STANDARD CHARTERED CAPITAL LIMITED ,MUMBAI vs. DCIT, CIRCLE 1(3)(1), MUMBIA

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH “J” MUMBAI

BEFORE SHRI OM PRAKASH KANT (ACCOUNTANT MEMBER) AND SHRI ANIKESH BANERJEE (JUDICIAL MEMBER)

ITA No. 8820/MUM/2025 Assessment Year: 2020-21

Standard Chartered Capital Deputy Commissioner of Income Limited, C 38/39, G Block, Tax, 13(1), Aayakar Bhavan, Vs. 12th Floor, Crescenzo, Bandra Mumbai – 400020, Maharashtra. Kurla Complex – 400051, Maharashtra. PAN NO.AAHCS 6432 N Appellant Respondent

Assessee by : Ms. Krupa Gandhi & Shri Riken Shah : Shri Mukesh Thakwani (SR DR) Revenue by

: 17/06/2026 Date of Hearing : 22/06/2026 Date of pronouncement ORDER PER OM PRAKASH KANT, AM

This appeal by the assessee is directed against the order dated 01.11.2025 passed by the Ld. Commissioner of Income Tax (Appeals) – National Faceless Appeal Centre, Delhi [in short ‘the Ld. CIT(A)’], for Assessment Year [in short ‘the AY’] 2020-21 , raising the following grounds:-

Standard Chartered Capital Limited, Standard Chartered Capital Limited, 2 ITA No. 8820/MUM/2025

“1. Ground No. 1-Disallowance under section 14A of the Income Disallowance under section 14A of the Income-tax Act, Disallowance under section 14A of the Income 1961 read with Rule BD of the Income 1961 read with Rule BD of the Income-tax Rules, 1962 1.1 On the facts and in circumstances of the case and in law, the Learned CIT(A) 1.1 On the facts and in circumstances of the case and in law, the Learned CIT(A) 1.1 On the facts and in circumstances of the case and in law, the Learned CIT(A) has erred in making disa has erred in making disallowance under the provisions of section 14A of the Act. llowance under the provisions of section 14A of the Act. r. w. Rule 80 of the Income r. w. Rule 80 of the Income-tax Rules, 1962 ('the Rules'). 1.2 The Learned AO has erred in attributing expenses disregarding the 1.2 The Learned AO has erred in attributing expenses disregarding the 1.2 The Learned AO has erred in attributing expenses disregarding the submissions filed by the appellant that no expenditure is actually incurred to submissions filed by the appellant that no expenditure is actually inc submissions filed by the appellant that no expenditure is actually inc earn the exempt income. earn the exempt income. 1.3 Further, Learned CIT(A) has erred in not appreciating the fact that the 1.3 Further, Learned CIT(A) has erred in not appreciating the fact that the 1.3 Further, Learned CIT(A) has erred in not appreciating the fact that the Appellant has sufficient own funds which are utilised for making investments Appellant has sufficient own funds which are utilised for making investments Appellant has sufficient own funds which are utilised for making investments yielding such exempt income. Therefore, no disallowance was required to be yielding such exempt income. Therefore, no disallowance was required t yielding such exempt income. Therefore, no disallowance was required t made by the Learned AO. made by the Learned AO. 1.4 Accordingly, the Appellant prays Your Honour to direct the Learned AO to 1.4 Accordingly, the Appellant prays Your Honour to direct the Learned AO to 1.4 Accordingly, the Appellant prays Your Honour to direct the Learned AO to delete the disallowance made under section 14A of the Act and oblige. delete the disallowance made under section 14A of the Act and oblige. delete the disallowance made under section 14A of the Act and oblige. 2. Ground No. 2 - - Non-allowability of deduction claimed under section allowability of deduction claimed under section 80G of the Act of Rs. 66,50,000. Act of Rs. 66,50,000. 2.1 The learned CIT(A) has erred in disregarding the detailed submissions filed 2.1 The learned CIT(A) has erred in disregarding the detailed submissions filed 2.1 The learned CIT(A) has erred in disregarding the detailed submissions filed by the Appellant along with supporting evidence and proceeded to confirm the by the Appellant along with supporting evidence and proceeded to confirm the by the Appellant along with supporting evidence and proceeded to confirm the action of the Learned AO i.e. disallowed the claim for deduction under section action of the Learned AO i.e. disallowed the claim for deduction under secti action of the Learned AO i.e. disallowed the claim for deduction under secti 80G of the Act amounting to Rs. 66,50,000, being donation made to eligible 80G of the Act amounting to Rs. 66,50,000, being donation made to eligible 80G of the Act amounting to Rs. 66,50,000, being donation made to eligible institution registered under section 80G of the Act. institution registered under section 80G of the Act. 2.2 The Learned CIT(A) erred in holding that an amount spent towards Corporate 2.2 The Learned CIT(A) erred in holding that an amount spent towards Corporate 2.2 The Learned CIT(A) erred in holding that an amount spent towards Corporate Social Responsibility ('CSR') under section 13 Social Responsibility ('CSR') under section 135 of the Companies Act, 2013 is not 5 of the Companies Act, 2013 is not eligible for deduction under section 80G of the Act, even if such institution is eligible for deduction under section 80G of the Act, even if such institution is eligible for deduction under section 80G of the Act, even if such institution is specifically approved under section 80G. specifically approved under section 80G. 2.3. The Learned CIT(A) misinterpreted the legislative intension and erred in not The Learned CIT(A) misinterpreted the legislative intension and erred in not The Learned CIT(A) misinterpreted the legislative intension and erred in not allowing the deduction of CSR expenses under section 80G of the Act considering uction of CSR expenses under section 80G of the Act considering uction of CSR expenses under section 80G of the Act considering the same is not allowable as business expenditure the same is not allowable as business expenditure 2.4 As can be noticed from the provisions of clause (iiihk) and (ilihi) of section 2.4 As can be noticed from the provisions of clause (iiihk) and (ilihi) of section 2.4 As can be noticed from the provisions of clause (iiihk) and (ilihi) of section 80G(2), specific funds covered under the CSR category is ex 80G(2), specific funds covered under the CSR category is excluded from granting cluded from granting a deduction under section 80G of the Act. The Learned CIT(A) and AD failed to a deduction under section 80G of the Act. The Learned CIT(A) and AD failed to a deduction under section 80G of the Act. The Learned CIT(A) and AD failed to consider that there are specific exclusions from section 80G and proceeded to consider that there are specific exclusions from section 80G and proceeded to consider that there are specific exclusions from section 80G and proceeded to generalise the legislative intent thereby erred in not granting relief to the generalise the legislative intent thereby erred in not granting relief to the generalise the legislative intent thereby erred in not granting relief to the Appellant. 2.5 In view of the above, the Appellant humbly prays before Your Honour to 2.5 In view of the above, the Appellant humbly prays before Your Honour to 2.5 In view of the above, the Appellant humbly prays before Your Honour to consider the plea to direct the Learned AD to allow the deduction under section consider the plea to direct the Learned AD to allow the deduction under section consider the plea to direct the Learned AD to allow the deduction under section 80G amounting to Rs. 66,50,000. 80G amounting to Rs. 66,50,000.

Standard Chartered Capital Limited, Standard Chartered Capital Limited, 3 ITA No. 8820/MUM/2025

Standard Chartered Capital Limited, Standard Chartered Capital Limited, 4 ITA No. 8820/MUM/2025

claimed under section 80G in respect of CSR expenditure. Interest claimed under section 80G in respect of CSR expenditure. Interest claimed under section 80G in respect of CSR expenditure. Interest under section 234C was also levied and interest under section 244A under section 234C was also levied and interest under section 244A under section 234C was also levied and interest under section 244A was granted while issuing refund. Aggrieved, the assessee preferred was granted while issuing refund. Aggrieved, the assessee preferred was granted while issuing refund. Aggrieved, the assessee preferred an appeal before the L an appeal before the Ld. CIT(A), who granted partial relief. d. CIT(A), who granted partial relief. Dissatisfied with the findings of the first appellate authority, the Dissatisfied with the findings of the first appellate authority, the Dissatisfied with the findings of the first appellate authority, the assessee is in further appeal before us. assessee is in further appeal before us.

Ground No. 1 – Disallowance under Section 14A Disallowance under Section 14A 3. At the outset, the learned counsel for the assessee At the outset, the learned counsel for the assessee At the outset, the learned counsel for the assessee submitted that Ground No. 1 relating to the disallowance under section 14A of that Ground No. 1 relating to the disallowance under section 14A of that Ground No. 1 relating to the disallowance under section 14A of the Act was not being pressed. A written communication to that the Act was not being pressed. A written communication to that the Act was not being pressed. A written communication to that effect has been placed on record. effect has been placed on record. In view of the unequivocal In view of the unequivocal statement made on behalf of the assessee, Ground No. 1 is statement made on behalf of the assessee, Ground No. 1 statement made on behalf of the assessee, Ground No. 1 dismissed as not pressed. dismissed as not pressed.

Ground No. 2 – Deduction under Section 80G in respect of CSR Deduction under Section 80G in respect of CSR Deduction under Section 80G in respect of CSR Expenditure

Standard Chartered Capital Limited, Standard Chartered Capital Limited, 5 ITA No. 8820/MUM/2025

eligible for deduction under section 80G. eligible for deduction under section 80G. Accordingly, he disallowed Accordingly, he disallowed the deduction observing as under: the deduction observing as under:-

