OMNICOM MEDIA GROUP INDIA PRIVATE LIMITED,MUMBAI vs. DCIT 8(2)(1), MUMBAI

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ITA 3132/MUM/2026Status: DisposedITAT Mumbai13 August 2026AY 2020-20219 pages

In favour of the assessee: the assessee's appeal was allowed. From the AI summary of this appeal.

AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that CSR expenditure, while not deductible as business expenditure under Section 37, can be eligible for deduction under Section 80G if the donee institutions are approved and other conditions are met. The disallowance by lower authorities was set aside.

What were the facts?

The assessee claimed a deduction under Section 80G for donations made from CSR funds. The Assessing Officer and CIT(A) disallowed this deduction, holding that CSR expenditure cannot be considered a donation for Section 80G purposes.

What were the issues?

Whether donations made from Corporate Social Responsibility (CSR) funds are eligible for deduction under Section 80G of the Income Tax Act, 1961.

Which sections of the Income-tax Act were involved?

Section 80G,Section 37(1)

AI-generated summary — verify with the full judgment below

Before: SHRI NARENDER KUMAR CHOUDHRY & SHRI ARUN KHODPIA

For Appellant: Ms. Aarati
For Respondent: Shri V.S. Mahajan (Sr. DR)
Hearing: 10.06.2026Pronounced: 13.08.2026

PER ARUN KHODPIA(A.M):

1.

The captioned appeal is preferred by the assessee against the order under Section 250 of the Income Tax Act, 1961, passed by the Learned Commissioner of Income-tax (Appeals)/National Faceless Appeal Centre, Delhi [hereinafter referred to as “CIT(A)”]dated 30.01.2026 for the Assessment

P a g e | 2 A.Y. 2020-21 Year [A.Y.] 2020-21, arises out of order under section 143(3) dated 29.09.2023 passed by the Assessment Unit, Income Tax department.

2.

The grounds of appeal raised by the assessee are as under:

1.

In the facts and circumstances of the case and in law, the Hon'ble Commissioner of Income Tax (Appeals) erred in: 1.1.Upholding the disallowance of deduction of Rs. 19,16,350/- claimed under section 80G of the Income-tax Act, 1961, in respect of donations made to eligible institutions, merely on the ground that the said contributions formed part of Corporate Social Responsibility (CSR) expenditure.

1.2.

Holding that CSR expenditure, being mandatory in nature, cannot qualify as "donation" for the purposes of section 80G, despite there being no such restriction or condition prescribed under section 80G of the Act, except in respect of donations to Swachh Bharat Kosh and Clean Ganga Fund.

1.3.

Importing the restriction contained in Explanation 2 to section 37(1) into section 80G, ignoring the settled legal position that Explanation 2 to section 37 applies only for computation of business income under Chapter IV-D and cannot be extended to deny deductions expressly allowable under Chapter VI-A.

1.4.

Failing to appreciate that the Legislature has consciously restricted CSR-related deduction under section 80G only in respect of Swachh Bharat Kosh and Clean Ganga Fund, and that, applying the principle of expressiounius est exclusioalterius, all other CSR

P a g e | 3 A.Y. 2020-21 donations to eligible institutions continue to be allowable under section 80G.

1.5.

Disregarding binding judicial precedents of various coordinate benches of the Hon'ble Tribunal, including decisions of the Hon'ble Mumbai Bench, which has consistently held that CSR contributions (other than those specifically excluded) are eligible for deduction under section 80G.

1.6.

Erroneously holding that voluntariness is an implicit requirement under section 80G, despite the Act not defining the term "donation" so as to exclude statutory or mandatory payments, and despite fulfillment of all statutory conditions prescribed under section 80G.

1.7.

Ignoring the CBDT Circular No. 1/2015 and the Explanatory Memorandum to the Finance Bill, which clarify that CSR expenditure is not intended to be denied deduction under other provisions of the Act where otherwise eligible, including section 80G.

1.8.

Sustaining the disallowance which results in double taxation / double disallowance, by first denying deduction of CSR expenditure under section 37 and thereafter again denying deduction under section 80G, contrary to legislative intent.

2.

The above grounds of appeal are distinct and separate and without prejudice to each other.

3.

It is humbly prayed that the reliefs as prayed for hereinabove and/or such other reliefs as may be justified by the facts and circumstances of the case and as may meet the ends of justice should be granted.

3.

Brief facts of the case are,that the assessee company is engaged in the business ofMedia, planning, buying and implementing media activities on behalf of their client. The P a g e | 4 A.Y. 2020-21 company has filed its return on23.01.2021 declaring total income of Rs. 27,00,30,570/-.The case of assessee thereafter was selected for scrutiny. Accordingly, statutory notice was issued and certain queries were raised, which were responded by the assessee.

4.

During the assessment, a particular issue has been raised by the Ld. AO that the assessee has utilised its corporate social responsibilities (CSR) funds of Rs. 26,32,600/- for granting donations to certain foundations/Samiti/Trust/PM Care etc.to the extent ofRs. 19,16,350 and has claimed deduction under section 80G. The AO observed that the deductions claimed under section 80G using the fundsout if corporate social responsibilityis not allowableas per the provision ofExplanation 2 of Section 37 of the IncomeTax Act.

5.

Accordingly, an addition of Rs. 19,16,350 was made to the income of the assessee. The assesseecarried the matter before the Ld. CIT(A), who withidentical view similar to that of P a g e | 5 A.Y. 2020-21 the AO had, dismissed the appeal of the assessee, with the following observations: -

4.

