TMI Blog2022 (12) TMI 1015X X X X Extracts X X X X X X X X Extracts X X X X ..... nded or imported to CSR contribution which was eligible for deduction under Chapter VI. Thus in our considered understanding, donation made by the assessee on account of CSR expenses to a trust which is duly registered u/s 80G(5)(vi) is allowable as deduction u/s 80G - Having so held, which is also fortified by the decision of JMS Mining Pvt. Ltd [ 2021 (7) TMI 907 - ITAT KOLKATA] we find that ld. PCIT has not been able to make out a case on the issue raised by him that the order of ld. AO is erroneous in so far as prejudicial to the interest of the revenue. Deduction u/s 80G for donation made to Ramkrishna Mission Ashram, ld. PCIT took an adverse view for want of donation receipts and certificate of registration of the donee. Assessee has furnished all the relevant documentary evidences to substantiate its claim which ld. PCIT has failed to consider himself. As already noted above, we do not ascribe to the action taken by the ld. PCIT on this issue also. As in the case of DG Housing Projects Ltd [ 2012 (3) TMI 227 - DELHI HIGH COURT] held that in cases of wrong opinion for finding on merit, the CIT has to come to the conclusion and himself decide that order is erroneous, b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s of Explanation to section 37 of the Act and is required to be added back in the computation of income. 3. Brief facts of the case are that assessee is engaged in the business of manufacturing and selling of jewellery. Return was filed on 30.10.2017 reporting total income of Rs. 25,16,27,420/-. Case was selected for scrutiny through CASS for which statutory notices were issued and served on the assessee and were replied by the assessee by filing all the required details, information and documents as per questionnaire issued by the ld. AO. Assessment was completed u/s 143(3) of the Act vide order dated 03.12.2019 with assessed income equal to income returned by the assessee. Subsequently, ld. PCIT called for the assessment records and on the basis of verification of the material available on record, initiated the revisionary proceedings by issuing notice u/s 263 of the Act, dated 07.03.2022, by raising the two issues described above. 4. Before us, Shri Ravi Tulsiyan, FCA represented the assessee. On the first issue of donation of Rs. 40,000/- made to Ramakrishna Mission for which deduction of Rs. 20,000/-was claimed u/s 80G of the Act, ld. Counsel pointed to various documents ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sel referred to computation of taxable income and tax payable placed in the paper book at page 31 and 32. He further stated that this sum of Rs. 30,75,973/- was claimed as deduction @ 50% u/s 80G which was reduced from the gross total income as computed in the computation of taxable income. Ld. Counsel stated that acknowledgement receipt of payment of Rs. 30,75,973/- to Radha Madhab Institution along with approval u/s 80G(5)(vi) of the Act dated 05.01.2015 issued by the office of CIT(E), Kolkata vide order no. DIT(E)/303/8E/54/82-83 were submitted before the ld. AO and are placed in the paper book at page no. 21 to 23. He submitted that the approval granted to Radha Madhab Institution was deemed to be extended in perpetuity as stated in the letter of approval referred above. 4.3. Ld. Counsel further submitted that ld. PCIT has referred to Explanation 2 to Section 37 which has no co-relation with claim of deduction u/s 80G of the Act. According to him, Explanation 2 to section 37(1) of the Act does not in any way debar an assessee to claim an amount as deduction in any other provision of the Act when the said deduction is expressly allowable under other provision of the Act. He f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... contentions and perused the material available on record and have given thoughtful consideration to the submission made before us. We observe that in the course of proceedings u/s 263 of the Act, before the Ld. PCIT, assessee had furnished the relevant details and explained the issue raised through the show cause notice by the Ld. PCIT, supporting its contentions by various decisions as narrated above. It is well settled law that for invoking the provisions of section 263 of the Act, both the conditions, that the order must be erroneous and prejudicial to the interest of revenue needs to be satisfied. This ratio stands laid down by various Hon'ble Courts. 7. Before we advert on the facts and law involved in this appeal before us, it is worth apprising ourselves on the law governing the issue involved. In the first place, the assessee company has challenged the very invocation of jurisdiction by Ld. Pr. CIT of his revisional powers u/s 263 of the Act. Therefore, firstly we have to look at the rightful exercise of revisional powers by the Ld. Pr. CIT for which we have to examine whether in the first place the order of the Assessing Officer found fault by the Ld. Pr. CIT is er ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... relevant documentary evidences contained in the Paper Book for which ld. PCIT in the show cause notice had observed that there is no evidence in support of such payment of donation because of which veracity of such payment could not be established. Having perused the records, we do not ascribe to such observation made by the ld. PCIT while invoking the revisionary proceedings u/s 263 of the Act. 9.1. As far as the position of law is concerned in respect of deduction claimed u/s 80G on account of CSR expenses, we note that ld. PCIT has referred to Explanation 2 to section 37 inserted by Finance Act, 2014, according to which, expenditure incurred by an assessee on the activities relating to CSR shall not be deemed to be an expenditure incurred by the assessee for the purpose of business. By referring to Explanation 2 to section 37, ld. PCIT drew his consideration that claim of deduction u/s 80G by the assessee of Rs. 15,37,987/- (50% of Rs. 30,75,973/-) is required to be added back in the computation of income. We note that assessee has rightly claimed deduction of CSR expenses u/s 80G of the Act, more importantly, in the light of the fact that it has suo moto added back the amou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing must be recorded by CIT who cannot remand the matter to the assessing officer to decide whether the findings recorded are erroneous. In cases where there is inadequate enquiry but not lack of enquiry, again the CIT must give and record a finding that the order/enquiry made is erroneous. This can happen if an enquiry and verification is conducted by the CIT and he is able to establish and show the error or mistake made by the AO, making the order unsustainable in law. 11. We find that Ld. Pr. CIT in Para 4 of the impugned order has taken note of the amendment made in section 263 w.e.f. 01.06.2015. This amendment relates to Explanation 2 inserted in section 263 of the Act. The co-ordinate bench of Mumbai ITAT has dealt with Explanation 2 as inserted by the Finance Act, 2015 in the case of Narayan Tatu Rane v. Income Tax Officer [2016] 70 taxmann.com 227 (Mum) to hold that the said Explanation cannot be said to have overridden the law as interpreted by the Hon'ble Delhi High Court in DG Housing Projects Ltd (supra), according to which the Ld. Pr. CIT has to conduct an enquiry and verification to establish and show that the assessment order is unsustainable in law. The co-or ..... X X X X Extracts X X X X X X X X Extracts X X X X
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