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2025 Supreme(Online)(ITAT) 3918
INCOME TAX APPELLATE TRIBUNAL (MUMBAI BENCH)
Sandeep Singh Karhail, J, Om Prakash Kant, ACJ
Abhay Ispat (India) Pvt. Ltd. – Appellant
Versus
Principal Commissioner of Income Tax - 6 – Respondent
ITA No.3575/MUM/2025
For the Appellants/Petitioners: Shri Gaurav Kabra
For the Respondents: Shri Rajesh Kumar Yadav, CIT-DR
The invocation of revisionary powers under section 263 is inappropriate when an issue is debatable and has been previously ruled in favor of the taxpayer.
Headnote:This appeal concerns the dismissal of a challenge to the revisionary order under section 263 of the Income Tax Act regarding CSR expenditure deduction under section 80G. The court clarified relevant provisions of the Act, underscoring that deductions for CSR, though mandated, can still be eligible under specific circumstances. Key issues relate to the authority of the PCIT to revise assessment orders when those assessments are debatable, with the court confirming that the appellant's deduction claim, justified under earlier rulings, was improperly dismissed.
| Table of Content |
|---|
| 1. timeliness and appropriateness of invoking revisionary powers comparing legal standing. (Para 1 , 2 , 3) |
| 2. csr deduction arguments based on statutory compliance and its impact on assessments. (Para 4 , 5 , 6) |
| 3. assessing the nature of csr contributions and their eligibility for deductions. (Para 11 , 13) |
ORDER
PER SANDEEP SINGH KARHAIL, J.M.
The assessee has filed the present appeal against the impugned order dated 22/03/2025, passed under section 263 of the Income Tax Act, 1961 (“the Act”) by the learned Principal Commissioner of Income Tax, Mumbai - 6 [“learned PCIT”], for the assessment year 2020-21.
2. In this appeal, the assessee has raised the following grounds:
“1. On the fact and circumstances of the case as well as in Law, the Learned Principal Commissioner of Income Tax (PCIT) has erred in initiating proceedings U/s.263 of the Income Tax Act, 1961 (the Act) dated 03.03.2025 and passing an order U/s 263 of the Act, without considering the facts & Circumstances of the case.
2. On the fact and circumstances of the case as well as in Law, the Learned Principal CIT has erred in considering the order passed u/s. 143(3) r.w.s. 144B of the Income Tax Act, 1961 by the Learned Assessing officer as erroneous and prejudicial to the interest of the revenue, without appreciating the facts and circumstances of the case.
3. On the fact and circumstances of the case as well as in Law, the Learned Principal CIT has erred in set aside the assessment order passed by the Learned Assessing Officer, without considering the facts and circumstances of the case.
4. On the fact and circumstances of the case as well as in Law, the Learned Principal CIT has erred in directing the Learned Assessing Officer to make enquiries about the claim of section 80G deduction out of CSR expenses, without considering the facts and circumstances of the case.
5. The appellant craves leave to add, amend, alter or delete the said ground of appeal.
6. On the fact and circumstances of the case as well as in Law, the Learned Principal CIT has erred in passing Revision Order u/s.263 of the Income Tax Act, 1961 for the assessment order u/s. 143(3) r.w.s. 144B of the Act, 1961, passed by the Learned Assessing Officer after making adequate enquiries and application of mind, without considering the facts and circumstances of the case.”
3. The solitary grievance of the assessee is against the invocation of the revisionary proceedings under section 263 of the Act by the learned PCIT on the issue of deduction claimed under section 80G of the Act in respect of Corporate Social Responsibility (“CSR”) expenses.
4. The brief facts of the case as emanating from the record are: The assessee is engaged in wholesale and retail trade. For the year under consideration, the assessee filed its return of income declaring a total income of ₹ 16,63,88,490/-. The return filed by the assessee was selected for scrutiny, and statutory notices under section 143(2) and section 142(1) were issued and served on the assessee. After considering the submissions of the assessee in response to the statutory notices, the assessment was concluded vide order dated 20.09.2022 passed under section 143(3) r.w.s. 144B of the Act accepting the return of income filed by the assessee.
5. Subsequently, on the basis of objections raised by the internal audit, notice under section 263 of the Act was issued on 03.03.2025 on the basis that vide order dated 20.09.2022 passed under section 143(3) r.w.s 144B of the Act the assessment was concluded accepting the return of income and allowing the deduction claimed by the assessee under section 80G of the Act in respect of CSR expenses without making any examination on the said issue. In response, the assessee submitted that it spent ₹ 1,55,000/- towards CSR, which was suo-moto disallowed under section 37(1) of the Act. Further, the assessee submitted that it claimed deduction under section 80G of the Act to the tune of ₹ 77,500/- (being 50% of ₹ 1,55,000/-)
