RPG LIFE SCIENCES LIMITED,WORLI MUMBAI V. PRINCIPAL COMMISSIONER OF INCOME TAX -5, MUMBAI, CHURCHGATE, MUMBAI

ITA 2769/MUM/2025

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The case involves RPG Life Sciences Limited, which appealed against the order of the Principal Commissioner of Income Tax - 5, Mumbai, concerning the assessment year 2018-19. The core issue was the disallowance of Rs. 34,00,000 debited towards expenses on Corporate Social Responsibility (CSR), which the assessee claimed as a donation under section 80G of the Income Tax Act. The Principal Commissioner assumed jurisdiction under section 263, deeming the original assessment order erroneous and prejudicial to the interest of the revenue. However, the Tribunal found that the issue was debatable and supported by various precedents where CSR expenditure was allowed as a deduction under section 80G. The Tribunal's decision emphasized that a mere change of opinion does not justify the invocation of section 263.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 652985 (ITAT-MUMBAI)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-06-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: G
• Assessment Year: 2020-2021
• Other Referred Cases: Motilal Oswal Securities Ltd. (ITA No. 1795/Mum/2023), Allegis Services India Pvt. Ltd. (ITA No. 1693/Bang/2019), JMS Mining Pvt. Ltd. [130 taxmann.com 118 (Kolkata Trib.)], Elan Pharma (India) Pvt. Ltd. vs. PCIT in ITA No. 2419/Mum/2025
• Laws Referred To: Income Tax Act
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ARUN KANTI DATTA; DR
• Assessee Lawyers: KRISH DESAI; AR
• Keywords: Set aside; Difference of opinion; Change of opinion; Revision of order
• Section: 143(3); 263; 37(1); 80G

Judgement Text

" | आयकर अपीलीय अिधकरण ा यपीठ, मुंबई | IN THE INCOME TAX APPELLATE TRIBUNAL “G” BENCH, MUMBAI BEFORE SHRI SAKTIJIT DEY, HON’BLE VICE PRESIDENT & SHRI NARENDRA KUMAR BILLAIYA, HON’BLE ACCOUNTANT MEMBER I.T.A. No. 2769/Mum/2025 Assessment Year: 2020-21 RPG Life Sciences Limited RPG House, 4th Floor Dr. Annie Besant Road Worli Colony S.O. Mumbai Maharashtra - 400030 [PAN: AADCR8060K] Vs Principal Commissioner of Income Tax - 5, Mumbai अपीला थ\u0016/ (Appellant) \u0017\u0018 यथ\u0016/ (Respondent) Assessee by : Shri Krish Desai, A/R Revenue by : Shri Arun Kanti Datta, CIT, D/R सुनवाई की तारीख/Date of Hearing : 18/06/2025 घोषणा की तारीख /Date of Pronouncement: 20/06/2025 आदेश/O R D E R PER NARENDRA KUMAR BILLAIYA, AM: This appeal by the assessee is preferred against the order of ld. Pr. CIT, Mumbai – 5 [hereinafter “the ld. Pr. CIT”] dated pertaining to AY 2018-19. 2. The sum and substance of the grievance of the assessee is that the ld. Pr. CIT erred in assuming jurisdiction u/s 263 of the Act further erred in holding that the assessment order dated 21/09/2022 framed u/s 143(3) r.w.s. 144B of the Act is not only erroneous but also prejudicial to the interest of the revenue. 3. The cause for the assumption of jurisdiction by the ld. Pr. CIT can be understood from the following notices:- I.T.A. No. 2769/Mum/2025 2 I.T.A. No. 2769/Mum/2025 3 4. The root cause for the assumption of jurisdiction is that the assessee debited the amount of Rs. 34,00,000/- towards expenses on Corporate Social Responsibility (CSR) which was added back in the computation of income is disallowable but claimed as donation u/s 80G of the Act @50% of the expenses. 5. The ld. Pr. CIT was of the firm belief that the expenditure on CSR cannot be claimed as deduction u/s 80G of the Act as Explanation (2) to Section 37(1) of the Act clearly bars such exception not considered as business related. The ld. Pr. CIT further supported his belief by the explanatory notice to the Finance Bill, 2014 (CBDT Circular No. 1/2015 dated 21/01/2015). 6. We have given a thoughtful consideration to the order of the ld. Pr. CIT. We are of the considered view that the issue raised by the ld. Pr. CIT is a highly debatable issue as the Co-ordinate Benches of the Tribunal have taken a consistent view that CSR expenditure can be claimed as donation u/s 80G of the Act in the cases of Motilal Oswal Securities Ltd. (ITA No. 1795/Mum/2023, order dated 18.08.2023), Allegis Services India Pvt. Ltd. (ITA No. 1693/Bang/2019), JMS Mining Pvt. Ltd. [130 taxmann.com 118 (Kolkata Trib.)] and Elan Pharma (India) Pvt. Ltd. vs. PCIT in ITA No. 2419/Mum/2025. 7. As the issue is highly debatable, any view taken by the AO during the course of original assessment proceedings has to be considered as a plausible view and the view taken by the ld. Pr. CIT, howsoever plausible, is nothing but a change of opinion for which jurisdiction u/s 263 of the Act cannot be assumed. Considering the facts of the case in I.T.A. No. 2769/Mum/2025 4 totality, we set aside the order of the ld. Pr. CIT and restore that of the AO dated 21/09/2022. 7. In the result, appeal of the assessee is allowed. Order pronounced in the Court on 20th June, 2025 at Mumbai. Sd/- Sd/- (SAKTIJIT DEY) (NARENDRA KUMAR BILLAIYA) VICE PRESIDENT ACCOUNTANT MEMBER Mumbai, Dated 20/06/2025 *SC SrPs *SC SrPs *SC SrPs *SC SrPs आदेश की \u0014ितिलिप अ\u0019ेिषत /Copy of the Order forwarded to : 1. अपीलाथ\u001b / The Appellant 2. \u0014 थ\u001b / The Respondent 3. संबंिधत आयकर आयु! / Concerned Pr. CIT 4. आयकर आयु! ) अपील ( / The CIT(A)- 5. िवभागीय \u0014ितिनिध ,आयकर अपीलीय अिधकरण, मुंबई /DR,ITAT, Mumbai, 6. गाड% फाई/ Guard file. आदेशानुसार/ BY ORDER TRUE COPY Assistant Registrar आयकर अपीलीय अिधकरण ITAT, Mumbai "