CSR Expenditure Eligible for 80G Deduction: ITAT [Read Order]
The tribunal noted that while the amount spent is mandatory, companies can choose where to donate
![CSR Expenditure Eligible for 80G Deduction: ITAT [Read Order]](https://www.taxscan.in/wp-content/uploads/2025/04/CSR-ITAT-CSR-Expenditure-taxscan.jpg "CSR Expenditure Eligible for 80G Deduction: ITAT [Read Order]")
The Income Tax Appellate Tribunal ( ITAT ) Mumbai recently delivered a significant ruling, allowing companies to claim deductions under Section 80G for Corporate Social Responsibility (CSR) expenditures. The decision came in appeals filed by the Revenue against Sikka Ports and Terminals Ltd. for Assessment Years 2018-19 and 2020-21. Sikka Ports and Terminals Ltd had donated Rs.33.85 crore...
The Income Tax Appellate Tribunal ( ITAT ) Mumbai recently delivered a significant ruling, allowing companies to claim deductions under Section 80G for Corporate Social Responsibility (CSR) expenditures. The decision came in appeals filed by the Revenue against Sikka Ports and Terminals Ltd. for Assessment Years 2018-19 and 2020-21.
Sikka Ports and Terminals Ltd had donated Rs.33.85 crore to Reliance Foundation and Shyam Kothari Foundation. Both are registered under Section 80G. The company claimed a 50% deduction on these donations. Tax officials argued CSR spending is mandatory and not voluntary donations. They said such expenses should not qualify for deductions.
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The ITAT rejected this argument. It said CSR spending remains eligible for Section 80G benefits. The tribunal noted that while the amount spent is mandatory, companies can choose where to donate. Payments to registered institutions still count as donations. The ruling cited a Supreme Court case Commissioner of Expenditure, Tax vs. PVG Raju (1975), which defined donations. The court had held that donations don't need to be purely voluntary. What matters is whether the giver receives anything in return.
The ITAT also clarified the law's intent. A 2014 amendment blocked CSR deductions under Section 37. But it didn't restrict claims under other sections like 80G. The tribunal said if lawmakers wanted to block 80G claims, they would have said so. In a related matter, the ITAT struck down a tax disallowance under Section 14A. Officials had tried to apply a 2022 amendment retroactively. The tribunal said the change only applies from 2022 onward.
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This decision helps companies plan CSR spending. They can now claim deductions when donating to Section 80G-approved groups. The ruling also clarifies that mandatory CSR rules don't cancel tax benefits. The ITAT bench comprising Amit Shukla (Judicial Member and Padmavathy S (Accountant Member) dismissed both appeals by revenue authorities.
To Read the full text of the Order CLICK HERE
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