IMPERIAL AUTO INDUSTRIES LIMITED, NEHRU PLACE, SOUTH DELHI vs. DEPUTY COMMISSIONER OF INCOME TAX CIRCLE 10(1) DELHI, DELHI

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ITA 2353/DEL/2025Status: DisposedITAT Delhi13 May 2026AY 2020-215 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 allowing 80G deduction for CSR contributions is not erroneous and prejudicial to the revenue, citing several judicial precedents. Therefore, the PCIT's order under Section 263 was quashed.

What were the facts?

The assessee claimed deduction under Section 80G for CSR contributions. The Principal Commissioner of Income Tax (PCIT) invoked Section 263, holding the assessment order allowing this deduction as erroneous and prejudicial to revenue.

What were the issues?

Whether CSR contributions are eligible for deduction under Section 80G and if allowing such deduction makes an assessment order erroneous and prejudicial to revenue.

Which sections of the Income-tax Act were involved?

Section 80G,Section 263,Section 143(3),Section 144B

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, “A” BENCH, DELHI

Before: SHRI ANUBHAV SHARMA & SHRI MANISH AGARWAL

For Appellant: Adv. Sh. SakshamAagarwal, CA
Hearing: 25.02.2026Pronounced: 13.05.2026

PER ANUBHAV SHARMA, JM:

This appeal is preferred by the Assessee against the order u/s 263 of the

Income Tax Act 1961, dated 07.03.2025 of the Principal Commissioner of

P a g e | 2 ITA No.2353/Del/2025 Imperial Auto Industries Ltd. (AY: 2020-21) Income Tax-4, Delhi (hereinafter referred as Ld. First Appellate Authority or

in short Ld. ‘Revisionary Authority’) DIN & Order No :

ITBA/REV/F/REV5/2024-25/1074196914(1) arising out of the assessment

order dated 21.09.2022 u/s 143(3) read with Section 144B of the Income Tax

Act, 1961 (hereinafter referred to as ‘the Act’) passed by the Assessment

Unit, Income Tax Department, for AY: 2020-21.

2.

Heard and perused the records. The assessee’s return was selected for

complete scrutiny and the assessment was completed u/s 143(3) on

21.09.2022 and thereafter impugned order u/s 263 of the Act was passed on

07.03.2025 wherein ld. PCIT has held that as per the audit objections and

assessment records, the assessee’s claim for deduction u/s 80G was allowed

by the assessing officer which ought not have been allowed as the said

donation was towards on CSR contributions and the same was not thereby

voluntary contribution. Accordingly, the impugned order u/s 263 of the Act

has been challenged before us by raising following grounds:

“1. That having regard to facts & circumstances of the case, Ld. Pr. CIT has erred in law and on facts in assuming jurisdiction u/s 263 qua assessment order passed u/s 143(3) r.w.s. 144B dated 21.09.2022 and has further erred in holding that the said assessment order is erroneous and prejudicial to the interest of revenue.

P a g e | 3 ITA No.2353/Del/2025 Imperial Auto Industries Ltd. (AY: 2020-21)

2.

That in any view of the matter and in any case, the impugned order passed u/s 263 by Ld. Pr. CIT is bad in law and against the facts of the case. 3. That having regard to facts & circumstances of the case, Ld. Pr. CIT has erred in law and on facts in alleging excess allowance of deduction of Rs. 62,09,725/- u/s 80G of the Act and that too by recording incorrect facts and findings and merely on surmises and conjectures. 4. That having regard to facts & circumstances of the case, Ld. Pr. CIT has erred in law and on facts in setting aside the assessment order on the issue of CSR/80G deductions for fresh adjudication and that too without observing the principles of natural justice and merely on surmises and conjectures. 5. That in any view of the matter and in any case, the impugned order passed u/s 263 by Ld. Pr. CIT is barred by limitation, void-ab-initio, bad in law and against the facts of the case and in gross violation of principles of natural justice. 6. That the appellant craves the leave to add, amend, modify, delete any of the grounds of appeal before or at the time of hearing and all the above grounds are without prejudice to each other.”

3.

We find that as with regard to the scope of Section 263 of the Act to

inquire into an assessment order alleging the same to be erroneous so far as

prejudicial to the interest of revenue is concerned on account of allowing

deduction u/s 80G of the Act for contributions on CSR expenditure the

Coordinate Bench in the case Pashupati Capital Services Pvt. Ltd. Vs. PCIT,

ITA No. 2985/Del/2025 (Mum-Trib)vide order dated 31.07.2025 has

examined the issue and has taken into consideration the Tribunal decisions

wherein 80G deduction against CSR contributions have been allowed to hold

P a g e | 4 ITA No.2353/Del/2025 Imperial Auto Industries Ltd. (AY: 2020-21) that assessment order cannot be said to be erroneous so far as prejudicial to

the interest of revenue.

4.

Similar has been the view in the case of Dalal And Broacha Stock

Broking Pvt. Ltd. Vs. PCIT-4, ITA No. 2718/Mum/2025, dated 23.06.2025

(Mum-Trib)&The Rubi Mills Limited Vs. PCIT, ITA No. 3035/Del/2025,

dated 27.06.2025 (Mum-Trib).

5.

Since, the issue under consideration in proceedings u/s 263 of the Act is

settled to be in favour of the assessee by catena of judicial decisions

including JMS Mining (P) Ltd. vs PCIT (2021), 130 taxmann.com 118 (Kolkata-

trib.); Allegis Services (India) Pvt. Ltd. vs ACIT, in ITA No. 1693/Bang/2019, for

AY 2016- 17, on 29.04.2020.; M/s Goldman Sachs Services Private Ltd. vs JCIT,

in ITA No. 2355/Bang/2019, for AY 2015-16, on 15.06.2020; M/s FNF India

Private Ltd. vs. ACIT, in ITA No. 1565/Bang/2019, for AY 2016-17, on

05.01.2021. (CLC 119-125); Interglobe Technology Quotient (P.) Ltd. vs. ACIT,

in ITA No.95/DEL/2024; Teradata India Pvt. Ltd vs. DCIT, in ITA No. 1248 &

2337 (Delhi ITAT) 2024.; Honda Motorcycle and Scooter vs. ACIT, in lTA No.

1523/Del/ 2022. Ericsson India Global Services Private Ltd vs. DCIT, in ITA

No.1150/DEL/2024.; Optum Global Solutions vs. DCIT, in ITA No. 145 & 482

(Hyderabad ITAT) 2022.; First American India Pvt. Ltd. vs. ACIT, in ITA No.

P a g e | 5 ITA No.2353/Del/2025 Imperial Auto Industries Ltd. (AY: 2020-21) 1792/DEL/2019, we are inclined to hold that the relevant assessment order

cannot be said to be erroneous so far prejudicial to the interest of the revenue

and thus we sustain the ground and appeal of assessee is allowed. The

impugned order u/s 263 of the Act stands quashed.

Order pronounced in the open court on 13.05.2026

Sd/- Sd/- (Manish Agarwal) (Anubhav Sharma) ACCOUNTANT MEMBER JUDICIAL MEMBER Dated 13.05.2026 Rohit, Sr. PS

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