Deduction u/s 80G cannot denied merely because such payment forms part of CSR

First American (India) Pvt. Ltd Vs Asst. CIT (ITAT Bangalore)

The issue under consideration is that whether the expenditure incurred for CSR will also be qualified for deduction under section 80G?

In present facts of case, Ld.AR submitted that all payments forming part of CSR does not form part of profit and loss account for computing Income under the head, Income from Business and Profession. It has been submitted that some payments forming part of CSR were claimed as deduction under section 80G of the Act, for computing “Total taxable income”, which has been disallowed by authorities below. In our view, assessee cannot be denied the benefit of claim under Chapter VI A, which is considered for computing ‘Total Taxable Income”. If assessee is denied this benefit, merely because such payment forms part of CSR, would lead to double disallowance, which is not the intention of Legislature.

On the basis of above discussion, ITAT has declared that, authorities below have erred in denying claim of assessee under section 80G of the Act. ITAT also note that authorities below have not verified nature of payments qualifying exemption under section 80G of the Act and quantum of eligibility as per section 80G(1) of the Act.

Hence, ITAT are remitting the issue back to Ld. A.O. for verifying conditions necessary to claim deduction under section 80G of the Act. Accordingly grounds raised by assessee stands allowed for statistical purposes.

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