MINEX METALLURGICAL CO LIMITED,MUMBAI vs. DCIT, CIRCLE 2(2)(1), MUMBAI

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

Facts of the case, in brief, are that the assessee has e-filed return of income for the AY 2020-21 on 05.02.2021 declaring total income of Rs.17,67,74,570/-. The case was selected for scrutiny and notices were issued to the assessee. The assessee had claimed Rs.51,62,601/- as expenses on CSR. The assessee had also claimed deduction of Rs.27,60,000/- u/s 80G for expenditure made on CSR. The reply of the assessee is reproduced at para 4.2 in the assessment order. The assessee had relied on the following decisions that deduction u/s 80G is allowable in such circumstances: (i) M/s. Naik Seafoods Pvt. Ltd. vs Pr. CIT in ITA No. 490/MUM/2021 for AY2016-17, (ii) Reliance Home Finance Ltd. vs Pr. CIT in ITA Nos. 815 & 814/M/2021 dated 24.11.2021, (iii) Infinera India (P.) Ltd. vs JCIT (2022) 137 taxmann.com 197(Banglore-Trib.) and (iv) FNF India (P.) Ltd. vs ACIT (2021) 133 taxmann.com 251 (Banglore - Trib.). However, the AO did not accept the explanation of the assessee and relying upon the decision of the Hon’ble Supreme Court in case of Ramnath & Co. vs. CIT dated 05.06.2020 disallowed Rs.15,80,000/- u/s 80G of the Act , being 50% of Rs.31,60,000/- of the impugned amount. 4. Aggrieved by the order of AO, the assessee filed appeal before the CIT(A). The CIT(A) has confirmed the order of AO by relying upon the decision of the Hon’ble Supreme Court in case of Ramnath & Co. (supra). 5. Aggrieved by the order of CIT(A), the assessee filed appeal before the Tribunal. The assessee submitted that in the return of income, the total CSR and donation expenses has been disallowed under section 37(1) of the Act. Further, the Explanation to section 37(1) does not impose any restrictions on deduction under other provisions of the Act. He submitted that section 80G is an independent provision under the Act and there is no bar to claim the same in relation to CSR activities. The assessee has also placed reliance upon the number of judicial decisions to support its contention, including the recent decision of Mumbai Hon’ble Tribunal in the case of Reliance Retail Ltd. v. ACIT (2026) 184 taxmann.com 260 (Mumbai – Trib). The Ld. AR submitted that the Hon’ble High Courts and Tribunals have decided the issue in favour of assessee in a number of cases. He has relied on the following decisions: (i) Castrol India Ltd. vs. DCIT (Bom- HC) 161 taxmann.com 75 dated 05-03-2024, (ii) ACIT vs. NDL Ventures Ltd (Mumbai -ITAT) 185 taxmann.com 49 dated 27-03-2026, (iii) ACIT vs. Maersk Line India (P.) Ltd (Mumbai -ITAT) 184 taxmann.com 154 dated 05-03-2026, (iv) Jewelex India (P.) Ltd vs. DCIT (Mumbai -ITAT) 182 taxmann.com 499 dated 05-01-2026, (v) Strata Geosystems (India) (P.) Ltd. vs. PCIT (Mumbai -ITAT) 177 taxmann.com 157 dated 25-07-2025, (vi) ACG Pam Pharma Technologies (P.) Ltd. vs. PCIT (Mumbai - ITAT) 176 taxmann.com 98 dated 01-07-2025, (vii) ACIT vs. ShardaCropchem Limited (Mumbai-ITAT) in ITA No. 6163/MUM/2024 and in ITA No. 6164/MUM/2024 dated 21-01-2025, (viii) Alubound Dacs India (P.) Ltd. vs. DCIT (Mumbai -(TAT) 163 taxmann.com 536 dated 27-05-2024, (ix) Rishabh Instruments Ltd. vs. PCIT (Mumbai-ITAT) 179 taxmann.com 476 dated 16-10-2025, (x) Gallagher Insurance Brokers Private Limited vs. PCIT (Mumbai -ITAT) in ITA No. 3778/Mum/2025 dated 05-08-2025, (xi) Livlong Insurance Brokers Ltd. vs. PCIT (Mumbai -ITAT) 176 taxmann.com 566 dated 17-06-2025, (xii) Axis Securities Limited vs. PCIT (Mumbai-ITAT) in ITA No. 2736/MUM/2025 dated 17-06-2025 and (xiii) A. K. Capital Services Ltd. vs. PCIT (Mumbai-ITAT) 176 taxmann.com 638 dated 16-06-2025. 6. On the other hand, the Ld. Sr. DR supported the order of lower authorities. 7. We have heard the parties and perused the documents submitted in relation to the claim for deduction u/s 80G of the Act. This is a recurring issue and has been decided in a large number of cases, both by Hon’ble High Court and various Tribunals. For ready reference this issue has been examined by the co- ordinate Bench of the Tribunal in the case of Reliance Retail (cited supra), wherein it was observed as follows: “107. After examining the statutory provisions and the contentions of both the parties, we are unable to concur with the view taken by the lower authorities. At the outset, it is necessary to note that Explanation 2 to section 37(1) merely clarifies that expenditure incurred on CSR activities shall not be deemed to be expenditure incurred for the purposes of business or profession and therefore cannot be allowed as deduction while computing income under the head "Profits and gains of business or profession." The said Explanation does not impose any restriction on deductions allowable under other provisions of the Act. Section 80G, on the other hand, falls under Chapter VI-A and provides for deduction in respect of sums paid as donations to specified funds and institutions while computing total income. Therefore, the two provisions operate in distinct fields. 