Blue Dart Express Limited Vs PCIT (ITAT Mumbai)
Summary: The Mumbai Bench of the Income Tax Appellate Tribunal held that Corporate Social Responsibility (CSR) expenditure disallowed under Explanation 2 to Section 37(1) of the Income-tax Act, 1961, does not automatically become ineligible for deduction under Section 80G. The Tribunal found that the Assessing Officer had specifically examined the assessee’s Section 80G claim during both the original and reassessment proceedings, including the CSR expenditure issue, and had adopted a legally permissible view. Therefore, the Principal Commissioner of Income Tax (PCIT) could not invoke Section 263 merely to revisit the same issue without demonstrating that the assessment order was erroneous and prejudicial to the interests of the Revenue. On merits, the Tribunal distinguished the computation of business income under Sections 28 to 44DB from deductions available under Chapter VI-A. Since the assessee had already disallowed CSR expenditure under Section 37(1), deduction under Section 80G could independently be claimed where the statutory conditions were satisfied. The Tribunal also noted the specific statutory exclusions under Section 80G concerning contributions to the Swachh Bharat Kosh and Clean Ganga Fund. As the assessee’s donation did not fall within those exclusions, the Section 80G deduction was held allowable. The PCIT’s revisionary order under Section 263 was accordingly quashed and the assessee’s appeal was allowed.
