No Bar on Deduction u/s 80G for CSR Donation to Eligible Trust: ITAT Upholds ₹29 Lakh Relief to Adani Logistics [Read Order]

The Income Tax Appellate Tribunal, Ahmedabad Bench, held that there is no bar on claiming deduction under Section 80G of the Income Tax Act, 1961 in respect of CSR (Corporate Social Responsibility) expenditure, where the donation is made to an eligible trust.

The Tribunal upheld the order of the Commissioner of Income Tax (Appeals) (CIT(A)) granting relief to Adani Logistics for Assessment Year (AY) 2020-21.

The appellant, Deputy Commissioner of Income Tax, filed an appeal against the order of CIT(A) dated 04.08.2025 for AY 2020-21.

The respondent, Adani Logistics, filed the return of income for the AY 2020-21, declaring total income as ₹160,81,00,830. During assessment proceedings, the Assessing Officer (AO) noted that the respondent had claimed the deduction of ₹29,10,000 under section 80G of the Income Tax Act, with respect to the CSR expenses.

The revenue department, represented by R P Rastogi, contended that CSR expenditure being disallowed under Section 37(1), should not qualify for deduction under Section 80G.

The respondent has incurred ₹58,20,000 towards CSR activities which was disallowed under section 37 of the Act. However, the respondent has claimed the deduction under section 80G of the act, with respect to the CSR expenses donated to the eligible trust. The respondent was represented by Dhrunal Bhatt

T R Senthil Kumar, Judicial Member and Narendra Prasad Sinha, Accountant Member, observed that Section 37 and Section 80G operate in different spheres.

The Tribunal relied on the decision of Co-ordinate Bench in case of Gujarat State Financial Services Limited vs. DCIT, which held that under Section 80G of the Act, the CSR expenses and the business expenses under Section 37 operate under different arena and that there was no bar in claiming deduction under Section 80G of the Act in respect of CSR contribution, if the fund to which donations were made, was eligible for such deduction.

The Tribunal further noted that the donation was not made to Swachh Bharat Kosh or Clean Ganga Fund, where specific restrictions apply under Section 80G. Therefore, the tribunal held that there was no bar on the assessee to claim the deduction under Section 80G of the Act.

Accordingly, the ground taken by the Revenue Department was dismissed by the Tribunal.

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