Fortrea Scientific Private Limited Vs PCIT (ITAT Mumbai)
Allowing 80G Deduction on CSR Not an Error – PCIT Cannot Revise Merely for Alternate View Tribunal Protects Assessee from Revision
Assessee company, engaged in IT-enabled pharmaceutical data management & BPO services, filed appeal against revision order u/s 263 passed by PCIT. In assessment u/s 143(3) dated 29.09.2022, AO had allowed deduction u/s 80G of ₹30.79 lakh being 50% of CSR expenses of ₹61.58 lakh voluntarily disallowed u/s 37(1). Pr.CIT invoked revisionary jurisdiction holding that allowance of CSR donations u/s 80G was erroneous & prejudicial to revenue, as CSR expenses are statutory, not voluntary.
Assessee’s Contention
- AO had already verified the CSR details during scrutiny & taken a plausible view.
- CSR donations (other than to Swachh Bharat Kosh or Clean Ganga Fund) are eligible for 80G deduction.
- Multiple ITAT decisions had already upheld similar claims; hence, PCIT cannot revise merely due to difference of opinion.
Tribunal’s Findings/decision
- Citing Malabar Industrial Co. Ltd. v. CIT (2009) 109 taxmann.com 66 (SC), revision u/s 263 requires that order be both erroneous & prejudicial; both conditions must co-exist.
- AO had examined the CSR claim & followed binding ITAT precedents allowing deduction u/s 80G.
- Once a plausible view has been taken, revision cannot be invoked merely for an alternate view.
- Pending High Court appeals against those favourable ITAT decisions do not negate their binding nature.
- Assessment order neither erroneous nor prejudicial to Revenue; hence revision u/s 263 invalid.
FULL TEXT OF THE ORDER OF ITAT MUMBAI
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