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Facts
The assessee claimed a deduction under section 80G of the Income Tax Act for donations made as part of its Corporate Social Responsibility (CSR) expenditure. The Assessing Officer disallowed this claim, citing the prohibition of CSR expenditure deductions under section 37 of the Act.
Held
The Tribunal held that while CSR expenditure is not deductible under section 37, there is no such bar under section 80G. As the donee institution was approved under section 80G and no other conditions of the section were violated, the deduction claimed under section 80G is allowable.
Key Issues
Whether CSR expenditure, otherwise not deductible under section 37, can be claimed as a deduction under section 80G if paid to an approved institution.
Sections Cited
80G, 37
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Income Tax Appellate Tribunal, “B” BENCH, MUMBAI
O R D E R
Per Saktijit Dey, Vice President:
The present appeal arises out of order dated 28.11.2025 of National Faceless Appeal Centre (‘NFAC’ for short), Delhi pertaining to the assessment year (A.Y. for short) 2020- 21.
When the appeal was called out, none appeared on behalf of the assessee despite notice. Taking note of the nature of dispute involved in the appeal and also the fact that ld. Departmental Representative (‘ld. DR’ for short) was prepared to argue the matter, we are inclined to proceed ex parte qua the assessee and dispose of the appeal after hearing ld. DR and based on materials on record.
The sole grievance of the assessee in the present appeal is with regard to disallowance of deduction claimed u/s. 80G of the Income Tax Act, 1961 (‘the Act’ for short).
Briefly the facts are, the assessee is a resident corporate entity stated to be engaged in the business of providing Geographical Information Services comprising of Genesys International Corporation Limited vs. ITO photogrammy, remote sensing, cartography, data convention, state of the art terrestrial and 3D geo content including location navigation mapping and other computer based related services.
For the assessment year under dispute, the assessee filed its return of income on 10.02.2021, declaring Nil income, after claiming deduction u/s. 10AA, 80JJA and 80G of the Act. The return of income filed by the assessee was selected for scrutiny. In course of assessment proceeding, while verifying the return of income, the Assessing Officer (‘A.O.’ for short) noticed that in the previous year, the assessee had spent an amount of Rs.50 lacs towards Corporation Social Responsibility (‘CSR’ for short) expenditure and did not claim it deduction while computing its profit of business. On the contrary, the assessee had claimed deduction of an amount of Rs.22,60,837/- u/s. 80G of the Act out of CSR expenses being donation paid of Rs.50 lacs to Ram Bajaj Foundation.
Noticing the above, the A.O. called upon the assessee to justify the deduction claimed, considering the fact that in terms with section 37 of the Act, no deduction of CSR expenditure is allowable while computing business income. Though, the assessee justified its claim, however, the A.O. remained unconvinced. Ultimately, he disallowed assessee’s claim.
Though, the assessee contested the disallowance by filing an appeal before ld. first appellate authority, however, it did not succeed.
We have heard ld. Departmental Representative (‘ld. DR’ for short) and perused the materials available on record. Insofar as, facts relating to the assessment in dispute are concerned, there is no dispute that while complying to its obligations under CSR, the assessee had paid an amount of Rs.50 lacs to Ram Bajaj Foundation. The departmental
Genesys International Corporation Limited vs. ITO authorities have not disputed that the donee is approved u/s. 80G of the Act. Only reason for which departmental authorities have disallowed assessee’s claim is that the assessee cannot claim any deduction on account of CSR expenditure in view of the specific bar u/s. 37 of the Act. It is fact on record that the assessee had not claimed any deduction u/s. 37 of the Act with reference to the CSR expenditure while computing its business income. However, the assessee has claimed deduction of the eligible amount u/s. 80G of the Act. On a careful reading of the relevant provisions, it is noticed that though section 37 prohibits claim of deduction on account of CSR expenditure, however, there is no such bar u/s. 80G of the Act. The only condition being, the institution to whom payment is made must be approved u/s. 80G of the Act by the competent authority. Of course, there are other conditions as well. There is no allegation by the departmental authorities that any of the conditions of section 80G have been violated. That being the factual position emerging on record, in our considered opinion, assessee’s claim of deduction of an amount of Rs.22,60,837/- u/s. 80G of the Act is allowable. The aforesaid view of ours is supported by various decisions of co-ordinate benches. Accordingly, we direct the A.O. to allow assessee’s claim of deduction u/s. 80G of the Act.
In the result, the appeal is allowed. Order pronounced in the open court on 08.04.2026