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Judgment
PER SANJAY AWASTHI, ACCOUNTANT MEMBER:
The present appeal arises from order dated 19.12.2025, passed u/s 250 of the Income Tax Act, 1961 (hereafter as “the Act”), by NFAC.
In this case, vide order dated 20.09.2022 the Ld. AO added an amount of Rs.50,75,000/- by holding that the claim of the assessee u/s 80G of the Act on account of Corporate Social Responsibility (CSR) spend was not allowable. For this purpose, the Ld. AO is seen to have given a detailed reasoning in the body of the assessment order.
The aggrieved assessee approached the Ld. CIT(A) where also he could not succeed on the basis of detailed finding on pages 15 to 17 of the impugned order.
The aggrieved assessee has approached the ITAT with basically ground no.1 which challenges this action of the authorities below.
Before us the Ld. AR took us through the facts of the case and mentioned that the assessee had claimed CSR expenses amounting to Rs.109,04,471/- for the year under consideration. Thereafter, the assessee had disallowed such expenses in the computation and added to the net profit for the year. Additionally, the assessee had claimed an amount of Rs.50,75,000/- as deduction u/s 80G of the Act for donation, to eligible entities, made out of CSR expenses. The Ld. AR stated that the amounts claimed u/s 80G were duly given to eligible entities who were registered for the purposes of 80G of the Act. It was the submission that there were a plethora of ITAT coordinate bench orders which have consistently held that claiming of 80G deduction on CSR funds was allowable. The Ld. AR relied on the following coordinate bench orders:
Cheil India (P) Ltd. vs. DCIT [2024] 169 taxmann.com 507 (Delhi – Trib.) [28.10.2024];
NDL Ventures Ltd. vs. ACIT [2026] 185 taxmann.com 49 – Mumbai Tribunal;
DCIT vs. Gabriel India Ltd. [2025] 173 taxmann.com 219 (Mumbai – Trib.);
ACIT vs. Nyati Builders (P) Ltd. [2025] 180 taxmann.com 848 (Pune – Trib.);
ACIT vs. Sikka Ports & Terminals Ltd. [2025] 173 taxmann.com 366 (Mumbai – Trib.) decision;
Interglobe Technology Quatient (P) Ltd. vs. ACIT [2024] 163 taxmann.com 542 (Delhi – Trib.).
It was argued that the authorities below have placed reliance on section 135 of the Companies Act, 2013 as well as section 7 of the Notification of Ministry of Corporate Affairs dated 27.02.2014, to hold that on CSR spends the benefit of Section 80G would not be allowed. It was argued by the Ld. AR that the Income Tax Act was a separate and independent code and wherever some sections have to be borrowed from other enactments then those are specifically mentioned in the relevant sections. It was the submission that to borrow from the Companies Act, 2013 and super impose Section 135 from that Act on Income tax provisions would not be justified.
The Ld. DR relied on the orders of the authorities below and specifically pointed out that the disallowance was confirmed in the impugned order on the basis of a detailed discussion on pages 10 to 16 of the impugned order. Thereafter the Ld. DR highlighted various portions from the impugned order in support of his claim that the impugned disallowance was justifiably made.
