Top Stories Case digest on Deduction u/s 80 G of Income Tax Act By Aiswarya Krishnadas – On May 6, 2024 4:00 pm – 14 mins read What is Section 80G? Section 80G of the Income Tax Act is a provision that allows taxpayers to claim deductions on donations made to eligible charitable institutions and funds. The purpose of this section is to incentivise philanthropy and support organisations engaged in social, cultural, or economic development activities. How to make the Section 80G deduction claim Taxpayers can claim deductions under Section 80G while filing their Income Tax Returns. It is essential to accurately fill in the details of the donated amount and the particulars of the charitable organisation in the relevant sections of the tax return form. Section 80G tax exemption Section 80G of the Income Tax Act in India provides tax exemptions for donations made to specified charitable institutions and funds. The tax exemption under Section 80G is intended to encourage philanthropy by allowing individuals and entities to deduct the amount of donations made from their taxable income. Here are key points regarding Section 80G tax exemption in India: Deduction on donations: Individuals and entities making eligible donations can claim a deduction from their taxable income under Section 80G. The deduction is allowed based on the amount donated to specified institutions and is subject to certain conditions. 100% exemption or 50% exemption: The extent of the tax exemption depends on the nature of the donation and the recipient organisation. Some donations qualify for a 100% exemption, while others are eligible for a 50% exemption. The specific details are mentioned in the Income Tax Act.

Qualifying limits: Donations that qualify for a 100% exemption typically do not have a qualifying limit. However, for those eligible for a 50% exemption, there may be limits specified as a percentage of the donor’s gross total income. Eligible organisations: Not all charitable organisations qualify for exemptions under Section 80G. Only institutions and funds registered under this section and approved by the Income Tax Department are eligible to receive donations with associated tax benefits. Verification of eligibility: It is important for donors to verify the eligibility of the organisation or fund before making a donation. The Income Tax Department issues a list of approved institutions eligible for 80G benefits.  Donation receipts and documents: To avail of the tax exemption, donors must obtain a receipt from the charitable organisation for the donation made. The receipt should include details such as the name and address of the donor, the amount donated, and the registration number of the recipient organisation under Section 80G. Claiming exemption in Income Tax Return:

Taxpayers can claim the exemption while filing their Income Tax Returns. The relevant details, including the amount donated and the details of the recipient organisation, must be accurately filled in the appropriate sections of the tax return form. Malla Foundation vs The Commissioner of Income tax CITATION: 2022 TAXSCAN (ITAT) 162 The Bangalore bench of the Income Tax Appellate Tribunal (ITAT) has held that the donations are the lifeline for starting charitable activities of the assessee trust and the CIT(E) cannot deny approval without verifying the activities. We fail to understand how registration u/s 12AA of the I.T.Act has been granted on 23.03.2021 when the Officer concerned has not been able to examine the genuineness of the activities of the assessee-trust. The starting of activities of the trust is not a condition precedent for grant of approval u/s 80G of the I.T.Act. On receipt of the approval u/s 80G of the I.T.Act, the assessee would be receiving donations. The receipts of money through donations are the lifeline for starting the charitable activities of the assessee-trust. In the interest of justice and equity, we are of the view that the matter needs to be examined afresh by the CIT(E). Accordingly, the issue raised in this appeal is restored to the files of the CIT(E) for de novo consideration. It is ordered accordingly,” the Tribunal said. ACITCircle – 10(2) vs Green dot Health Foods Pvt. Ltd CITATION: 2023 TAXSCAN (ITAT) 516 The Income Tax Appellate Tribunal (ITAT), New Delhi Bench, has recently, in an appeal filed before it, held that deduction u/s 80(1C) is allowable,if form 10CB is filed before final assessment order.

