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Income Tax Appellate Tribunal, “A” BENCH, MUMBAI
Before: SMT. BEENA PILLAI & SHRI OMKARESHWAR CHIDARA
ORDER Per: Smt. Beena Pillai, J.M.: The present appeal filed by the assessee arises out of order dated 20/03/2025, passed by ld. PCIT, Mumbai – 4, for assessment year 2020-21 on following grounds of appeal:
1. The Learned Principal Commissioner of Income Tax (herein after referred as PCIT) erred in law and facts in holding that the ; A.Y. 2020-21 2 ABM Knowledgeware Ltd. assessment order u/s 143(3) of the Act dated 06.09.2022 was erroneous and prejudicial to the interests of revenue, without appreciating that the Assessing Officer (AO) had conducted due enquiry and consciously allowed the deduction u/s 80G of the Act.
2. The PCIT has erred in exceeding jurisdiction u/s 263 by revising the order on debatable issue where the AO had taken a plausible view.
3. The Learned PCIT erred in claiming that the Ld. AO has not mentioned about any enquiry conducted. The appellant states and submits that merely because assessment order does not contain details of enquiry/verification made it is not erroneous/prejudicial to revenue. Thus, revisional power u/s 263 of the Act used to reopen the assessment proceeding is bad in law.
The Learned PCIT erred in issuing a non-speaking order as it fails to provide any specific test or verification approach that the Ld. Assessing officer should have mentioned in the assessment order.
5. The Learned PCIT erred in referring the judgment of Hon'ble Apex Court in 1 SCR 1017G (1967) in the case of Commissioner of Expenditure Tax vs PVG Raju, Rajah of Vizianagaram is misplaced and out of context, it is not applicable qua the fact of this case.
6. The Learned Principal Commissioner of Income Tax erred in presuming that all CSR expenditures lack voluntariness, without examining the specific nature of the donations or the appellant's compliance with 80G conditions.
The Learned PCIT erred in interpreting Section 80G (2) (iihk) and (iihl) of the Act to conclude that all CSR expenses are ineligible for deduction, ignoring the explicit language of the provision which only excludes donations to Swachh Bharat Kosh and Clean Ganga Fund from CSR mandates.
The Learned PCIT erred in not considering the fact that section 135 of the companies Act 2013 does not prohibit CSR expenses deduction under 80G.
The learned PCIT has erred in not providing any reason for not considering the various court decision, that the appellant had quoted to support his.” Brief facts of the case are as under:
; A.Y. 2020-21 3 ABM Knowledgeware Ltd.
The assessee is a company and filed its return of income for year under consideration on 24/12/2020, declaring total income at Rs. 18,46,03,870/-. The case was selected for scrutiny and notice u/s. 143(2) was issued along with notice u/s. 142(1) of the Act. It is noted by the Ld. AO that, the case was selected for verification of claim of any other amount allowable as deduction in Schedule BP. The assessee accordingly submitted details as called upon u/s. 142(1) and the assessment was completed by accepting the returned income offered by the assessee. 2.1. Subsequently, notice u/s. 263 of the Act was issued to the assessee on 04/03/2025. The Ld. PCIT from the assessment records noted that, payments were made to various foundations, trusts, associations, etc. and the assessee claimed deduction u/s. 80G of the Act at Rs. 22,32,000/-. It was noted that, the aforesaid payments were made towards CSR expenses on which Section 80G deduction is not available because CSR expenditure is mandatory requirement under the Companies Act, 2013 and allowing deduction u/s. 80G would result in subsidising these expenses incurred by the assessee which is not the intent of the legislature. 2.2. The assessee furnished relevant details in order to substantiate its claim regarding allowability of Section 80G on the expenditure made under CSR. In support of the assessee relied on various decisions and explanatory notes to Memorandum of Association (MOA) to the amendment made u/s. 37 of the Act by inserting Explanation. 2.3. The Ld. PCIT after considering the submissions of the assessee observed and held as under:
; A.Y. 2020-21 4 ABM Knowledgeware Ltd. ; A.Y. 2020-21 5 ABM Knowledgeware Ltd. ; A.Y. 2020-21 6 ABM Knowledgeware Ltd. ; A.Y. 2020-21 7 ABM Knowledgeware Ltd. Aggrieved by the order of the Ld. PCIT, the assessee is in appeal before this Tribunal.
