Court upholds deduction claim despite certificate withdrawal

The court ruled in favor of the petitioner, holding that the withdrawal of the certificate by the prescribed authority did not impact the original deduction claimed under section 35CCA of the Income-tax Act. The court emphasized the importance of valid certificates for deduction claims and upheld the petitioner's reliance on the original certificate despite its later withdrawal. Consequently, the court quashed the notice issued under section 148, finding no income escapement due to the allowance of the deduction.

---

---

Issues Involved:
Challenge to notice u/s 148 of Income-tax Act for assessment year 1985-86 based on withdrawal of certificate u/s 35CCA of the Act for donation made to Society for Integral Development.

Judgment Details:

Challenge to Notice u/s 148:
- Petitioner challenged notice u/s 148 of Income-tax Act for assessment year 1985-86.
- Respondents issued notice to disallow deduction u/s 35CCA for donation to Society for Integral Development.
- Withdrawal of certificate by prescribed authority led to notice issuance.
- Dispute on entitlement to deduction under section 35CCA post certificate withdrawal.

Entitlement to Deduction u/s 35CCA:
- Assessee made donation to Society for Integral Development.
- Certificate issued by prescribed authority supported deduction claim u/s 35CCA.
- Respondents argued against deduction post withdrawal of certificate.
- Issue centered on validity of deduction based on original certificate despite later withdrawal.

Legal Precedent and Decision:
- Assessee entitled to rely on valid certificate for deduction under section 35CCA.
- Withdrawal of certificate retrospectively does not impact original deduction.
- Citing State of Maharashtra v. Suresh Trading Company, upheld reliance on valid certificate.
- Withdrawal of certificate post-donation does not affect deduction entitlement.
- Court quashed and set aside notice u/s 148, finding no income escapement due to deduction allowance.

This judgment clarifies the importance of valid certificates for deduction claims under relevant sections of the Income-tax Act, emphasizing that withdrawal of certificates retrospectively does not nullify deductions granted based on their original validity.

---