroneous by the Commissioner simply because, according to him, the order should have been written more elaborately. This section does not visualize a case of substitution of the judgment of the Commissioner for that of the Income-tax Officer, who passed the order unless the decisions is held to be erroneous. Cases may be visualized where the Income-tax Officer while making an assessment examines the accounts, makes enquiries, applies his mind to the facts and circumstances of t....
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....s not required to give detailed reason in respect of each and every item of deduction, etc. Therefore, one has to see from the record as to whether there was application of mind before allowing the expenditure in question as revenue expenditure. Learned counsel for the assessee is right in his submission that one has to keep in mind the distinction between "lack of inquiry" and "inadequate inquiry". If there was any inquiry, even inadequate, that would not by itself, give occasion to the Commissioner to pass orders under section 263 of the Act, merely because he has different opinion in the matter. It is only in cases of "lack of inquiry", that such a course of action would be open". 6.3 On merits of the case, whether the CSR expenditure is allowable u/s. 80G of the Act is also no more res integra by a catena of decisions by various Co-ordinate Benches of the Tribunal. The Mumbai Bench of the Tribunal in the case of Alubond Dacs India (P.) Ltd.in (2024) 163 taxmann. com 536 (Mum)considered the provisions of Companies Act and I.T. Act and held as follows: "11. We have heard the rival submissions and perused the materials available on record. The only morn question to be ....
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....eptions specified above which clearly mandates that the assessee is entitled to claim deduction for the donations contributed during the year under consideration u/s 80G of the Act. The decision relied upon by the ld. A.O in the case of PVG Raju (supra) is distinguishable on the facts of the present case where there is no requirement of proving the voluntariness of the donation contributed by the assessee for claiming deduction u/s. 80G of the Act. The amendment brought about by Finance Act, 2015 to section 80G of the Act which had inserted the sub clauses (iiihk) and (iiihl) to be the exception for qualifying a donation for claiming us. 80G of the Act could also be an evidencing factor to substantiate that CSR expenditures which falls under the nature specified in section 30 to 36 of the Act are an allowable deduction u/s 80G of the Act. 12. On the above observation, we deem it fit to hold that the assessee is entitled to deduction claimed u/s. 80G of the Act towards the CSR expenditure incurred by it. We, therefore, direct the ld. A.O, to allow the claim of the assessee subject to the condition that the assessee has satisfied the other requirements warranted u/s.80G of t....
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....g the total income of an assessee, there shall be deducted, in accordance with the provisions of this section, such sum paid by the assessee in the previous year as a donation. Further, section 80G(2) lists down the suns on which deduction shall be allowed to the assessee. Section 80G falls in Chapter VIA, which comes into play only after the gross total income has been computed by applying the computation provisions under various heads of income, including the Explanation 2 to section 37(1) of the Act. Thus, there is no correlation between suo-moto disallowance in section 37(1) and claim of deduction under section 80G of the Act. 7.5 As with regard to the reasoning that CSR expenditure are not voluntary but mandatory in nature due to penal consequences, we are of considered view that voluntary nature of donation is by nature of fact that it is not on the basis of any reciprocal promise of donee. The CSR expenditures are also without any reciprocal commitment from beneficiary being philanthropic in nature. The Act permits deduction of donations as per Section 80G of the Act, even though, assessee is not gaining any benefit out of any reciprocity from donee. Similar is the ....
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....on the issue of large amount of donation. No doubt that the assessing officer during the assessment examined the issue and disallowed donation under section 80G to Urvashi Foundations. Though, there is no discussion about the donation to other charitable trust or institution, however the assessing officer has sought details of donations to all about such charitable trust and institution. We find that the assessee also furnished all required details to the assessing officer. Thus, the assessing officer impliedly accepted the donation to such charitable trust or institution. We find that recently Co-ordinate Bench of Mumbai Tribunal in DCIT Vs Gabriel India (2025) 173 taxmann.com 219 (Mum) on similar issue where the assessee-company claimed deduction under section 80G at the rate of 50% of CSR expenses and furnished receipts of donees evidencing eligibility of deduction under section 80G allowed claim of such assessee. The tribunal while allowing relief to the assessee followed various other decisions of the different benches of the Tribunal. The relevant part of the decision if extracted below. "7. After giving a thoughtful consideration to the orders of the authorities bel....
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....American (India) Pvt. Ltd. (ITA No. 1762/Bang/2019) Allegis Services (India) Pvt. Ltd. (ITA No. 1693 /Bang/ 2019) Ld. Counsel further submitted that if the intention was to deny deduction of CSR expenses under section 80G, appropriate amendments on lines of section 37(1) should also have been made The Ruby Mills Limited under section 80G of the Act. In the absence of any such amendment, CSR expenses should not be disallowed under section 80G of the Act. 18. We have heard both the parties and perused the records. We find that ITAT, Bangalore Bench in the case of Goldman Sachs Services (P.) Ltd. (supra) has held that the other contributions made under section 135 (5) of the Companies Act are also eligible for deduction/s 80G of Ericsson India Global Services Pvt. Ltd. v. DCIT the Act subject to satisfying the requisite conditions prescribed for deduction u/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 u/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....