DELHI DUTY FREE SERVICES PRIVATE LIMITED,DELHI vs. DCIT, CIRCLE-13, DELHI

Briefly stated, the facts of the case are that the assessee company filed its Return of Income on 28.11.2017 declaring an income of Rs. 1,57,31,09,980/- in A.Y 2017-18 and on 27.11.2017 declaring an income of Rs. 176,18,27,590/- respectively. Return was selected for scrutiny assessment through CASS and accordingly, statutory notices were issued and served on the assessee.

During the course of scrutiny assessment proceedings in A.Y 2017- 18, the Assessing Officer noticed that the assessee has expense on CSR of Rs. 1,90,20,000/-. This amount was added back to the total income of the assessee. The assessee further claimed deduction u/s 80G of the Income-tax Act, 1961 [the Act, for short] of Rs. 95,10,000/- out of the expenses of CSR and donations. This claim of deduction of Rs. 95,10,000/- u/s 80G of the Act was disallowed on account of the fact that where the CSR expense is mandatory in nature under section 135 of the Company Act, whereas donations are to be treated as voluntary in nature u/s 80G of the Act.

Aggrieved, the assessee went in appeal before the ld. CIT(A) who rejected the claim of the assessee on the ground that the assessee has not claimed the expenditure as donation u/s 80G of the Act and Page 3 of 13 , 68, 69/DEL/2025 Delhi Duty Free Services [A.Ys 2017-18, 2018-19 & 2020-21] therefore, CSR cannot be directed to be treated as donation u/s 80G of the Act.

Now the further aggrieved assessee is in appeal before us.

Before us, both the rival representatives reiterated what has been stated before the lower authorities. The ld AR relied on the various decisions of Tribunal as presented before the CIT(A), particularly the case of InterGlobe Technology Quotient P Ltd V ACIT (2024) 163 taxmann.com 542(Del-Tri) and stated that even if such a disallowance were to be made as CSR, deduction u/s 80G of the Act is to be allowed.

Per contra, the ld. DR vehemently relied on the orders of the AO and the CIT(A).

We have heard the rival submissions and have perused the relevant material on record. We find that the issue of CSR to be allowed under section 80G has been covered in favour of the assessee by the order of the various co-ordinate Delhi bench as relied upon by the assessee.

In view of the fact that deduction u/s 80G is dependent on meeting certain criteria as provided in law, we set aside the issue of claim of CSR expense to be considered for deduction u/s 80G, to the file of the Assessing Officer, with the direction that as the requisite details as required by section 80G has not been furnished before us, the assessee shall furnish the relevant information before the AO to claim for Page 5 of 13 , 68, 69/DEL/2025 Delhi Duty Free Services [A.Ys 2017-18, 2018-19 & 2020-21] deduction under section 80G of the Income Tax Act along with all donation receipts and the 80G certificates issued by the Donee to the assessee. The Assessing Officer shall verify the detail in accordance with the law and if found proper, shall allow the CSR expense for deduction u/s 80G. We accordingly allow the ground Nos 1 and 2 with the above directions.

In the result, the appeal of the assessee is partly allowed.

The grounds raised

Ground Nos. 1 and 2 of ground I are pari-materia identical to those discussed and decided by us hereinabove while deciding Ground No. 1 to 2 in A.Y 2017-18 and 2018-19. Respectfully following the same, we partly allow the grounds with same directions.

With respect to Ground I (3), in respect of AY 2020-21, the ld AR stated that the Ld. AO has also disallowed deduction of CSR donations u/s. 80G on the ground that as the Appellant has opted for Section 115BAA (new tax regime) it is not eligible for claiming deductions under Chapter VI-A. The ld AR submitted that for AY 2020-21, an Appellant opting for Section 115BAA was not entitled to claim deduction "under any provision of Chapter-VIA under the heading "C.-Deductions in respect of certain incomes" other than the provisions of section 80JJAA".

The ld AR further submitted that subsequently, section 115BAA was amended vide Finance Act, 2020 w.e.f. AY 2021-22 and the words "under the heading "C- Deductions in respect of certain incomes"" were deleted and the provisions "under any provisions of Chapter VI A other than the provisions of section 80JJAA or section 80M” was added. The ld AR submitted that from AY 2021-22, the Act prohibited the claim deduction u/s. 80G w.e.f. AY 2021-22 for domestic companies paying taxes at rate of 22%. It is the say of the ld AR that for AY 2020-21 the assessee was entitled to claim deduction u/s. 80G.

The ld DR relied on the orders of authorities below.

We have heard the rival submissions and have carefully perused the materials on record. We find force in the argument of the assessee.

With respect to ground 1,2 and 3 regarding disallowance of PF/ESIC u/s 36(1)(va), the assessee has contested the disallowance of Rs. 28,41,392/- u/s 36(1)(va) of the Income Tax Act, on the ground that Page 9 of 13 , 68, 69/DEL/2025 Delhi Duty Free Services [A.Ys 2017-18, 2018-19 & 2020-21] as the due date of remittance was a public holiday, the assessee Company had remitted the amount on the next day before the due date of filing the return of income and that the amendment brought in by the Finance Act, 2021 with respect to Sec. 36(1)(va) have a prospective effect and no disallowance shall be made for the previous years.

We find that this issue of disallowance of PF/ESIC is no more res integra as the quarrel is now settled by the decision of the Hon'ble Supreme Court in favour of the Revenue and against the assessee by the decision in the case of Checkmate Services [Pvt] Ltd [supra]. The hon’ble Supreme Court has laid down the law from the day of inception that the payment of employees contribution of PF/ESIC has to be deposited within the due dates as prescribed under the PF/ESIC laws and not before the due date of filing return. In view of the same, these grounds are dismissed.

With respect to grounds of disallowance on account of difference of income from books and Form 26AS, the ld AR submitted that this ground was duly raised by the assessee before Ld. CIT(A) who inadvertently has not adjudicated the said grounds and accordingly, it was prayed that this Ground be sent back to the Ld. CIT(A) with a direction to decide the issue on merits.

Per contra, the ld DR did not raise any serious objection.

We find that the AO, on perusal of the submission of the assessee, noticed that on party wise analysis of the receipts appearing in form 26AS are higher than the income credited to profit and loss account in respect of income booked of M/s Prestige Wines and Spirits Private Limited. The AO, finding no suitable explanation from the assessee, added the difference of Rs. 19,992/- to the taxable income of the assessee. When the assessee went in appeal before the ld. CIT(A), the CIT(A) did not adjudicate the issue.

We are of the considered view, in light of the above facts, that the matter of reconciliation of income from books as compared to Form 26 AS be set aside to the file of CIT(A) for fresh adjudication after allowing adequate opportunity of being heard to the assessee. The assessee is also directed to provide necessary information /documents as required by the authorities. Ground is allowed for statistical purpose.

In the result, appeals of Revenue in decided as follows: