The Tax Publishers2021 TaxPub(DT) 0169 (Bang-Trib)


Section 80G

Where assessee had incurred certain expenses on account of CSR as per provisions of the Companies Act, 2013 and on this payment which was made to eligible entity (charitable institution) as listed in section 80G of the IT Act, assessee was entitled for grant of deduction under section 80G to the extent of its eligibility, because assessee cannot be denied the benefit of claim under Chapter VI-A.

Deduction under section 80G - Expenses incurred on CSR activity - Allowability of charitable donations under section 80G vs. Disallowance of the same under CSR (Corporate Social Responsibility) spend (Explanation 2 to section 37(1)) -

Assessee had made some donations which were eligible for CSR spend bereft of which they claimed the same under section 80G. It was the case of the revenue that CSR spend is a disallowable expenditure due to Explanation 2 to section 37(1) which was upheld by the first appellate authority. Held: The spheres of Explanation 2 to section 37(1) and section 80G operate in two different zones. Explanation 2 to section 37(1) restricts expenditure from sections 30 to 36 while section 80G is a deduction from total income based on certain conditions. It is also noticed that under section 80G(2) (iiihk) and (iiihl) there are certain spends which are ineligible under section 80G which are CSR in nature. As long as the spend of the assessee did not fall in this, they were eligible for the 80G deduction. Therefore, assessee was entitled to deduction under section 80G.

Applied:Allegis Services (India) Pvt. Ltd. v. ACIT [ITA No. 1693/Bang/2019 Order, dated 29-4-2020] : 2020 TaxPub(DT) 2149 (Bang-Trib)


FAVOUR : In assessee's favour

A.Y. : 2016-17



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