Here Solutions India Private Limited Vs DCIT (ITAT Mumbai)
The appeal filed by Here Solutions India Private Limited was directed against the final assessment order passed pursuant to the directions of the Dispute Resolution Panel-1, Mumbai, for Assessment Year 2022-23. The sole issue before the Mumbai Bench of the Income Tax Appellate Tribunal was whether the assessee could claim deduction under Section 80G of the Income-tax Act, 1961 in respect of donations which formed part of its Corporate Social Responsibility (CSR) expenditure.
The assessee was engaged in the business of providing digital map data for vehicle navigation, internet and wireless applications and business solutions. It filed its return of income on 24 November 2022 declaring total income of Rs. 106,19,86,250/-. During the relevant previous year, it incurred CSR expenditure aggregating to Rs. 2,00,86,572/-. The assessee had made a suo motu disallowance of the entire CSR expenditure while computing its business income under Section 37. At the same time, it claimed deduction under Section 80G in respect of eligible donations made to charitable institutions and the PM CARE Fund. The total deduction claimed under Section 80G was Rs. 1,01,17,974/-.
The Assessing Officer/DRP denied the deduction principally on the reasoning that the donations formed part of CSR expenditure and were therefore not voluntary donations eligible for deduction under Section 80G. The assessee contended that Explanation 2 to Section 37(1) merely prohibits deduction of CSR expenditure while computing business income and does not impose any corresponding prohibition under Section 80G. It further submitted that Section 80G contains specific restrictions concerning donations forming part of CSR expenditure, particularly contributions to Swachh Bharat Kosh and Clean Ganga Fund, and that those specific exclusions could not be expanded into a general prohibition against all CSR donations.
