Appeal successful in claiming deduction for donation to Charitable Trust under section 35AC

Devajyoti N. Bhattacharya Versus ACIT-17 (1), Mumbai

Devajyoti N. Bhattacharya Versus ACIT-17 (1), Mumbai - TMI Issues:
Assessee's claim u/s 35AC for Rs. 15 Lacs.

Analysis:
The appeal contested the CIT(A)'s order confirming the disallowance of deduction claimed u/s 35AC for a donation of Rs. 15,00,000. The appellant argued that the donation was made to a registered Charitable Trust by Account Payee cheques, supported by documents and receipts. The sole issue was the assessee's claim u/s 35AC for Rs. 15 Lacs. The AR highlighted similar cases where the deduction was allowed, presenting the Tribunal's common order. The DR contended the donations were not genuine, justifying the disallowance. The assessee's deduction was denied during assessment as the trust's expenses were found bogus after a search action. The assessee defended the donation's legitimacy, citing trust registration details and receipts. The deduction was denied, leading to the current challenge.

The Tribunal noted similar cases where the deduction was allowed, shifting the onus to the AO to prove otherwise. The AO failed to conduct inquiries or provide evidence of cash returns, leading to the disallowance's deletion. Citing a Delhi High Court decision, the Tribunal found the assessee had met the burden of proof, requiring the AO to refute with evidence. As no such inquiry was conducted, the disallowance was deemed baseless, following the precedent to delete the disallowance. The appeal was partly allowed based on this order.