“Thus, it is clear from the above that every Thus, it is clear from the above that every company having a net worth of rupees company having a net worth of rupees five hundred Crores or more or turnover of t profit of five Crore or more during any five hundred Crores or more or turnover of t profit of five Crore or more during any five hundred Crores or more or turnover of t profit of five Crore or more during any financial year is MANDATED to spend, in every financial year, at least two financial year is MANDATED to spend, in every financial year, at least two financial year is MANDATED to spend, in every financial year, at least two percent of the average net profits of the company Irupees o percent of the average net profits of the company Irupees one thousand Crores or ne thousand Crores or more or a net made during the three immediately preceding financial years. This more or a net made during the three immediately preceding financial years. This more or a net made during the three immediately preceding financial years. This expenditure is categorically disallowed u/s 37 of the Income Tax Act, 1961. expenditure is categorically disallowed u/s 37 of the Income Tax Act, 1961. expenditure is categorically disallowed u/s 37 of the Income Tax Act, 1961. Further, as per the Notification of Ministry of Corporate Affairs dated 27th Further, as per the Notification of Ministry of Corporate Affairs dated 27th Further, as per the Notification of Ministry of Corporate Affairs dated 27th February 2014 the scope and nature of CSR expenditure has been elaborated in ebruary 2014 the scope and nature of CSR expenditure has been elaborated in ebruary 2014 the scope and nature of CSR expenditure has been elaborated in detail Section 7 of the said notification defines CSR expenditure as follows detail Section 7 of the said notification defines CSR expenditure as follows detail Section 7 of the said notification defines CSR expenditure as follows "7. CSR Expenditure. CSR expenditure shall include all expenditure "7. CSR Expenditure. CSR expenditure shall include all expenditure "7. CSR Expenditure. CSR expenditure shall include all expenditure including contribution to corpus for including contribution to corpus for projects or programs relating projects or programs relating to CSR activities approved by the Board on the recommendation of to CSR activities approved by the Board on the recommendation of to CSR activities approved by the Board on the recommendation of its CSR Committee, but does not include any expenditure on an its CSR Committee, but does not include any expenditure on an its CSR Committee, but does not include any expenditure on an item not in conformity or not in line with activities which fall item not in conformity or not in line with activities which fall item not in conformity or not in line with activities which fall within the purview of Schedule VI within the purview of Schedule VII of the Act" It is pertinent to note here that the said expenditure even if of the nature of a It is pertinent to note here that the said expenditure even if of the nature of a It is pertinent to note here that the said expenditure even if of the nature of a contribution to the corpus for projects of programs relating to CSR activities is still contribution to the corpus for projects of programs relating to CSR activities is still contribution to the corpus for projects of programs relating to CSR activities is still a MANDATORY CONTRIBUTION' required a MANDATORY CONTRIBUTION' required to be made by the company in be made by the company in pursuance of the Companies Act, 2013. A donation by its dictionary meaning and e of the Companies Act, 2013. A donation by its dictionary meaning and e of the Companies Act, 2013. A donation by its dictionary meaning and also as per the meaning implied by the provisions of the Income Tax Act, 1961 is also as per the meaning implied by the provisions of the Income Tax Act, 1961 is also as per the meaning implied by the provisions of the Income Tax Act, 1961 is a "VOLUNTARY CONTRIBUTION". Thus, the legislative intent for providing the a "VOLUNTARY CONTRIBUTION". Thus, the legislative intent for providing the a "VOLUNTARY CONTRIBUTION". Thus, the legislative intent for providing the benefit of tax deduction u/s benefit of tax deduction u/s 80G was to incentivize and encourage voluntary 80G was to incentivize and encourage voluntary donations by individuals and organizations towards organizations/trusts/funds donations by individuals and organizations towards organizations/trusts/funds donations by individuals and organizations towards organizations/trusts/funds working for issues of social relevance and importance. working for issues of social relevance and importance. CSR expense being a contribution stipulated by the Companies Act, 2013 is a CSR expense being a contribution stipulated by the Companies Act, 2013 is a CSR expense being a contribution stipulated by the Companies Act, 2013 is a necessary obligation of the company which was introduced by the legislature necessary obligation of the company which was introduced by the legislature necessary obligation of the company which was introduced by the legislature with the objective that companies having net worth/turnover/profit above a with the objective that companies having net worth/turnover/profit above a with the objective that companies having net worth/turnover/profit above a threshold should share the burden of the government in providing social services. threshold should share the burden of the government in providing social services. threshold should share the burden of the government in providing social services. Thus, a CSR expense can Thus, a CSR expense cannot at the same time be a donation. For this purpose, not at the same time be a donation. For this purpose, the government also categorically mentioned that the amount relating to CSR the government also categorically mentioned that the amount relating to CSR the government also categorically mentioned that the amount relating to CSR should be 2% of the average net profit. If tax deduction is allowed on such CSR should be 2% of the average net profit. If tax deduction is allowed on such CSR should be 2% of the average net profit. If tax deduction is allowed on such CSR expenses, this would result in subsidizing the expenses, this would result in subsidizing these expenses by one se expenses by one-third amount. The same has also been specifically mentioned in the explanatory notes to the The same has also been specifically mentioned in the explanatory notes to the The same has also been specifically mentioned in the explanatory notes to the provisions of the Finance Act, 2015 vide circular 01/2015 dated 21st January provisions of the Finance Act, 2015 vide circular 01/2015 dated 21st January provisions of the Finance Act, 2015 vide circular 01/2015 dated 21st January 2015. The relevant extract is produced 2015. The relevant extract is produced below” 13.2 If such expenses 13.2 If such expenses are allowed as tax deduction this would result in are allowed as tax deduction this would result in subsidizing of around one subsidizing of around one-third of such expenses by the government by third of such expenses by the government by way of tax expenditure... way of tax expenditure...

Standard Chartered Capital Limited, Standard Chartered Capital Limited, 6 ITA No. 8820/MUM/2025

If the assessee takes donations for the purpose of Section BOG of the Income-tax If the assessee takes donations for the purpose of Section BOG of the Income If the assessee takes donations for the purpose of Section BOG of the Income Act.1961 then the 50% deducti Act.1961 then the 50% deduction of these CSR expenses by calling them on of these CSR expenses by calling them assessee is further subsidizing these expenses over and above the one-third assessee is further subsidizing these expenses over and above the one assessee is further subsidizing these expenses over and above the one amount. In addition to the above. amount. In addition to the above. 13.3 any expenditure incurred by an assessee on the activities relating to 13.3 any expenditure incurred by an assessee on the activities relating to 13.3 any expenditure incurred by an assessee on the activities relating to corporate social responsibilit corporate social responsibility referred to in section 135 of the Companies y referred to in section 135 of the Companies Act. 2013 shall not be deemed to have been incurred for the purpose of Act. 2013 shall not be deemed to have been incurred for the purpose of Act. 2013 shall not be deemed to have been incurred for the purpose of business and hence shall not be allowed as deduction under said section business and hence shall not be allowed as deduction under said section business and hence shall not be allowed as deduction under said section 37 However the CSR expenditure which is of the nature described in 37 However the CSR expenditure which is of the nature described in 37 However the CSR expenditure which is of the nature described in Section 30 to Section 36 of those sections subject to fulfillment of Section 30 to Section 36 of those sections subject to fulfillment of Section 30 to Section 36 of those sections subject to fulfillment of conditions, if any, specified therein." conditions, if any, specified therein." As can be seen from the above highlighted portion of the Explanatory Notes to the As can be seen from the above highlighted portion of the Explanatory Notes to the As can be seen from the above highlighted portion of the Explanatory Notes to the provisions of the Finance Act. 2015 that only that CSR expenditure is allowed as provisions of the Finance Act. 2015 that only that CSR expenditur provisions of the Finance Act. 2015 that only that CSR expenditur a deduction (disallowed u/s 37 of the Income a deduction (disallowed u/s 37 of the Income-tax Act, 1961) which is of the tax Act, 1961) which is of the nature described in Section 30 to Section 36 of the Income nature described in Section 30 to Section 36 of the Income-tax Act, 1961. Thus, tax Act, 1961. Thus, when the law explicitly states the nature of the expenses allowed for deduction to when the law explicitly states the nature of the expenses allowed for deduction to when the law explicitly states the nature of the expenses allowed for deduction to be that of Section 30 to Section 36, the assessee cannot suo e that of Section 30 to Section 36, the assessee cannot suo-moto expand the e that of Section 30 to Section 36, the assessee cannot suo scope of such a law to imply Section 80G. scope of such a law to imply Section 80G. It is thus clear that the expenditure on CSR activities is non-deductible for tax It is thus clear that the expenditure on CSR activities is non It is thus clear that the expenditure on CSR activities is non purposes unless falling within provisions of Sections 30 purposes unless falling within provisions of Sections 30 to 36 of the Income Tax to 36 of the Income Tax Act, 1961. Further the contention of the assessee that sub section (iihk) and sub Act, 1961. Further the contention of the assessee that sub section (iihk) and sub Act, 1961. Further the contention of the assessee that sub section (iihk) and sub section (iiihl) of Section 80G exclusively specify the phrase that. section (iiihl) of Section 80G exclusively specify the phrase that. section (iiihl) of Section 80G exclusively specify the phrase that. "other than the sum spent by the assessee in pursuance of Corporate "other than the sum spent by the assessee in pursuance of Corporate "other than the sum spent by the assessee in pursuance of Corporate Social Respon Social Responsibility under sub-section (5) of section 135 of the Companies ection 135 of the Companies Act, 2013 (18 of 2013)" 2013 (18 of 2013)" whereas the other sub sections u/s 80G do not, implies the fact that this whereas the other sub sections u/s 80G do not, implies the fact that this whereas the other sub sections u/s 80G do not, implies the fact that this condition does not hold for the other sub sections of Section 80G is not only condition does not hold for the other sub sections of Section 80G is not only condition does not hold for the other sub sections of Section 80G is not only incorrect but also a very superficial reading of the law. o a very superficial reading of the law. These sub sections were introduced in the Income These sub sections were introduced in the Income-tax Act, 1961 by the Finance tax Act, 1961 by the Finance Act. 2015. This is the same finance act which categorically also specified that Act. 2015. This is the same finance act which categorically also specified that Act. 2015. This is the same finance act which categorically also specified that only that expenditure on CSR activities is deductible for only that expenditure on CSR activities is deductible for tax purposes which falls tax purposes which falls within the provisions of Sections 30 to 36 of the Income Tax Act, 1961. Thus, the within the provisions of Sections 30 to 36 of the Income Tax Act, 1961. Thus, the within the provisions of Sections 30 to 36 of the Income Tax Act, 1961. Thus, the legislative intent is only further strengthened by the introduction of the phrase intent is only further strengthened by the introduction of the phrase intent is only further strengthened by the introduction of the phrase "other than the sum spent by the assessee in pursuance of Corporate Social "other than the sum spent by the assessee in pursuance of Corporat "other than the sum spent by the assessee in pursuance of Corporat Responsibility that the deduction u/s 80G of the Income Responsibility that the deduction u/s 80G of the Income-tax Act 1961 is allowed tax Act 1961 is allowed only to those voluntary contributions made by the assessee over and above its only to those voluntary contributions made by the assessee over and above its only to those voluntary contributions made by the assessee over and above its Corporate Social Responsibility. interpretation for the said statute to twist the law Corporate Social Responsibility. interpretation for the said statute to twist the law Corporate Social Responsibility. interpretation for the said statute to twist the law in his favour. The assessee has deliberately applied the mischief rule of his favour. The assessee has deliberately applied the mischief rule of his favour. The assessee has deliberately applied the mischief rule of Something which is not directly allowed by the legislature cannot be allowed Something which is not directly allowed by the legislature cannot be allowed Something which is not directly allowed by the legislature cannot be allowed indirectly by the legislature. It is well settled position of law and there is no legal indirectly by the legislature. It is well settled position of law and there is no legal indirectly by the legislature. It is well settled position of law and there is no legal

Standard Chartered Capital Limited, Standard Chartered Capital Limited, 7 ITA No. 8820/MUM/2025

authority required for the above proposition of law. However, if there had been authority required for the above proposition of law. However, if there had been or the above proposition of law. However, if there had been requirement of one, the Supreme Court of India in 1979 has already adopted this requirement of one, the Supreme Court of India in 1979 has already adopted this requirement of one, the Supreme Court of India in 1979 has already adopted this legal maxim in its philosophy and had said in the case of Jagir Singh vs Ranbir legal maxim in its philosophy and had said in the case of Jagir Singh vs Ranbir legal maxim in its philosophy and had said in the case of Jagir Singh vs Ranbir Singh [AIR 1979 SC 381]. Singh [AIR 1979 SC 381].

