CSR Disallowance Under Section 37 Does Not Bar Relief Under Section 80G- Bangalore ITAT

Sandisk India Device Design Centre Private Limited Vs DCIT (ITAT Bangalore)

CSR Disallowance Under Section 37 Does Not Bar Relief Under Section 80G- Bangalore ITAT

The Bangalore ITAT held that eligible donations made as part of Corporate Social Responsibility (CSR) expenditure qualify for deduction under section 80G, even though the CSR expenditure itself is not allowable as a business deduction under section 37. The Tribunal observed that there is no statutory prohibition against claiming section 80G deduction where the donation is made to institutions holding valid section 80G recognition and all prescribed conditions are satisfied. Since the assessee had already disallowed the CSR expenditure while computing business income and had produced receipts evidencing donations through account-payee cheques to eligible institutions, the Assessing Officer was directed to allow the section 80G deduction of ₹1,02,33,452. However, the Tribunal clarified that donations to Clean Ganga Fund and Swachh Bharat Abhiyan would not qualify under this principle.

On the issue of employees’ contribution to Provident Fund, the Tribunal dismissed the assessee’s claim by following the Supreme Court’s decision in Checkmate Services Pvt. Ltd., holding that delayed payment beyond the due date prescribed under the relevant welfare statute is not allowable, even if deposited before the due date for filing the return under section 139(1). Accordingly, while the section 80G claim was allowed, the PF disallowance was sustained, and the appeal was partly allowed.

FULL TEXT OF THE ORDER OF ITAT BANGALORE

1. This appeal by M/s. Sandisk India Device Design Centre Private Limited pertains to Assessment Year 2020-21 and is directed against the order dated 18 September 2025 passed by the National Faceless Appeal Centre, Delhi, dismissing the assessee’s appeal against the assessment order dated 26 September 2022 passed under section 143(3) read with section 144C of the Income Tax Act, 1961, by the National Faceless Assessment Centre, Delhi.