NYATI BUILDERS PRIVATE LIMITED,PUNE vs. ASSISSTANT COMMISSIONER OF INCOME TAX, PUNE

ITA 1246/PUN/2025Status: DisposedITAT Pune24 November 2025AY 2018-1910 pages
AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that the authorities below erred in denying the assessee's claim under Section 80G. The Tribunal noted that the AO and CIT(A) had not verified the nature of payments qualifying for exemption under Section 80G and the quantum of eligibility. The Tribunal reasoned that the assessee cannot be denied the benefit of a claim under Chapter VI-A, which is considered for computing 'Total Taxable Income', merely because such payment forms part of CSR. Doing so would lead to double disallowance, which is not the intention of the legislature. The Tribunal relied on decisions of co-ordinate benches. Consequently, the Tribunal set aside the orders of the lower authorities and directed the AO to verify and allow the assessee's claim of deduction under Section 80G to the extent eligible. The grounds raised by the assessee were allowed for statistical purposes.

What were the facts?

The assessee, Nyati Builders Private Limited, engaged in real estate development, filed its return for AY 2018-19 declaring a total income of Rs. 39,21,10,000/-. The Assessing Officer (AO) disallowed CSR expenditure of Rs. 1,13,37,800/-, disallowing a deduction of Rs. 56,68,900/- claimed under Section 80G. The AO held that CSR expenditure, being mandatory under the Companies Act, 2013, is not a voluntary donation eligible for 80G deduction and allowing it would subsidize corporate expenses, contrary to legislative intent. The Commissioner of Income Tax (Appeals) [CIT(A)] upheld the AO's disallowance. The assessee appealed to the Income Tax Appellate Tribunal (ITAT).

What were the issues?

1. Whether the disallowance of Rs. 56,68,900/- under Section 80G of the Income Tax Act, 1961, in respect of Corporate Social Responsibility (CSR) expenditure is justified? Assessee's Contention: The assessee argued that while Rs. 50,00,000/- was incurred as CSR expenditure under Section 135 of the Companies Act, 2013, the balance amount of donation is eligible for deduction under Section 80G. The assessee prayed to restrict the disallowance to Rs. 25,00,000/- (50% of Rs. 50,00,000/-) and allow the balance claim of Rs. 31,68,900/-. Revenue's Contention: The Revenue contended that CSR expenditure is mandatory and not a voluntary donation, hence not eligible for deduction under Section 80G. The Revenue also argued that if expenditure is not allowable under Section 37, it cannot be eligible for Section 80G deduction.

Which sections of the Income-tax Act were involved?

Section 80G,Section 37,Section 135,Section 143(3),Section 142(1),Section 144B,Section 115JB

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, “A” BENCH, PUNE

Before: SHRI R.K. PANDA & MS. ASTHA CHANDRA

PER ASTHA CHANDRA, JM :

The appeal filed by the assessee is directed against the order dated 25.03.2025 of the Ld. Commissioner of Income Tax (Appeals), Pune-12 ["CIT(A)"] pertaining to Assessment Year ("AY") 2018-19. 2. Briefly stated, the facts of the case are that the assessee is a company engaged in the business of real estate development and construction of residential as well as commercial project. For the AY 2018- 19, the assessee filed its original return of income on 29.11.2018 u/s 139 of the Income Tax Act, 1961 (the "

The order continues below.

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