CSR Expenses, Contribution to CM’s Relief Fund eligible for Income Tax Exemption: ITAT [Read Order]

The Delhi bench of the Income Tax Appellate Tribunal (ITAT) comprising G.S. Pannu, President and Ms. Astha Chandra, Judicial Member has held that the CSR expenses incurred by the Company and the contribution towards CM’s Relief Fund shall be eligible for exemption under the provisions of the Income Tax Act,1961.

The assessee, M/s Security Printing & Minting Corporation of India Ltd, challenged the disallowance of CSR expenses of Rs. 3,96,00,919/- and denial of deduction under section 80G of Rs. 2.50 crore to CM relief fund out of aggregate CSR expenses. The AO made the impugned disallowance treating the CSR expenses as being capital in nature

The assessee contended that no enduring benefit has either accrued or arisen to the assessee company.

Recalling its past orders and relying on a catena of judgments, the Tribunal held that “Identical issue has been considered by the Tribunal in its order in ITA Nos. 3685 & 3686/Del/2017 dated 16.09.2021 for AY 2012-13 and 2013-14 wherein the Tribunal recorded the finding that the impugned expenditure cannot be held to be capital and it is not in the nature of personal expenditure or for any violation of law.”

“Respectfully following the order (supra) of the Tribunal and concurring with the same, we delete the impugned disallowance of CSR expenses. As regards donation to CM’s relief fund, the same is, otherwise allowable as deduction under section 80G(2)(a)(iiihf),” the Tribunal said.

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