Section 263 cannot override AO’s reasoned decision allowing CSR-linked 80G deduction: Mumbai ITAT

Ruby Mills Ltd Vs PCIT (ITAT Mumbai)

Assessee company  challenged a revisionary order passed u/s 263 buy which PCIT had set aside the completed assessment u/s 143(3), directing a fresh assessment to disallow CSR-related donations claimed u/s 80G.  PCIT held that CSR expenditure is statutorily mandated & not voluntary, hence not eligible u/s 80G. Citing Explanation 2 to section 263, PCIT viewed the assessment as erroneous & prejudicial to revenue & directed reassessment.

On appeal,  Tribunal noted that AO while passing the a

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