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Income Tax Appellate Tribunal, “G” BENCH, MUMBAI
Before: SHRI ABY T. VARKEY, JM & SHRI AMARJIT SINGH, AM
O R D E R
PER ABY T. VARKEY, JM:
This is an appeal preferred by the assessee against the order of the Ld. Commissioner of Income Tax-50, Mumbai dated 24.02.2023 for assessment year 2017-18.
The first ground of appeal
of the assessee is as under: - “1(a) The appellant submits that the learned Commissioner of Income-tax (Appeals) [(“CIT(A)”)] erred in not allowing the claim towards expenditure on account of gratuity representing amount actual paid to an approved gratuity fund of Rs.83,69,981/- representing employer's contribution. (b) The appellant submits that CIT(A) failed to appreciate that the aforesaid amount of Rs.83,69,981/- was paid on or before the due date for filing its return of income for Assessment Year 2017-18 to an approved gratuity fund Savita Oil Technologies Ltd and, accordingly, the said sum was allowable under section 43B of the Income-tax Act, 1961 (‘the Act”). (c) The appellant submits that CIT (A) erred in considering the provisions of section 40A(7) of the Act on a wrong understanding that the aforesaid amount of Rs.83,69,981/-, represents the amount of gratuity paid to employees. The appellant reiterates that the said amount represents amount contributed to approved gratuity fund on or before the due date of filing its return of income for Assessment Year 2017-18 and as such allowable under section 43B of the Act and ought to have been allowed as a deduction.”
3. Brief facts are that the assessee had filed original return of income on 31.10.2017 with a returned income of Rs.110,64,34,870/- which was subsequently revised on 30.03.2019 with a revised returned income of Rs.111,27,87,919/-. The AO framed assessment u/s 143(3) of the Income Tax Act, 1961 (hereinafter “the Act”) on 09.12.2019 determining the total income at Rs.125,81,98,990/- after making additions/disallowance on various issues like- * restricting the claim of deduction u/s 80IA of the Act on windmills to Rs.14,40,36,846/- as against Rs.28,86,33,063/- resulting in disallowance of Rs.14,45,96,217/- * treating the carbon credit receipt of Rs.8,14,857/- as revenue in nature * rejection of additional claims of (i) deduction u/s 80G of the Act of Rs.22,75,000/- and (ii) deduction of gratuity expenses of Rs.83,69,981/-.
Savita Oil Technologies Ltd 4. Aggrieved by the aforesaid action of the AO, the assessee preferred an appeal before the Ld. CIT(A) before whom the assessee submitted in respect to the claim of Rs.83,69,981/- (employer’s contribution of gratuity in approval fund) that the assessee did not made this claim in the original return filed by it. However, it raised additional claim before the AO which was not accepted by him by citing the decision of the Hon’ble Supreme Court in the case of Goetze (India) Ltd. Vs. CIT (2006) (284 ITR 323) wherein it was held by the Hon’ble Apex Court that the AO can entertain a new claim only if an assessee files a revised return of income. Therefore, he rejected the claim of the assessee. Before the Ld. CIT(A), the assessee filed copy of TAR (tax audited report) and submission, which shows that an amount of Rs.1,19,07,199/- was paid before the due date of furnishing the return of income u/s 139(1) of the Act by reflecting the nature of liability as “gratuity” in para 26(i)(B)(a) of the Act in the return of income (Refer page 74 of PB). The Ld. CIT(A) noted that appellant had made the claim for deduction of balance gratuity expenses of Rs.83,69,981/- by claiming it to be gratuity paid and contended before him that the same is part of the total expenditure of Rs.1,41,57,199/-, part of which is Rs.22,50,000/- which amount has been paid during the year under consideration and the balance of Rs.1,19,07,199/- has been paid before the date of filing of return hence the same is allowable u/s 43B of the Act. According to the Ld. CIT(A), the claim made by the assessee is legally untenable, since assessee’s claim of deduction was on account of payment of gratuity of Rs.83,69,981/- and not on account of either (i) employer’s contribution to the gratuity fund Savita Oil Technologies Ltd governed by the provisions of section 36(1)(v) r.w.s. section 43B of the Act or and (ii) provision made by the assessee for payment of gratuity to its employees governed by the provisions of section 40A(7) of the Act. Therefore, he declined to allow the claim of the assessee. Aggrieved by the aforesaid action of the Ld. CIT(A), the assessee is before us.