The aforesaid observation was made by the Delhi ITAT, when an appeal was filed before it by the Revenue,as directed against the order dated 16.08.2019 of the Commissioner of Income Tax (Appeals), New Delhi, relating to Assessment Year 2017-18. We find that the CIT(A) while deciding the issue in favor of the assessee, has given the finding that though there was delay in upholding Form 10CCB but the same was uploaded before the return of income was processed u/s 143(1) of the Act. For allowing the ground of assessee, CIT(A) had relied on the decision of Hon’ble Delhi High Court in the case of CIT vs. Contimeters Electricals (P.) Ltd. [2009] 178 Taxman 422 (Delhi) and other decisions. We find that Hon’ble Apex Court in the case of CIT vs. G. M. Knitting Industries (P.) Ltd. (2017) 71 taxmann.com 35 (SC) hasheld even though Form 10CCB was not filed along with the return of income but when the same was filed before the final order of assessment was made, assessee was entitled to claim deduction.”, the ITAT Panel comprising of Yogesh Kumar US, the Judicial Member, along with Anil Chaturvedi, the Accountant Member noted. M/s. Goldman Sachs Services Pvt. Ltd. vs Joint Commissioner of Income Tax CITATION: 2020 TAXSCAN (ITAT) 111 In a Relief to Goldman Sachs, the Income Tax Appellate Tribunal (ITAT), Bangalore Bench held that Corporate Social Responsibility (CSR) is also eligible for deduction under Section 80G of Income Tax Act subject to assessee satisfying the requisite conditions prescribed for deduction under Section 80G of the Act.

We are of the opinion that the matter has to be considered for examination and verification of facts subject to the assessee satisfying the requirements of claim u/s.80G of the Act. Accordingly, we restore the entire disputed issues to the file of A.O. for fresh examination and verification as discussed above and the assessee should be provided the adequate opportunity of hearing and shall cooperate in submitting the information,” the Tribunal said. Batuk Vithalabhai Donga vs ITO CITATION: 2023 TAXSCAN (ITAT) 255 The bench of Waseem Ahmed (Accountant Member) and Sidhhartha Nautiyal (Judicial Member) of Rajkot Income Tax Appellate Tribunal (ITAT) ruled that no addition shall be made under section 69A of Income Tax Act, 1961 on the ground of denial of deduction under section 80G. The tribunal emphasised that the section 69A of Income Tax Act can only be used in the event that the assessee is discovered to be the owner of any money, bullion, jewellery, or other valuable item that is not recorded in the books of account and the assessee makes no attempt to explain the nature and source of acquisition of such money, bullion, jewellery, or other valuable articles. Further it was observed that the AO has erred in facts and in law in invoking the provisions of section 69A of Income Tax Act in respect of incorrect claim of deduction under section 80G of Income Tax Act.

Lady Meherbai D. Tata Education Trust vs Commissioner of Income Tax CITATION: 2023 TAXSCAN (ITAT) 170 The Mumbai Bench of the Income Tax Appellate Tribunal ( ITAT ), ruled that Principal Commissioner of Income Tax ( PCIT ) cannot order conditional approval under Section 80G of the Income Tax Act, 1961. A Bench comprising Kuldip Singh, Judicial Member and S Rifaur Rahman, Accountant Member noted that “Consequently, approval granted by the PCIT/CIT under section 80G of the Act to the assessees is made absolute sans conditions of the impugned order. Hence, both the appeals filed by the assessee are allowed.” Santshreshtha Gajajan Maharaj Sevabhavi Sanstha vs Commissioner of Income-tax CITATION: 2022 TAXSCAN (ITAT) 1837 The Pune bench of Income Tax Appellate Tribunal (ITAT) presided over by R.S. Syal, Vice President and Accountant Member with Partha Sarathi Chaudhury, Judicial Member held that the assessee-trust is allowed to get exemption under the Section 80G of the Income Tax Act, 1961. The bench ruled that the department had not provided sufficient evidence to support the trust’s religious nature. If the trust engaged in religious activities, it is not subject to the provisions of section 80G of the Income Tax Act. As a response, the tribunal directed the CIT(E)’s to grant the exemption under Section 80G of the Income Tax Act. COMMISSIONER OF INCOME TAX, (EXEMPTION) KOLKATA vs VIJAY KUMAR BAJORIA FOUNDATION

