WORLDQUANT RESEARCH (INDIA) PVT LTD,MUMBAI V. THE PRINCIPLE CIT-6, MUMBAI

ITA 3549/MUM/2025

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The case involves WorldQuant Research (India) Private Limited appealing against the order of the Principal Commissioner of Income Tax, Mumbai - 6, which had found the assessment order dated 06/09/2022 to be erroneous and prejudicial to the interest of the revenue. The dispute centered on the deduction of CSR expenditure claimed under section 80G of the Income Tax Act, which was initially allowed by the Assessing Officer but later contested by the PCIT based on an audit objection. The Tribunal examined whether the PCIT was correct in assuming jurisdiction under section 263 and found that the issue was highly debatable, referencing several precedents where similar deductions were allowed.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 713284 (ITAT-MUMBAI)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-07-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Assessment Year: 2020-2021
• Other Referred Cases: 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.)], 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: SWAPNIL CHOUDHARY; DR
• Assessee Lawyers: CHANDNI SHAH; HARDIK NIRMAL; TEJAL SARAF; ARS
• Keywords: Set aside; Difference of opinion; Change of opinion; Audit objection; 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 NARENDRA KUMAR BILLAIYA, HON’BLE ACCOUNTANT MEMBER & SHRI ANIKESH BANERJEE, HON’BLE JUDICIAL MEMBER I.T.A. No. 3549/Mum/2025 Assessment Year: 2020-21 WorldQuant Research (India) Private Limited 1102, 11th Floor Hiranandani Knowledge Park Technology Street Hiranandani Gardens Mumbai - 400076 [PAN: AAACW8197K] Vs The Principal Commissioner of Income Tax, Mumbai - 6 अपीला थ\u0016/ (Appellant) \u0017\u0018 यथ\u0016/ (Respondent) Assessee by : Ms. Chandni Shah, Mr. Hardik Nirmal & Ms. Tejal Saraf, A/Rs Revenue by : Shri Swapnil Choudhary, Sr. D/R सुनवाई की तारीख/Date of Hearing : 24/07/2025 घोषणा की तारीख /Date of Pronouncement: 31/07/2025 आदेश/O R D E R PER NARENDRA KUMAR BILLAIYA, AM: This appeal by the assessee is preferred against the order of the ld. Principal Commissioner of Income Tax , Mumbai - 6 [hereinafter ‘the ld. PCIT)’] dated 10/03/2025 pertaining to AY 2020-21. 2. The sum and substance of the grievance of the assessee is that the ld. PCIT erred in assuming jurisdiction conferred upon him by the provisions of Section 263 of the Act and further erred in holding that the assessment order dated 06/09/2022 framed u/s 143(3) of the Act is erroneous in so far as it is prejudicial to the interest of the revenue. Printed from counselvise.com I.T.A. No. 3549/Mum/2025 2 3. The sole reason for assuming jurisdiction u/s 263 of the Act is the audit objection by the revenue and audit party in relation to the CSR expenditure disallowed u/s 37(1) of the Act amounting to Rs. 29,95,468/- claimed as donation u/s 80G of the Act amounting to Rs. 14,97,734/-. 4. The ld. PCIT was of the firm belief that allowing the CSR expenditure to be deduction u/s 80G of the Act would create a significant loophole enabling corporations to shift their statutory obligations onto the public exchequer. The ld. PCIT was of the firm belief that the decision of the AO is erroneous on merits as well as the fact that he has not conducted further enquiries. Drawing support from the Finance Bill, 2014, the ld. PCIT, adjudicated by holding that the assessment order passed by the AO is erroneous insofar as it is prejudicial to the interest of the revenue. 5. Having heard the rival submissions, we have carefully perused the orders of the authorities below. 6. We have given a thoughtful consideration to the order of the ld. PCIT. We are of the considered view that the issue raised by the ld. PCIT 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 expenditure 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. Printed from counselvise.com I.T.A. No. 3549/Mum/2025 3 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. PCIT, 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 totality, we set aside the order of the ld. PCIT and restore that of the AO dated 06/09/2022. 8. In the result, appeal of the assessee is allowed. Order pronounced in the Court on 31st July, 2025 at Mumbai. Sd/- Sd/- (ANIKESH BANERJEE) (NARENDRA KUMAR BILLAIYA) JUDICIAL MEMBER ACCOUNTANT MEMBER Mumbai, Dated 31/07/2025 *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 Printed from counselvise.com I.T.A. No. 3549/Mum/2025 4 Date Initial 1. Draft dictated on 24/07/2025 Sr.PS 2. Draft placed before author 25/07/2025 Sr.PS 3. Draft proposed & placed before the second member JM/AM 4. Draft discussed/approved by Second Member. JM/AM 5. Approved Draft comes to the Sr.PS/PS /07/2025 Sr.PS/PS 6. File pronounced on /07/2025 Sr.PS 7. File sent to the Bench Clerk /07/2025 Sr.PS 8. Date on which file goes to the AR 9. Date on which file goes to the Head Clerk. 10. Date of dispatch of Order. 11. Dictation Pad is enclosed Yes Printed from counselvise.com "