ITAT Mumbai Rules CSR Donations Eligible for Section 80G Deduction; Deletes Disallowance for Landmark Worldwide

April 30, 2026 : The Mumbai Bench of the Income Tax Appellate Tribunal (ITAT) has held that a deduction under Section 80G of the Income-tax Act cannot be denied simply because the donation was made to satisfy Corporate Social Responsibility (CSR) obligations. A Bench comprising Shri Pawan Singh (Judicial Member) and Shri Girish Agrawal (Accountant Member) allowed the appeal filed by Landmark Worldwide Breakthrough Technologies Pvt. Ltd. for Assessment Year 2016-17. The dispute arose after the assessee filed a return reporting a total income of Rs. 6,83,43,310/- and claimed a deduction of Rs. 22,94,274/- under Section 80G for a donation made to the Prime Minister’s National Relief Fund (PMNRF). While the assessee had already voluntarily disallowed the CSR expenditure under Section 37(1) while computing its business income, the Assessing Officer (AO) and the National Faceless Appeal Centre (NFAC) disallowed the Section 80G claim, arguing that the donation lacked voluntariness as it was a mandated CSR expense.

The Tribunal observed that the issue was no longer a matter of first impression and had been settled by a consistent line of decisions from various coordinate benches. The Bench noted that while Explanation 2 to Section 37(1) specifically prohibits CSR expenditure from being claimed as a business expense, there is no corresponding statutory embargo under Section 80G. The Tribunal emphasized that Section 37(1) and Section 80G operate in independent fields, with the former governing business income and the latter granting deductions from the Gross Total Income under Chapter VI-A. Furthermore, the Bench highlighted that the legislature had specifically restricted CSR-related deductions only for contributions to the Swachh Bharat Kosh and Clean Ganga Fund, implying that other approved donations remain eligible.

Rejecting the Revenue’s contention that CSR donations are not “voluntary,” the Tribunal clarified that while the Companies Act mandates the amount to be spent, the choice of the recipient institution remains with the assessee. The Bench also referenced clarifications from the Ministry of Corporate Affairs stating that while no specific tax exemptions were created for CSR, spending on activities like the PMNRF continues to enjoy benefits under existing sections of the Income-tax Act. Consequently, the ITAT deleted the disallowance, stating that as long as the donation is made to an approved institution and documentary compliance is met, the deduction cannot be denied.