BHARAT SERUMS AND VACCINES LIMITED,MUMBAI vs. DEPUTY COMMISSIONER OF INCOME TAX - CIRCLE 15(1)(2), MUMBAI

Facts

The assessee company claimed deduction under Section 80G for CSR expenses. The PCIT initiated revision proceedings under Section 263, holding that CSR expenditure, being statutorily mandated, cannot be considered voluntary donations. The assessment order was set aside, directing the AO to re-examine the issue.

Held

The Tribunal held that the deduction u/s 80G on CSR expenditure is allowable if other conditions are met, as CSR expenditure, while mandatory, does not disqualify it from being considered a donation. The AO's acceptance of the deduction was a plausible view, and the PCIT's revision order was based on a change of opinion, failing the twin conditions for Section 263 jurisdiction.

Key Issues

Whether CSR expenditure, being a statutory obligation, can be claimed as a deduction under Section 80G and if the PCIT's revision order under Section 263 was sustainable when the AO had taken a plausible view.