We have heard both the parties and perused the records. At the outset, the Ld. AR brought to our notice that the Ld. CIT(A) has not appreciated the fact that the assessee’s claim of deduction of Rs.83,69,981/- was allowable since it was employer’s contribution paid towards approved gratuity fund. Therefore, according to him, the Ld. CIT(A) misdirected himself to hold that the aforesaid sum of Rs.83,69,981/- was not allowable u/s 43B of the Act, whereas, the fact was that the assessee has already made payment on or before the due date for furnishing the return of income u/s 139(1) of the Act. The Ld. AR also drew our attention of page no. 74 of PB which was filed with return of income (Form 3CD), and brought to our notice that the assessee has shown under para no. 26(i)(B)(a) the amount paid of Rs.1,19,07,199 before the due date of furnishing the return of income u/s 139(1) of the Act wherein an amount of Rs.1,19,07,199/- under sub-heading “nature of liabilities” is reflected as gratuity. According to the Ld. AR, the assessee had no choice of correct description of the entry because it is drop-down menu (Pre-programmed soft-ware of department) and so the assessee had no other choice but to select from menu gratuity and thus not able to spell out/enter in that column that it Savita Oil Technologies Ltd was an approved gratuity fund. According to Ld. AR, due to this technical glitch, the deduction was disallowed. Thereafter, he drew our attention to page no. 9 of PB and brought to our notice that the profit for the year before taxation was to the tune of Rs.126 crores; and then he drew our attention the sub-heading “other comprehensive income” wherein an amount of Rs.83,69,981/- has been shown to have been deposited in the approved gratuity fund which can be seen from a perusal of note 35 placed at page no. 49 PB classified as “re- measurements of the defined benefit plans”. According to the Ld. AR, the following chart will demonstrate the deduction claimed by assessee which reads as under : - Particulars Amount Amount debited to Profit & Loss A/c 57,87,218 Amount debited to other Comprehensive Income A/c 83,69,981 (OCI) Total 1,41,57,199 Amount paid during the year 22,50,000 Amount paid before due date for filing of ROI 1,19,07,199 Total 1,41,57,199
Thus, according to Ld. AR, a perusal of the chart would re- concile the claim of deduction made by assessee. The Ld. AR also brought to our notice that the AO allowed similar claim for AY. 2019- 20, AY. 2020-21 & AY. 2021-22 by allowing similar claim of deduction to the tune of Rs.1,01,17,988/-, Rs.27,97,595 and Rs.90,01,492/- respectively in assessment framed u/s 143(3) of the Act after calling for specific details on this issue i.e. gratuity amount debited to other comprehensive income as noted (supra). In the light of the aforesaid facts, we have to examine whether assessee’s claim regarding deduction in respect of amount actually paid to approved Savita Oil Technologies Ltd gratuity fund of Rs.83,69,981/- representing the employer’s contribution is allowable or not u/s 40A(7) or section 36(1)(v) read with section 43B of the Act. It would gainful to have a look at the relevant provisions. Section 36(1)(v) of the Act reads as under: - Other deductions 36(i) The deductions provided for in the following clauses shall be allowed in respect of the matters dealt with therein, in computing the income referred to in section 28- (i) the amount of any premium paid in respect of insurance against risk of damage or destruction of stocks or stores used for the purposes of the business or profession; (ia) ……… (ib) ……… (iii) the amount of the interest paid in respect of capital borrowed for the purposes of the business or profession: (v) any sum paid by the assessee as an employer by way of contribution towards an approved gratuity fund created by him for the exclusive benefit of his employees under an irrevocable trust.”