The Calcutta High Court (HC) has held that registration of trust u/s 12AA  of the Income Tax Act,1961 is valid when the object of the Trust is charitable in nature and allowed the Exemption u/s 80(G)(S)(vi) of the act. The [CIT(E)] has not recorded any finding that the object of the Trust is not charitable in nature and apart from that there was no material brought on record by the[CIT(E)] that the donations were given with some ulterior motive. Justice T S Sivagnanam and Justice Hiranmay Bhattacharyya observed that the Tribunal had rightly pointed out that no material was produced by the assessee therein to show that it carried out any charitable activity. While dismissing the tax case appeal, the Court upheld theorder of the Tribunal. Bai Navajbai tata vs CIT CITATION: 2022 TAXSCAN (ITAT) 1726 The Mumbai Bench of the Income Tax Appellate Tribunal ( ITAT ), held that Commissioner of Income Tax (Exemptions) (CIT(E)) cannot impose conditions on his own while granting approval under Section 80G of the Income Tax Act, 1961. In the case of Chamber of Indian Charitable Trusts vs. PCIT, it was held that the CIT(E) did not enjoy the power to prescribe or impose any conditions on his own (other than what is stipulated in law) while granting the registration under Section 12AB of the Income Tax Act, we similarly hold that the CIT(E) lacked jurisdiction to impose any conditions on his (other than what is stipulated in law) while granting the approval under Section 80G of the Income Tax Act as well.

After hearing detailed submissions, a Bench consisting of Aby T Varkey, Judicial Member and Pramod Kumar, Vice President observed that “We hold that the CIT(E) did not enjoy the power to impose any conditions on his own while granting the approval u/s 80G of the Income Tax Act (other than what is stipulated in law).” Sir Ratan Tata Trust vs Commissioner of Income Tax CITATION: 2022 TAXSCAN (ITAT) 1689 The Income Tax Appellate Tribunal (ITAT), Mumbai Bench, has recently, while deciding an appeal filed before it and thereby granting relief to Sir Ratan Tata Trust, held that no conditions can be imposed by PCIT under clause 1 of section 80g (v), for granting registration to trusts. Thus, allowing both the appeals of the assessees, the Mumbai ITAT thus ruled: “In the instant case, the assessee has come up under clause I of sub section v of section 80G, no such condition can be imposed by the Ld. PCIT. So we are of the considered view that impugned order passed by the Ld. PCIT is not sustainable to the extent of imposing conditions in para 10(a) to (j) of the impugned order, in the eyes of law.” The Jt.CITS.K. RangeHimatnagar vs Shree Ganesh Construction CITATION: 2022 TAXSCAN (ITAT) 1338

The Income Tax Appellate Tribunal “A” Bench, Ahmedabad, has recently, in an appeal filed before it, held that the assessee is entitled to 80G deduction with regard to the contributions or donations made to certain relief funds and charitable institutions, such as Chief Minister KanyaKelvani Nidhi. We have heard the arguments of both the sides and also perused the relevant material available on record. It is observed that even though the original receipt for payment of donation of Rs.50,000/- made to Chief Minister KanyaKelvani Nidhi was not produced by the assessesas the same was lost or misplaced, sufficient evidence was produced by the assessee to support and substantiate its claim of having paid the said donation. As noted by the Ld.CIT(A) in his impugned order, the said evidence was sufficient to verify the claim of the assessee regarding payment of donation of Rs.50,000/- to Chief Minister Kanya Kelavani Nidhi.Even the donation receipt issued by the Executive Engineer Panchayat Department Dahod evidencing payment of donation was produced by the assessee.