108. In the present case, the assessee has admittedly disallowed the entire CSR expenditure while computing business income, and the claim under section 80G has been made only while computing total income under Chapter VI-A. In such circumstances, denial of deduction under section 80G would effectively result in double disallowance, which does not appear to be the legislative intent. 109. A careful reading of section 80G further shows that the legislature has expressly excluded only certain CSR contributions from the ambit of deduction. Specifically, section 80G(2)(a)(iiihk) and 80G(2)(a)(iiihl) provide that contributions made to Swachh Bharat Kosh and Clean Ganga Fund shall not qualify for deduction if such payments are made in pursuance of CSR obligations. The presence of such specific exclusions indicates that the legislature was conscious of CSR-related contributions and deliberately chose to restrict deduction only in respect of the aforesaid funds. If the intention of Parliament was to deny deduction under section 80G for all CSR-related payments, it would have enacted a general prohibition. The absence of such a restriction clearly supports the assessee's contention. 110. We also find merit in the submission of the assessee that the mandatory nature of CSR expenditure does not alter the intrinsic character of the payment as a donation, particularly when the payment is made to an eligible charitable institution and no reciprocal benefit is received from the donee. The concept of voluntariness, in the context of donations under section 80G, must be understood with reference to the absence of quid pro quo and not merely with reference to the statutory framework governing CSR obligations. 111. This view finds support from several judicial precedents relied upon by the assessee. In Interglobe Technology Quotient Pvt. Ltd. v. ACIT [2024] 163 taxmann.com 542/207 ITD 360(Delhi - Trib.) /(ITA No. 95/Del/2024), the Delhi Tribunal held that the mandatory nature of CSR spending does not disentitle an assessee from claiming deduction under section 80G where the other statutory conditions are fulfilled. Similarly, in First American (India) (P.) Ltd. v. ACIT [IT Appeal No. 1762(Bang)2019, dated 29-4-2020] and Allegis Services (India) (P.) Ltd. v. ACIT [IT Appeal No. 1693(Bang) of 2019], the Bangalore Bench of the Tribunal held that denial of deduction under Chapter VI-A merely because the payment forms part of CSR expenditure would lead to double disallowance, which is not contemplated by the Act. 112. Further support is derived from decisions such as FNF India (P.) Ltd. v. ACIT [2021] 133 taxmann.com 251 (Bangalore - Trib.), Sling Media Pvt. Ltd. v. DCIT [2022] 135 taxmann.com 164 /194 ITD 1 (Bangalore - Trib.), Infinera India (P.) Ltd. v. JCIT [2022] 137 taxmann.com 197 / 194 ITD 463 (Bangalore - Trib.) , National Seeds Corporation Ltd. v. ACIT (Delhi ITAT), and DCIT v. Peerless General Finance & Investment Co. Ltd. (Kolkata ITAT), wherein the Tribunal has consistently taken the view that deductions allowable under Chapter VI-A cannot be denied merely because the expenditure was disallowed while computing business income. 113. The decision of the Co-ordinate Bench in Naik Seafoods Pvt. Ltd. v. Pr. CIT [IT Appeal No. 490 (Mum.) of 2021, dated 26-11-2021] also supports the principle that deductions under Chapter VI-A must be considered independently of the computation of income under other heads, subject to fulfilment of statutory conditions. 114. In the present case, the learned AR has also invited our attention to Paper Book pages 137 to 139, wherein the donation receipts issued by Reliance Foundation have been placed on record. These documents establish that the payment was actually made to an institution duly registered under section 80G. Importantly, the genuineness of the donation and the eligibility of the donee institution under section 80G have not been disputed by the Assessing Officer. 115. In view of the above factual and legal position, we are of the considered opinion that the deduction claimed by the assessee under section 80G cannot be denied merely on the ground that the payment also formed part of CSR expenditure under the Companies Act. 116. Accordingly, we hold that the disallowance of Rs. 10,53,00,000/- made by the Assessing Officer and confirmed by the learned CIT(A) is not sustainable in law. The addition is therefore deleted and Ground No. 4 raised by the assessee is allowed.”

In the result, the appeal of the assessee is allowed for statistical purpose.

The Respondent 3. The CIT(A) 4. CIT 5. DR/AR, ITAT, MUMBAI 6. Guard File