Section 43B of the Act which reads as under: - Certain deductions to be only on actual payment. 43B. Notwithstanding anything contained in any other provision of this Act, a deduction otherwise allowable under this Act in respect of- (a) …….
Savita Oil Technologies Ltd (b) any sum payable by the assessee as an employer by way of contribution to any provident fund or superannuation fund or gratuity fund or any other fund for the welfare of employees, (or) (c) ……. (d) …… (f) any sum payable by the assessee as an employer in lieu of any leave at the credit of his employee, (or) (g) any sum payable by the assessee to the Indian Railways for the use of railway assets shall be allowed (irrespective of the previous year in which the liability to pay such sum was incurred by the assessee according to the method of accounting regularly employed by him) only in computing the income referred to in section 28 of that previous year in which such sum is actually paid by him. Provided that nothing contained in this section shall apply in relation to any applicable in his case for furnishing the return of income under sub-section (1) of section 139 in respect of the previous year in which the liability to pay such sum was incurred as aforesaid and the evidence of such payment is furnished by the assessee along with such return.
The assessee’s case is that an amount of Rs.83,69,981/- has been paid as gratuity before the due date in filing of return of income to approved gratuity fund accordingly the said amount was allowable u/s 36(1)(v) r.w.s 43B of the Act.
Savita Oil Technologies Ltd 9. Section 40A of the Act reads as under: - Expenses or payments not deductible in certain circumstances 40A. (1) The provisions of this section shall have effect notwithstanding anything to the contrary contained in any other provision of this Act relating to the computation of income under the head "profits and gains of business or profession". (2)(a) ………. (7)(a) Subject to the provisions of clause (b), no deduction shall be allowed in respect of any provision (whether called as such or by any other name) made by the assessee for the payment of gratuity to his employees on their retirement or on termination of their employment for any reason. (b) Nothing in clause (a) shall apply in relation to any provision made by the assessee for the purpose of payment of a sum by way of any contribution towards an approved gratuity fund, or for the purpose of payment of any gratuity, that has become payable during the previous year. Explanation- For the removal of doubts, it is hereby declared that where any provision made by the assessee for the payment of gratuity to his employees on their retirement or termination of their employment for any reason has been allowed as a deduction in computing the income of the assessee for any assessment year, any sum paid out of such provision by way of contribution towards an approved gratuity Savita Oil Technologies Ltd fund or by way of gratuity to any employee shall not be allowed as a deduction in computing the income of the assessee of the previous year in which the sum is so paid.
As per clause (b) of section 40A(7) of the Act allows deduction any provision made by assessee/employees for the purpose of payment of a sum by way of contribution towards and Approved Gratuity Fund. It is noted that assessee’s case is that it has made contribution of Rs.83,69,981/- towards approved gratuity fund and therefore prima- facie the claim of the assesse need to be allowed since there is no fetter u/s 40A(7) of the Act. However, the Ld. DR brought to our notice that no verification of the fact has been under-taken by AO as to whether the assessee has made the actual payment on or before the due date of filing of return of income as well as whether the assessee has made payment to the approved gratuity fund which need to be verified by the AO. We find force in the submission of Ld. DR and in the light of the discussion (supra), we set aside the impugned order of Ld. CIT(A) and restore this issue back to the file of AO for the limited purpose of verification whether Rs.83,69,981/- was paid to the approved gratuity fund on or before the due date of filing of return; and the AO after verification find the claim to be correct to allow it.
Savita Oil Technologies Ltd 11. Ground no. 2 is against the action of the Ld. CIT(A) disallowing deduction u/s 80G of the Act amounting to Rs.22,75,000/- on the ground that these are CSR expenditure.
