2017 (3) TMI 35

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....ablished by Tata Group for distribution of contribution received by Trust from any person to Political Parties. In the assessment order passed u/s 143(3) of the Act, the deduction claimed u/s 80GGB was allowed. Subsequently, the return of income was re-opened u/s 147 of the Act. Notice u/s 148 was issued to the assessee on 29.03.2012. The notice u/s 148 was issued on the ground that the deduction u/s 80GGB was wrongly allowed to the assessee. The assessee filed objection to the re-opening of the completed assessment. The objection of assessee was rejected by AO. The Assessing Officer (AO) completed the re-assessment proceeding on 07.03.2015 and passed assessment order passed u/s 143(3) r.w.s. 147. The AO withdrawn the deduction u/s 80GGB. On appeal before the ld. CIT(A), the deduction was allowed. Thus, being aggrieved by the order of ld. CIT(A), the Revenue has filed the present appeal before us. The assessee has also filed an application under Rule 27 of Income-tax (Appellate Tribunal) Rules, 1963 to on various grounds as pleaded in the application. 3. We have heard the ld. Departmental Representative (DR) for the Revenue and ld. Authorized Representative (AR) for assessee and....

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....fully supported the order of ld. CIT(A). The Ld. AR of the assessee further argued that while passing the assessment order u/s 143(3) of the Act, the AO made the proper enquiries before allowing the deduction. The deduction was allowed after full satisfaction. The ld. AR of the assessee argued that in Schedule-F attached with the statement of total income, the assessee has disclosed the deduction u/s 80GGB of Rs. 3.5 Crore. During the original assessment proceeding, the assessee submitted letter dated 31.10.2015 disclosing the details of deduction claimed u/s 80G and 80GGB as per paragraph no. XII of letter dated 31.10.2005. Rs. 3.5 Crore was duly debited in the computation of income (page 21 and 22 of PB). The amount was duly reflected in the Auditor's Report (page 27 to 29 of PB). The ld. AR further submitted that all these details and evidences were duly supplied to the AO before passing the order u/s 143(3) on 26.12.2008 and the assessee was granted deduction u/s 80GGB of the Act. In support of his submission that the re-opening is invalid for various reasons, the Ld. AR of the assessee relied upon the following decisions : 1. CIT v Bhanji Lavji [1971] 79 ITR 582 (SC) 2. ....

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....ervice of notice of appeal by Revenue, the assessee has filed application under Rule 27 of the Income Tax (Appellate Tribunal) Rules, 1963 for supporting of the order appealed. For proper appreciation of legal position we may refer section 80GGB, which was inserted w.e.f. 11.09.2003, which may be read as under: "80GGB. In computing the total income of an assessee, being an Indian company, there shall be deducted any sum contributed by it in the previous year to any political party. Explanation.-For the removal of doubts, it is hereby declared that for the purposes of this section, the word "contribute", with its grammatical variation, has the meaning assigned to it under Section 293A of the Companies Act, 1956 (1 of 1956). We may also refer section 293A of Companies Act as under: 293A. (1) Notwithstanding anything contained in any other provision of this Act- (a) no Government company; and (b) no other company which has been in existence for less than three financial years, shall contribute any amount or amounts, directly or indirectly, (i) to any political party; or (ii) for any political purpose to any person. (2) A company, not being a company referred....

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.... in its profit and loss account any amount or amounts contributed by it to any political party or for any political purpose to any person during the financial year to which that account relates, giving particulars of the total amount contributed and the name of the party or person to which or to whom such amount has been contributed. (5) If a company makes any contribution in contravention of the provisions this section, - (a) the company shall be punishable with fine which may extend to three times the amount so contributed; and (b) every officer of the company who is in default shall be punishable with imprisonment for a term which may extend to three years and shall also be liable to fine. [Explanation.- For the purposes of this section, "political party" means a political party registered under section 29A of the Representation of the People Act, 1951 (43 of 1951).)" 5. On careful reading of the provision of section 293A, it made clear that assessee falls in the category as referred under sub-section 2 of section 293A. Sub-section (2) of section 293A permits contribution to any Political Parties by a Company either directly or indirectly. The ld. AR of the assess....