DCIT Vs Amneal Pharmaceuticals Pvt. Ltd. (ITAT Ahmedabad)
The appeal was filed by the Department against the order of the Commissioner of Income Tax (Appeals) dated 09.09.2025 for Assessment Year 2022–23, concerning allowability of deduction under Section 80G in respect of donations forming part of Corporate Social Responsibility (CSR) expenditure.
The assessee, a company, had made donations aggregating to ₹22.88 crores to specified foundations and claimed deduction of ₹21.44 crores under Section 80G, being 50% of the eligible amount. At the same time, the assessee had suo motu disallowed the entire CSR expenditure under Explanation 2 to Section 37(1) while computing business income. The claim under Section 80G was made on the basis that the recipient institutions were approved under Section 80G(5), and there was no restriction in the statute denying such deduction merely because the donations formed part of CSR obligations.
The Assessing Officer rejected the claim, holding that CSR expenditure is mandatory under Section 135 of the Companies Act, 2013 and therefore lacks the voluntary character required for a “donation” under Section 80G. It was further held that allowing deduction under Section 80G would indirectly permit deduction of CSR expenditure, which is expressly disallowed under Explanation 2 to Section 37(1). Accordingly, the deduction was disallowed and the amount added back to income.