At the outset, the ld. AR submitted that, on merits the issue is squarely covered by various decisions of this Tribunal as well as the clarifications issued by the legislature on the aspect of CSR spent. He submitted that, the Ld. PCIT did not appreciate the judicial development on the issue and directed the Ld. AO to disallow the claim. This is categorically clear from the observations recorded in para 5.5 to para 5.7 of the impugned order. 3.1. The Ld. AR submitted that, admittedly there was no specific query raised by the ld. AO on the aspect of the deduction claimed u/s. 80G. but the view adopted by the Ld. AO was a plausible one which cannot be found fault with. He submitted that, the ld. PCIT cannot pass such order directing the Ld. AO to disallow the claim, when on merits the assessee is able to establish that the claim of deduction u/s. 80G in accordance with law.
4. In support of ground no. 2 to 8 the Ld. AR also placed reliance on the Memorandum to the Finance (no. 2) Bill, 2014 pertaining to the corporation social responsibility that reads as under: “Under the Companies Act, 2013 certain companies (which have net worth of Rs.500 crore or more, or turnover of Rs. 1000 crore or more, or a net profit of Rs.5 crore or more during any financial year) are required to spendcertain percentage of their profit on activities relating to Corporate Social Responsibility (CSR). Under the existing provisions of the Act expenditure incurred wholly and exclusively for the purposes of the business is only allowed as a deduction for computing taxable business income. CSR expenditure, being an application of income, is not incurred wholly and exclusively for the purposes of carrying on business. As the application of income is not allowed as deduction for the purposes of computing taxable income of a company, amount spent on CSR cannot be allowed as deduction for computing the taxable income of the company. Moreover, the objective of CSR is to share burden of the Government in ; A.Y. 2020-21 8 ABM Knowledgeware Ltd. providing social services by companies having net worth/turnover/profit above a threshold. If such expenses are allowed as tax deduction, this would result in subsidizing of around one-third of such expenses by the Government by way of tax expenditure. The existing provisions of section 37(1) of the Act provide that deduction for any expenditure, which is not mentioned specifically in section 30 to section 36 of the Act, shall be allowed if the same is incurred wholly and exclusively for the purposes of carrying on business or profession. As the CSR expenditure (being anapplication of income) is not incurred for the purposes of carrying on business, such expenditures cannot be allowed under the existing provisions of section 37 of the Income-tax Act. Therefore, in order to provide certainty on this issue, it is proposed to clarify that for the purposes of section 37(1) any expenditure incurred by an assessee on the activities relating to 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 business and hence shall not be allowed as deduction under section 37. However, the CSR expenditure which is of the nature described in section 30 to section 36 of the Act shall be allowed deduction under those sections subject to fulfilment of conditions, if any, specified therein. This amendment will take effect from 1st April, 2015 and will, accordingly, apply in relation to the assessment year 2015-16 and subsequent years.” 4.1. He thus submitted that, it is all by virtue of this amendment that explanation to section 37(1) inserted was as to clarify the purpose of section 37(1) that expenditure incurred by an assessee for activities relating to CSR referred in section 145 of the Companies Act 2013, shall not to be deemed to be a expenditure incurred for the purpose of its business or profession. He thus submitted that, the CSR expenditure is therefore to be disallowed under the Explanation 2 to section 37(1) while computing income under the head income from business profession. He thus submitted that the memorandum clarifies the impact of Explanation 2 to 37(1), wherein the legislature clearly indicated its ; A.Y. 2020-21 9 ABM Knowledgeware Ltd. mind regarding allowability of deduction under section 30 to 36, subject to fulfilment of conditions if any specified therein. 4.2. The Ld. AR drawing the same corollary submitted that, even though the expenditure under the head CSR is disallowed u/s. 37(1), there is no such embargo to consider if the same is allowable u/s.80G of the Act. He submitted that, if the assessee is denied this benefit merely because such payment formed part of CSR expenditure, would lead to double disallowance which is not the intention of legislature. 4.3. The Ld.AR thus submitted that, on merits also the claim of the assessee is allowable and therefore there is no loss of revenue to the department in order to justify the initiation of 263 proceeding. 