What may not be done directly cannot be allowed to be done indirectly, that ot be done directly cannot be allowed to be done indirectly, that ot be done directly cannot be allowed to be done indirectly, that would be an evasion of the statute. It is a "well would be an evasion of the statute. It is a "well-known principle of law that the known principle of law that the provisions of an Act of Parliament shall not be evaded by shift or contrivance" (per provisions of an Act of Parliament shall not be evaded by shift or contrivance" (per provisions of an Act of Parliament shall not be evaded by shift or contrivance" (per Abbott C.J. in Fox v. B Abbott C.J. in Fox v. Bishop of Chester (1824) 2 B & C 635 "To carry out ishop of Chester (1824) 2 B & C 635 "To carry out effectually the object of a Statute, it must be construed as to defeat all attempts to effectually the object of a Statute, it must be construed as to defeat all attempts to effectually the object of a Statute, it must be construed as to defeat all attempts to do, or avoid doing, in an indirect or circuitous manner that which it has prohibited do, or avoid doing, in an indirect or circuitous manner that which it has prohibited do, or avoid doing, in an indirect or circuitous manner that which it has prohibited or enjoined" Additionally various Additionally various ITAT judgments relied upon by the Assessee have also not ITAT judgments relied upon by the Assessee have also not acknowledge the change of position as adopted by Ministry of Corporate Affairs acknowledge the change of position as adopted by Ministry of Corporate Affairs acknowledge the change of position as adopted by Ministry of Corporate Affairs from 2016 to 2021. The MCA has issued a fresh General Circular 14/2021 dated from 2016 to 2021. The MCA has issued a fresh General Circular 14/2021 dated from 2016 to 2021. The MCA has issued a fresh General Circular 14/2021 dated 25th August 2021 [E 25th August 2021 [E-file no.CSR-05/01/2021-CSR-MCA]. 3.14. What tax benefits can be availed under CSR? 3.14. What tax benefits can be availed under CSR? 3.14. What tax benefits can be availed under CSR? No specific tax exemptions have been extended to CSR expenditure. The No specific tax exemptions have been extended to CSR expenditure. The No specific tax exemptions have been extended to CSR expenditure. The Finance Act, 2014 also clarifies that expenditure on CSR does not form Finance Act, 2014 also clarifies that expenditure on CSR does not form Finance Act, 2014 also clarifies that expenditure on CSR does not form part of business expenditure. part of business expenditure. Kind attention is once again drawn to the Explanatory Notes to the provisions Explanatory Notes to the provisions Kind attention is once again drawn to the of the Finance (No. 2) Act, 2014 of the Finance (No. 2) Act, 2014 where it is specified at where it is specified at Point 13.2 that - “CSR expenditure, being an application of income, is not incurred wholly and expenditure, being an application of income, is not incurred wholly and expenditure, being an application of income, is not incurred wholly and exclusively for the purp exclusively for the purpose of carrying on business. As the application of As the application of Income is not allowed as deduction for the purpose of computing taxable Income is not allowed as deduction for the purpose of computing taxable Income is not allowed as deduction for the purpose of computing taxable income of a company, income of a company, amount spent on CSR cannot be allowed as deduction amount spent on CSR cannot be allowed as deduction for computing the taxable income of the Company." Thus, the explanatory note is for computing the taxable income of the Company." Thus, the e for computing the taxable income of the Company." Thus, the e clear in spelling out that no deduction is to be allowed out of CSR expenses in any clear in spelling out that no deduction is to be allowed out of CSR expenses in any clear in spelling out that no deduction is to be allowed out of CSR expenses in any form and therefore, the claim of 80G deduction is not allowable. form and therefore, the claim of 80G deduction is not allowable. form and therefore, the claim of 80G deduction is not allowable. The case laws which have been submitted by the Assessee have not discussed The case laws which have been submitted by the Assessee have not discussed The case laws which have been submitted by the Assessee have not discussed the Explanatory Note Point 13.2 to the provisions of Finance Act wherein, it is ry Note Point 13.2 to the provisions of Finance Act wherein, it is ry Note Point 13.2 to the provisions of Finance Act wherein, it is mentioned that application of Income is not allowed as deduction wherein the mentioned that application of Income is not allowed as deduction wherein the mentioned that application of Income is not allowed as deduction wherein the intention of the legislature is specified that on Mandatory CSR spending is an intention of the legislature is specified that on Mandatory CSR spending is an intention of the legislature is specified that on Mandatory CSR spending is an application of Income which is no application of Income which is not allowable as deduction and therefore, 80G t allowable as deduction and therefore, 80G deduction is also not available to the assessee. deduction is also not available to the assessee. This shows that the legislature's intention is to make certain companies This shows that the legislature's intention is to make certain companies This shows that the legislature's intention is to make certain companies spend CSR expenditure out of the tax paid profits for the betterment of spend CSR expenditure out of the tax paid profits for the betterment of spend CSR expenditure out of the tax paid profits for the betterment of the society and th the society and therefore assessee company's claim to allow CSR erefore assessee company's claim to allow CSR expenses u/s 80G, defeats the very purpose of CSR expenses which must expenses u/s 80G, defeats the very purpose of CSR expenses which must expenses u/s 80G, defeats the very purpose of CSR expenses which must

Standard Chartered Capital Limited, Standard Chartered Capital Limited, 8 ITA No. 8820/MUM/2025

be incurred out of tax paid profits. Therefore, the assessee company's be incurred out of tax paid profits. Therefore, the assessee company's be incurred out of tax paid profits. Therefore, the assessee company's claim of 80G of Rs. 66,50,000/ claim of 80G of Rs. 66,50,000/-is not allowed and added to the total is not allowed and added to the total income of the assessee company. Further, Penalty proceedings u/s 270A income of the assessee company. Further, Penalty proceedings u/s 270A income of the assessee company. Further, Penalty proceedings u/s 270A of the Act is initiated separately for under of the Act is initiated separately for under-reporting of the income. reporting of the income. [Additions: Rs.66,50,000/ [Additions: Rs.66,50,000/-]” 4.1 On further appeal the Ld. CIT(A) also upheld the disallowance of On further appeal the Ld. CIT(A) also upheld the disallowance of On further appeal the Ld. CIT(A) also upheld the disallowance of deduction u/s 80G observing as under: observing as under:-

“7.1. Adjudication on Ground 3 7.1. Adjudication on Ground 3

Before adjudication it would do well to go through the provisions of section 80G Before adjudication it would do well to go through the provisions of section 80G Before adjudication it would do well to go through the provisions of section 80G Section 80G(1) allows deduction only for sum paid by the assessee in the Section 80G(1) allows deduction only for sum paid by the assessee in the Section 80G(1) allows deduction only for sum paid by the assessee in the previous year as donations to specified funds or previous year as donations to specified funds or charitable institutions as charitable institutions as enumerated in Section 80G(5)/(6), Section 80G(2) specifically excludes certain enumerated in Section 80G(5)/(6), Section 80G(2) specifically excludes certain enumerated in Section 80G(5)/(6), Section 80G(2) specifically excludes certain contributions from deduction, e.g., contributions to Swachh Bharat Kosh and contributions from deduction, e.g., contributions to Swachh Bharat Kosh and contributions from deduction, e.g., contributions to Swachh Bharat Kosh and Clean Ganga Fund under CSR. Beyond these, there is no express exclusion for Clean Ganga Fund under CSR. Beyond these, there is no express exclusion fo Clean Ganga Fund under CSR. Beyond these, there is no express exclusion fo other CSR contributions. other CSR contributions. I find that the underlying principle for allowing the deductions is that only bona I find that the underlying principle for allowing the deductions is that only bona I find that the underlying principle for allowing the deductions is that only bona fide voluntary donations qualify, not mandatory obligations under statute fide voluntary donations qualify, not mandatory obligations under statute fide voluntary donations qualify, not mandatory obligations under statute It is undisputed that Corporate Social Responsibility (CSR) is Mandatory under It is undisputed that Corporate Social Responsibility (CSR) is Mandatory It is undisputed that Corporate Social Responsibility (CSR) is Mandatory Companies Act. Section 135 of the Companies Act, 2013 imposes a statutory Companies Act. Section 135 of the Companies Act, 2013 imposes a statutory Companies Act. Section 135 of the Companies Act, 2013 imposes a statutory obligation on certain companies to spend a minimum percentage of profits on obligation on certain companies to spend a minimum percentage of profits on obligation on certain companies to spend a minimum percentage of profits on CSR. Since CSR expenditure is mandatorily mandated, it is not voluntary: Section CSR. Since CSR expenditure is mandatorily mandated, it is not voluntary: Section CSR. Since CSR expenditure is mandatorily mandated, it is not voluntary: Section 80G is intended for voluntary donations. The Supreme Court and several High r voluntary donations. The Supreme Court and several High r voluntary donations. The Supreme Court and several High Courts have consistently held that a statutory obligation cannot be treated as a Courts have consistently held that a statutory obligation cannot be treated as a Courts have consistently held that a statutory obligation cannot be treated as a "donation" for tax deduction purposes. Treating mandatory CSR contributions as "donation" for tax deduction purposes. Treating mandatory CSR contributions as "donation" for tax deduction purposes. Treating mandatory CSR contributions as deductible under Section 80G would eff deductible under Section 80G would effectively circumvent the statutory intent ectively circumvent the statutory intent behind CSR legislation behind CSR legislation and Section 80G. Explanation 2 to Section 37(1) and Section 80G. Explanation 2 to Section 37(1) specifically disallows deductions for CSR expenses while computing business specifically disallows deductions for CSR expenses while computing business specifically disallows deductions for CSR expenses while computing business income. While the appellant argues that Chapter VIA (Section 80G) operates after income. While the appellant argues that Chapter VIA (Section 80G) op income. While the appellant argues that Chapter VIA (Section 80G) op gross total income, this does not permit the creation of a deduction where the gross total income, this does not permit the creation of a deduction where the gross total income, this does not permit the creation of a deduction where the contribution is statutory and obligatory. I find much force in the AO's argument contribution is statutory and obligatory. I find much force in the AO's argument contribution is statutory and obligatory. I find much force in the AO's argument that allowing CSR contributions as eligible deduction would amount to that allowing CSR contributions as eligible deduction would amount to that allowing CSR contributions as eligible deduction would amount to subsidising of the CSR obligation by the government which would defeat the the f the CSR obligation by the government which would defeat the the f the CSR obligation by the government which would defeat the the purpose of CSR contributions. purpose of CSR contributions. The appellant's reliance on the clarifications in Finance Bill 2015 and FAQ from The appellant's reliance on the clarifications in Finance Bill 2015 and FAQ from The appellant's reliance on the clarifications in Finance Bill 2015 and FAQ from Ministry of Corporate Affairs is misplaced. When read together they only clarify Ministry of Corporate Affairs is misplaced. When read together they only clarif Ministry of Corporate Affairs is misplaced. When read together they only clarif that CSR expenditure is not allowable as business expenditure; they do not that CSR expenditure is not allowable as business expenditure; they do not that CSR expenditure is not allowable as business expenditure; they do not intend to allow mandatory CSR to qualify as a Section 80G donation and they do intend to allow mandatory CSR to qualify as a Section 80G donation and they do intend to allow mandatory CSR to qualify as a Section 80G donation and they do not alter the statutory requirement that Section 80G is for voluntary donations not alter the statutory requirement that Section 80G is for voluntary donations not alter the statutory requirement that Section 80G is for voluntary donations

Standard Chartered Capital Limited, Standard Chartered Capital Limited, 9 ITA No. 8820/MUM/2025

only. CSR contributi only. CSR contributions, being mandated under Section 135 of Companies Act, ons, being mandated under Section 135 of Companies Act, cannot be treated as eligible donations under Section 80G. cannot be treated as eligible donations under Section 80G.

Therefore, the AO's disallowance of Rs. 66,50,000 claimed as deduction under Therefore, the AO's disallowance of Rs. 66,50,000 claimed as deduction under Therefore, the AO's disallowance of Rs. 66,50,000 claimed as deduction under Section 80G is legally correct and consistent with both statutory provisions and Section 80G is legally correct and consistent with both statuto Section 80G is legally correct and consistent with both statuto the legislative intent. the legislative intent.” 4.2 We have carefully considered the rival submissions and We have carefully considered the rival submissions and We have carefully considered the rival submissions and examined the material available on record. The controversy involved examined the material available on record. The controversy involved examined the material available on record. The controversy involved is no longer res integra and stands concluded by a series of is no longer res integra and stands concluded by a series of is no longer res integra and stands concluded by a series of decisions rendered by Co decisions rendered by Coordinate Benches of the Tribunal. ordinate Benches of the Tribunal.

