Deduction u/s 80G & 80GGA If Clubbed in Computation and Not in ITR Form Can be Allowed with Verification: ITAT Rules for TATA [Read Order]

The Mumbai Bench of the Income Tax AppellateTribunal (ITAT) directed the Assessing Officer to allow the charitable deduction claims under Section 80G and 80GGA, even if clubbed together in the return's computation, provided the underlying donations are factually verified.

Tata Education Trust (assessee) claimed deduction for donations under Section 80G in the Income Tax Return (ITR) form itself, the further deduction under Section 80GGA for scientific research or rural development was not claimed in a separate designated column but was instead included in the computation of total income filed during the assessment proceedings.

The Assessing Officer (AO) had completely disallowed the claim under section 80GGA on the ground that it was not made in the return of income. Aggrieved by the AO’s order, the assessee filed an appeal before the commissioner of Income Tax (appeals) [CIT(A)].

The CIT(A) upheld the AO’s order and confirmed the disallowance. Aggrieved by the CIT(A)’s order, the assessee filed an appeal before the ITAT.

The assessee argued that the ITR form (specifically ITR-5, used by the Trust) lacked a separate column to claim deduction under section 80GGA, forcing the clubbing of the claim with the 80G deduction or including it only in the detailed computation.

The two-member bench comprising Saktijit Dey (Vice President) and Narendra Kumar Billaiya (Accountant Member) found that the assessee had furnished all supporting evidence for both the 80G and 80GGA claims. The Tribunal relied on a decision of its Coordinate Bench in the case of ACIT vs. Nawajbhai Ratan Tata Trust, where an identical difficulty was considered.

Following the judicial precedent, the tribunal acknowledged the technical difficulty faced by the assessee due to the absence of a specific column in the ITR-5 form. The Tribunal concluded that the claim should not be rejected on purely technical grounds when the necessary details and proofs were supplied.

Consequently, the tribunal directed the AO to allow the assessee's claim of deduction under section 80G and 80GGA of the Act after factual verification of the donations made to the eligible institutions. The tribunal remanded the matter for verification. In the result, the appeal filed by the assessee was allowed.

Support our journalism by subscribing to Taxscan premium. Follow us on Telegram for quick updates