4.4. On the contrary, the Ld.DR vehemently supported the order passed by the Ld.PCIT. He also placed reliance on the decision of Hon’ble Delhi Tribunal in case of Agilent Technology (international)Pvt. Ltd. vs. ACIT reported in(2024) 160 taxmann.com 238. He submitted that, the test of voluntariness is not satisfied in respect of the expenditure incurred under CSR. He submitted that, under 80G the claim of deduction is assuming the character of donation and the thus any payment made voluntarily can only be considered for deduction u/s.80G subject to the necessary conditions being satisfy therein. He emphasis that, the payment made under CSR lacks the character of it be a donation and therefore cannot be considered for deduction u/s.80G of the Act. 4.5. In the counter to the above agreement of the Ld.DR, the Ld.AR placed reliance on a recent decision of coordinate bench of this Tribunal in case of ACIT vs. Sikka Port and Terminal Ltd. reported ; A.Y. 2020-21 10 ABM Knowledgeware Ltd. in (2025) 173 taxmann.com 366. He submitted that, the decision relied by the Ld.DR has been distinguished by observing as under: “5. We heard the parties and perused the material on records. The assessee during the year disallowed a sum of Rs.33,85,00,000 under section 37 of the Act towards the CSR Spend in compliance with section 135 of the Act. Since the institutions to which the said amounts are given are registered under section 80G of the Act, the assessee claimed 50% i.e.16,92,50,000 of the same as deduction. The argument of the revenue is that the payment are made to comply with the mandate under the Companies Act, and therefore it cannot be treated as donations which are "voluntary" payments. The further argument of the revenue is that when the statute has denied the direct claim of the CSR spend under section 37, the assessee claiming the deduction indirectly under section 80G is against the intention of the legislature and cannot be allowed. The assessee's contention is that there is no restriction under section 80G to the effect that the contribution should be voluntary and that the CSR spend is an application of income which is eligible for deduction from the gross total income of the assessee as per the provisions of section 80G.
The word "donation" has not been defined under the Act. However the Hon'ble Supreme Court in the context of Expenditure Tax Act in the case of P.V.G. Raju (supra) has described the meaning of the word "donation" in the following words When a person gives money to another without any material return, he donates that sum. An act by which the owner of a thing voluntarily transfers the title and possession of the same from himself to another, without any consideration, is a donation. We do not require lexicographic learning nor precedential erudition to understand the meaning of what many people do every day, viz., giving donations to some fund or other, or to some person or other. Indeed, many rich people out of diverse motives make donations to political parties. The hope of spiritual benefit or political goodwill, the spontaneous affection that benefaction brings, the popularization of a good cause or the prestige that publicized bounty fetches-these and other myriad consequences or feelings may not mar a donation to make it a grant for a quid pro quo. Wholly motiveless donation is rare, but material return alone negates a gift or donation.' 7. Therefore to examine if CSR spending of the assessee would be a donation it is essential to examine whether the donations given by the assessee to M/s. Reliance Foundation and M/s Shyam Kothari ; A.Y. 2020-21 11 ABM Knowledgeware Ltd. Foundation without any material return and without any consideration and whether it was a grant for quid pro quo. It is not the case of the revenue that the assessee has made contributions to these institutions with an intention get something in return. The only contention of the revenue is that the contributions are made as part of a mandate and not voluntary. However, the Hon'ble Supreme Court in the above case has laid down the basic principle that a payment made without any material return and without any consideration and not for quid pro quo is a donation. Therefore in our considered view, the payment made whether voluntarily or as part of a mandate does not negate the intention of the contribution made. The reliance placed by the Id DR on the decision of Agilent Technologies (International) Pvt. Ltd (supra) is factually distinguishable. The DRP whose order was upheld in the said case, had placed reliance on the decision of the Hon'ble High Court in the case of DCIT v. Hindustan Darr Oliver Ltd (1994) 45 TTJ Mumbai 552 where the payment made was held as not a donation since it was found that the intention behind making the donation was to get reserved seats in the college run by the institute to whom the payments are made as part of CSR spending. As already mentioned, the revenue is not contending that the assessee in the present case has made payments to get something material in return” We have perused the submissions the advance by both sides in the light of record placed before us.
Admittedly notice u/s.143(2) was issued to the assessee to verify large any claim of amount allowable as deduction under Schedule BP and the notice was issued for complete scrutiny. Scanned copy of the notice issued u/s.143(2) is as under:
; A.Y. 2020-21 12 ABM Knowledgeware Ltd. ; A.Y. 2020-21 13 ABM Knowledgeware Ltd. 5.1. The assessing officer is vested with broad powers u/s.143(2) in a complete scrutiny. However, during the assessment proceedings, the assessing officer only verified issue relating to the issue mentioned in the notice for further clarification. There is nothing on record to suggest that, details relating to other issues were verified by the Ld.AO. It is noted that, the questioner issued by the assessing officer though called for all the information pertaining to computation of income, he only verified one issue as per Section 143(2) notice that needed further clarification.