Keeping in view these details and documents furnished by the assessee to support and substantiate its claim of donation of Rs.50,000/- paid to Chief Minister KanyaKelvani Nidhi, the Ld.CIT(A), in our opinion, has rightly deleted the disallowance of assessee’s claim for deduction u/s.80G of the Act made by the Assessing Officer. We, therefore, uphold the impugned order of the Ld.CIT(A) deleting the disallowance made by the Assessing Officer on account of assessee’s claim for deduction u/s.80G of the Act and dismiss the ground No.3 of Revenue’s appeal.” Shree Radheshyam Sharnam vs Commissioner of Income-tax CITATION: 2022 TAXSCAN (ITAT) 808 The Jaipur bench of the Income Tax Appellate Tribunal (ITAT) has been allowed to submit the required documents for the approval of exemption u/s 80G(5)(vi) before the CIT(Exemption) as a relief to the critical covid pandemic period. The appellant contended that the society/trust was facing difficulties due to the Covid-19 pandemic at the time of the hearing and was unable to submit all the necessary documents before the CIT (Exemptions) within the time limit.  Further stated that since the applicant society was engaged in providing service to elderly persons duringthe critical pandemic period. Shri Sandeep Gosain, JM & Shri Rathod Kamlesh Jayantbhai, AM has ordered to remand the matter back to the file of the CIT (Exemptions) to decide the matter afresh after affording a reasonable opportunity. The appeal was allowed for statistical purposes. Shiv Raj Sharma Shiksha Samiti Bilaspur vs CIT CITATION: 2020 TAXSCAN (ITAT) 112 The ITAT Mumbai bench, while ruling in favour of Shiv Raj Sharma Shiksha Samit, held that the benefit of Section 80G under the Income Tax Act, 1961 cannot be denied to society solely for the reason that it is not involved in charitable activities. We note that at the time of granting approval u/s 80G of the Act, only the object of trust is required to be examined and, therefore, assessee’s application seeking approval u/s. 80G(5) of the Act could not be rejected on the ground that the assessee society is not engaged in charitable activities,” the Tribunal said. Bhuvaneshwari Kali Thakuranir Seva Samity vs Commissioner of Income Tax-(Exemptions) CITATION: 2020 TAXSCAN (ITAT) 113 Recently Kolkata Bench of Income Tax Appellate Tribunal (ITAT) in the case of Bhuvaneshwari Kali Thakuranir Seva Samity vs. Commissioner of Income Tax-(Exemptions), held that exemption to donations under Section 80G of the Income Tax Act, 1961 cannot be granted if the assessee spend more than 5% of its total income for religious purposes. After going through a number of case laws and upholding the decision of the CIT(E), the bench comprising of Judicial Member J. Sudhakar Reddy and Accountant Member Aby T. Varkey observed “The ld. CIT(E), in his order u/s 80G(5B) of the Act, held that the assessee spent more than 5% of its income towards religious purposes. The religious expenditure in question is towards puja expenses and honarium paid to priests. In our view the judgement in the case of Umaid Charitable Trust (supra), does not come to the rescue of the assessee, because in that case a single charitable contribution was made to another trust, which carries out renovation of Lord Vishnu Temple. Such single contribution was not considered as a religious activity. In the case on hand, worship of Godess Kali Mata and expenditure incurred towards the same is definitely incurred for a particular religious purpose. The arguments of the assessee, that any person of any religion can perform the Puja to Goddess Kali and hence the expenditure in question is not restricted to a particular religion is not correct. General Capital and Holding Company Pvt. Ltd. vs Income Tax Officer CITATION: 2020 TAXSCAN (ITAT) 114 In the case between General Capital and Holding Company Pvt. Ltd vs Income Tax Officer, Ahmedabad bench of Income Tax Appellate Tribunal (ITAT) held that deduction under Section 80G of the Income Tax Act 1961 is allowable in the year of actual payment as well as that of getting the necessary donation receipt. The division bench further observed that “the purpose of using the crucial expression “in relevant previous year” in statute is to ensure actual payment on or before the relevant previous year rather than altogether rejecting a case alike the instant facts only”. After verifying the books of accounts submitted by the Assessee, the bench found that the assessee having actually transferred the money to donee trust through banking channel only and the said trust is an approved institution.

