Deloitte Tax Services India Private Limited Vs DCIT (ITAT Hyderabad)
Summary: The Hyderabad Bench “B” of the Income Tax Appellate Tribunal disposed of ITA-TP Nos. 341/Hyd/2023 and 342/Hyd/2023 through a common order dated 19 June 2024 for Assessment Year 2018-19. The appeals were filed by Deloitte Tax Services India Private Limited and Deloitte & Touche Assurance & Enterprise Risk Services India Private Limited against orders dated 2 May 2023 passed by the CIT(A)-10, Hyderabad. The hearing took place on 21 May 2024.
The principal issue common to both appeals concerned the allowability of deduction under Section 80G of the Income-tax Act, 1961 for donations forming part of Corporate Social Responsibility expenditure. In ITA No. 342/Hyd/2023, the assessee also challenged denial of refund of excess Dividend Distribution Tax (DDT) paid by mistake.
According to the assessees, during financial year 2018-19 they made donations in discharge of their CSR obligations. Since CSR expenditure was not allowable as business expenditure under Section 37, the assessees suo moto disallowed the expenditure while computing business income and subsequently claimed the contribution under Section 80G. Their case was that Section 37 and Section 80G operated independently and that there was no general statutory prohibition against claiming a deduction under Section 80G merely because the donation also formed part of CSR expenditure.