Brief facts are that this claim was also not made by the assessee in the original return of income; and the assessee filed a letter during the assessment proceedings making this additional claim. The AO did not admit new claim citing the decision of the Hon’ble Supreme Court in the case of Goetze (India) Ltd. (supra). On appeal, the Ld. CIT(A) noted that during year assessee had spent Rs.46,10,000/- including an amount of donations of Rs.45,50,000/- towards Corporate Social Responsibility (CSR) which amount (Rs.46,10,000/-) was added back in the computation of income. However, the assessee made the claim for deduction u/s 80G of the Act and submitted copy of certificate u/s 80G of the Act of the donees. However, since the claim was made before the AO after time limit for filing of revised return, the assessee made the claim as well as filing the relevant details, summary of the list of the donations and copy of the list including the certificate of the donees to support its claim u/s 80G of the Act. The Ld. CIT(A) noted that the claim of Rs.45,50,000/- (in respect of claim of additional deduction of Rs.22,75,000/-) has been spent as part of the CSR activities. And therefore, according to him it cannot be allowed in term of Explanation-2 u/s 37(1) of the Act which stipulated as under: - “[Explanation 2,- For the removal of doubts, it is hereby declared that for the purposes of sub-section (1), any expenditure incurred by an assessee on the activities relating to Savita Oil Technologies Ltd 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.]
According to the Ld. CIT(A), the explanation has been inserted w.e.f. 01.04.2015, therefore, the deduction claimed cannot be allowed and rejected the claim. Aggrieved, the assessee is before us.
Before us, the Ld. AR submitted that this issue is no longer res- integra. According to him, the Explanation-2 to section 37(1) of the Act which denies deduction for CSR expenses by way of business expenditure is applicable only to the extent of computing business income under Chapter IV-D and it could not be extended or imported to CSR contribution which was otherwise eligible for deduction under Chapter VI and cited the following case laws, which are as under: - (i) M/s. Naik Seafoods Pvt. Ltd. Vs. PCIT (ITA. No.490/Mum/2021, order dated 26.11.2021 (T Mum) (ii) JMS Mining (P.) Ltd. PCIT (2021) 191 ITR (T) 80, order dated July 22, 2021) (Kol). (iii) DCIT Vs. Peerless General Finance & Investment & Co. Ltd. (2019) (112 taxmann.com 410, order dated December 5, 2019) (Kol) (iv) Allegis Services (India) Pvt. Ltd. Vs. ACIT (ITA. No. 1762/Bang/2019, order dated April, 29 2020) (Bang) (v) First American (India) Pvt. Ltd. V ACIT (ITA. No. 1762/Bag/2019, order dated April 29, 2020) (Bang) (vi) M/s. FNF India Pvt. Ltd. Vs. ACIT (133 taxmann.com 251, order dated January 5, 2021) (Bang) (vii) M/s. Goldman Sachs Services Pvt. Ltd. V JCIT (2020) (117 taxmann.com 535, order dated June 15, 2020)
Savita Oil Technologies Ltd (viii) Infinera India (P) Ltd. V JCIT (2022) (194 ITD 463, order dated February 23, 2022) (Bang) (ix) Sling Media (P.) Ltd. V DCIT (2022) (194 ITD 1, order dated November 30,2021) (Bang)
We note that similar issue had cropped up before Co-ordinate Bench of this Tribunal [Kolkata Bench in the case of M/s JMS Mining Pvt. Ltd. Vs. PCIT for AY. 2016-17] (2021) (130 taxmann.com 118) wherein the Tribunal has held as under: - “17. Coming next to the legality/correctness of the deduction allowed by the AO in respect of CSR/donation u/s. 80G of the Act, first of all, we agree with the Ld. CITDR that CSR expenses which are required to be mandatorily incurred by the assessee Company as per Section 135 of the Companies Act are not entitled to deduction u/s 37(1) of the Act for A.Y 2015-16 by virtue of the fetter placed by Explanation 2 to Section 37(1) of the Act which was inserted by the Finance Act vide no. 2.2014. The relevant provisions of Explanation 2 to Section 37(1) of the Act read as follows: "Explanation 2. -For the removal of doubts, it is hereby declared that for the purposes 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)27 shall not be deemed to be an expenditure incurred by the assessee for the purposes of the business or profession" From a plain reading of the above provision shows that, any expenditure incurred towards CSR activities as referred to in Section 135 of the Companies Act, 2013 shall not be allowed as ‘business expenditure’ and shall be deemed to have not been incurred for purpose of business. The embargo created by this Explanation 2 inserted in Section 37 of the Act by the Finance (No.2) Act, 2014 was to deny deduction for CSR expenses incurred by companies, as and by Savita Oil Technologies Ltd way of regular business expenditure while computing "Income under the head Business".