9 In light of the preceding, I am of the considered view that the claim of deduction of Rs 19,16,350/- made u/s 80G of the Act is not admissible under the provisions of Section 80G itself on standalone basis, even without invoking the analogy of prohibition under Section 37. 6. The assessee being aggrieved with the aforesaid findings of the Ld. CIT(A) has filed the present appeal before us.

7.

At the outset, the Ld. Counsel of the assessee has submitted that there is no bar on making donations out of the CSR fund except certain funds specified in sub clauses of section 80G, which are specifically, demarcated under the provisions ofthe Act.The Ld. AR has placed his reliance on the Assistant decision of ITAT [2026] 185 taxmann.com 49 (Mumbai-Trib), wherein, the Tribunal after discussing the issue atlengthhas held as under:

P a g e | 6 A.Y. 2020-21 5.4 We have examined the rival submissions and the material placed on record. The issue is no longer res integra. The statutory embargo introduced by Explanation 2 to section 37(1) denies deduction of CSR expenditure only as a business expenditure. However, there is no corresponding prohibition under Chapter VI-A, including section 80G, save and except specific exclusions expressly provided by the Legislature. It is trite law that where the Legislature intends to deny a benefit, it does so expressly. In the absence of any explicit bar under section 80G, a donation otherwise satisfying the prescribed conditions cannot be denied deduction merely because it also qualifies as CSR expenditure. The distinction between disallowability under section 37(1) and eligibility under section 80G must be maintained, as both provisions operate in distinct fields. The consistent view of various coordinate benches of the Tribunal, including decisions relied upon by the learned CIT(A), supports the proposition that CSR expenditure, though not allowable as business expenditure, may still qualify for deduction under section 80G, subject to fulfillment of statutory conditions. Denial of such deduction would result in unintended double disallowance, which is not the object of the law. In the present case, it is not disputed that the donee institutions are duly approved under section 80G and the payments have been made through proper banking channels. Once these foundational conditions are satisfied, the claim cannot be rejected solely on the ground that the expenditure also falls within the ambit of CSR.” Similarly in the case of Jewelex India Private Limited Vs. DCIT, ITAT Mumbai [2026] 182 taxmann.com 499 (Mumbai- Trib.) has held as under. “We have heard both the parties and perused the records. We find that ITAT, Bangalore Bench in the case of Goldman Sachs Services (P.) Ltd. (supra) has held that the other contributions made under section 135 (5) of the Companies Act are also eligible for deduction/s 80G of Ericsson India Global Services Pvt. Ltd. v. DCIT the Act subject tosatisfying the requisite conditions prescribed for deduction u/s 80G of the Act. For this purpose, the issue is remanded to the file of AO to examine the same whether the payments satisfy the claim of donation u/s 80G of the Act. We

P a g e | 7 A.Y. 2020-21 find that the case law is fully applicable to the facts of the case. There is no restriction in the Act that expenditure when disallowed for CSR cannot be considered u/s 80G of the Act. Hence, we remit the issue to the file of AO to verify whether these payments were qualified as donations u/s 80G of the Act or not, if they qualify as donation u/s 80G of the Act then the requisite amount deserves to be allowed.

8.

Before us, it is the specific contention of learned Counsel of the assessee that the institutes to whom the assessee has donated the CRS fund are registered under section 80G of the Act. Keeping in view the submissions of the assessee as well as the ratio laid down in the judicial precedents cited before us, we direct the Assessing Officer to allow assessee's claim of deduction under section 80G of the Act, subject to, factual verification of assessee's claim that the donee institutions are registered under section 80G of the Act and other conditions of section 80G of the Act are fulfilled. Ground is allowed for statistical purposes.

7.

In view of the aforesaid submissions, it is prayed that, while the assessee has made the donations in Trusts / institutions, which are not restricted by the provisions of section 80G of the Act. Therefore, the CSR funds applied by the assessee in donating under section 80G shall be allowed, and the claim of the assessee cannot be denied.

8.

Per contra, learned DR vehemently supported the order of the Ld. CIT.

P a g e | 8 A.Y. 2020-21

9.

We have considered the rival submissions, perused the material available on record and case-lawsrelied upon by the assessee. Admittedly, the issue herein is no more res-integra which is decided by the various coordinate benches of the Tribunals that fund set-aside for the purpose of CSR activities are first not allowable as a deduction in the computation of income as per provisions of section 37 of the Act, which in the present case the assessee had added suo moto, however, such funds can be utilised for the purpose and the assessee would be eligible for deduction under Section 80G, subject to certain pre- conditions enumerated in the section. We accordingly, set aside the matter to the file of AO for factual examination regarding fulfilment of the pre-conditions of 80G, and accordingly allow the claim of assessee upon such compliances.

10.

Needless to say, the assessee is directed to furnish the necessary information before the AO, which may be already before him but just for the sake of assistance such information shall be furnished again in case the assessing officer desires so.

P a g e | 9 A.Y. 2020-21

11.

In the result, the appeal of the assessee is allowed in above terms.

Order pronounced in the open court on 13/08/2026. (NARENDER KUMAR CHOUDHRY) ACCOUNTANT MEMBER

Place: मुंबई/Mumbai िदनांक /Date 13.08.2026 Lubhna Shaikh / Steno

आदेश की "ितिलिप अ"ेिषत/Copy of the Order forwarded to : 1. अपीलाथ" / The Appellant

2.

""थ" / The Respondent. आयकर आयु" / CIT 3. िवभागीय "ितिनिध, आयकर अपीलीय अिधकरण DR, ITAT,

4.

Mumbai 5. गाड" फाईल / Guard file. स"ािपत "ित //// आदेशानुसार/ BY ORDER,

उप/सहायक पंजीकार (Dy./Asstt.

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