Gujarat Tea Processors & Packers Ltd. Vs PCIT (ITAT Ahmedabad)
Section 263 Revision Quashed Where AO Examined Issues; CSR-Linked Donations Eligible for 80G Deduction:
The Ahmedabad Bench of the Income Tax Appellate Tribunal (ITAT) allowed the assessee’s appeal for AY 2020-21 and quashed the revisionary order passed under section 263 by the Principal Commissioner of Income Tax (PCIT), holding that the twin conditions of “erroneous” and “prejudicial to the interests of Revenue” were not satisfied.
The PCIT had invoked section 263 on two issues:
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Allowability of deduction under section 80G in respect of donations allegedly forming part of CSR expenditure, and
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Non-disallowance of interest under sections 201(1A) / 206C(7) amounting to ₹1.70 lakh.
The Tribunal found that both issues were specifically examined by the Assessing Officer during scrutiny assessment under section 143(3), after calling for and verifying relevant details. The PCIT failed to demonstrate any lack of inquiry or specific error in the assessment order and merely sought to reopen the matter for further verification, which is impermissible under section 263.
On merits, the ITAT held that:
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Interest under sections 201(1A)/206C(7) was not claimed as an expenditure by the assessee; hence, no disallowance could arise, and the assessment order could not be treated as erroneous.
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As regards section 80G, the Act itself provides specific exclusions for CSR-related donations only under sections 80G(2)(a)(iiihk) and (iiihl) (Swachh Bharat Kosh and Clean Ganga Fund). No other restriction can be read into the statute, and therefore, deduction under section 80G cannot be denied merely because the donation is linked to CSR, unless it falls within the specified exclusions.
Relying on several coordinate bench decisions, the Tribunal held that the PCIT had assumed jurisdiction under section 263 without application of mind and on a mere difference of opinion.
Accordingly, the revision order under section 263 was set aside, and the appeal was allowed in full.
FULL TEXT OF THE ORDER OF ITAT AHMEDABAD