So, it can be clearly seen that this Explanation 2 to Section 37(1) of the Act which denies deduction for CSR expenses by way of business expenditure is applicable only to the extent of computing 'Business Income' under Chapter IV-D of the Act. The said Explanation according to us cannot be extended or imported to CSR contributions which is otherwise eligible for deduction under any other provision or Chapter, to say donations made to charitable trusts registered u/s 80G of the Act for the reasons cited infra.
In the facts of the present case, it is an admitted position that the donation of Rs.1.35 crores was disallowed and suo-moto added back by the assessee in terms of Explanation 2 to Section 37(1) while computing "Income under the head Business". However, according to assessee, since the said CSR contribution comprised of donation made to registered charitable trust, it was legally entitled to claim deduction under Section 80G of the Act to arrive at the "Total Income" in terms of Chapter VI of the Act, and AO has allowed it, which action of AO has been found fault by Ld PCIT, which issue need to be examined. For examining the same let us look in to the relevant provisions which we need to be taken in to consideration.
The provisions of Section 135(5) of the Companies Act, 2013 read as under: "The Board of every company referred to in sub-section (1), shall ensure that the company spends, in every financial year, at least two per cent. of the average net profits of the company made during the three immediately preceding financial years or where the company has not completed the period of three financial years since its incorporation, during such immediately preceding financial years, in pursuance of its Corporate Social Responsibility Policy:"
Savita Oil Technologies Ltd 21. Let us also look at section 80G of the Act (relevant portions) which reads as under: Section 80G : Deduction in respect of donation to certain funds, charitable institution, etc. (1) In computing the total income of an assessee, there shall be deducted in accordance with and subject to the provision of this section (i) ….. (ii) …… (2) The sum referred to in sub-section (i) should be the following namely – (a) Any sums paid by the assessee in the previous year as donations to – (i) ….. (ii) …… “(iiihk). The Swachh Bharat Kosh, set up by the Central Government, other than the sum spent by the assessee in pursuance of Corporate Social Responsibility under subsection (5) of Section 135 of the Companies Act, 2013 (18 of 2013); or (iiihl). The Clean Ganga Fund, set up by the Central Government, where such assessee is a resident and such sum is other than the sum spent by the assessee in pursuance of Corporate Social Responsibility under Sub-section (5) of Section 135 of the Companies Act, 2013) (18 of 2013).” (iv). Any other fund or any institution to which section applies; or (3) …………………. (4) ………………. (5) This Section applies to donations to any institution or fund referred to in Sub-clause (iv) of Clause (a) of Sub-section (2), only if it is established in India for a charitable purpose and if it fulfills the following condition namely: (i) ………. (a) …………. (b) …………… (c) ……………… (ii) ………………… Savita Oil Technologies Ltd (vi) in relation to donations made after the 31st day of March, 1992 , the institution or fund is for the time being approved by the PCIT or Commissioner in accordance with the rules 3 made in this behalf.
