TaxTMI 
TaxTMI 
1993 (6) TMI 14
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.... year under consideration was completed under section 143(1) on June 26, 1987, on a total loss of Rs. 2,380 wherein the claim for deduction of Rs. 40,000 was allowed. The Commissioner of Income-tax subsequently found that the approval under section 35CCA to the Society for Integral Development which was accorded by the State Level. Committee was withdrawn on March 3, 1987, with retrospective effect from December 13, 1982. The Commissioner of Income-tax was of the opinion that the assessment dated June 26, 1987, in which the donation of Rs. 40,000 was allowed was erroneous and prejudicial to the interests of the Revenue. He, accordingly, passed an order under section 263 on February 15, 1988, setting aside the assessment order with direction to the Assessing Officer to pass a fresh order. The assessee came up in appeal before the Tribunal. It is recorded in the statement of case as follows: "The Tribunal observed that the approval to the Society for Integral Development under section 35CCA of the Income-tax Act, 1961, was withdrawn on July 3, 1987, with retrospective effect from December 13, 1982. The Tribunal, therefore, held that on the date of assessment, i.e., June 26, ....
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....its appellate order recorded that "the approval was granted on March 3, 1987, and it was withdrawn on July 3, 1987" which is contrary to the material on record. The minutes of the State Level Committee which is annexed to the statement of the case shows that the meeting was held by circulation in the month of March, 1987. The State Level Committee found that the said society has violated the conditions as laid down in the letter of approval of December 17, 1982, in (i) not maintaining proper books of account ; (ii) not utilising money raised on donations for approved programmes of rural development ; and (iii) merely acting as an agency for supplying certificates under section 35CCA(2) of the Income-tax Act, 1961, on commission and returning the balance to the alleged donors within a day or two of the clearing of cheques received as donation. The Committee, therefore, resolved on March 3, 1987, that the approval accorded to the Society for Integral Development, vide letter dated December 17, 1982, be withdrawn retrospectively from December 13, 1982. The assessment was made on June 26, 1987, after the approval had been withdrawn. It is surprising that the assessee having a net....
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....nts furnished, the Income-tax Officer had knowledge of such withdrawal of approval is immaterial. The Commissioner of Income-tax, on examination of records, found that the approval to the society stood withdrawn before the assessment was made and, accordingly, the assessment made by the Income-tax Officer by allowing exemption of the donation to the said society was erroneous in so far as it is prejudicial to the interests of the Revenue. The assessee obtained benefit to which the assessee was not entitled on the date the assessment was made. Such erroneous assessment can be rectified by the Commissioner by exercising his power of revision. Even assuming that the approval was withdrawn after the assessment was made, even then an assessee who indulges in making fictitious donations for the purpose of obtaining an illegal benefit by way of tax evasion cannot claim that such exemption should not have been retrospectively withdrawn. The scheme for giving exemption under section 35CCA is meant for the benefit of the institution carrying out the rural development programmes and not facilitating evasion of tax by the donor. Counsel for the assessee has also urged before us that the doc....
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....ts any disqualification. We are not impressed with such argument inasmuch as there is no such provision in section 35CCA. We cannot read into the provision something which is not there. The Explanation below section 80G as referred to is in quintessential nature a substantive provision. But no such substantive right is conferred on a contributor to the society under section 35CCA. In the absence of such a protection carved out for the donor, it is not open to the assessee to plead for it. That would be grafting to the law a substantive provision. But the judiciary is content with only interpreting the provisions, not amputating or grafting any limb, more so when the effect would be substantive. The submissions of counsel for the assessee would have been persuasive if the case of the assessee on the face of it had not looked so bizarre in that the assessee which is an investment company sacrifices almost the entirety of its income to the society. This behaviour is grotesque particularly in the light of the finding of the State Level Committee, that the donee society, in fact, operated not as a society for rural development but as a commission earning agent for securing to erring ....