Tax Bombshell! Companies Win Big as ITAT Allows Double-Dipping on CSR Donations"

The Mumbai Income Tax Appellate Tribunal has delivered a landmark ruling allowing corporations to claim tax deductions under Section 80G for mandatory CSR expenses. In the case of ACIT vs. Jamnagar Utilities and Power Pvt. Ltd., ITAT rejected the Revenue Department's argument that mandatory CSR spending under Companies Act Section 135 disqualifies it from voluntary donation status. This reverses the traditional view that CSR expenses couldn't qualify as business expenses under Section 37(1) while also being eligible for Section 80G benefits. The ruling creates a powerful incentive for companies to increase social responsibility spending, potentially transforming corporate philanthropy from a legal burden into a tax-advantaged opportunity.

Source : The CSR Journal