4.3 The learned counsel for the assessee placed reliance on the The learned counsel for the assessee placed reliance on the The learned counsel for the assessee placed reliance on the decision of the Coordinate Bench in decision of the Coordinate Bench in ACIT v. NDL Ventures ACIT v. NDL Ventures Limited [(2026) 185 taxmann.com 49 (Mumbai [(2026) 185 taxmann.com 49 (Mumbai - Trib.)] Trib.)], wherein, after an elaborate examination of the after an elaborate examination of the statutory framework and statutory framework and earlier precedents, it was held that the restriction contained in earlier precedents, it was held that the restriction contained in earlier precedents, it was held that the restriction contained in Explanation 2 to section 37(1) merely disentitles an assessee from Explanation 2 to section 37(1) merely disentitles an assessee from Explanation 2 to section 37(1) merely disentitles an assessee from claiming CSR expenditure as a business deduction. The said claiming CSR expenditure as a business deduction. The said claiming CSR expenditure as a business deduction. The said restriction does not extend to deduction restriction does not extend to deductions otherwise admissible s otherwise admissible under Chapter VI-A, including section 80G of the Act. The Tribunal A, including section 80G of the Act. The Tribunal A, including section 80G of the Act. The Tribunal observed that in the absence of any express prohibition under observed that in the absence of any express prohibition under observed that in the absence of any express prohibition under section 80G, donations made to eligible institutions cannot be section 80G, donations made to eligible institutions cannot be section 80G, donations made to eligible institutions cannot be denied deduction merely because such dona denied deduction merely because such donations also qualify as tions also qualify as CSR expenditure. The finding of the Coordinate Bench of the The finding of the Coordinate Bench of the The finding of the Coordinate Bench of the Tribunal in the case of ACIT vs. NDL Ventures Limited (supra) is Tribunal in the case of ACIT vs. NDL Ventures Limited Tribunal in the case of ACIT vs. NDL Ventures Limited reproduced for ready reference: reproduced for ready reference:

Standard Chartered Capital Limited, Standard Chartered Capital Limited, 10 ITA No. 8820/MUM/2025

“5.3. Before us Id. counsel for the assessee referred to the decision of the counsel for the assessee referred to the decision of the coordinate beach of the Tribunal in The case of ACG Pam Pharma Technologies coordinate beach of the Tribunal in The case of ACG Pam Pharma Technologies coordinate beach of the Tribunal in The case of ACG Pam Pharma Technologies (P.) Ltd v Pr. CIT [2025] 176 taxmann.com 98 (Mumbai Pr. CIT [2025] 176 taxmann.com 98 (Mumbai – Trib.) Wherein the claim Trib.) Wherein the claim of deduction u/s 80G for donation classified as CSR has been held to be of deduction u/s 80G for donation classified as CSR has been held to be of deduction u/s 80G for donation classified as CSR has been held to be allowable. The relevant find allowable. The relevant findings of the Tribunal (supra) is reproduced as under: ings of the Tribunal (supra) is reproduced as under: "7. First for all, we take up the first issue/question and after hearing the parties "7. First for all, we take up the first issue/question and after hearing the parties "7. First for all, we take up the first issue/question and after hearing the parties at length on this issue, at length on this issue, we noticed that Ld. PCIT has held that since CSR noticed that Ld. PCIT has held that since CSR expenditure is mandatory therefore the same expenditure is mandatory therefore the same cannot constitute a donation, which cannot constitute a donation, which is voluntary and hence not eligible for deduction under ACG Pam Pharma is voluntary and hence not eligible for deduction under ACG Pam Pharma is voluntary and hence not eligible for deduction under ACG Pam Pharma Technologies Private Limited section 80G of the Act. whereas it is an undisputed Technologies Private Limited section 80G of the Act. whereas it is an undisputed Technologies Private Limited section 80G of the Act. whereas it is an undisputed fact that donation made by the assessee are to entities registered under section fact that donation made by the assessee are to entities registered u fact that donation made by the assessee are to entities registered u 80G and that the assessee is otherwise eligible to claim deduction under section 80G and that the assessee is otherwise eligible to claim deduction under section 80G and that the assessee is otherwise eligible to claim deduction under section 80G of the Act. 8. We noticed that though section 135 of the 8. We noticed that though section 135 of the Companies Act, 2013 mandates the Companies Act, 2013 mandates the quantum of CSR expenses, it does not mandate to whom and how expenses, it does not mandate to whom and how expenses, it does not mandate to whom and how the amount to be spent and the Appellant at its discretion can choose the mode of spending be spent and the Appellant at its discretion can choose the mode of spending be spent and the Appellant at its discretion can choose the mode of spending towards CSR. The donations made by the Appellant to ACS Cares Foundation are R. The donations made by the Appellant to ACS Cares Foundation are R. The donations made by the Appellant to ACS Cares Foundation are made voluntarily as there is no reciprocal commitment from the donees. In any made voluntarily as there is no reciprocal commitment from the donees. In any made voluntarily as there is no reciprocal commitment from the donees. In any purpose of claiming deduction. CBDT, vide Circular No. 1/2015 dated 21st ing deduction. CBDT, vide Circular No. 1/2015 dated 21st ing deduction. CBDT, vide Circular No. 1/2015 dated 21st January 2015 which contains to be voluntary the Explanatory Notes provisions of January 2015 which contains to be voluntary the Explanatory Notes provisions of January 2015 which contains to be voluntary the Explanatory Notes provisions of the Finance (No. 2) Act, 2014, has stated that expenditure incurred which is the Finance (No. 2) Act, 2014, has stated that expenditure incurred which is the Finance (No. 2) Act, 2014, has stated that expenditure incurred which is eligible for CSR and allowable under eligible for CSR and allowable under other sections, shall be allowed as a sections, shall be allowed as a deduction while computing income. The relevant extract of CBDT Circular is deduction while computing income. The relevant extract of CBDT Circular is deduction while computing income. The relevant extract of CBDT Circular is reproduced as under: reproduced as under: "13.3 The provisions of section 37(1) of the Income "13.3 The provisions of section 37(1) of the Income-tax Act provide that tax Act provide that deduction for any expenditure, which is not mentioned deduction for any expenditure, which is not mentioned deduction for any expenditure, which is not mentioned specifically in section 30 to section 36 of the Income section 30 to section 36 of the Income-tax Act, shall be allowed if the same tax Act, shall be allowed if the same is incurred wholly and exclusively for the purposes of carrying on business is incurred wholly and exclusively for the purposes of carrying on business is incurred wholly and exclusively for the purposes of carrying on business or profession. As the CSR expenditure (being an application of income) is or profession. As the CSR expenditure (being an application of income) is or profession. As the CSR expenditure (being an application of income) is not incurred for the purposes of carrying on business, such expenditures for the purposes of carrying on business, such expenditures for the purposes of carrying on business, such expenditures cannot be allowed under the provisions of section 37 of the Income cannot be allowed under the provisions of section 37 of the Income cannot be allowed under the provisions of section 37 of the Income-tax Act. Therefore, in order to provide certainty on this issue, said section 37 has Therefore, in order to provide certainty on this issue, said section 37 has Therefore, in order to provide certainty on this issue, said section 37 has been amended to clarify that for the purpose been amended to clarify that for the purposes of sub- -section (1) of section 37 any expenditure incurred by an assessee on the activities relating to 37 any expenditure incurred by an assessee on the activities relating to 37 any expenditure incurred by an assessee on the activities relating to corporate social responsibility referred to in section 135 of the Companies corporate social responsibility referred to in section 135 of the Companies corporate social responsibility referred to in section 135 of the Companies Act, 2013 shall not be deemed to have been incurred for the purpose of Act, 2013 shall not be deemed to have been incurred for the purpose of Act, 2013 shall not be deemed to have been incurred for the purpose of business and hence shall not be allowed as deduction under said section ness and hence shall not be allowed as deduction under said section ness and hence shall not be allowed as deduction under said section 37. However, the CSR expenditure which is of the nature described in 37. However, the CSR expenditure which is of the nature described in 37. However, the CSR expenditure which is of the nature described in section 30 to section 36 of the Income section 30 to section 36 of the Income-tax Act shall be allowed as tax Act shall be allowed as deduction under those sections subject to fulfillmen deduction under those sections subject to fulfillment of conditions, if any, t of conditions, if any, specified therein." specified therein." 9. The CBDT Circular clearly states that the restriction on claiming deduction of 9. The CBDT Circular clearly states that the restriction on claiming deduction of 9. The CBDT Circular clearly states that the restriction on claiming deduction of CSR expense is only with respect to Section 37(1) of the Act ACG Pam Pharma CSR expense is only with respect to Section 37(1) of the Act ACG Pam Pharma CSR expense is only with respect to Section 37(1) of the Act ACG Pam Pharma

Standard Chartered Capital Limited, Standard Chartered Capital Limited, 11 ITA No. 8820/MUM/2025

