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Facts
The assessee filed its return declaring income of Rs.140,20,60,888/-. The AO completed assessment under Section 143(3) but disallowed a deduction of Rs.82,00,000/- under Section 80G. Subsequently, the AO passed a rectification order under Section 154 allowing the deduction.
Held
The Tribunal held that the CIT(A) should have allowed withdrawal of the appeal as the cause of action did not survive after the rectification order. The Tribunal also found that the deduction under Section 80G on donation made out of CSR Fund is allowable.
Key Issues
Whether the CIT(A) erred in not acknowledging a subsequent rectification order and deciding the appeal on merit? Whether deduction under Section 80G on donation made out of CSR Fund is allowable?
Sections Cited
143(3), 80G, 154
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Income Tax Appellate Tribunal, DELHI BENCH ‘C’: NEW DELHI
Before: SHRI SATBEER SINGH GODARA & SHRI AVDHESH KUMAR MISHRA
ORDER
PER AVDHESH KUMAR MISHRA, AM
This appeal of the assessee for Assessment Year (‘AY’) 2016-17 is directed against the order dated 13.12.2024 of the Commissioner of Income Tax (Appeals)-26, New Delhi [‘CIT(A)’].
The relevant facts giving rise to this appeal are that the assessee filed its Income Tax Return (‘ITR’) of the relevant year declaring income of Rs.140,20,60,888/-. The case was scrutinized and the Ld. Assessing Officer (‘AO’) completed the assessment vide order dated 28.12.2019 under section 143(3) of the Income Tax Act, 1961 (‘Act’). In the body of assessment order, Delhi Duty Services P. Ltd. there was no discussion about the disallowance of claim of deduction of Rs.82,00,000/- under section 80G of the Act. However, in the Computation of income sheet attached with the aforesaid assessment order, the Ld. AO did not allow the claim of deduction of Rs.82,00,000/- under section 80G of the Act. Dissatisfied with the assessment order, the assessee filed not only an appeal before the Ld. CIT(A) but also a rectification application under section 154 of the Act before the Ld. AO. Subsequently, the Ld. AO passed a Rectification Order dated 26.08.2020 under section 154 of the Act allowing the claim of deduction of Rs.82,00,000/- under section 80G of the Act. The appellant assessee filed detailed submission before the Ld. CIT(A) and also a copy of the said Rectification Order dated 26.08.2020 under section 154 of the Act. However, the Ld. CIT(A) did not take any cognizance of Rectification Order dated 26.08.2020 under section 154 of the Act and decided the appeal on merit after holding that his power is co terminus with that of the AO. The Ld. CIT(A) dismissed the appeal distinguishing various case laws relied upon by the assessee. Hence, this appeal is before us.
The dispute before us is that whether the deduction under section 80G of the Act on donation made out of CSR Fund is allowable.
At the outset, Sh. Ankit B. Agrawal, Ld. Authorized Representative of the assessee, submitted that the assessee’s grievance got redressed by the Ld. AO vide order under section 154 of the Act. However, the Ld. CIT(A) revived it later on vide impugned order. It was contended that when the said Delhi Duty Services P. Ltd. assessment order got merged in the order dated 26.08.2020 under section 154 of the Act, the Ld. CIT(A) would have allowed withdrawal of the appeal as cause of action did not survive after the order dated 26.08.2020 under section 154 of the Act rather than passing the impugned order. The Ld. AR placed reliance on number of case laws. Few of such case laws are Interglobe Technology Quotient Private Ltd. (ITA No. 95/Del./2024, (Delhi Trib.), Sikka Ports and Terminals Ltd [2025] 173 taxmann.com 366 (Mumbai Trib.), L & T Finance Ltd. [2024] 167 taxmann.com 503 (Kolkata Trib.), AT & T Global Network Services India Pvt. Ltd. (ITA No. 1576/Del/2022) (SA No.425/Del/2024), Credit Suisse Services (India) private Limited (ITA. No.44/Pun/2024), Godfrey Phillips India Ltd. (ITA No. 1218/Mum/2023), Infinera India (P.) Ltd. [2022] 137 taxmann.com 197 (Bangalore Trib.), Sling Media (P) Ltd. 194 ITD 1 (bang. Trib.), JMS Mining (P) Ltd. 130 taxmann.com 118 (Kol. Trib.), Power Mech Projects Ltd. 156 taxmann.com 575 (Hyd. Trib.), so on.
On the other hand, the Ld. Sr. DR, placing emphasis on the finding of the Ld. CIT(A), prayed for dismissal of the appeal.
We have heard both parties and have perused the material available on the record. We find force in the arguments/submissions/contentions of the Ld. AR. We have considered the entire facts of the case. We find force in the contention of the Ld. AR that the assessment order got merged in the order dated 26.08.2020 under section 154 of the Act; therefore, the Ld. CIT(A)
Delhi Duty Services P. Ltd. would have allowed withdrawal of the appeal as cause of action did not survive after the order dated 26.08.2020 under section 154 of the Act. Further, on merit, keeping in view various case laws cited above, we are of the considered view that the deduction under section 80G of the Act on donation made out of CSR Fund is allowable. Thus, the impugned order is set aside. The appellant assessee gets consequential relief.
In the result, the appeal of the assessee is allowed.