Case Law Details
JMS Mining Pvt. Ltd. Vs PCIT (ITAT Kolkata)
Current appeal has been filed against the order dated March 30, 2021 (Impugned order) passed by Ld. Principal Commissioner of Income-tax (Respondent) under Section 263 of Income Tax Act, 1961 (IT Act). It is challenged on the ground of the invocation of jurisdiction by the Respondent without satisfying the essential condition mentioned in Section 263 ibid which provides that the Assessing Officer’s (AO) order has to be considered as erroneous and prejudicial to the interest of the revenue.
JMS Mining (P.) Ltd (“the Appellant”) claimed deduction on Income Tax Assessment under Section 80G of the IT Act which provides for claiming of deduction to certain funds, charitable institutions etc. The Appellant donated a certain sum of amount to Shree Charity Trust and a Music Academy Trust as contribution towards Corporate Social Responsibility (“CSR”) activities. The same was allowed by the AO. Further, it was challenged by the Respondent by invoking revision jurisdiction under Section 263 ibid on the ground that the action of AO to allow deduction of CSR expenses was erroneous as it could not be allowed as per express prohibition under Explanation 2 to Section 37(1) of the IT Act. Explanation 2 of Section 37 of the IT Act provides that expenditure of the activities relating to CSR shall not be deemed to expenditure of business or profession.
The Respondent contended that the AO passed the Impugned order without making enquiries or verification which should have been made therefore, clause (a) of Explanation 2 of Section 263(1) of the IT Act is attracted in this case. The section provides power to the Commissioner to call for or examine record of any proceeding if he considers the order passed by AO to be erroneous.
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