ITAT Mumbai Holds CSR Donations to Charities Eligible for Section 80G Deduction; Favours Assessee

The ITAT Mumbai ruled in favour of Trent Limited, holding that CSR donations made to recognised charities can be claimed as a tax deduction under Section 80G. The Assessing Officer and CIT(A) had earlier rejected the company’s claim of Rs 1.28 crore, saying CSR spending was not eligible for deduction. However, the ITAT overturned these orders and directed the tax department to allow the deduction. As a result, the company’s appeal was fully allowed.

The present appeal has been filed by a company named Trent Limited (Appellant) against the Deputy Commissioner of Income Tax (Respondent) in the Income Tax Appellate Tribunal (ITAT) “E” Bench, Mumbai, before Shri Rahul Chaudhary (Judicial Member) and Smt Renu Jauhri (Accountant Member). The case is related to the assessment year 2020-21 and was decided on December 3, 2025. The appeal is filed against the order dated July 7, 2025 passed by the National Faceless Appeal Centre (NFAC).

Background of the case:

During the year in question, the company spent Rs. 26,500,000 on Corporate Social Responsibility (CSR) activities. Out of this amount, the company claimed that Rs 12,800,000 should be allowed as a tax deduction under Section 80G because this portion was given as donations to charitable institutions. However, when the tax authorities examined the return (through an assessment order dated September 23, 2022 under Sections 143(3) and 144B), the Assessing Officer rejected the company’s claim. The officer stated that the deduction under Section 80G cannot be allowed for CSR-related donations and therefore disallowed the Rs 1,28,00,000 claimed by the company.

The assessee further approached the CIT(A). However, CIT(A) disposed of the appeal filed by the assessee and upheld the above disallowance of Rs 12,800,000 made by the AO.

The company being aggrieved, approached the ITAT challenging the rejected claim by the assessee under Section 80G of the Act. During the hearing, the Assessee’s lawyer AR referred to certain earlier decisions made by the Mumbai Bench of the Income Tax Appellate Tribunal. The idea was to show that in similar situations in the past, the Tribunal had given favourable rulings, and therefore the Assessee’s claim should also be accepted based on those precedents.

After reviewing the Tribunal’s earlier decisions, the Tribunal agreed with the Assessee’s view in those cases. In those rulings, the Tribunal allowed companies to claim tax deductions under Section 80G for CSR expenses when those expenses were made as donations to recognised charitable institutions. And the AO is directed to grant a deduction of Rs 12,800,000 as claimed by the Assessee under Section 80G of the Act. As a result, the present appeal filed by the Assessee is allowed.