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Judgment
PER NAVEEN CHANDRA, ACCOUNTANT MEMBER:
The above-captioned two appeals are preferred by the assessee against the separate order dated 12.01.2026 and 11.12.2025, passed by the Ld. Commissioner Of Income Tax, Appeal Addl/JCIT (A)-2 Pune (hereinafter referred to as 'ld. CIT(A)') and The Ld. Commissioner Of Income Tax (Appeal) - 30, New Delhi under Section 250 of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’), for the A.Y. 2018-19 arising out of the following respective assessment orders: passed u/s. 143(1) of the Income-tax Act, 1961" (hereinafter referred to as "the Act" in short for the sake of brevity) by the Centralized Processing Centre (CPC), Bengaluru. passed by the Assessing officer, NFAC, Delhi under section 143(3) r.w.s 143(3A) r.w.s 143(3B) of the Act.
Since both appeals were filed by the same assessee and heard together, and while the facts and issues are common, they involve different grounds, both appeals are being disposed of by this common order for the sake of convenience and brevity.
At the outset, it is noticed from the appeals record that there is a delay of 8 days in filing both the appeals before the Appellate Tribunal. Considering the reasons for delay filed by the assessee, we hereby, condone the delay. Assessee has also filed adjournment application in absencia, but the same is rejected having no valid reason. As none was present on behalf of the assessee, the ld DR provided us with his able assistance.
Firstly we take ITA No.3897/Del/2026 :
Brief facts of the case are that the assessee is a company who had filed its Return of Income (ROI) for A.Y. 2018-19 on 08.10.2018 declaring total income of Rs.1,34,85,32,666/-. Said return was processed by the CPC u/s 143(1) of the Act and determined the total income of the assessee at Rs.1,35,43,22,538/-. The issue in contention is that the CPC had made adjustment u/s 143(1) on account of late deposit of Employee Contribution towards EPF and ESI of an amount of Rs 4,27,005/- in view of the provisions of section 36(1)(va) of the Act , in accordance with the details filed in the Form 3CD. On appeal, the CIT(A) confirmed the said disallowance. Aggrieved assessee is now in appeal before us with the following grounds:
1)“That the appellant denies it's liability to be assessed at total income of Rs.1,35,06,92,040/- and accordingly denies its liability to pay tax and interest demanded thereon.
2)That the CIT(A) erred in law and on facts by upholding the disallowance of Rs.4,27,005/- representing employees, share of PF/ESl contributions, treating them as paid beyond the statutory due dates under the EPF Act, 1952 and ESI Act, 1948 respectively; whereas the contributions deducted from employees' wages each month were duly remitted to the authorities well within the applicable due dates, as per their respective acts.
3)That having regard to the facts and circumstances of the case, Ld. A.O., has erred in law and on facts in charging interest u/s 234B and 234C.
4)That the appellant craves the leave to add, modify, amend or delete any of the grounds of appear at the time of hearing and a, the above grounds are without prejudice to each other.”
Before us, learned Departmental Representative appraised us with the facts of the case and stated that the issue of disallowance of PF/ESI payment made after the due date is covered by the decision of Supreme Court in the case of Checkmate Services Pvt ltd Vs CIT- I dated 12-Oct-2022.
We have heard the rival submissions and perused the material available on record. We are of the considered opinion that the disallowance made under section 36(1)(va) of the Act on account of delayed payment of PF/ESI in the proceedings u/s 143(1) of the Act is valid in light of the decision of Checkmate Services [supra] and the hon’ble Delhi High Court in the case of Woodland (Aero Club) Private Limited vs ACIT [2025] 178 taxmann.com 207 (Delhi)[08-09-2025]. The hon’ble Delhi Court, relying on the decision of Checkmate Services P. Ltd. vs. CIT, held that disallowance u/s 36(1)(va) for employee's contribution to ESI/PF that was deposited by assessee-employer after due date prescribed in PF/ESCI Acts but before due date of filing return under section 139(1), is valid. The hon’ble Delhi High Court also held that such disallowance can be made under section 143(1) of the Act. The ground is disposed in aforesaid terms. Appeal is dismissed.
