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Facts
The assessee's return of income for AY 2020-21 was accepted after a scrutiny assessment. The Principal Commissioner of Income Tax initiated revisionary proceedings under Section 263, contending that the assessment order was erroneous and prejudicial to revenue interest because 50% of CSR expenditure was claimed as a donation under Section 80G of the Act.
Held
The Tribunal found that the issue of allowing CSR expenditure as a donation under Section 80G is highly debatable, with co-ordinate benches consistently taking a view in favour of allowing it. The Tribunal concluded that the Pr. CIT's assumption of jurisdiction under Section 263 amounted to a mere change of opinion on a plausible view taken by the Assessing Officer. Consequently, the Pr. CIT's order was set aside, and the original assessment order was restored.
Key Issues
Whether the Principal Commissioner of Income Tax correctly assumed jurisdiction under Section 263 to revise an assessment order, particularly when the underlying issue of allowing CSR expenditure as a donation under Section 80G was debatable and a plausible view was already adopted by the Assessing Officer.
Sections Cited
263, 143(3), 144B, 80G
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Income Tax Appellate Tribunal, “F” BENCH, MUMBAI
Before: SHRI SAKTIJIT DEY, HON’BLE & SHRI NARENDRA KUMAR BILLAIYA, HON’BLE
O R D E R
PER NARENDRA KUMAR BILLAIYA, AM:
This appeal by the assessee is preferred against the order of the ld. Principal Commissioner of Income Tax [hereinafter “the ld. Pr. CIT”] dated 13/03/2025 framed u/s 263 of the Act.
None appeared on behalf of the assessee in spite of notices. We decide to proceed ex-parte. 3. The ld. D/R was heard at length. Case records carefully perused. The sum and substance of the grievance of the assessee is that the ld. Pr. CIT erred in assuming jurisdiction u/s 263 of the Act and further erred in holding that the assessment order dated 29/07/2022 is not only erroneous but prejudicial to the interest of the revenue. 4. Briefly stated the facts of the case are that the assessee filed its return of income on 26/11/2020 declaring total income at Rs. 2 19,81,52,990/-. The return was selected for scrutiny assessment and order u/s 143(3) r.w.s. 144B of the Act was framed on 29/07/2022. The returned income of the assessee was accepted as such. 4.1. Assuming jurisdiction conferred upon him by the provision of Section 263 of the Act, the ld. Pr. CIT issued a showcause notice to the assessee asking it to showcause why the assessment order dated 29/07/2022 should not be treated as erroneous and prejudicial to the interest of the revenue as 50% of the CSR expenditure of Rs. 26,93,080/- is claimed as donation u/s 80G of the Act. The ld. Pr. CIT went on to hold that the assessment order framed u/s 143(3) r.w.s. 144B of the Act is not only erroneous but prejudicial to the interest of the revenue and directed the AO to disallow the deduction u/s 80G of the Act in respect of donation claimed out of CSR expenditure. 5. We have given a thoughtful consideration to the order of the ld. Pr. CIT. We are of the considered view that the issue raised by the ld. Pr. CIT is a highly debatable issue as the Co-ordinate Benches of the Tribunal have taken a consistent view that CSR expenditure can be claimed as expenditure u/s 80G of the Act in the cases of Motilal Oswal Securities Ltd. (ITA No. 1795/Mum/2023, order dated 18.08.2023), Allegis Services India Pvt. Ltd. (ITA No. 1693/Bang/2019), JMS Mining Pvt. Ltd. [130 taxmann.com 118 (Kolkata Trib.)] and Elan Pharma (India) Pvt. Ltd. vs. PCIT in ITA No. 2419/Mum/2025. 6. As the issue is highly debatable, any view taken by the AO during the course of original assessment proceedings has to be considered as a plausible view and the view taken by the ld. Pr. CIT, howsoever plausible, is nothing but a change of opinion for which jurisdiction u/s 3 263 of the Act cannot be assumed. Considering the facts of the case in totality, we set aside the order of the ld. Pr. CIT and restore that of the AO dated 29/07/2022. 7. In the result, appeal of the assessee is allowed. Order pronounced in the Court on 13th June, 2025 at Mumbai. (SAKTIJIT DEY) ACCOUNTANT MEMBER Mumbai, Dated 13/06/2025 *SC SrPs *SC SrPs *SC SrPs *SC SrPs