MSCI SERVICES PRIVATE LIMITED,MUMBAI vs. THE PRINCIPAL COMMISSIONER OF INCOME-TAX, MUMBAI - 4, MAHARASHTRA, MUMBAI

आयकरअपीलीयअिधकरण�ायपीठमुंबईम�। IN THE INCOME TAX APPELLATE TRIBUNAL “D” BENCH, MUMBAI BEFORE SHRICHALLA NAGENDRA PRASAD, JM & SHRI ARUN KHODPIA, AM I.T.A. No.3792/Mum/2026 (Assessment Year: 2020-21) MSCI Services Private Limited The Principal Commissioner of 12th Floor, Nesco IT Building Income-Tax, Mumbai-4 Room No.629, 6th floor, Aayakar No.3, Nesco IT Park, Nesco Vs. Complex Goregaon East S.O, Bhavan, Maharishi Karve Road, Mumbai-400063 Mumbai-400020 PAN: AADCM8594K Assessee-अपीलाथ� / Appellant Revenue-��थ�/ Respondent :

Assessee by : Shri Paras S. Savla & Karan Jain & Shreyas Sardesai : Shri Amit Kumar Singh, Sr. DR Revenue by : 23.07.2026 Date of Hearing Date of Pronouncement : 29.07.2026

O R D E R Per Arun Khodpia, AM: This appeal is preferred by the assessee, directed against the order of the Principal Commissioner of Income Tax PCIT, Mumbai-4 [in short, “the Ld. PCIT”], dated 29.01.2026 for the Assessment Year (AY) 2020-21, arises out of the assessment order under section 143(3) of the Income Tax Act, 1961 [in short, “the Act”] dated 27.09.2023, passed by Assessment Unit, Income Tax Department [in short, “the Ld. AO”].The grounds of appeal raised by the assessee are as under:

ITA No. 3792/Mum/2026 MSCI Services Private Limited “Validity of revision proceedings under section 263 of the Act 1. On facts and circumstances of the case and in law, the learned PCIT erred in passing an order under section 263 of the Act without appreciating that the assessment order dated 27 September 2023 passed by the learned Assessing Officer ('AO') under section 143(3) read with section 144B of the Act was neither erroneous nor prejudicial to the interest of the revenue and thus, the order under section 263 of the Act is without jurisdiction and bad-in-law. Deduction under section 80G of the Act 2. On facts and circumstances of the case and in law, the learned PCIT erred in holding that amount of Rs. 1,30,00,000 claimed by the Appellant as deduction under section 80G of the Act is not eligible for deduction on the ground that the same were contributions towards Corporate Social Responsibility ("CSR").” 2. As per facts on records, the assessee-company is engaged in the field of information technology and software development enabled services which primarily included software maintenance and migration, software product development, data processing, marketing and sales support services etc. ITR for the year under consideration was filed on 24th April, 2020, declaring total income at Rs.1,01,76,79,730/-. The case of assessee was subsequently selected for scrutiny under CASS for the following reasons:  “Purchases shown in the ITR is less than the Invoice value of Import shown in the Export Import Data.  High risk International Transactions (Entity reported in CbCR data) (TP Risk Parameter).  Large payments made under section194J to persons who have not filed return of income in comparison to total payments on TAN corresponding to PAN in Form 26Qfor section code194J.  Deduction from Total Income (Chapter VI-A) (Business ITR). 3. In terms of aforesaid scrutiny assessment proceedings, statutory notices u/s 143(2) and 142(1) were issued which were responded by the assessee. Finally, the assessment was completed making therein a disallowance of education and higher education cess for Rs.86,81,156/-. Subsequently, the case of assessee has