From a bare reading of the section 80G of the Act we note that deduction under this section has to be made in accordance with and subject to the provisions of this section i.e. section 80G of the Act. As per this section i.e. section 80G of the Act, an amount equal to fifty percent (50%) of the aggregate of the sums specified in sub-section 2 [refer sub-clause (iv) of Clause (a) of Sub-section 2 of section 80G of the Act read with section 80G (1) (ii)] which allows the donation given to any other Fund or any institution to which this section applies and if it satisfies the requirement of sub-section (5) of section 80G of the Act, then 50% of the donation is allowable expenditure [refer section 80G (1) (ii)]even if the assessee has included the expenditure as CSR Expenditure because there is no prohibition or restriction placed by the Parliament on such a donation even if shown as CSR expenditure. The reason for saying so is that in section 80G of the Act certain restrictions in respect of deduction in respect of two (2) donations are expressly seen in this Section. So the Parliament has expressed its intention clearly by bringing in restriction in respect of expenditure classified by an assessee company while claiming deduction u/s. 80G of the Act i.e. CSR expenditure related to Swachh Bharat Kosh and Clean Ganga Fund. So if an assessee makes some donation to these projects and include/classify it as CSR expenditure while claiming deduction u/s. 80G of the Act then it will be allowed only the amount that is other than the sums spent by the assessee in pursuance of CSR u/s. 135 of the Companies Act. In other words, if an assessee company spends only the mandatory expenditure of 2% of net profit for CSR activity, which includes the amount of donation to Swach Bharat Kosh & Clean Ganga Fund (iiihk) and (iiihi) of clause (a) of sub-section (2) of section 80G of the Act, then deduction u/s. 80G of the Act is not allowable, which can be illustrated by giving certain examples (infra). However, in a case scenario, wherein the Savita Oil Technologies Ltd assessee expends the mandatory expenditure and gives donation to these two projects i.e. over and above the mandatory CSR expenditure u/s. 135 of Companies Act, that sum donated to Swach Bharat Kosh & Clean Ganga Fund will be eligible for 100% deduction u/s. 80G of the Act [refer section 80G (1)(i) and subject to section 80G (4)]. However, such a restriction in respect of expenditure made by an assessee to any other fund or institution as referred to in sub clause (iv) of clause (a) of sub-section 2 of section 80G of the Act had not been placed by the Legislature. And if the Parliament desired, it could have been made such kind of restriction or any restriction like in the case of donation to Swach Bharat Kosh & Clean Ganga Fund. So the assertion of Ld. PCIT that AO could not have allowed deduction u/s 80G of the Act to an assessee on the CSR expenditure/donation to an institution u/s 80G(2)(a)(iv) which is enjoying certificate 80G(5)(vi) of the Act, is erroneous and therefore cannot be accepted. For this, we rely on the interpretation maxim “Expressio Unius Esl Exclusio Alterius” which is a Latin phrase that means “express mention of one thing excludes all others. This is one of the rules used in interpretation of Statutes. The phrase indicates that items not on the list are assumed not to be covered by the Statute. When something is mentioned expressly in a Statute, it leads to the presumption that the things not mentioned are excluded. This is an aid to the construction of Statutes. Applying the legal maxim 'expressio unius est exclusio alterius', it can be safely inferred that when the Legislature in particular has provided for only the above referred two specific exceptions in Section 80G, then it is the implied intent of the Legislature to permit deduction u/s 80G in respect of CSR contributions made to funds/organizations referred to in all other sub-clauses of Section 80G [other than (iiihk) and (iiihl)] of the Act. The above analysis made by us, can be cumulatively illustrated by the following examples for ease of understanding purpose only and should not be cited for making claim which should be made subject to the facts and law involved in each case and also subject to section 80G(4) of the Act:
Savita Oil Technologies Ltd Example: A company has reported eligible net profit u/s 135 of Companies Act, 2013 at Rs.100 crores. The minimum CSR contribution of 2% under Section 135(5) of the Act works out to be Rs. 2 crores. Situation 1 : The company has been spent the required minimum CSR contribution of Rs 2 crores towards construction of roads & schools in the vicinity of the backward area where the factory is located. Tax Treatment: The entire CSR expenditure of Rs.2 crores is to be disallowed and added back in terms of Explanation 2 to Section 37(1) of the Act. Situation 2 : The company has contributed Rs.3 crores to Swach Bharat Kosh. Tax Treatment: The entire CSR expenditure of Rs.3 crores is to be disallowed and added back in terms of Explanation 2 to Section 37(1) of the Act. In terms of Section 135(5) of the Act read with Section 80G(iiihk) only the excess sum paid amounting to Rs. 1 crores [ 3 crores - 2% of 100 crores] can be availed as deduction u/s 80G of the Act. Situation 3 : The company has contributed Rs.l crore to Swach Bharat Kosh and Rs.1 crore to any other charitable trust registered u/s 80G(5) of the Act. Tax Treatment: The entire CSR expenditure of Rs.2 crores is to be disallowed and added back in terms of Explanation 2 to Section 37(1) of the Act. In terms of Section 135(5) of the Act read with Section 80G(iiihk) the donation of Rs.l crores made to Swach Bharat Kosh is not eligible for deduction u/s 80G of the Act. The company can claim deduction of fifty percent of the donation of Rs. 1 crores paid to any other registered charitable trust u/s 80G(2)(iv) read with Section 80G(1)(ii) of the Act. Situation 4 : The company has contributed Rs.1 crore to Prime Minister's National Relief Fund and Rs. 1 crore to any other charitable trust registered u/s 80G(5) of the Act.