Technologies Private Limited wherein it will not be d Technologies Private Limited wherein it will not be deemed to be a business eemed to be a business expenditure for the purpose computing income under the head 'Profits and Gains expenditure for the purpose computing income under the head 'Profits and Gains expenditure for the purpose computing income under the head 'Profits and Gains from Business or Profession'. The Circular itself clarifies that CSR expenditure will from Business or Profession'. The Circular itself clarifies that CSR expenditure will from Business or Profession'. The Circular itself clarifies that CSR expenditure will be allowable under other sections under the same head of income. In view of be allowable under other sections under the same head of income. In be allowable under other sections under the same head of income. In CBDT Circular, it is clear that there is no express bar in claiming deduction in CBDT Circular, it is clear that there is no express bar in claiming deduction in CBDT Circular, it is clear that there is no express bar in claiming deduction in respect of CSR expenditure, other than under Section 37(1) of the Act. The respect of CSR expenditure, other than under Section 37(1) of the Act. The respect of CSR expenditure, other than under Section 37(1) of the Act. The Ministry of Corporate Affairs ("MCA") has issued Frequently Asked Questions Ministry of Corporate Affairs ("MCA") has issued Frequently Asked Questions Ministry of Corporate Affairs ("MCA") has issued Frequently Asked Questions ("FAQ") through General Circular No.01/2016 dated January 12, 2016 (FAQ No.6) General Circular No.01/2016 dated January 12, 2016 (FAQ No.6) General Circular No.01/2016 dated January 12, 2016 (FAQ No.6) has clarified on the issue follows: has clarified on the issue follows:- “Question No.6: What tax benefits can be availed under CSR? “Question No.6: What tax benefits can be availed under CSR? “Question No.6: What tax benefits can be availed under CSR? Answer: No specific tax exemptions have been extended Answer: No specific tax exemptions have been extended Answer: No specific tax exemptions have been extended to CSR expenditure per se. The Finance expenditure per se. The Finance Act, 2014 also clarifies that expenditure 2014 also clarifies that expenditure on CSR does not form part of business expenditure on CSR does not form part of business expenditure. What What no specific tax exemptions have been extended to expenditure incurred on CSR, spending exemptions have been extended to expenditure incurred on CSR, spending exemptions have been extended to expenditure incurred on CSR, spending on several activities like on several activities like Prime Minister’s Relief Fund, Scientific res Prime Minister’s Relief Fund, Scientific research, rural development projects, rural development projects, skill development projects, agriculture skill development projects, agriculture extension projects etc, which find place in Schedule VII, already enjoys extension projects etc, which find place in Schedule VII, already enjoys extension projects etc, which find place in Schedule VII, already enjoys exemptions under different sections of the Income exemptions under different sections of the Income-tax Act, 1961." tax Act, 1961." 10. This clarification being issued by th 10. This clarification being issued by the Ministry of Corporate Affairs, e Ministry of Corporate Affairs, Government of India also confirms that donation covered under CSR Expenses Government of India also confirms that donation covered under CSR Expenses Government of India also confirms that donation covered under CSR Expenses are eligible for the deduction under section ROG of the Income tax Act, 1961. are eligible for the deduction under section ROG of the Income are eligible for the deduction under section ROG of the Income Moreover, reliance is placed on the decision of the Coordinate Bench of the ITAT, Moreover, reliance is placed on the decision of the Coordinate Bench o Moreover, reliance is placed on the decision of the Coordinate Bench o Mumbai Bench in the case of ACIT. Sharda Cropchem Limited (ITA No. Mumbai Bench in the case of ACIT. Sharda Cropchem Limited (ITA No. Mumbai Bench in the case of ACIT. Sharda Cropchem Limited (ITA No. 6163/Mum/2024) wherein it was held that donations which are classified as 6163/Mum/2024) wherein it was held that donations which are classified as 6163/Mum/2024) wherein it was held that donations which are classified as CSR expenditure are eligible for deduction under Section 80G of the Act. The CSR expenditure are eligible for deduction under Section 80G of the Act. The CSR expenditure are eligible for deduction under Section 80G of the Act. The relevant extract of the or relevant extract of the order is reproduced as under: "9. We have carefully perused relevant provisions of the Act and legal position "9. We have carefully perused relevant provisions of the Act and legal position "9. We have carefully perused relevant provisions of the Act and legal position emerging from the cited decision (supra). The CSR expenses which are required to emerging from the cited decision (supra). The CSR expenses which are required to emerging from the cited decision (supra). The CSR expenses which are required to be mandatorily incurred by the incurred by the assessee-company as per section 135 company as per section 135 of the Companies Act are not entitled to deduction under section 37(1) for assessment Companies Act are not entitled to deduction under section 37(1) for assessment Companies Act are not entitled to deduction under section 37(1) for assessment year 2015-16 by virtue of the fetter placed by Explanation 2 to section 37(1), 16 by virtue of the fetter placed by Explanation 2 to section 37(1), 16 by virtue of the fetter placed by Explanation 2 to section 37(1), which was inserted by the Finance (No. 2) which was inserted by the Finance (No. 2) Act, 2014. A plain reading of Act, 2014. A plain reading of Explanation 2 to section 37(1) shows that any expenditure incurred towards CSR ction 37(1) shows that any expenditure incurred towards CSR ction 37(1) shows that any expenditure incurred towards CSR activities as referred to in section 135 of the Companies Act, 2013 shall not be activities as referred to in section 135 of the Companies Act, 2013 shall not be activities as referred to in section 135 of the Companies Act, 2013 shall not be allowed as business expenditure and shall be deemed to have not been incurred allowed as business expenditure and shall be deemed to have not been incurred allowed as business expenditure and shall be deemed to have not been incurred for purpose of business. The embargo for purpose of business. The embargo created by Explanation 2 inserted in created by Explanation 2 inserted in section 37 by Finance (No. 2) Act, 2014 was to deny deduction for (3SR expenses section 37 by Finance (No. 2) Act, 2014 was to deny deduction for (3SR expenses section 37 by Finance (No. 2) Act, 2014 was to deny deduction for (3SR expenses ACG Pam Pharma Technologies Private Limited incurred by companies, as and by ACG Pam Pharma Technologies Private Limited incurred by companies, as and by ACG Pam Pharma Technologies Private Limited incurred by companies, as and by way of regular business expenditure while computing 'income under the head way of regular business expenditure while computing 'income un way of regular business expenditure while computing 'income un business. So, it can be clearly seen that this Explanation 2 to section ion 37(1) business. So, it can be clearly seen that this Explanation 2 to section ion 37(1) business. So, it can be clearly seen that this Explanation 2 to section ion 37(1) which denies deduction for CSR expenses by way of business expenditure is which denies deduction for CSR expenses by way of business expenditure is which denies deduction for CSR expenses by way of business expenditure is applicable only to the extent of computing "business income' under Chapter IV-D. applicable only to the extent of computing "business income' under Chapter IV applicable only to the extent of computing "business income' under Chapter IV The said Explanation cannot be extended or imported to CSR contributions which id Explanation cannot be extended or imported to CSR contributions which id Explanation cannot be extended or imported to CSR contributions which

Standard Chartered Capital Limited, Standard Chartered Capital Limited, 12 ITA No. 8820/MUM/2025

are otherwise eligible for deduction under any other provision or Chapter, so as to are otherwise eligible for deduction under any other provision or Chapter, so as to are otherwise eligible for deduction under any other provision or Chapter, so as to say donations made by charitable trust registered under section 80G. Parliament say donations made by charitable trust registered under section 80G. Parliament say donations made by charitable trust registered under section 80G. Parliament has expressed its i has expressed its intention clearly by bringing in restriction in respect of ntention clearly by bringing in restriction in respect of expenditure classified by an assessee company while claiming deduction under expenditure classified by an assessee company while claiming deduction under expenditure classified by an assessee company while claiming deduction under section 80G i.e. CSR expenditure related to Swachh Bharat Kosh and Clean section 80G i.e. CSR expenditure related to Swachh Bharat Kosh and Clean section 80G i.e. CSR expenditure related to Swachh Bharat Kosh and Clean Ganga Fund. And if the Parliament desired, it co Ganga Fund. And if the Parliament desired, it could have been made such kind of uld have been made such kind of restriction or any restriction like in the case of donation to Swachh Bharat Kosh& restriction or any restriction like in the case of donation to Swachh Bharat Kosh& restriction or any restriction like in the case of donation to Swachh Bharat Kosh& Clean Ganga Fund. So the assertion of the Assessing Officer is erroneous and Clean Ganga Fund. So the assertion of the Assessing Officer is erroneous and Clean Ganga Fund. So the assertion of the Assessing Officer is erroneous and therefore cannot be accepted. It can be safely inferred that when the Legislature therefore cannot be accepted. It can be safely inferred that whe therefore cannot be accepted. It can be safely inferred that whe in particular has provided for only the above referred tivo specific exceptions in in particular has provided for only the above referred tivo specific exceptions in in particular has provided for only the above referred tivo specific exceptions in section 80G, then it is the implied intent of the Legislature to permit deduction section 80G, then it is the implied intent of the Legislature to permit deduction section 80G, then it is the implied intent of the Legislature to permit deduction under section 80G in respect of CSR contributions made to funds/organizations under section 80G in respect of CSR contributions made to funds/organizat under section 80G in respect of CSR contributions made to funds/organizat referred to in all other sub referred to in all other sub-clauses of section 80G [other than (iiihk) and (iiihl)] of clauses of section 80G [other than (iiihk) and (iiihl)] of the Act. 9.1 It may be stated here that the co 9.1 It may be stated here that the co-ordinate Bench of ITAT, Mumbai in the case ordinate Bench of ITAT, Mumbai in the case Alubound Dacs India Private Limited v. Dy. CIT in IT A No. 3663/M u m/2023 (A. Alubound Dacs India Private Limited v. Dy. CIT in IT A No. 3663/M u m/202 Alubound Dacs India Private Limited v. Dy. CIT in IT A No. 3663/M u m/202 Y. 2020-21)has duly considered similar contentious issue and decided the same 21)has duly considered similar contentious issue and decided the same 21)has duly considered similar contentious issue and decided the same in favour of the assessee. The relevant extracts are reproduced below for the sake in favour of the assessee. The relevant extracts are reproduced below for the sake in favour of the assessee. The relevant extracts are reproduced below for the sake of ready reference: …….. 9.3 Respectfully following the decisions cited above, we hold that the assessee is 9.3 Respectfully following the decisions cited above, we hold th 9.3 Respectfully following the decisions cited above, we hold th entitled to deduction claimed u/s. 80G of the Act towards the CSR expenditure entitled to deduction claimed u/s. 80G of the Act towards the CSR expenditure entitled to deduction claimed u/s. 80G of the Act towards the CSR expenditure incurred by it. We, therefore, direct the Id. A.O. to allow the claim of the assessee incurred by it. We, therefore, direct the Id. A.O. to allow the claim of the assessee incurred by it. We, therefore, direct the Id. A.O. to allow the claim of the assessee subject to the condition tha subject to the condition that the assessee has satisfied the other requir sfied the other requirements warranted u/s.SOG of the Act. We do not find any infirmity in the Appellate warranted u/s.SOG of the Act. We do not find any infirmity in the Appellate warranted u/s.SOG of the Act. We do not find any infirmity in the Appellate order. Hence, ground no. 3 raised by the Revenue is dismissed. order. Hence, ground no. 3 raised by the Revenue is dismissed. order. Hence, ground no. 3 raised by the Revenue is dismissed. 11. Thus, after evaluating the facts of the present case and also decision of the . Thus, after evaluating the facts of the present case and also decision of the . Thus, after evaluating the facts of the present case and also decision of the Coordinate Bench and the Set Coordinate Bench and the Settled proposition of law, we are also of the view that tled proposition of law, we are also of the view that the assessee is entitled for deduction claimed under section 80G of the Act the assessee is entitled for deduction claimed under section 80G of the Act the assessee is entitled for deduction claimed under section 80G of the Act towards CSR expenditure incurred by it." towards CSR expenditure incurred by it." 5.4. We have examined the rival submissions and the material placed o e have examined the rival submissions and the material placed o e have examined the rival submissions and the material placed on record "The issue is no longer sue is no longer res integra. The statutory emb statutory embargo introduced by Explanation 2 to section 37(1) denies deduction of CSR expenditure only as a to section 37(1) denies deduction of CSR expenditure only as a to section 37(1) denies deduction of CSR expenditure only as a business expenditure. However, there is no corresponding prohibition under business expenditure. However, there is no corresponding prohibition under business expenditure. However, there is no corresponding prohibition under Chapter VI including section 80G, save including section 80G, save and except specific exclusions provided by nd except specific exclusions provided by the Legislature. It is trite law that where the Legislature intends to deny a benefit, the Legislature. It is trite law that where the Legislature intends to deny a benefit, the Legislature. It is trite law that where the Legislature intends to deny a benefit, it does so expressly. In the it does so expressly. In the absence of any explicit bar under section 80G, a absence of any explicit bar under section 80G, a donation otherwise satisfying the prescribed co donation otherwise satisfying the prescribed conditions cannot be denied nditions cannot be denied deduction 37(1) and eligibility under section 80G must be maintained, as both deduction 37(1) and eligibility under section 80G must be maintained, as both deduction 37(1) and eligibility under section 80G must be maintained, as both provisions operate in distinct fields. The consistent view of various coordinate in distinct fields. The consistent view of various coordinate in distinct fields. The consistent view of various coordinate benches of the Tribunal, including decisions relied upon by the learned CIT(A), benches of the Tribunal, including decisions relied upon by the learned benches of the Tribunal, including decisions relied upon by the learned supports the proposition that CSR expenditure, though not allowable as business supports the proposition that CSR expenditure, though not allowable as business supports the proposition that CSR expenditure, though not allowable as business