ITA No. 3792/Mum/2026 MSCI Services Private Limited been taken up by the Ld. PCIT u/s 263 of the Act to invoke revisionary provisions, raising an issue that the assessee had claimed an amount of Rs.1,30,00,000/- towards Corporate Social Responsibility (CSR) expenditurein its P & L account under the head ‘other expenses’. However, the same amount was utilized to contribution to Prime Minister’s National Relief Fund and, therefore a simultaneous claim of deduction u/s 80G was made. The question was that the 80G is not allowable in respect of CSR. After deliberations, Ld. PCIT had concluded the revisionary proceedings, observing as under: “4.7 In common parlance, donations are made without any expectation of reciprocal return or benefits in lieu of the same whereas the expenses made under CSR head are for the benefits in the form of mandatory compliance as per section 135 of the Companies Act. Thus, voluntariness is lacking in the expenses made under CSR head. In the decision by Supreme Court in the case of Commissioner of Expenditure Tax vs. PVG Raju Raja of Vizianagaram (supra), the Hon'ble Apex Court held that for any payment to constitute as donation, it must satisfy the test of voluntariness. The assessee in the current case incurred expenses under CSR head as part of mandatory compliance of the provisions of CompaniesAct and this certainly lacked voluntariness character. Thus, it is apparent that the A.O had no occasion to examine the issue of CSR expenses vis-a-vis section 80G donations and to this extent, it can be held that the assessment order suffers from infirmity being erroneous and also prejudicial to the interest of revenue for allowing ineligible claim of deduction of Rs.1,30,00,000/- u/s. 80G of the Act. Hence, the assessment order dated 27/09/2023 is hereby set aside to the file of the AO for limited purpose to enquire the claim of Section 80G deduction vis-à- vis CSR expenses and modify the assessment order accordingly.” 4. With aforesaid observation, the Ld. PCIT, held that the assessment order suffers from infirmity and is also prejudicial to the interest of Revenue, as an ineligible claim of assessee was allowed by the Ld. AO and has directed the Ld. AO to modify the assessment order to that extent.

ITA No. 3792/Mum/2026 MSCI Services Private Limited 6. At the outset, it is submitted by the Ld. AR that the issue herein is no more res integra,as it is held by Hon’ble Courts that the expenditure incurred towards Corporate Social Responsibility (CSR) by making donations to institutions which are eligible to accept donations u/s 80G, if such institutions are voluntary and not mandated by section 135 of Companies Act, 2013,the assessee is eligible for deduction u/s 80G. Reliance was placed on the decision of Jurisdictional ITAT in the case of ACIT V. Sikka Ports and Terminals Ltd. [2025] 173 taxman.com 366 (Mumbai – Trib.). Ld. AR also placed his reliance on the decisions of ITAT Kolkata in the case of JMS Mining (P.) Ltd. v. PCIT [2021] 130 taxmann.com 118 (Kolkata – Trib.)and Societe Generale Securities India (P.) Ltd. v. PCIT [2023] 157 taxman.com 533 (Mumbai – Trib.).

B. Arunkumar Capital & Credit Services (P.) [2025] 177 taxmann.com 167 (Mumbai - Ltd. v. PCIT Trib.) Bajaj Electricals Limited v. PCIT ITA No. 1302/Mum/2021 [2025] 177 taxmann.com 673 (Mumbai - Hemani Industries Ltd. v. PCIT Trib.) TTEC India Customer Solutions (P.) Ltd. v. [2025] 176 taxmann.com 289 (Ahmedabad PCIT - Trib.) RPG Life Sciences Limited v. PCIT ITA No. 2769/Mum/2025

ITA No. 3792/Mum/2026 MSCI Services Private Limited

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ITA No. 3792/Mum/2026 MSCI Services Private Limited therefor, following the aforesaid ratio of law cannot be considered to be erroneous or prejudicial to the interest of Revenue.

ITA No. 3792/Mum/2026 MSCI Services Private Limited 11. We find that since in the present case, it appears that the Ld. AO had not made any enquiry qua this issue. However since the donation was made to an eligible fund which is not restricted by the provisions of section 80G(2)(a)(iiihk) and (iiihl) in pursuance to sub-section (5) of section 135 of Companies Act, 2013, therefore the action of Ld. AO cannot be considered to be prejudicial to the interest of Revenue as the assessee is entitled to claim benefit of 80G, which ought to be allowed to the assessee by incurring the CSR funds to make contribution to ‘Prime Minister’s National Relief Fund’. Under such circumstances, the revisionary proceedings initiated by invoke the provisions of section 263 of the Act are held to be bad in law and deserve to be set aside. We direct accordingly.

Order pronounced in the open court on 29-07-2026.

Sd/- Sd/- (ARUN KHODPIA) (CHALLA NAGENDRA PRASAD) JUDICIAL MEMBER ACCOUNTANT MEMBER

Mumbai, Dated : 29-07-2026. Ankit K., Sr. PS

ITA No. 3792/Mum/2026 MSCI Services Private Limited

Copy of the Order forwarded to : 1. The Appellant 2. The Respondent 3. DR, ITAT, Mumbai 4. Guard File 5. CIT

BY ORDER,

(Dy./Asstt. Registrar) ITAT, Mumbai