; A.Y. 2020-21 14 ABM Knowledgeware Ltd.
Revision of orders prejudicial to revenue. (1) The Principal Chief Commissioner or Chief Commissioner or Principal Commissioner or Commissioner may call for and examine the record of any proceeding under this Act, and if he considers that any order passed therein by the Assessing Officer or the Transfer Pricing Officer, as the case may be, is erroneous in so far as it is prejudicial to the interests of the revenue, he may, after giving the assessee an opportunity of being heard and after making or causing to be made such inquiry as he deems necessary, pass such order thereon as the circumstances of the case justify, including,— (i) an order enhancing or modifying the assessment or cancelling the assessment and directing a fresh assessment; or (ii) an order modifying the order under section 92CA; or (iii) an order cancelling the order under section 92CA and directing a fresh order under the said section. *** Explanation 2.— For the purposes of this section, it is hereby declared that an order passed by the Assessing Officer [or the Transfer Pricing Officer, as the case may be, shall be deemed to be erroneous in so far as it is prejudicial to the interests of the revenue, if, in the opinion of the Principal Chief Commissioner or Chief Commissioner or Principal Commissioner or Commissioner,— (a) the order is passed without making inquiries or verification which should have been made; (b)the order is passed allowing any relief without inquiring into the claim; (c)the order has not been made in accordance with any order, direction or instruction issued by the Board under section 119; or (d)the order has not been passed in accordance with any decision which is prejudicial to the assessee, rendered by the jurisdictional High Court or Supreme Court in the case of the assessee or any other person." (Emphasis added) 5.2. Thus, to decide as to whether or not the jurisdiction was rightly exercised by the Ld.PCIT under Section 263 of the Act, we would have to take into consideration the provisions of Section 263 of the Act, sans Explanation 2 (inserted by Finance Act 2015 w.e.f. 1/04/2015) that elucidate circumstances when an assessment order can be held to be erroneous and prejudicial to the interests of the Revenue.
; A.Y. 2020-21 15 ABM Knowledgeware Ltd. 5.3. We also note that even before the said amendment, it stipulated the mandatory requirement of the order being “erroneous” as well as “prejudicial to the interests of the Revenue”. Therefore, what manifests from the above is the fact that, the twin conditions have to be met before assuming jurisdiction under Section 263 of the Act, and the PCIT has to form an opinion that the order passed by the assessing officer is “erroneous” and “prejudicial to the interests of the Revenue”. 5.4. We also note that prior to the amendment, the scope of these words were explained by the Hon'ble Supreme Court. We refer to the decision of Malabar Industrial Co. Ltd. Vs. CIT reported in (2000) 243 ITR 83 Hon’ble Supreme Court inter alia laid down that, the prerequisite for exercise of jurisdiction by the Ld.PCIT under section 263 is that, the order of the assessing officer must be erroneous in so far as it is prejudicial to the interests of Revenue. The PCIT thus has to satisfy twin conditions, namely : (a) The order of the assessing officer sought to be revised is erroneous, and (b) It is prejudicial to the interests of the Revenue.
5.5. Hon’ble Supreme Court held that, if one of them is absent i.e; if the order of the assessing officer is erroneous, but is not prejudicial to the revenue, or, if it is not erroneous, but is prejudicial to the interest of the revenue, recourse cannot be had to section 263(1) of the Act. Hon’ble Supreme Court further held that: 9. The phrase 'prejudicial to the interests of the revenue' has to be read in conjunction with an erroneous order passed by the Assessing Officer. Every loss of revenue as a consequence of an order of the Assessing ; A.Y. 2020-21 16 ABM Knowledgeware Ltd. Officer cannot be treated as prejudicial to the interests of the revenue, for example, when an ITO adopted one of the courses permissible in law and it has resulted in loss of revenue; or where two views are possible and the ITO has taken one view with which the Commissioner does not agree, it cannot be treated as an erroneous order prejudicial to the interests of the revenue unless the view taken by the ITO is unsustainable in law. It has been held by this Court that where a sum not earned by a person is assessed as income in his hands on his so offering, the order passed by the Assessing Officer accepting the same as such will be erroneous and prejudicial to the interests of the revenue - Rampyari Devi Saraogi v. CIT [1968] 67 ITR 84 (SC) and in Smt. Tara Devi Aggarwal v. CIT [1973] 88 ITR 323 (SC).
