Standard Chartered Capital Limited Vs DCIT (ITAT Mumbai)
The Mumbai ITAT partly allowed the assessee’s appeal against the CIT(A) order dated 01.11.2025 for AY 2020-21. The assessee, engaged in borrowing and lending of money, had claimed a ₹66,50,000 deduction under Section 80G, representing 50% of ₹1,33,00,001 CSR expenditure donated to institutions approved under Section 80G. The Assessing Officer disallowed the claim on the ground that CSR expenditure under Section 135 of the Companies Act, 2013 is mandatory and therefore cannot qualify as a voluntary donation under Section 80G. The CIT(A) upheld the disallowance, relying on the mandatory nature of CSR expenditure and Explanation 2 to Section 37(1).
The ITAT, however, noted that the issue was covered by decisions of Coordinate Benches, including ACIT v. NDL Ventures Limited [(2026) 185 taxmann.com 49 (Mumbai – Trib.)]. It held that Explanation 2 to Section 37(1) creates an embargo only against treating CSR expenditure as business expenditure. There is no corresponding prohibition under Section 80G except for specific exclusions expressly provided by Parliament. The Tribunal also noted that the recipient institutions were approved under Section 80G and the donations were made through recognised banking channels. Accordingly, CSR expenditure otherwise satisfying Section 80G conditions could not be denied deduction merely because it also fulfilled the assessee’s CSR obligation. The ITAT directed deletion of the ₹66,50,000 disallowance and allowed Ground No. 2.
