Weighted deduction for donations remains available when approval existed at payment, despite later withdrawal of approval.

Weighted deduction under section 35(1)(ii) was available where donations were made to an institution that held valid approval at the time of payment. The statutory Explanation provides that deduction cannot be denied merely because the approval is withdrawn later, so a subsequent cancellation does not by itself invalidate the donor's claim. The same principle applies where approval is withdrawn retrospectively or after the donation, if the payment was made while approval remained in force. The disallowance of the weighted deduction was therefore not sustainable, and the assessee's claim was allowed.

---

---

Issues: Whether the assessee was entitled to weighted deduction under section 35(1)(ii) of the Income-tax Act, 1961 in respect of donations made to an institution whose approval was withdrawn subsequently.

Analysis: The assessee had made donations when the recipient institution held a valid approval under section 35(1)(ii). The statutory Explanation to section 35(1)(ii) provides that deduction shall not be denied merely because the approval is withdrawn subsequent to payment. The subsequent cancellation of approval therefore could not, by itself, invalidate the deduction claimed by the donor. The decision also followed the settled view that a retrospective or later withdrawal of approval does not affect a donation made while the approval was in force.

Conclusion: The disallowance of the weighted deduction was not sustainable and the assessee's claim was allowed.

---