Therefore, the bench directed the Revenue to delete the disallowance under section 80G of the Income Tax Act. COMMISSIONER OF INCOME TAX, (EXEMPTION) KOLKATA vs VIJAY KUMAR BAJORIA FOUNDATION CITATION: 2022 TAXSCAN (HC) 952 The Calcutta High Court (HC) has held that registration of trust u/s 12AA  of the Income Tax Act,1961 is valid when the object of the Trust is charitable in nature and allowed the Exemption u/s 80(G)(S)(vi) of the act. The [CIT(E)] has not recorded any finding that the object of the Trust is not charitable in nature and apart from that there was no material brought on record by the[CIT(E)] that the donations were given with some ulterior motive. Justice T S Sivagnanam and Justice Hiranmay Bhattacharyya observed that the Tribunal had rightly pointed out that no material was produced by the assessee therein to show that it carried out any charitable activity. While dismissing the tax case appeal, the Court upheld theorder of the Tribunal. ACITCircle – 10(2) vs Green dot Health Foods Pvt. Ltd CITATION: 2023 TAXSCAN (ITAT) 516 The Income Tax Appellate Tribunal (ITAT), New Delhi Bench, has recently, in an appeal filed before it, held that deduction u/s 80(1C) is allowable,if form 10CB is filed before final assessment order. The aforesaid observation was made by the Delhi ITAT, when an appeal was filed before it by the Revenue,as directed against the order dated 16.08.2019 of the Commissioner of Income Tax (Appeals), New Delhi, relating to Assessment Year 2017-18. We find that the CIT(A) while deciding the issue in favor of the assessee, has given the finding that though there was delay in upholding Form 10CCB but the same was uploaded before the return of income was processed u/s 143(1) of the Act. For allowing the ground of assessee, CIT(A) had relied on the decision of Hon’ble Delhi High Court in the case of CIT vs. Contimeters Electricals (P.) Ltd. [2009] 178 Taxman 422 (Delhi) and other decisions. We find that Hon’ble Apex Court in the case of CIT vs. G. M. Knitting Industries (P.) Ltd. (2017) 71 taxmann.com 35 (SC) hasheld even though Form 10CCB was not filed along with the return of income but when the same was filed before the final order of assessment was made, assessee was entitled to claim deduction.”, the ITAT Panel comprising of Yogesh Kumar US, the Judicial Member, along with Anil Chaturvedi, the Accountant Member noted. M/s. A. G. Peripherals vs ACIT CITATION: 2022 TAXSCAN (ITAT) 1586 The Income Tax Appellate Tribunal (ITAT), Delhi Bench held that there can be two initial assessment years and the year in which there was substantial expansion that year is the initial assessment year within the period of 10 years for the purpose of claiming deduction under section 80-IC of the Income Tax Act, 1961. A Coram consisting of Challa Nagendra Prasad, Judicial Member and Pradip Kumar Kedia, Accountant Member observed that “Thus respectfully following the decision of the Hon’ble Supreme Court we hold that the assessee is entitled for deduction under section 80-IC of the Act for the assessment years 2012-13 and 2015-16 which are under consideration. We reverse the order of the CIT (Appeals) and direct the Assessing Officer to allow the claim of the assessee under section 80-IC of the Act.” M/s. Bharat Engineering Construction Co. Pvt. Ltd vs The Assistant Commissioner of Income Tax In a recent ruling the Chennai bench of the Income Tax Appellate Tribunal ( ITAT ) observed that the deduction under Section 80 IA of the Income Tax Act, 1961 is not allowed to enterprise carrying civil contract work for developer of infrastructure facility. The two member bench of the tribunal comprising Manohan Das ( Judicial member ) and Manju Natha G ( Accountant member )  set aside the order of the CIT(A) on this issue and restore the issue back to the file of the Assessing Officer and direct the Assessing Officer to re-examine the claim of deduction under Section 80- IA(4) of the Income Tax Act, in light of necessary evidences including agreement entered into by the appellant with various departments and ascertain the nature of works executed by the assessee, in order to consider for the purpose of section 80-IA(4) of the Income Tax Act, and decide the issue in accordance with law.