Standard Chartered Capital Limited, Standard Chartered Capital Limited, 13 ITA No. 8820/MUM/2025

expenditure, may still qualify for deduction under section 80G, subject to expenditure, may still qualify for deduction under section 80G, subject to expenditure, may still qualify for deduction under section 80G, subject to fulfillment of statutory conditions. Denial of such deduction would result in fulfillment of statutory conditions. Denial of such deduction would result in 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 ble disallowance, which is not the object of the law. In the present ble 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 case, it is not disputed that the donee institutions are duly approved under case, it is not disputed that the donee institutions are duly approved under section 80G and the payments have been made through proper banking section 80G and the payments have been made through proper banking section 80G and the payments have been made through proper banking channels. Once these foundational condition channels. Once these foundational conditions are satisfied, the claim cannot be s are satisfied, the claim cannot be rejected solely on the ground that the expenditure also falls within the ambit of rejected solely on the ground that the expenditure also falls within the ambit of rejected solely on the ground that the expenditure also falls within the ambit of CSR. 5.5 In view of the above, we find no reason to interfere with the well-reasoned 5.5 In view of the above, we find no reason to interfere with the well 5.5 In view of the above, we find no reason to interfere with the well order of the learned CIT(A). Grounds Nos. 5 and 6 of order of the learned CIT(A). Grounds Nos. 5 and 6 of the Revenue's appeal are the Revenue's appeal are accordingly dismissed. accordingly dismissed.” 4.4 Similar view has been reiterated by the Coordinate Bench in Similar view has been reiterated by the Coordinate Bench in Similar view has been reiterated by the Coordinate Bench in ACIT v. Jamnagar Utilities and Power Private Limited (ITA No. ACIT v. Jamnagar Utilities and Power Private Limited (ITA No. ACIT v. Jamnagar Utilities and Power Private Limited (ITA No. 2117/Mum/2024) and several other decisions, wherein it has and several other decisions, wherein it has and several other decisions, wherein it has consistently been hel consistently been held that once the conditions prescribed under d that once the conditions prescribed under section 80G are satisfied and the donee institution is duly approved section 80G are satisfied and the donee institution is duly approved section 80G are satisfied and the donee institution is duly approved under the said provision, deduction cannot be denied solely on the under the said provision, deduction cannot be denied solely on the under the said provision, deduction cannot be denied solely on the ground that the expenditure forms part of CSR obligations. The ground that the expenditure forms part of CSR obligations. The ground that the expenditure forms part of CSR obligations. The Tribunal has further held that denial of deduction under section further held that denial of deduction under section further held that denial of deduction under section 80G in such circumstances would result in an unintended double 80G in such circumstances would result in an unintended double 80G in such circumstances would result in an unintended double disallowance, which is neither contemplated by the statutory disallowance, which is neither contemplated by the statutory disallowance, which is neither contemplated by the statutory provisions nor supported by legislative intent. provisions nor supported by legislative intent. The relevant part of The relevant part of the said decision is reproduced as under: cision is reproduced as under:-

“5. We have heard rival submission of the parties and perused the relevant 5. We have heard rival submission of the parties and perused the relevant 5. We have heard rival submission of the parties and perused the relevant material on record. In the case, the assessee debited Rs.8,60,00,000/- on material on record. In the case, the assessee debited Rs.8,60,00,000/ material on record. In the case, the assessee debited Rs.8,60,00,000/ account of CSR, which was added back was while computing total income for the account of CSR, which was added back was while computing total income for t account of CSR, which was added back was while computing total income for t purpose of filing return of income. However, the assessee claimed 50% deduction purpose of filing return of income. However, the assessee claimed 50% deduction purpose of filing return of income. However, the assessee claimed 50% deduction i.e. Rs.4,30,00,000/ i.e. Rs.4,30,00,000/- u/s 80G of the Act. According to the Assessing Officer CSR u/s 80G of the Act. According to the Assessing Officer CSR is statutory liability on the part of the assessee, which is to be incurred out of is statutory liability on the part of the assessee, which is to be incurred out of is statutory liability on the part of the assessee, which is to be incurred out of profit in compliance to the Companies Act, whereas section 80G of the Act deal compliance to the Companies Act, whereas section 80G of the Act deal compliance to the Companies Act, whereas section 80G of the Act deal with donation in the nature of the voluntary out of once own violation. The CSR with donation in the nature of the voluntary out of once own violation. The CSR with donation in the nature of the voluntary out of once own violation. The CSR not being voluntary rather it was legal mandate on the part of the assessee, the not being voluntary rather it was legal mandate on the part of the assessee, the not being voluntary rather it was legal mandate on the part of the assessee, the Assessing Officer held th Assessing Officer held the CSR expenditure out of purview of the section 80G of e CSR expenditure out of purview of the section 80G of

Standard Chartered Capital Limited, Standard Chartered Capital Limited, 14 ITA No. 8820/MUM/2025

the Act and accordingly he disallowed the claim of deduction of the assessee of the Act and accordingly he disallowed the claim of deduction of the assessee of the Act and accordingly he disallowed the claim of deduction of the assessee of Rs.4,30,00,000/-. On further appeal, the Ld. CIT(A) allowed the claim of the . On further appeal, the Ld. CIT(A) allowed the claim of the . On further appeal, the Ld. CIT(A) allowed the claim of the assessee observing as under: assessee observing as under: "I have carefully considered the assessment order and submission made carefully considered the assessment order and submission made carefully considered the assessment order and submission made by the appellant. The appellant has relied upon the following judicial by the appellant. The appellant has relied upon the following judicial by the appellant. The appellant has relied upon the following judicial decisions including the decisions of jurisdictional ITAT Mumbai where it including the decisions of jurisdictional ITAT Mumbai where it including the decisions of jurisdictional ITAT Mumbai where it has been held that payments towards donations made has been held that payments towards donations made has been held that payments towards donations made on account of corporate social corporate social responsibility, disallowed under disallowed under section 37(1), are allowable as deductions allowable as deductions under section 80G of the Act: Section 37(1), under section 80G of the Act: Section 37(1),  DCIT v. Reliance Industries Ltd. (2023) 1.T.A. No. 2587 & DCIT v. Reliance Industries Ltd. (2023) 1.T.A. No. 2587 & DCIT v. Reliance Industries Ltd. (2023) 1.T.A. No. 2587 & 2588/Mum/2022 (Mumbai ITATI M/s. Naik Seafoods Pvt. Ltd. Vs. 2588/Mum/2022 (Mumbai ITATI M/s. Naik Seafoo 2588/Mum/2022 (Mumbai ITATI M/s. Naik Seafoo Pr. CIT Pr. CIT-2 (ITA No 490/MUM/2021)  (Mumbai ITAT) FNF India (P.) Ltd. Vs. ACIT (2021) (133 (Mumbai ITAT) FNF India (P.) Ltd. Vs. ACIT (2021) (133 (Mumbai ITAT) FNF India (P.) Ltd. Vs. ACIT (2021) (133 taxmann.com 251) (Bangalore ITAT) taxmann.com 251) (Bangalore ITAT)  Sling Media (P.) Ltd. Vs. DCIT (2022) (194 ITD 1) (Banglore ITAT) Sling Media (P.) Ltd. Vs. DCIT (2022) (194 ITD 1) (Banglore ITAT) Sling Media (P.) Ltd. Vs. DCIT (2022) (194 ITD 1) (Banglore ITAT) Infinera India (P) Ltd. Vs. JCIT (2022) (194 ITD 463) (Bangalore Infinera India (P) Ltd. Vs. JCIT (2022) (194 ITD 463 Infinera India (P) Ltd. Vs. JCIT (2022) (194 ITD 463 ITAT)  DCIT Vs. M/s. The Peerless General Finance & Investment & Co. DCIT Vs. M/s. The Peerless General Finance & Investment & Co. DCIT Vs. M/s. The Peerless General Finance & Investment & Co. Ltd (ITA No. 1469 & 1470/Kol/2019) (Kolkata ITAT) Ltd (ITA No. 1469 & 1470/Kol/2019) (Kolkata ITAT) Ltd (ITA No. 1469 & 1470/Kol/2019) (Kolkata ITAT) Further, it is also observed from the contents of above decision of Hon'ble Further, it is also observed from the contents of above decision of Hon'ble Further, it is also observed from the contents of above decision of Hon'ble ITAT that the explanatory memorandum to Finance ITAT that the explanatory memorandum to Finance ITAT that the explanatory memorandum to Finance Act No. 2, 2014, introducing Explanation 2 to Section 37 (1) which prohibited the introducing Explanation 2 to Section 37 (1) which prohibited the introducing Explanation 2 to Section 37 (1) which prohibited the allowability allowability allowability of of of CSR CSR CSR expenditure expenditure expenditure as as as business business business expenditure. expenditure. expenditure. The The The memorandum clearly states that CSR expenditure described in sections 30 memorandum clearly states that CSR expenditure described in sections 30 memorandum clearly states that CSR expenditure described in sections 30 to 36 of the Income to 36 of the Income-tax Act, 1961 shall be allowed. Legislators never e allowed. Legislators never intended to deny deductions for CSR expenditure outright; it is only not intended to deny deductions for CSR expenditure outright; it is only not intended to deny deductions for CSR expenditure outright; it is only not allowable under section 37(1). As the amendment in section 37(1) does not allowable under section 37(1). As the amendment in section 37(1) does not allowable under section 37(1). As the amendment in section 37(1) does not apply to sections 30 to 36 of the Act, the same would not apply to section apply to sections 30 to 36 of the Act, the same would not apply to section apply to sections 30 to 36 of the Act, the same would not apply to section 80G of the Act. Thus, appellant shall be allowed to claim a deduction f the Act. Thus, appellant shall be allowed to claim a deduction f the Act. Thus, appellant shall be allowed to claim a deduction under section 80G of the Income Tax Act, 1961 to t under section 80G of the Income Tax Act, 1961 to the extent of eligibility. he extent of eligibility. It is further viewed that jurisdictional urther viewed that jurisdictional Hon'ble Mumbai ITAT in the case of Hon'ble Mumbai ITAT in the case of M/s. Reliance Industries V.DCIT[2023](I M/s. Reliance Industries V.DCIT[2023](ITΑ NO.2587 2588/MUM/2022) TΑ NO.2587 2588/MUM/2022) has followed the decision rendered by Mumbai ITAT in the case of Naik has followed the decision rendered by Mumbai ITAT in the case of Naik has followed the decision rendered by Mumbai ITAT in the case of Naik Sea foods P Ltd V. Sea foods P Ltd V. Pr. CIT-2(ITA NO.490/MUM/2021). In the case of Naik 2(ITA NO.490/MUM/2021). In the case of Naik Sea foods P Ltd (supra), the co Sea foods P Ltd (supra), the co-ordinate bench has followed the decision ordinate bench has followed the decision rendered by Bang rendered by Bangalore bench of Tribunal in the case of M/s FNF India P alore bench of Tribunal in the case of M/s FNF India P Ltd (ITA No. 1565/Bang/2019 dated 05 Ltd (ITA No. 1565/Bang/2019 dated 05-01-2021), which in turn followed 2021), which in turn followed the decision rendered in the case of Allegis Services (India) Pvt. Ltd. v. the decision rendered in the case of Allegis Services (India) Pvt. Ltd. v. the decision rendered in the case of Allegis Services (India) Pvt. Ltd. v. ACIT (ITA No. 1693/Bang/2019) and held that the assessee ACIT (ITA No. 1693/Bang/2019) and held that the assessee ACIT (ITA No. 1693/Bang/2019) and held that the assessee is eligible for deduction u/s 80G of the Act in respect of certain payments included in deduction u/s 80G of the Act in respect of certain payments included in deduction u/s 80G of the Act in respect of certain payments included in CSR Expenses. The relevant discussions made by the Tribunal are CSR Expenses. The relevant discussions made by the Tribunal are CSR Expenses. The relevant discussions made by the Tribunal are extracted below: extracted below:-

Standard Chartered Capital Limited, Standard Chartered Capital Limited, 15 ITA No. 8820/MUM/2025