We have considered the rival submissions and have gone through the documents before us. We have also perused the coordinate bench cases relied on by the Ld. AR. Right at the outset, it deserves to be mentioned that there is a considerable body of judicial pronouncements by coordinate benches whereby the claim of deduction u/s 80G has been allowed on CSR spends. While the cases relied on by the Ld. AR are also on the issue of allowability of 80G benefit of CSR, but we also see that the case of Agilent Technologies (International) Pvt. Ltd. vs. ACIT (ITA No.789/Del/2022) is against the assessee which apparently the Ld. AR has fairly placed before us in the paper book of case laws. A perusal of the finding given in the ITAT orders placed before us, including the case of Agilent Technologies (supra), we find that in another case of Kellog Brown & Root Engineering & Construction India (P) Ltd. vs. DCIT, reported in 187 taxmann.com 342 [2026] (Delhi – Trib.), the issue has been adequately put in perspective through the following finding: -
“II. Ground No.6 – Denial of deduction u/s 80G
(i)The authorities below has denied deductions to the tune of Rs.12,25,000/- u/s 80G of the Act, 1961 to the assessee with respect to donation of Rs.24,50,000/- paid by the assessee to Odisha State Disaster Management Authority (50%). The same was denied by the authorities below as the same was part of CSR incurred by the assessee to meet its obligation as per Section 135 of the Companies Act, 2013. The AO has allowed deductions to the tune of Rs.48,08,411/- paid by the assessee towards PM Cares Fund and National Defense Fund, as these donations were albeit part of CSR but as per AO eligible for deduction u/s 80G. However, deduction u/s 80G claimed by the assessee with respect to donation of Odisha State Disaster Management Authority was denied by the AO as the same was part of CSR obligation to the assessee u/s 135 of 2013 Act, and hence as per the AO deduction u/s 80G is not admissible. The expenditure towards CSR obligation are prohibited u/s 37(1) of the Act, 1961. The assessee has produced receipt issued by Odisha State Disaster Management Authority bearing number 027667 (PB/page 542) and certificate issued by Odisha State Disaster Management Authority (A Government of Odisha Agency) that it qualifies u/s 80G(5)(vi) of the Act, 1961 and certificate is valid for AY 2020-21 (Placed in PB/page 543). The Tribunal has held in following judicial pronouncements that if the donations are paid towards CSR contribution as part of obligation under the Companies Act, 2013, the same cannot be allowed as deduction u/s 37(1), but there is no bar in claiming deduction u/s 80G except as provided in Section 80G(2)(a)(iiihk) and (iiihl) wrt The Swachh Bharat Kosh and The Clean Ganga Fund. The judicial precedents relied upon by the assessee are as under:
(a)Schenker India (P) Ltd. vs. Asstt. CIT [IT Appeal No.2391 (Delhi) of 2022, dated 19.03.2025]
(b)Strides Pharma Science Ltd. vs. ITO [IT Appeal No.5721 (Mum.) of 2024, dated 20.03.2025]
(c)Livlong Insurance Brokers Ltd. vs. Pr. CIT [2025] 176 taxmann.com 566 (Mumbai – Trib.)
(d)GIA India Laboratory (P) Ltd. vs. Dy. CIT [IT Appeal No.4395 (Mum.) of 2024, dated 21.11.2025] Respectfully following the aforesaid decisions and other decisions relied upon by the assessee as listed in the paper book filed by the assessee, we direct AO to allow deduction u/s 80G in accordance with law wrt to donation paid by the assessee to Odisha State Disaster Management Authority. We order accordingly.
III. Ground No.7 Denial of double taxation relief available u/s 90
of the Act, 1961 – The assessee has claimed that the Ld. DRP as well AO in its final assessment order has observed that the claim of the assessee wrt double taxation relief u/s 90 to the tune of Rs.1,11,34,019/- is found to be correct and no adverse inference was drawn, but the credit of the same was not given by the AO to the assessee while computing the tax payable in consequent to assessment framed. Both the parties before us are ad-idem that the matter can be restored back to the file of the AO for verification and accordingly grant of double taxation relief u/s 90 after due verification. Thus, this issue is restored to the file of the AO accordingly to grant double tax relief available to the assessee u/s 90 of the Act, 1961 after due verification in accordance with law. We order accordingly.”
It is our opinion that once the fact of CSR expenditure on charities eligible for deduction u/s 80G of the Act is seen, then the same would need to be allowed. For this purpose, the finding in Kellog Brown & Root Engineering case (supra) has considerable persuasive value. Accordingly, we direct that the benefit of Section 80G(5) deserves to be allowed, as claimed by the assessee.
In the result, the appeal is allowed.