Now we take ITA No.3898/Del/2026:
The instant year was also selected for scrutiny vide notice u/s 143(2) dated 22.09.2019. In the instant case, the assessee made an CSR expenses of Rs.65,00,000/- to Maharaja Agarsain Hospital Charitable Trust and claimed the same as deductible u/s 80(G) of the Act for donation made to Maharaja Agarsain Hospital Charitable Trust, an eligible entity u/s 80(G). The AO however, disallowed the deduction of Rs.32,50,000/- claimed by the assessee on the ground that the assessee did not furnish the copies of decisions relied upon. Aggrieved assessee was in appeal before the ld. CIT(A) who dismissed the appeal of the assessee. Aggrieved, assessee is now in appeal before the Tribunal with the following grounds:
1.That the appellant denies its liability to be assessed at a total income of Rs. 1,35,39,42,040/- after making a disallowance of Rs. 32,50,000/- and accordingly denies its liability to pay tax and interest thereon.
2.Without prejudice to the above and without admitting, on the facts and circumstances of the case and in law, the learned CIT(A) erred in setting aside the assessment holding that only voluntary donations are eligible for deduction u/s. 80G and not the CSR donations that are made as per statutory requirement. The Ld. AO failed to appreciate that while Explanation 2 to Section 37(1) prohibits the claim of Corporate Social Responsibility (CSR) expenditure as a business expense, there is no such restrictive amendment or "express bar" under Section 80G in Chapter VI-A of the Act.
3.The learned AO erred in his observation that CSR contribution is a
"statutory obligation" and not a "voluntary contribution." The Appellant submits that Section 80G does not distinguish between voluntary and mandatory donations; it only requires a qualifying payment to an eligible institution.
4.That the appellant craves the leave to add, modify, amend or delete any of the grounds of appeal at the time of hearing and all the above grounds are without prejudice to each other.
Before us, learned Departmental Representative submitted that the CSR expense is statutory obligation and not voluntary contributions under section 80G of the Act.
We have heard the rival submissions and perused the material available on record. We find that the issue of allowability of CSR expense as donation u/s 80G is squarely covered in favour of the assessee and against the Revenue by the order of the co-ordinate bench. The ITAT Bench Delhi in the case of Interglobe Technology Quotient (P) Ltd vs ACIT: [2024] 163 taxmann. com 542 (Del Trib.) dated 28/05/2024 and Cheil India (P.) Ltd. Vs. Deputy Commissioner of Income-tax ITA NO. 29 (Delhi) OF 2024[A.Y.-2020-21] dated 28/10/2024, has allowed the claim of deduction u/s 80G in the case of contribution towards CSR.
There are however, certain conditions enumerated in section 80G of the Act which are to be fulfilled before claim of deduction are allowed. The co-ordinate Delhi bench in ITA No. 5643/DEL/2010 order dated 22.04.2019, in the case of Max New York Life Insurance Company for A.Y 2006-07 has captured the conditions and held as under:
“41.The 2nd additional ground is with respect to the claim of deduction u/s 80G of the income tax act with respect to the donation disallowed in the hands of the assessee. As the donation expenditure has been disallowed in the hands of the assessee and added to the total income of the assessee naturally, the assessee is entitled to deduction under Chapter VI-A of the income tax act with respect to the donation u/s 80G of the act. As the requisite details as required by that section has not been furnished before us we direct the assessee to furnish the relevant information before the assessing officer in accordance with the law to claim any deduction under section 80G of the income tax act along with all donation receipts and the 80G certificates issued by the Donee to the assessee within one month of this order. The learned assessing officer may verify the detail in accordance with the law and if found proper, may grant the deduction. Accordingly, the 2nd additional ground of the appeal of the assessee is allowed with above direction.”
In view of the fact that deduction u/s 80G is dependent on meeting certain criteria as provided in law, we set aside the issue of claim of CSR expense made to Maharaja Agarsain Hospital Charitable Trust to be considered for deduction u/s 80G, to the file of the Assessing Officer, with the direction that the assessee shall furnish the relevant information before the AO to claim deduction under section 80G of the Income Tax Act along with all donation receipts and the 80G certificates issued by the Donee to the assessee. The Assessing Officer shall verify the details in accordance with the law and if found proper, shall allow such CSR expense for deduction u/s 80G. We accordingly allow the ground Nos 2 for statistical purposes.
In the result, the appeal of assessee in ITA Nos.3897 is dismissed and appeal in ITA 3898/DEL/2026 is allowed for statistical purposes.