CSR Contributions Eligible For Deduction as Donations If Conditions Satisfied u/s 80G: ITAT Accepts 50% of Total Donation [Read Order]
The Tribunal ruled that Corporate Social Responsibility (CSR) contributions are eligible for deduction if the recipient institutions are registered under Section 80G of the Income Tax Act and other conditions of the section are fulfilled.
![CSR Contributions Eligible For Deduction as Donations If Conditions Satisfied u/s 80G: ITAT Accepts 50% of Total Donation [Read Order]](https://images.taxscan.in/h-upload/2025/06/30/2056884-csr-itat-csr-deduction-taxscan.webp "CSR Contributions Eligible For Deduction as Donations If Conditions Satisfied u/s 80G: ITAT Accepts 50% of Total Donation [Read Order]")
The Mumbai Bench of the Income Tax Appellate Tribunal (ITAT) held that Corporate Social Responsibility (CSR) contributions can qualify for deductions under Section 80G of the Income Tax Act, 1961 if the donations are made to institutions registered under Section 80G and comply with the section’s requirements.
The Ruby Mills Limited (assessee), a company filed income tax return for the assessment year 2020-21, declaring a total income of Rs. 31.64 crore. The Assessing Officer (AO) completed the assessment, making various additions but allowing a deduction of Rs. 48.54 lakhs under Section 80G for CSR-related donations.
The Principal Commissioner of Income Tax (PCIT) initiated revision proceedings and issued a show-cause notice to the assessee. The PCIT contended that the CSR expenditure of Rs. 70.40 lakhs, out of which Rs. 66.09 lakhs was claimed as eligible for deduction under Section 80G, was not allowable.
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The PCIT argued that CSR expenses, being mandatory under the Companies Act, lacked the voluntary nature required for Section 80G deductions. The PCIT directed the AO to pass a fresh assessment order and disallowed the Rs. 48.54 lakhs deduction.
Aggrieved by the PCIT’s order, the assessee appealed to the ITAT. The counsel for the assessee argued that the AO had thoroughly examined the Section 80G claim during the assessment proceedings.
The counsel added that the AO issued a specific notice, to which the assessee responded with detailed evidence, including donation receipts. The counsel submitted that the donations were made to institutions registered under Section 80G, fulfilling the conditions for deduction.
The counsel further relied on judicial precedents, including decisions from the Jurisdictional High Court and various ITAT benches, which consistently allowed 50% deductions for CSR donations under Section 80G of the Income Tax Act.
The two-member bench, comprising Pawan Singh (Judicial Member) and Prabhash Shankar (Accountant Member), observed that the AO had sought and examined details of the Section 80G deductions during the assessment.
The bench observed that the assessee provided receipts confirming that the recipient institutions were registered under Section 80G, satisfying the conditions for deduction.
The bench relied on the decisions from the Mumbai Tribunal, including DCIT vs. Gabriel India Ltd. and Dalal and Broacha Stock Broking Pvt. Ltd. vs. PCIT, which held that CSR donations are eligible for 50% deduction under Section 80G if the recipient institutions are registered under the section and other conditions are met.
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The Tribunal further held that the AO’s decision to allow the deduction was legally sustainable and not erroneous. It quashed the PCIT’s order and upheld the AO’s allowance of the Rs. 48.54 lacs deduction under Section 80G of the Income Tax Act. The appeal of the assessee was allowed.
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