"15. Considered the rival submissions and material placed on "15. Considered the rival submissions and material placed on "15. Considered the rival submissions and material placed on record, we observe from record, we observe from the record that Ld. Pr.CIT while examining the record that Ld. Pr.CIT while examining the records of the assessment observed that the Assessing Officer the records of the assessment observed that the Assessing Officer the records of the assessment observed that the Assessing Officer has not Verified the expenses claimed by the assessee and allowed has not Verified the expenses claimed by the assessee and allowed has not Verified the expenses claimed by the assessee and allowed by the Assessing Officer ITA NO. 490/MUM/2021 (A.Y: 2016-17) by the Assessing Officer ITA NO. 490/MUM/2021 (A.Y: 2016 by the Assessing Officer ITA NO. 490/MUM/2021 (A.Y: 2016 M/s. Naik Seafoods P M/s. Naik Seafoods Pvt. Ltd., without making the proper verification vt. Ltd., without making the proper verification and purchases which is 95% of the sale declared by the assessee and purchases which is 95% of the sale declared by the assessee and purchases which is 95% of the sale declared by the assessee and again Assessing Officer allowed the same without making again Assessing Officer allowed the same without making again Assessing Officer allowed the same without making proper verification. After considering the submissions of both the proper verification. After considering the submissions of both the proper verification. After considering the submissions of both the parties we obser parties we observe from the record that with regard to section 80G ve from the record that with regard to section 80G deduction we observed that the Coordinate Bench of ITAT deduction we observed that the Coordinate Bench of ITAT deduction we observed that the Coordinate Bench of ITAT Bangalore Bench decided the issue of deduction u/s. 80G relating Bangalore Bench decided the issue of deduction u/s. 80G relating Bangalore Bench decided the issue of deduction u/s. 80G relating to donations which is part of Corporate Social Responsibility in the to donations which is part of Corporate Social Responsibility in the to donations which is part of Corporate Social Responsibility in the case of M/s.FNF case of M/s.FNF India Pvt. Ltd., v. ACIT (ITA. No. 1565/Bang/2019 India Pvt. Ltd., v. ACIT (ITA. No. 1565/Bang/2019 dated 05.01.2021). The relevant findings of the Bangalore Bench dated 05.01.2021). The relevant findings of the Bangalore Bench dated 05.01.2021). The relevant findings of the Bangalore Bench are reproduced below: are reproduced below:- "9. After hearing both the parties, we find that similar issue came "9. After hearing both the parties, we find that similar issue came "9. After hearing both the parties, we find that similar issue came up up up for for for consideration consideration consideration before before before this this this Tribunal Tribunal Tribunal in in in ITA ITA ITA No. N N 1693/Bang/2019 in the case of Allegis Services (India) Put. Ltd. v. 1693/Bang/2019 in the case of Allegis Services (India) Put. Ltd. v. 1693/Bang/2019 in the case of Allegis Services (India) Put. Ltd. v. ACIT. The Tribunal by its order dated 29.4.2020 held as under.- ACIT. The Tribunal by its order dated 29.4.2020 held as under. ACIT. The Tribunal by its order dated 29.4.2020 held as under. "10. Section 135 of Companies Act, 2013 requires companies with "10. Section 135 of Companies Act, 2013 requires companies with "10. Section 135 of Companies Act, 2013 requires companies with CSR obligations, with effect from 01/04/2014. CSR obligations, with effect from 01/04/2014. Finance (No Finance (No.2) Act, 2014 inserted new Explanation 2 to sub .2) Act, 2014 inserted new Explanation 2 to sub-section (1) of section 37, so as to clarify that for purposes of sub-section (1) (1) of section 37, so as to clarify that for purposes of sub (1) of section 37, so as to clarify that for purposes of sub of section 37, any expenditure incurred by an assessee on the of section 37, any expenditure incurred by an assessee on the of section 37, any expenditure incurred by an assessee on the activities relating to corporate social responsibility referred to in activities relating to corporate social responsibility referred t activities relating to corporate social responsibility referred t section 135 of the Companies Act, 2013 shall not be deemed to be section 135 of the Companies Act, 2013 shall not be deemed to be section 135 of the Companies Act, 2013 shall not be deemed to be an expenditure incurred by the assessee for the purposes of the an expenditure incurred by the assessee for the purposes of the an expenditure incurred by the assessee for the purposes of the business or profession. business or profession. 11. This amendment will take effect from 1/04/2015 and will, 11. This amendment will take effect from 1/04/2015 and will, 11. This amendment will take effect from 1/04/2015 and will, accordingly, apply to assessment year accordingly, apply to assessment year 2015- -16 and subsequent years. 12. Thus, CSR expenditure is to be disallowed by new Explanation 12. Thus, CSR expenditure is to be disallowed by new Explanation 12. Thus, CSR expenditure is to be disallowed by new Explanation 2 to section 37(1), while computing Income under the Head Income 2 to section 37(1), while computing Income under the Head Income 2 to section 37(1), while computing Income under the Head Income form Business and Profession. Further, clarification regarding form Business and Profession. Further, clarification regarding form Business and Profession. Further, clarification regarding impact of Explanation 2 to secti impact of Explanation 2 to section 37(1) of the Income Tax Act int on 37(1) of the Income Tax Act int Explanatory Memorandum to The Finance (No.2) Bill, 2014 is as Explanatory Memorandum to The Finance (No.2) Bill, 2014 is as Explanatory Memorandum to The Finance (No.2) Bill, 2014 is as under: *The existing provisions of section 37(1) of the Act provide that *The existing provisions of section 37(1) of the Act provide that *The existing provisions of section 37(1) of the Act provide that deduction for any expenditure, which is not mentioned specifically deduction for any expenditure, which is not mentioned specifically deduction for any expenditure, which is not mentioned specifically in section 30 to se in section 30 to section 36 of the Act, shall be allowed if the same is ction 36 of the Act, shall be allowed if the same is

Standard Chartered Capital Limited, Standard Chartered Capital Limited, 16 ITA No. 8820/MUM/2025

incurred wholly and exclusively for the purposes of carrying on incurred wholly and exclusively for the purposes of carrying on incurred wholly and exclusively for the purposes of carrying on business or profession. As the CSR expenditure (being an business or profession. As the CSR expenditure (being an business or profession. As the CSR expenditure (being an application of income) is not incurred for the purposes of carrying on application of income) is not incurred for the purposes of carrying on application of income) is not incurred for the purposes of carrying on business, s business, such expenditure cannot be allowed under the existing uch expenditure cannot be allowed under the existing provisions of section 37 of the Income provisions of section 37 of the Income-tax Act. Therefore, in order to tax Act. Therefore, in order to provide certainty on this issue, it is proposed to clarify that for the provide certainty on this issue, it is proposed to clarify that for the provide certainty on this issue, it is proposed to clarify that for the purposes of section 37(1) any expenditure incurred by an assessee purposes of section 37(1) any expenditure incurred by an ass purposes of section 37(1) any expenditure incurred by an ass on the activities relating to corporate social responsibility referred to on the activities relating to corporate social responsibility referred to on the activities relating to corporate social responsibility referred to in section 135 of the Companies Act, 2013 shall not be deemed to in section 135 of the Companies Act, 2013 shall not be deemed to in section 135 of the Companies Act, 2013 shall not be deemed to have been incurred for the purpose of business and, hence, shall not been incurred for the purpose of business and, hence, shall not been incurred for the purpose of business and, hence, shall not be allowed as deduction unde be allowed as deduction under of section 37. However, the CSR 36 7. However, the CSR 36 of the Act shall be allowed deduction under those sections subject of the Act shall be allowed deduction under those sections subject of the Act shall be allowed deduction under those sections subject 36penditure which is of the nature described in section 30 to section 36penditure which is of the nature described in section 30 to section 36penditure which is of the nature described in section 30 to section to ultillment of conditions, if any, specified therein. to ultillment of conditions, if any, specified therein. to ultillment of conditions, if any, specified therein. 13. From the above it is clear that und 13. From the above it is clear that under Income tax Act, certain er Income tax Act, certain provisions explicitly state that deductions for expenditure would be provisions explicitly state that deductions for expenditure would be provisions explicitly state that deductions for expenditure would be allowed while computing income under the head, Income from allowed while computing income under the head, Income from allowed while computing income under the head, Income from Business and Profession to those, who pursue corporate social Business and Profession to those, who pursue corporate social Business and Profession to those, who pursue corporate social responsibility projects under following responsibility projects under following sections. sections.  Section 30 provides deduction insurance premium repairs, Section 30 provides deduction insurance premium repairs, municipal tax and  Section 31, provides deduction on repairs and insurance of Section 31, provides deduction on repairs and insurance of plant, machinery and furniture Section 32 provides for plant, machinery and furniture Section 32 provides for depreciation on tangible assets like building, machinery, depreciation on tangible assets like building, machiner plant, furniture and also on intangible assets like knowhow, plant, furniture and also on intangible assets like knowhow, patents, patents, trademarks, trademarks, licenses. licenses. Section Section 33 33 allows allows development rebate on machinery, plants and ships. development rebate on machinery, plants and ships.  Section Section 34 34 states states conditions conditions for for depreciation depreciation and and development rebate.  Section 35 grants deduction on expenditure for scientific ction on expenditure for scientific research and knowledge extension in natural and applied research and knowledge extension in natural and applied sciences under agriculture, animal husbandry and fisheries. sciences under agriculture, animal husbandry and fisheries. Payment to approved universities/research institutions or Payment to approved universities/research institutions or company also qualifies for deduction. In-house R&D is company also qualifies for deduction. In eligible for deduction, under this section.  Section 35CCD provides deduction for skill development Section 35CCD provides deduction for skill development projects, which constitute the flagship mission of the present projects, which constitute the flagship mission of the present Government.  Section 36 provides deduction regarding insurance premium Section 36 provides deduction regarding insurance premium on stock, health of employees, loans or commission for of employees, loans or commission for employees, employees, interest interest on on borrowed borrowed capital, capital, employer employer contribution to provident fund, gratuity and payment of contribution to provident fund, gratuity and payment of security transaction tax.

