TaxTMI 
TaxTMI 
2026 (9) TMI 1527
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....9;) by Hon. Pr. Commissioner of Income Tax-8, Mumbai ('Pr. CIT') is bad in law. The proceedings were initiated u/s 263 of the Act on account of deduction claimed u/s 80G of the Act of CSR expenditure incurred. The impugned order fails to satisfy the statutory preconditions for revision and is liable to be quashed. 2. The learned Pr. CIT has erred in law and on facts of the case in invoking jurisdiction u/s 263 of the Income Tax Act, 1961, and setting aside the assessment order u/s 143(3) r.wis 144B of the Act dated August 29, 2023. The assumption of jurisdiction is invalid, as the foundational conditions for invocation of Section 263 are not satisfied. 2.1 The assessment order is neither erroneous nor prejudicial to the interests of the Revenue, having been passed after due consideration of material available on record, including computation of income, audited financial statements and tax audit report. The invocation of jurisdiction under Section 263 of the Act merely on account of absence of specific discussion on CSR expenditure and deduction under section 80G is unsustainable, as non-discussion does not imply lack of enquiry. 2.2 The order u/s ....
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....the assessee on 02.03.2026. In response the assessee filed a reply before the Ld. PCIT and contended that Coordinate Bench of the Tribunal in various cases has allowed deduction u/s 80G in respect of CSR expenses if the otherwise same meet the eligibility criteria of section 80G of the Act. The Ld. Counsel further submitted that the parliament has specifically excluded the sum spent under the CSR on 'Swatch Bharat kosh' and 'Clean Ganga fund' from the ambit of section 80G of the Act. But in respect of other CSR expenses no such exclusion has been mentioned. 6. The assessee referred to the various decisions relied upon in support of the contention that CSR expenses incurred are eligible for deduction u/s 80G. But the Ld. PCIT was not convinced with the contention and he held the order of the AO as erroneous insofar as prejudicial to the interest of the Revenue mainly for the reason that no enquiry was conducted by the AO on this issue. The relevant observation of the Ld. PCIT is reproduced as under:- "5.1 I have gone through the assessment order and seen the submissions of the assessee. On perusal of the assessment records, it is seen that return of income for the Financ....
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....reproduced hereunder: "[Explanation 2.-For the removal of doubts, it is hereby declared that for the purpose of sub-section (1), any expenditure incurred by an assessee on the activities relating to corporate social responsibility referred to in section 135 of the Companies Act, 2013 (18 of 2013) shall not be deemed to be an expenditure incurred by the assessee for the purposes of the business or profession.]" 7. We have heard the rival submissions and perused the material available on record. The controversy before us is whether the assessment order allowing deduction under section 80G in respect of donations forming part of CSR expenditure could validly be revised under section 263 of the Act. The ld PCIT has proceeded on the premise that the Assessing Officer ought not to have allowed deduction under section 80G in respect of CSR expenditure as such expenditure, being mandatory under section 135 of the Companies Act, 2013, is not eligible for deduction. In our considered opinion, the very premise adopted in the revisional order is contrary to the consistent view taken by the Coordinate Benches of the Tribunal in Val Organics Pvt. Ltd. v. DCIT (ITA No. 2473/Mum/2025) ....
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....NF India Private Limited v. ACIT [(2021) 85 ITR (T) 18 (Bang.)] and the Kolkata Bench in JMS Mining Private Limited v. PCIT [(2021) 136 taxmann.com 118 (Kol-Trib.)] have upheld the admissibility of such deduction. Conversely, the Delhi Bench of the Tribunal in Agilent Technologies (International) Pvt. Ltd. v. ACIT [2024] 160 taxmann.com 238 (Del. Trib.) has taken a contrary view and disallowed the claim. Particular significance attaches to the decision of the Kolkata Bench in JMS Mining Private Limited v. PCIT (supra), which arose in the context of revisional proceedings under section 263 of the Act. In that case, the Tribunal held that the Assessing Officer's decision to allow deduction under section 80G in respect of CSR expenditure constituted a plausible and legally sustainable view, and consequently, the revisional order passed under section 263 of the Act was quashed. 4.2 In the present case also, having regard to the existence of divergent judicial opinion and the fact that the Assessing Officer adopted one such plausible view, it cannot be said that the assessment order suffered from an error which was prejudicial to the interests of the Revenue. In this connection....