GILLETTE INDIA LIMITED,MUMBAI vs. PRINCIPAL COMMISSIONER OF INCOME TAX, JAIPUR

ITA 1316/JPR/2026Status: DisposedITAT Jaipur16 October 2026AY 2018-1911 pages
AI SummaryAllowed

What were the facts?

The assessee, Gillette India Limited, filed an appeal against an order passed by the Principal Commissioner of Income Tax (PCIT), Jaipur-1, under Section 263 of the Income Tax Act, 1961, for Assessment Year 2018-19. The PCIT had revised an assessment order passed under Section 143(3) r.w.s. 144C(13) r.w.s. 144B. The original assessment was framed on a total income of Rs. 3,47,53,70,690/-, resulting in an assessed income of Rs. 6,88,66,06,173/-. The PCIT's revision pertained to the disallowance of Rs. 1,77,00,000/- claimed as deduction under Section 80G for Corporate Social Responsibility (CSR) expenditure. The PCIT held that CSR contributions are not voluntary donations and thus not eligible for deduction under Section 80G, deeming the assessment order erroneous and prejudicial to the revenue.

What did the Tribunal hold?

The Tribunal held that the assessment order passed by the Assessing Officer (AO) was neither erroneous nor prejudicial to the interest of the revenue, thus quashing the impugned order passed by the PCIT under Section 263. The Tribunal noted that the AO had discussed the issue of CSR expenditure and deduction claimed under Chapter VI-A by considering the assessee's reply to the notice issued under Section 142(1) of the Act. The AO had specifically sought details regarding deductions claimed under Chapter VI-A, and the assessee had provided details of the Section 80G deduction along with supporting documents. The Tribunal found that the issue was duly discussed and decided by the AO after due application of mind. Merely because the PCIT took a different view did not make the assessment order erroneous. The Tribunal relied on the consistent view of the Tribunal in similar cases, such as American Express (India) P. Ltd. and ACIT vs. Sikka Ports and Terminals Ltd., which held that CSR expenses, although not allowable under Section 37(1), are eligible for deduction under Chapter VI-A and Section 80G if they satisfy the prescribed conditions. The Tribunal emphasized that Section 80G operates independently of Section 37(1) and that donations forming part of CSR obligations cannot be denied deduction under Section 80G if they meet the eligibility criteria. Therefore, the PCIT's order was found to have failed legal scrutiny.

What were the issues?

The Tribunal had to decide the following questions: 1. Whether the order passed by the PCIT under Section 263 of the Income Tax Act, 1961, invoking revisionary powers, was illegal, bad in law, and void ab initio, particularly concerning the initial notice issued under Section 143(2) and the alleged violation of CBDT instructions. 2. Whether the deduction claimed under Section 80G of the Act in respect of donations forming part of CSR expenditure is allowable, and if the PCIT erred in holding it as not allowable by interlinking CSR disallowance under Section 37(1) with Chapter VI-A deductions. 3. Whether the PCIT's order violated the principles of natural justice by not recording cogent reasons or arriving at independent satisfaction and by mechanically passing the order without considering judicial precedents. 4. Whether the original assessment order was erroneous in nature, considering the Assessing Officer (AO) had duly examined the deduction claimed under Chapter VI-A. Assessee's Contentions: - The revisionary order under Section 263 was illegal and void ab initio. The initial notice under Section 143(2) was not in conformity with CBDT instructions. - CSR expenditure and Section 80G deductions are independent provisions and should not be interlinked. Disallowance under Section 37(1) does not preclude Section 80G deductions for eligible donations. - The term 'donation' under Section 80G includes both voluntary and mandatory payments. - The AO had duly conducted inquiries and examined the deductions claimed under Chapter VI-A, including Section 80G, making the assessment order not erroneous. - Reliance was placed on decisions in American Express (India) P. Ltd. Vs. PCIT and Mahansaria Enterprises (P.) Ltd. Vs. PCIT. Revenue's Contentions: - The PCIT's order was justified, relying on Explanation 2 to Section 37 of the Act, which states that CSR expenditure is not an expenditure for business or profession and thus not allowable. The PCIT also referred to the explanatory memorandum to the Finance Act (No.2) 2014, stating that allowing CSR expenses for tax purposes would result in subsidizing them by the government.

Which sections of the Income-tax Act were involved?

Section 263,Section 143(3),Section 144C(13),Section 144B,Section 143(2),Section 80G,Section 37(1),Section 135,Section 142(1)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, JAIPUR “A” BENCH, JAIPUR

Before: SHRI KULDIP SINGH & SHRI PRAKASH, ACCOUNTANCT MEMBER

PER : KULDIP SINGH, JUDICIAL MEMBER:-

The Appellant, Gillette India Limited (hereinafter referred to as the ‘assessee’) by filing the present appeal, sought to set aside the impugned order dated 20.03.2026 passed u/s 263 of the Income Tax Act, 1961 (hereinafter referred to as the “Act”) by the Principal Commissioner of Income Tax, Jaipur-1 [hereinafter referred to as the “PCIT”] qua assessment year 2018-19 on the grounds inter-alia that:- “1. Order passed under section 263 of the Act is illegal, bad in law and void ab - initio.

I.T.A No. 1316/JPR/2026 Page No 2

On the facts and in the circumstances of the case and in law, the Learned Principal Commissioner of Income Tax ("Ld. PCIT") h

The order continues below.

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