Standard Chartered Capital Limited, Standard Chartered Capital Limited, 17 ITA No. 8820/MUM/2025

Income Tax Act, under section 80G, forming part of Chapter VIA, Income Tax Act, under section 80G, forming part of Chapter VIA, Income Tax Act, under section 80G, forming part of Chapter VIA, provides for deductio provides for deductions for computing taxable income as under: ns for computing taxable income as under:  Section 80G(2) provides for sums expended by an assessee Section 80G(2) provides for sums expended by an assessee as donations against which deduction is available. as donations against which deduction is available. 1. Certain donations, give 100% deduction, without any qualifying 1. Certain donations, give 100% deduction, without any qualifying 1. Certain donations, give 100% deduction, without any qualifying limit like Prime Minister's National limit like Prime Minister's National Relief Fund, National Defence Relief Fund, National Defence Fund, National Illness Assistance Fund etc., s Fund, National Illness Assistance Fund etc., specified under section pecified under section 80G(I) (i 80G(I) (i) 2. Donations with 50% deduction are also available under Section 2. Donations with 50% deduction are also available under Section 2. Donations with 50% deduction are also available under Section 80G for all those sums that do not fall under section 80G(1)i). 80G for all those sums that do not fall under section 80G(1)i). 80G for all those sums that do not fall under section 80G(1)i). Under Section 80G Under Section 80G(2) (lihk) and (lihl) there are specific exclusion of (2) (lihk) and (lihl) there are specific exclusion of certain payments, that are part of certain payments, that are part of CR responsibility, not eligible for CR responsibility, not eligible for deduction 4/880G. deduction 4/880G. 1. In our view, expenditure incurred under section 30 to 36 1. In our view, expenditure incurred under section 30 to 36 are claimed while computing income under the head, Income are claimed while computing income under the head, In form Business and Profession", where as monies spent under form Business and Profession", where as monies spent under form Business and Profession", where as monies spent under section 80G ate claimed while computing "Total Taxable section 80G ate claimed while computing "Total Taxable income" in the hands of assessee. The point of claim under income" in the hands of assessee. The point of claim under these provisions are different. 2. Further, intention of legislature is very clear and 2. Further, intention of legislature is very c unambiguous, since expenditure incurred under section 30 to unambiguous, since expenditure incurred under section 30 to 36 are excluded from Explanation 2 to section 37(1) of the 36 are excluded from Explanation 2 to section 37(1) of the Act, they are specifically excluded in clarification issued. Act, they are specifically excluded in clarification issued. There is no restriction on an expenditure being claimed under There is no restriction on an expenditure being claimed under above sections to be exempt, as long as it satisfies necessary sections to be exempt, as long as it satisfies necessary conditions under section 30 to 36 of the Act, for computing conditions under section 30 to 36 of the Act, for computing income under the head, "Income from Business and income under the head, "Income from Business and Profession" 3. For claiming benefit under section 80G, deductions are 3. For claiming benefit under section 80G, deductions are considered at the stage of computing Total taxable income. tage of computing Total taxable income. Even if any payments under section 80G forms part of CSR Even if any payments under section 80G forms part of CSR payments/keeping in mind ineligible deduction expressly payments/keeping in mind ineligible deduction expressly provided u/s.80G), the same would already stand excluded provided u/s.80G), the same would already stand excluded while computing, Income under the head, "Income form while computing, Income under the head, "Incom Business and Profession". The effect of such disallowance Business and Profession". The effect of such disallowance would lead to increase in Business income. Thereafter would lead to increase in Business income. Thereafter benefit accruing to assessee under Chapter VIA for benefit accruing to assessee under Chapter VIA for computing "Total Taxable Income cannot be denied to computing "Total Taxable Income cannot be denied to assessee, subject to fulfillment of necessary conditions f necessary conditions therein.

Standard Chartered Capital Limited, Standard Chartered Capital Limited, 18 ITA No. 8820/MUM/2025

Standard Chartered Capital Limited, Standard Chartered Capital Limited, 19 ITA No. 8820/MUM/2025

conditions for deduction u/s 80G of the Act in respect of deduction claimed. We conditions for deduction u/s 80G of the Act in respect of deduction claimed. We conditions for deduction u/s 80G of the Act in respect of deduction claimed. We also note there is no specific bar in section 80G of the Act for claiming deduction also note there is no specific bar in section 80G of the Act for claiming deduction also note there is no specific bar in section 80G of the Act for claiming deduction in respect of CSR expe in respect of CSR expenditure if an assessee otherwise fulfill all the requirement nditure if an assessee otherwise fulfill all the requirement of section 80G of the Act. In view of the above, respectfully following the finding of of section 80G of the Act. In view of the above, respectfully following the finding of of section 80G of the Act. In view of the above, respectfully following the finding of the Co-ordinate Bench of ITAT on the issue in dispute referred by the Ld. CIT(A), ordinate Bench of ITAT on the issue in dispute referred by the Ld. CIT(A), ordinate Bench of ITAT on the issue in dispute referred by the Ld. CIT(A), we uphold the finding of t we uphold the finding of the Ld. CIT(A) on the issue in dispute. The ground of he Ld. CIT(A) on the issue in dispute. The ground of appeal of the Revenue is accordingly dismissed. appeal of the Revenue is accordingly dismissed.”

4.5 We respectfully concur with the aforesaid view. Explanation 2 to We respectfully concur with the aforesaid view. Explanation 2 to We respectfully concur with the aforesaid view. Explanation 2 to section 37(1) creates a limited embargo against allowance of CSR section 37(1) creates a limited embargo against allowance of CSR section 37(1) creates a limited embargo against allowance of CSR expenditure as busi expenditure as business expenditure while computing income ness expenditure while computing income under the head “Profits and Gains of Business or Profession”. under the head “Profits and Gains of Business or Profession”. under the head “Profits and Gains of Business or Profession”. However, there exists no corresponding restriction under section However, there exists no corresponding restriction under section However, there exists no corresponding restriction under section 80G, save and except the specific exclusions expressly enacted by 80G, save and except the specific exclusions expressly enacted by 80G, save and except the specific exclusions expressly enacted by Parliament. It is a set Parliament. It is a settled canon of statutory interpretation that tled canon of statutory interpretation that where the Legislature intends to deny a deduction, it does so in where the Legislature intends to deny a deduction, it does so in where the Legislature intends to deny a deduction, it does so in explicit terms. The absence of any such prohibition under section explicit terms. The absence of any such prohibition under section explicit terms. The absence of any such prohibition under section 80G is indicative of a conscious legislative choice. In the present 80G is indicative of a conscious legislative choice. 80G is indicative of a conscious legislative choice. case, there is no dispute that the recipient institutions were duly s no dispute that the recipient institutions were duly s no dispute that the recipient institutions were duly approved under section 80G and that the donations were made approved under section 80G and that the donations were made approved under section 80G and that the donations were made through recognised banking channels. Once these foundational through recognised banking channels. Once these foundational through recognised banking channels. Once these foundational conditions stand satisfied, the deduction cannot be denied merely conditions stand satisfied, the deduction cannot be denied merely conditions stand satisfied, the deduction cannot be denied merely because the expenditure also fulfils the assessee’s CSR obligation penditure also fulfils the assessee’s CSR obligation penditure also fulfils the assessee’s CSR obligation under the Companies Act, 2013. under the Companies Act, 2013.

4.6 Respectfully Respectfully Respectfully following following following the the the binding binding binding precedents precedents precedents of of of the the the Coordinate Benches, we hold that the assessee is entitled to Coordinate Benches, we hold that the assessee is entitled to Coordinate Benches, we hold that the assessee is entitled to deduction under section 80G in respect of the impugned donations. deduction under section 80G in respect of the impugned donations. deduction under section 80G in respect of the impugned donations.

Standard Chartered Capital Limited, Standard Chartered Capital Limited, 20 ITA No. 8820/MUM/2025

Accordingly, the disallowance of Accordingly, the disallowance of ₹66,50,000/- sustained by the sustained by the authorities below is directed to be deleted. Ground No. 2 is allowed. authorities below is directed to be deleted. Ground No. 2 is allowed. authorities below is directed to be deleted. Ground No. 2 is allowed.

Ground No. 3 – Levy of Interest under Section 234C Levy of Interest under Section 234C By way of Ground No. 3, the assessee has challenged the levy 5. By way of Ground No. 3, the assessee has challenged the levy By way of Ground No. 3, the assessee has challenged the levy of interest under section 234C amounting of interest under section 234C amounting to ₹ ₹68,435/-. The grievance of the assessee is that the submissions and supporting grievance of the assessee is that the submissions and supporting grievance of the assessee is that the submissions and supporting material furnished in this regard were not properly examined by the material furnished in this regard were not properly examined by the material furnished in this regard were not properly examined by the lower authorities.

5.1 We are of the considered view that the levy of interest under We are of the considered view that the levy of interest under We are of the considered view that the levy of interest under section 234C is cons section 234C is consequential and dependent upon verification of equential and dependent upon verification of the factual computation of advance tax liability. Since the assessee the factual computation of advance tax liability. Since the assessee the factual computation of advance tax liability. Since the assessee asserts that the levy has not been correctly worked out, the issue asserts that the levy has not been correctly worked out, the issue asserts that the levy has not been correctly worked out, the issue requires factual verification at the level of the Assessing Officer. requires factual verification at the level of the Assessing Officer. requires factual verification at the level of the Assessing Officer. Accordingly, the orders of the authorities below on this issue are set ingly, the orders of the authorities below on this issue are set ingly, the orders of the authorities below on this issue are set aside and the matter is restored to the file of the Assessing Officer aside and the matter is restored to the file of the Assessing Officer aside and the matter is restored to the file of the Assessing Officer for fresh examination and recomputation, if warranted, in for fresh examination and recomputation, if warranted, in for fresh examination and recomputation, if warranted, in accordance with law after affording adequate opportunity of hearing accordance with law after affording adequate opportunity of hea accordance with law after affording adequate opportunity of hea to the assessee. Ground No. 3 is allowed for statistical purposes. to the assessee. Ground No. 3 is allowed for statistical purposes. to the assessee. Ground No. 3 is allowed for statistical purposes.

Ground No. 4 – Short Grant of Interest under Section 244A Short Grant of Interest under Section 244A 6. Ground No. 4 relates to the assessee’s grievance regarding Ground No. 4 relates to the assessee’s grievance regarding Ground No. 4 relates to the assessee’s grievance regarding short grant of interest under section 244A of the Act. The learned short grant of interest under section 244A of the Act. The lear short grant of interest under section 244A of the Act. The lear counsel submitted that interest has been granted only up to the counsel submitted that interest has been granted only up to the counsel submitted that interest has been granted only up to the date of the assessment order and not up to the actual date of date of the assessment order and not up to the actual date of date of the assessment order and not up to the actual date of

Standard Chartered Capital Limited, Standard Chartered Capital Limited, 21 ITA No. 8820/MUM/2025

issuance of refund, thereby resulting in short grant of statutory issuance of refund, thereby resulting in short grant of statutory issuance of refund, thereby resulting in short grant of statutory interest. We find that the issue raised by the assessee is e We find that the issue raised by the assessee is e We find that the issue raised by the assessee is essentially factual in nature and requires verification of the dates relevant for factual in nature and requires verification of the dates relevant for factual in nature and requires verification of the dates relevant for computation of interest under section 244A. Although such computation of interest under section 244A. Although such computation of interest under section 244A. Although such grievance could ordinarily be addressed by way of a rectification grievance could ordinarily be addressed by way of a rectification grievance could ordinarily be addressed by way of a rectification application before the Assessing Officer, we consid application before the Assessing Officer, we consider it appropriate, er it appropriate, in the interests of justice, to restore the matter to the file of the in the interests of justice, to restore the matter to the file of the in the interests of justice, to restore the matter to the file of the Assessing Officer. The Assessing Officer shall verify the computation The Assessing Officer shall verify the computation The Assessing Officer shall verify the computation of interest under section 244A and, if it is found that the assessee is of interest under section 244A and, if it is found that the assessee is of interest under section 244A and, if it is found that the assessee is entitled to any further i entitled to any further interest in accordance with law, the same nterest in accordance with law, the same shall be granted after due verification. Ground No. 4 is accordingly shall be granted after due verification. Ground No. 4 is accordingly shall be granted after due verification. Ground No. 4 is accordingly allowed for statistical purposes. allowed for statistical purposes.

Order pronounced in the open Court on ounced in the open Court on 22/06 06/2026. Sd/- Sd/ Sd/- (ANIKESH BANERJEE ANIKESH BANERJEE) (OM PRAKASH KANT OM PRAKASH KANT) JUDICIAL MEMBER JUDICIAL MEMBER ACCOUNTANT MEMBER ACCOUNTANT MEMBER Mumbai; Dated: 22/06/2026 M. Ranganath Vittal , Sr. P.S. M. Ranganath Vittal , Sr. P.S.

Standard Chartered Capital Limited, Standard Chartered Capital Limited, 22 ITA No. 8820/MUM/2025

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

BY ORDER, BY ORDER, //True Copy// (Assistant Registrar) (Assistant Registrar) ITAT, Mumbai ITAT, Mumbai