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TMI Blog2024 (8) TMI 540X X X X Extracts X X X X X X X X Extracts X X X X ..... )(a) allows deduction for 'any sums paid by the assessee in the previous year as donations'. Thus, the deduction allowable is for sums paid as donation. Donations paid to the said Kosh and Fund are not allowable u/s 80G(2)(a)(iiihk) and (iiihl) as explained above. What is not allowable is however amounts spent by the assessee in pursuance of CSR in pursuance of section 135 of the Companies Act 2013. Contributions to the said Kosh and Fund are CSR activities included in Schedule VII to the Companies Act 2013, The disallowance for deduction u/s 80G vis-a-vis CSR can be restricted only to contributions to these Funds under CSR. It is a well-established rule of interpretation that one must look merely at what is stated in the statute; there is no scope for intendment in law. So only contributions to these two funds will not qualify for deduction u/s 80G(2)(a) of the Act. No error or infirmity in the order of the CIT(A) in directing the A.O. to allow the deduction claimed u/s 80G of the Act. Decided against revenue. - Dr. B.R.R. Kumar, Accountant Member And Shri Yogesh Kumar U.S., Judicial Member For the Appellant : Sh. K. Sampath, Adv Sh. Harshit Chauhan, Adv For the Responde ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he facts and circumstances of the case, the Ld. CIT(A) was right in deleting the disallowances made by the AO under section 140 by following the decision of Hon'ble ITAT in the own case of the assessee and not appreciating the facts that the Id. AO has duly recorded his satisfaction in the assessment order at Page No. 6 7? 3 Whether on the facts and circumstances of the case, the Ld. CIT(A) was right in deleting the disallowing made by the AO on the basis of deduction claimed under chapter VIA on account of donation made and claimed u/s 80G amounting to Rs. 72,46,141/-? 4. That the appellant craves leave to add, amend and alter the ground of appeal during the appellate proceedings. 3. Since the issues involved in the above Appeals are identical, the above appeals are heard together and decided in this common order. For the sake of convenience the brief facts for Assessment Year 2017-18 has been considered. 4. The assessee company is engaged in the business of Software Development and IT Enabled Services. The assessee filed its return of income declaring total income of Rs. 26,05,01,130/-. 5. During the year under consideration, the assessee entered into international transactio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... A.O. disallowed the 80G claim made by the Assessee with respect to donation made to various foundations, trusts amounting to 1,44,92,281/- and the claim of 50% of eligible amount of Rs. 72,46,141/- was disallowed u/s 80G and added back to the total income of the Assessee. 7. Aggrieved by the Assessment Orders, the Assessee preferred an Appeal before the CIT(A). The Ld. CIT(A) vide order dated 21/08/2023 for AY 2017-18 and 2018-19 and vide orders dated 14/09/2023, allowed the Appeal filed by the Assessee by deleting the additions made by the A.O. As against the orders of the Ld. CIT (A), the Revenue preferred the present Appeals on the Grounds mentioned above. 8. The Ground No. 1 2 of the Appeal filed by the Revenue in all the above three Appeals are regarding disallowance made by the A.O. u/s 14A of the Act which has been deleted by the Ld. CIT(A) and the Department of Revenue is aggrieved by the same. 9. The Departmental Representative submitted that the Ld. CIT (A) committed error in allowing the Appeals of the Assessee by deleting the disallowance made u/s 14A of the Act without appreciating the fact that the A.O. has not duly recorded his satisfaction with regard to the claim ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... icer has not pointed out why the suo moto disallowance made by the assessee is inadequate to cover the expenses attributable for earning exempt income. We observe that the ld. CIT (Appeals) holds that the working submitted by the assessee is general and not specified any name of the employees involving in this activity. It is the observation of the ld. CIT (Appeals) when exact time and energy of employees including middle and top management invested is not ascertainable then the only method left before the Assessing Officer to compute disallowance is under Rule 8D(2)(iii). Here we observe that provisions of section 14A of the Act contemplates recording of satisfaction by the Assessing Officer having regard to the accounts of the assessee if he is not satisfied with the claim of the assessee in respect of expenditure in relation to income which does not form part of total income. On reading of the assessment order, we find that the Assessing Officer having regard to the suo moto disallowance made by the assessee has not recorded any objective satisfaction as to why the allocation of indirect expenses made by the assessee is not sufficient to meet the expenses attributable for earnin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sis of deduction claimed under chapter VIA on account of donation made and claimed u/s 80G amounting to Rs. 72,46,141/-. 14. During the year under consideration, the assessee donated Rs. 1, 44,92,282/- to a trust registered u/s 12AA/80G of the Act and claimed 50% of donation i.e. Rs. 72,46,141/- u/s 80G of the Act. The Ld. A.O. was of the opinion that the sum paid by the assessee sum paid by the Assessee cannot be considered as a 'donation' for the purpose of Section 80G of the Act as the element of charity is missing in it. The main characteristic of charity is that it is purely voluntary and there is no legal obligation to make that contribution. The amounts spent on CSR activities, even though is contributed to the areas where 80G deduction is available, but the same lacks voluntary character and partakes the nature of an obligation to be fulfilled, a necessary requirement imposed by law in accordance with Section 135 of the Companies Act 2013 . Accordingly, the Ld. A.O. made the disallowance u/s 80G of the Act. The Ld. CIT (A) deleted the said addition which is under challenged by the Department. 15. We have heard the parties perused the material available on record. Du ..... X X X X Extracts X X X X X X X X Extracts X X X X
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