2023 (6) TMI 108 - AT - Income Tax

Tribunal directs deduction under section 80GGA, rejects disallowance under section 35AC.

The Tribunal partly allowed the appeal, directing the Assessing Officer to grant the deduction under section 80GGA and recompute the assessee's income. ... Assessment of trust - Disallowance of payment of donation as non-genuine - HELD THAT:- We observe that assessee has made the donation on 30.01.2009 and assessee has submitted all the relevant information with regard to payment of donation and all these donations were made through banking channels. It is fact on record that the trust was searched on 27.10.2014 and subsequently registration of the trust was cancelled on 01.11.2016. As decided in Shri Mrunal H. Shah [2021 (5) TMI 794 - ITAT MUMBAI] assessee has duly discharged the onus casted upon him and it was incumbent upon Ld. AO to refute the same - no such inquiry has been conducted and the disallowance has been made on mere allegations. Therefore, respectfully following the earlier order, we delete the disallowance - Decided in favour of assessee. Issues Involved:1. Reopening of assessment u/s 147 of the Income-tax Act, 1961.2. Disallowance of donation made by the assessee u/s 35AC of the Income Tax Act, 1961.Summary of the judgment:Issue 1: Reopening of assessment u/s 147The assessee filed an appeal against the order of the Learned Commissioner of Income Tax (Appeals) for the A.Y.2009-10, challenging the reopening of assessment u/s 147 of the Act. The reasons for reopening were related to a search action conducted on Navjeevan Charitable Trust, where it was found that expenses were mere book entries. The Assessing Officer rejected the submissions of the assessee, stating that the donations made were non-genuine. The assessee appealed to the Ld.CIT(A) who also upheld the disallowance. The assessee further appealed, arguing that the reopening reasons lacked tangible material. The Tribunal observed that the issue was covered in favor of the assessee on merits and did not delve into the jurisdictional issue at that stage.Issue 2: Disallowance of donation u/s 35ACThe assessee made a donation to Navjeevan Charitable Trust, which was later found to be involved in providing accommodation entries. Despite the denial of the deduction by the Assessing Officer and Ld.CIT(A), the Tribunal found that the assessee had made the donation through valid channels and had submitted relevant documents. Relying on precedents, the Tribunal concluded that the assessee had discharged the burden of proof and the deduction could not be denied. Therefore, the Tribunal allowed the ground raised by the assessee, partially allowing the appeal.In conclusion, the Tribunal partly allowed the appeal filed by the assessee, directing the Assessing Officer to grant the deduction u/s 80GGA and recompute the assessee's income.