2025 (7) TMI 877 - AT - Income Tax

Revision u/s 263 - As per CIT assessment order is not only erroneous but prejudicial to the interest of the revenue - revision of debatable issue - CIT(A) directed the AO to disallow the deduction u/s 80G of the Act in respect of donation claimed out of CSR expenditure - HELD THAT - We are of the considered view that the issue raised by the ld. Pr. CIT is a highly debatable issue as the Co-ordinate Benches of the Tribunal have taken a consistent view that CSR expenditure can be claimed as expenditure u/s 80G of the Act in the cases of Motilal Oswal Securities Ltd. 2023 (8) TMI 924 - ITAT MUMBAI Allegis Services India Pvt. Ltd. 2020 (5) TMI 378 - ITAT BANGALORE JMS Mining Pvt. Ltd 2021 (7) TMI 907 - ITAT KOLKATA and Elan Pharma (India) Pvt. Ltd. 2025 (6) TMI 1128 - ITAT MUMBAI 6. As the issue is highly debatable any view taken by the AO during the course of original assessment proceedings has to be considered as a plausible view and the view taken by the ld. Pr. CIT howsoever plausible is nothing but a change of opinion for which jurisdiction u/s 263 of the Act cannot be assumed. Assessee appeal allowed.

Summary

The Appellate Tribunal (ITAT Mumbai) heard an appeal against the Principal Commissioner of Income Tax's (Pr. CIT) order dated 13/03/2025 framed under Section 263 of the Income Tax Act. The Pr. CIT had held the assessment order dated 29/07/2022 erroneous and prejudicial to revenue for allowing 50% of CSR expenditure claimed as a donation under Section 80G.The Tribunal noted that the assessee did not appear, and proceeded ex-parte. It observed that the issue-whether CSR expenditure qualifies for deduction under Section 80G-is "highly debatable," citing consistent decisions of Coordinate Benches (Motilal Oswal Securities Ltd., Allegis Services India Pvt. Ltd., JMS Mining Pvt. Ltd., Elan Pharma (India) Pvt. Ltd.) allowing such claims.The Tribunal held that since the Assessing Officer's view was plausible and the Pr. CIT's order represented merely a "change of opinion," jurisdiction under Section 263 could not be invoked. Accordingly, the Tribunal set aside the Pr. CIT's order and restored the original assessment order dated 29/07/2022, allowing the appeal.