Savita Oil Technologies Ltd Tax Treatment: The entire CSR expenditure of Rs.2 crores is to be disallowed and added back in terms of Explanation 2 to Section 37(1) of the Act. The company can claim deduction for hundred percent of the donation of Rs. 1 crores paid to Prime Minister's National Relief Fund u/s 80G(2)(iiia) read with Section 80G(1)(i) of the Act. The company claim deduction to the extent of fifty percent of the donation of Rs. 1 crores paid to any other registered charitable trust u/s 80G(2)(iv) read with Section 80G(1)(ii) of the Act.
As discussed supra, we concur with the contention of the assessee that since Parliament intended certain restrictions to only CSR expenditure in respect of two donations included by an assessee as CSR expenditure i.e. [Swachh Bharat Kosh and Clean Ganga Fund] has impliedly not made any prohibition/restriction in respect of claim of CSR expenses in other cases if it is otherwise eligible under Section 80G of the Act. In this context we find that the assessee has made donation of Rs. 1.25 crores on 20.01.2016 by RTGS dated 19.01.2016 through UCO Bank which is evident from page 18 of PB which is received by Shree Charity Trust which was 80G(5)(vi) certificate of the Department dated 15.01.2009 placed at page 17 of PB. The assessee has also made payment of Rs. 10 Lakhs to Pt. Jashraj Music Academy Trust which is found placed at page 22 & 23 and the approval u/s 80G (5)(vi) of the Act in respect of Pt. Jashraj Music Academy Trust is found placed at page 19 of PB dated 30.03.2012 given by Director of Income Tax (Exemption). Therefore, since the assessee satisfies the condition u/s. 80G of the Act of the donees, the assessee’s claim for deduction of CSR expenses/contribution u/s 80G of the Act was allowed after enquiry by the AO. Thus we are of the opinion that the action of the AO allowing the claim u/s. 80G of the Act is a plausible view and is in line with the ratio of the decision of Tribunal cited (supra). Therefore, we find that the Ld. PCIT has not been able to make out a case that on this issue raised by him, the AO's order is erroneous as well as prejudicial to the revenue. So the Savita Oil Technologies Ltd jurisdictional fact as well as law is absent for invoking revisional jurisdiction. Therefore, the usurpation of jurisdiction by Ld. PCIT u/s 263 of the Act is bad in law and therefore need to be quashed and we order accordingly.”
In the light of the aforesaid decision of this Tribunal (supra), we find the issue to be covered by the ratio of the decision (supra) and it applies mutatis mutandis to the claim raised by the assessee. However, since the facts have not been verified by the AO (whether donees enjoyed certificate u/s 80G of the Act, the amount of donation etc need to be verified), the AO to do so and after the ratio of the aforesaid judicial precedent (supra) is applied to the facts of the case, to allow the same in accordance to law.
In the result, the appeal of the assessee is allowed for statistical purposes. Order pronounced in the open court on this 25/10/2023.