Allegis services (India) Pvt. Ltd. Vs ACIT (ITAT Bangalore)
In a ruling addressing the interplay between mandatory Corporate Social Responsibility (CSR) expenditure under the Companies Act, 2013, and deductions available under the Income-tax Act, 1961, the Income Tax Appellate Tribunal (ITAT), Bangalore Bench, has held that a donation forming part of CSR spending may still be eligible for deduction under Section 80G of the Income-tax Act. The Tribunal’s decision came in the case of Allegis services (India) Pvt. Ltd. Vs ACIT, overturning the findings of the lower tax authorities.
The appellant, Allegis Services (India) Private Limited, had filed its return of income for the assessment year 2016-17, declaring a significant income. During the scrutiny assessment, the Assessing Officer (AO) noted that the company had claimed a deduction of Rs. 8,40,000 under Section 80G of the Act for donations made. The AO was of the view that this claim was not allowable because the amount represented expenditure incurred as part of the company’s mandatory CSR obligations under Section 135 of the Companies Act, 2013. The AO reasoned that only donations made outside the scope of CSR expenses would be eligible for deduction under Section 80G. Consequently, the AO disallowed the claimed deduction.