5.6. Thus, the Income-tax Officer is not only an adjudicator but also an investigator. He cannot remain passive in respect of a return which is picked up for complete scrutiny. The assessing officer must ascertain the truth of the facts stated in the return. It is in this context that Hon’ble Supreme Court assigns such meaning to the word "erroneous" for the purposes of section 263. 5.7. In present facts of the case, the return was picked up for complete scrutiny, as per the notice issued under section 143(2). It is thus incumbent on the assessing Officer to investigate the facts stated in the return, and circumstances would make prudent that the word "erroneous" in section 263 includes the failure to make such an inquiry. The order becomes erroneous because no inquiry was made, and not because there is anything wrong with the order if all the facts stated therein are assumed to be correct. 5.8. Now the question arises is whether the assessing officer still applied his mind on the issue of deduction claimed by the assessee under section 80G of the Act. Admittedly, the Ld.AO did not issue any specific query regarding the deduction claimed by the assessee. The details filed by the assessee was not verified by the Ld.AO. Further, it cannot be lost out of mind that, the notice ; A.Y. 2020-21 17 ABM Knowledgeware Ltd. issued under section 143(2) of the act was for a complete scrutiny. The Ld.AO was under the mandate to verify every claim made in the return of income. Thus, the test under Explanation 2(a) to section 263 of the Act needs to be invoked.
5.9. Considering the totality of the facts and the decisions relied by both sides as discussed herein above, we concur with the invoking provisions of section 263by the Ld.PCIT as the assessing officer failed to carry out any inquiry, failed to apply his mind while passing the assessment order in respect of the deduction claimed under section 80 G of the Act. Accordingly, ground no. 1 and 2 raised by the assessee stands dismissed.
6. On the issue of the allowability of deduction under section 80G of the Act out of the CSR spending, the Ld.PCIT during the revisionary proceeding had sufficient documents to conclude that the proceedings should be dropped. Section 263 is not enacted to facilitate mere escape of revenue, which is addressed in other provisions of the Act. The prejudice contemplated under section 263 is the prejudice to the income-tax administration as a whole. Section 263 should be proceeded not as a jurisdictional corrective or as a review of a subordinate’s order in exercising supervisory power, but for correcting distortions and prejudices to the revenue. This is a unique concept that must be understood in the context of and in the interests of the revenue administration.
6.1. The Ld.DR relied on the decision of Hon’ble Delhi Tribunal in case of Agilent Technology (international) Pvt. Ltd. vs. ACIT(supra) and submitted that, no deduction is allowable under section 80G on the amount incurred for the purposes of CSR. He submitted A.Y. 2020-21 18 ABM Knowledgeware Ltd. that the assessment order was prejudicial, and the order passed under section 263 corrected such prejudice caused to the Revenue administration. 6.2. We note that the decision of Hon’ble Bangalore Tribunal relied by the Ld.AR in case of First American (India) Pvt. Ltd. v. ACIT in of 2019, vide order dated 29.04.2020 dealt with the applicability of section 80G by observing as under: 11. Section 135 of Companies Act, 2013 requires companies with CSR obligations, with effect from 01/04/2014. Finance (No.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) of section 37, any expenditure incurred by an assessee on the activities relating to corporate social responsibility referred to in section 135 of the Companies Act, 2013 shall not be deemed to be an expenditure incurred by the assessee for the purposes of the business or profession.
This amendment will take effect from 1/04/2015 and will, accordingly, apply to assessment year 2015-16 and subsequent years.
Thus, CSR expenditure is to be disallowed by new Explanation 2 to section 37(1), while computing Income under the Head 'Income form Business and Profession'. Further, clarification regarding impact of Explanation 2 to section 37(1) of the Income Tax Act in Explanatory Memorandum to The Finance (No.2) Bill, 2014 is as under: "The existing provisions of section 37(1) of the Act provide that deduction for any expenditure, which is not mentioned specifically in section 30 to section 36 of the Act, shall be allowed if the same is incurred wholly and exclusively for the purposes of carrying on business or profession. As the CSR expenditure (being an application of income) is not incurred for the purposes of carrying on business, such expenditure cannot be allowed under the existing provisions of section 37 of the Income-tax Act. Therefore, in order to provide certainty on this issue, it is proposed to clarify that for the purposes of section 37(1) any expenditure incurred by an assessee on the activities relating to 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 business and, hence, shall not be allowed as deduction under section 37. However, the CSR expenditure which is of the nature described in section 30 to section 36 of the Act shall be allowed deduction under those sections subject to fulfilment of conditions, if any, specified therein."