Accordingly, the appeal of the assessee allowed BEE Co-op Credit Society Ltd vs The Income Tax Officer CITATION: 2023 TAXSCAN (ITAT) 1862 The Income Tax Appellate Tribunal (ITAT) Bangalore Bench held that Interest income earned from deposits made on other cooperative banks are eligible for deduction under section 80(2)(d) of Income Tax Act, 1961. The tribunal after reviewing the facts and submissions of the both parties,the two member bench of Chandra Poojari,(Accountant Member ) and Beena Pillai,(Judicial Member) observed that assessee is eligible for deduction under section 80P(2)(d) in respect of interest earned from deposits made on other Cooperative banks, Therefore the bench allowed the appeal of the assessee. COMMISSIONER OF INCOME TAX, (EXEMPTION) KOLKATA vs VIJAY KUMAR BAJORIA FOUNDATION CITATION: 2022 TAXSCAN (HC) 952 The Calcutta High Court (HC) has held that registration of trust u/s 12AA  of the Income Tax Act,1961 is valid when the object of the Trust is charitable in nature and allowed the Exemption u/s 80(G)(S)(vi) of the act. The [CIT(E)] has not recorded any finding that the object of the Trust is not charitable in nature and apart from that there was no material brought on record by the[CIT(E)] that the donations were given with some ulterior motive. Justice T S Sivagnanam and Justice Hiranmay Bhattacharyya observed that the Tribunal had rightly pointed out that no material was produced by the assessee therein to show that it carried out any charitable activity. While dismissing the tax case appeal, the Court upheld theorder of the Tribunal. ACITCircle – 10(2) vs Green dot Health Foods Pvt. Ltd CITATION: 2023 TAXSCAN (ITAT) 516 The Income Tax Appellate Tribunal (ITAT), New Delhi Bench, has recently, in an appeal filed before it, held that deduction u/s 80(1C) is allowable,if form 10CB is filed before final assessment order. The aforesaid observation was made by the Delhi ITAT, when an appeal was filed before it by the Revenue,as directed against the order dated 16.08.2019 of the Commissioner of Income Tax (Appeals), New Delhi, relating to Assessment Year 2017-18. “We find that the CIT(A) while deciding the issue in favor of the assessee, has given the finding that though there was delay in upholding Form 10CCB but the same was uploaded before the return of income was processed u/s 143(1) of the Act. For allowing the ground of assessee, CIT(A) had relied on the decision of Hon’ble Delhi High Court in the case of CIT vs. Contimeters Electricals (P.) Ltd. [2009] 178 Taxman 422 (Delhi) and other decisions. We find that Hon’ble Apex Court in the case of CIT vs. G. M. Knitting Industries (P.) Ltd. (2017) 71 taxmann.com 35 (SC) hasheld even though Form 10CCB was not filed along with the return of income but when the same was filed before the final order of assessment was made, assessee was entitled to claim deduction.”, the ITAT Panel comprising of Yogesh Kumar US, the Judicial Member, along with Anil Chaturvedi, the Accountant Member noted. First American (India) Pvt. Ltd. vs The Asst. Commissioner of Income Tax CITATION: 2020 TAXSCAN (ITAT) 148 The Income Tax Appellate Tribunal (ITAT) redirected the issue to the Assessing Officer (AO) as the authorities have erred in denying a claim under Section 80G of the Income Tax Act, 1961 by observing that the CSR payments eligible under the said provision shall be deducted at the time of computation of the head “Profit and Gain from Business and Profession”.  For claiming benefit under section 80G, deductions are considered at the stage of computing “Total taxable income”. Even if any payments under section 80G forms part of CSR payments( keeping in mind ineligible deduction expressly provided u/s.80G), the same would already stand excluded while computing, Income under the head, “Income from Business and Profession”. The effect of such disallowance would lead to an increase in business income. Thereafter benefit accruing to the assessee under Chapter VIA for computing “Total Taxable Income” cannot be denied to the assessee, subject to fulfillment of necessary conditions therein,” the Tribunal said.

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