PCIT fails to Record reason for Revision: ITAT quashes order u/s 263 [Read Order]

The Income Tax Appellate Tribunal (ITAT), Kolkata Bench has held that Principal Commissioner of Income Tax (PCIT) fails to record the reason for revision and quashes order u/s 263

The appellant, Diamond Beverages Private Limitedincurred a sum of Rs.7,50,000/- as Corporate Social Responsibility (CSR) Expenditure during the relevant year. The appellant claimed it under section 80G of the Act because the trust and institutions to which the amounts were paid, were already enjoying benefits of registration u/s Section 80G. Accordingly, 50% of the expenditure was claimed as an allowable expenditure with the aid of Section 80G.

The PCIT had gone through the record carefully andhold that donations were given and claimed u/s 80G is not obligatory and rather voluntary in nature. Therefore,the appellant cannot claim expenditure incurred under CSR by taking benefit of Section 80G of the Act. He accordingly set aside the assessment andinitiated proceedings under section 263 of the Act.

The counsel for the appellant submitted that the claim made u/s 80G of the Act would be admissible to an assessee if the recipients are enjoying benefit u/s 80G of the Act and there is no further requirement to be fulfilled by the assessee.

The Coram of Mr. Rajpal Yadav, Vice President,and Mr. Rajesh Kumar, Accountant Member has observed that the Pr. CIT has not recorded any finding that the recipients were not enjoying registration u/s 80G of the Act, neither this fact was verified by him. His reasoning is from the angle that there is a distinction between the expenditure claimed under CSR expenditure and donation made u/s 80G of the Act. Hence the Tribunal held that “we are of the view that the impugned order is not sustainable and hence the same is quashed”.

Mr. S. Agarwal appeared on behalf of the appellant and Mr. Md. Ghayas Uddin appeared on behalf of the revenue.

To Read the full text of the Order CLICK HERE

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