From the above it is clear that under Income tax Act, certain provisions explicitly state that deductions for expenditure would be allowed while computing income under the head, 'Income from Business and ; A.Y. 2020-21 19 ABM Knowledgeware Ltd. Profession" to those, who pursue corporate social responsibility projects under following sections. • Section 30 provides deduction on repairs, municipal tax and insurance premiums. • Section 31, provides deduction on repairs and insurance of plant, machinery and furniture • Section 32 provides for depreciation on tangible assets like building, machinery, plant, furniture and also on intangible assets like know-how, patents, trademarks, licenses. • Section 33 allows development rebate on machinery, plants and ships. • Section 34 states conditions for depreciation and development rebate. • Section 35 grants deduction on expenditure for scientific research and knowledge extension in natural and applied sciences under agriculture, animal husbandry and fisheries. Payment to approved universities/research institutions or company also qualifies for deduction. In-house R&D is eligible for deduction, under this section. • Section 35CCD provides deduction for skill development projects, which constitute the flagship mission of the present Government. • Section 36 provides deduction regarding insurance premium on stock, health of employees, loans or commission for employees, interest on borrowed capital, employer contribution to provident fund, gratuity and payment of security transaction tax. Income Tax Act, under section 80G, forming part of Chapter VIA, provides for deductions for computing taxable income as under: • Section 80G(2) provides for sums expended by an assessee as donations against which deduction is available. a) Certain donations, give 100% deduction, without any qualifying limit like Prime Minister's National Relief Fund, National Defence Fund, National Illness Assistance Fund etc., specified under section 80G(1)(i) b) Donations with 50% deduction are also available under Section 80G for all those sums that do not fall under section 80G(1)(i). Under Section 80G(2) (iiihk) and (iiihl) there are specific exclusion of certain payments, that are part of CSR responsibility, not eligible for deduction u/s80G.
In our view, expenditure incurred under section 30 to 36 are claimed while computing income under the head, 'Income form Business and Profession", where as monies spent under section 80G are claimed while computing "Total Taxable income" in the hands of assessee. The point of claim under these provisions are different.
Further, intention of legislature is very clear and unambiguous, since expenditure incurred under section 30 to 36 are excluded from Explanation 2 to section 37(1) of the Act, they are specifically excluded in clarification issued. There is no restriction on an expenditure being claimed under above sections to be exempt, as long as it satisfies necessary conditions under section 30 to 36 of the Act, for computing income under the head, "Income from Business and Profession".
For claiming benefit under section 80G, deductions are considered at the stage of computing "Total taxable income". Even if any payments under section 80G forms part of CSR payments( keeping in mind ineligible ; A.Y. 2020-21 20 ABM Knowledgeware Ltd. deduction expressly provided u/s.80G), the same would already stand excluded while computing, Income under the head, "Income form Business and Profession". The effect of such disallowance would lead to increase in Business income. Thereafter benefit accruing to assessee under Chapter VIA for computing "Total Taxable Income" cannot be denied to assessee, subject to fulfillment of necessary conditions therein.
We therefore do not agree with arguments advanced by Ld.Sr.DR.
In present facts of case, Ld.AR submitted that all payments forming part of CSR does not form part of profit and loss account for computing Income under the head, "Income from Business and Profession". It has been submitted that some payments forming part of CSR were claimed as deduction under section 80G of the Act, for computing "Total taxable income", which has been disallowed by authorities below. In our view, assessee cannot be denied the benefit of claim under Chapter VI A, which is considered for computing 'Total Taxable Income". If assessee is denied this benefit, merely because such payment forms part of CSR, would lead to double disallowance, which is not the intention of Legislature. 6.3. The above decision analyses the ambit of exemption available under section 80G of the Income Tax Act and the specific exceptions in respect of payments forming part of CSR (Corporate Social Responsibility) expenditure, on which deduction is not available under the said section. Accordingly, in respect of all other payments, deduction under section 80G cannot be denied merely on the ground that such payments form part of CSR spending.
6.4. It is important to note that payments forming part of CSR do not form part of the profit and loss account for the purpose of computing income under the head “Profits and Gains of Business or Profession.” However, if certain payments that form part of CSR expenditure are otherwise eligible under section 80G, the deduction under section 80G cannot be denied, since the benefit under Chapter VI-A is available for the purpose of computing “Total Taxable Income.”