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TMI Blog2024 (3) TMI 306X X X X Extracts X X X X X X X X Extracts X X X X ..... supporting the network, development and delivery of software based solutions for telecommunication industry - HELD THAT:- Undisputedly, expenditure incurred towards CSR is specifically prohibited from being allowed as deduction towards business expenditure by insertion of Explanation 2 to Section 37(1) of the Act by Finance Act, 2014 w.e.f 01.04.2015. However, there is no such corresponding amendment to section 80G of the Act. Only condition for claiming deduction u/s 80G as per the existing provision is the institute to which donation is made must have been registered under section 80G - Once the aforesaid condition is fulfilled, the donor is entitled to avail the deduction. This is also the view expressed by the Co-ordinate Bench in case ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ORDER] - Accordingly, ground raised is dismissed. - Sh. Saktijit Dey, Vice-President And Sh. Pradip Kumar Kedia, Accountant Member For the Assessee : Shri Vishal Kalra, Adv., Shri Ankit Sahni, Adv. And Shri Yishu Goel, Adv. For the Revenue : Shri Vizay B. Vasanta, CIT-D.R. ORDER PER SAKTIJIT DEY, VICE-PRESIDENT : The captioned appeal has been filed by the assessee against the order of Learned Commissioner of Income-tax (Appeals)-44, Delhi, pertaining to Assessment Year 2015-16. 2. At the outset, learned Counsel appearing for the assessee submitted that Ground No.1, being a general ground, does not require adjudication. He further submitted that Ground No.6 has become redundant as the Assessing Officer, in the meanwhile, has granted the de ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... learned First Appellate Authority held that intention of Government is very clear that expenditure on CSR does not form part of business expenditure and no specific tax exemption including deduction under section 80G of the Act has been extended to CSR expenditure. He further held that deduction under section 80G of the Act is applicable only to donation which is a voluntary act on the part of the donor. He observed that since CSR expenditure has been incurred mandatorily in compliance of provisions of the Companies Act, it cannot be said to be voluntary and would not qualify for tax deduction under section 80G of the Act. 5. Before us, learned Counsel appearing for the assessee submitted that the institutions to whom the assessee has dona ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e relevant observation are as under: 17. Apropos the issue of disallowance u/s 80G of the Income-tax Act, 1961 (for short 'the Act') : The assessee made certain donation to approved institutions or funds and claimed 50% of the total donation made as deduction u/s 80G. This amount also formed part of the CSR initiative of the assessee company which amounts to INR 22,81,29,964/-. It is observed that the assessee has duly disallowed CSR expenditure of INR 22,81,29,964/- debited to the statement of profit and loss under section 37 of the Act. DRP rejected the claim of the assessee by saying that the donation is pursuant to the CSR policy of the company and lacks the test of voluntariness as required under section 80G. The AO has disallo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that expenditure when disallowed for CSR cannot be considered u/s 80G of the Act. Hence, we remit the issue to the file of AO to verify whether these payments were qualified as donations u/s 80G of the Act or not, if they qualify as donation u/s 80G of the Act then the requisite amount deserves to be allowed. 8. Before us, it is the specific contention of learned Counsel of the assessee that the institutes to whom the assessee has donated the CRS fund are registered under section 80G of the Act. Keeping in view the submissions of the assessee as well as the ratio laid down in the judicial precedents cited before us, we direct the Assessing Officer to allow assessee s claim of deduction under section 80G of the Act, subject to, factual verif ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... see has claimed deduction of Education Cess ( EC ) and Secondary Higher Education Cess ( SHEC ) levied on income tax payable on the total income. Having considered rival submissions, we are of the view that in view of amendment u/s 40(a)(ii) of the Act by Finance Act, 2022 with retrospective effect from 01.04.2005, the claim of the assessee is not allowable. This is so because as per the amended provision, Education Cess and Secondary Higher Education Cess partake the character of income tax. In this context, we refer to decision of the Hon ble Supreme Court in the case of JCIT vs. M/s. Chambal Fertilisers and Chemicals Ltd. SLP(C) No.7379 of 2019 order dated 14.12.2022. Accordingly, ground raised is dismissed. 14. Ground No.7 on the issue ..... X X X X Extracts X X X X X X X X Extracts X X X X
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