Tribunal grants deduction under section 35(1)(ii) emphasizing natural justice principles.

The Tribunal allowed the appellant's appeal, directing the Assessing Officer to grant the deduction claimed under section 35(1)(ii) for the relevant assessment years. The decision was based on the lack of evidence supporting the disallowance and the failure to provide the appellant with an opportunity for cross-examination. The judgment emphasized the importance of adhering to principles of natural justice and relying on concrete evidence rather than mere suspicion.

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Issues:
1. Delay in filing appeal
2. Disallowance of section 35(1)(ii) deduction claim

Delay in filing appeal:
The appellant's appeal for the assessment year 2014-15 was delayed by 18 days, attributed to a communication gap and compilation of necessary records. The delay was condoned as there was no objection from the Revenue side.

Disallowance of section 35(1)(ii) deduction claim:
The appellant contested the disallowance of its deduction claim under section 35(1)(ii) of the Income Tax Act, relating to a contribution made to a specific institution. The lower authorities had disallowed the claim on the grounds that the institution was allegedly involved in accommodation entry transactions rather than scientific research and development. However, the appellant argued that the institutions were registered under section 12A of the Income Tax Act and approved by the Central Government for the purpose of claiming the deduction. The appellant denied receiving back the donation amounts in cash or kind. The Assessing Officer had based the disallowance on statements recorded during survey proceedings without providing an opportunity for cross-examination, which was against the principles of natural justice. The Tribunal, relying on previous judgments, directed the Assessing Officer to allow the deduction claimed by the appellant under section 35(1)(ii) for both the assessment years in question.

Conclusion:
The Tribunal allowed the appellant's appeal, directing the Assessing Officer to grant the deduction claimed under section 35(1)(ii) for the relevant assessment years. The decision was based on the lack of evidence supporting the disallowance and the failure to provide the appellant with an opportunity for cross-examination. The judgment emphasized the importance of adhering to principles of natural justice and relying on concrete evidence rather than mere suspicion.

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