TaxTMI 
TaxTMI 
2019 (11) TMI 1560
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....4-15 by the assessing officer on the basis of report from investigation department of Kolkata and no enquiry was made by him about the escapement of income. 4. The deduction was allowed by the assessing officer in original assessment and subsequently re opened the assessment on the basis of survey report received from Kolkata investigation department. The assessing officer has not made any independent enquiry about the escape income. The learned commissioner of income tax (Appeals) has erred in confirming the action of assessing officer. 5. The Commissioner of Income tax (Appeals) has confirmed the disallowance of donations given by the appellant company to a society which was approved and notified by the CBDT on 14.03.2008, the appellant company had given donation to the society on 20.01.2014 and the CBDT has cancelled the approval vide notification dated 06.09.2016. The donation given by appellant company was much before the withdrawal notification by the government. 6. The assessing officer has disallowed the claim on the ground that the approval granted to the society was cancelled by the CBDT with retrospective effect and hence any donation given to such society cannot b....
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....thdrawn by CBDT as per another notification dated 06.09.2016 of which copy is available on page nos. 6 and 7 of the paper book. He submitted that hence, approval was very much there on 28.10.2014 when the amount was given by the assessee as donation and hence, merely on this basis that subsequently the approval was withdrawn, deduction cannot be denied to the assessee as per this explanation below section 35(1)(iii) of the IT Act. 4. As against this, it was submitted by ld. DR of revenue that although the approval was there on the date of donation by the assessee but in view of this finding of the department that M/s. Herbicure Healthcare Bio-Herbal Research Foundation (HHBRF) was engaged in a racket of obtaining bogus donation through various brokers on commission, deduction should not be allowed. In the rejoinder, it was submitted by ld. AR of assessee that the assessee has taken proper care and given donation to such an institution which was approved by CBDT and hence, it cannot be said that the assessee was at fault and therefore, deduction should not be denied. 5. We have considered the rival submissions. First of all, we reproduce the provisions of section 35(1) of the IT A....
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....sum paid to a research association which has as its object the undertaking of research in social science or statistical research or to a university, college or other institution to be used for research in social science or statistical research : Provided that such association, university, college or other institution for the purposes of this clause- (A) is for the time being approved, in accordance with the guidelines, in the manner and subject to such conditions as may be prescribed; and (B) such association, university, college or other institution is specified as such, by notification in the Official Gazette, by the Central Government. Explanation.-The deduction, to which the assessee is entitled in respect of any sum paid to a research association, university, college or other institution to which clause (ii) or clause (iii) applies, shall not be denied merely on the ground that, subsequent to the payment of such sum by the assessee, the approval granted to the association, university, college or other institution referred to in clause (ii) or clause (iii) has been withdrawn; (iv) in respect of any expenditure of a capital nature on scientific research related to the bu....
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....s. 15,00,000/- vide Donation Cheque No. 122172 dated: 18.01.2014 of Bank of India same was acknowledge by M/s. Herbicure Healthcare Boi-Herbal Research Foundation vide No: HHBHRF/20-1-2014/001 dated: 20.01.2014. The acknowledgement was signed by one of the Director of M/s. Herbicure Healthcare Boi-Herbal Research Foundation. Donations were recorded in the Books of account and other document of the assessee vide Voucher No: 1569 dt: 20.01.2014. However the assessee has made Donation of Rs. 15,00,000/- and claimed deduction u/s. 35(1)(ii) of the IT Act as Expenses on Scientific research at 175% [150000*175/100=26.25 lakhs]. The CBDT (ITA DIVISION) have withdrawn the benefit from the M/s. Herbicure Healthcare Boi-Herbal Research Foundation at Research No:House Saral Dighi(E) Post. Boral Kolkata-700154 Retrospectively in effect. In the present situation as per No: Diss/Pr.CIT/BLR-6/2016-17 dt: 22.09.2016 from ITO(HQ)Pr.CIT/BLR-6 Doner (M/s. Stone Impex (India) Pvt Ltd. have lost their claim for weighted deductions u/s. 35(1)(ii) for the donations made. In connection with the deduction u/s 35(1)(ii) for the donations, the notification of CBDT dated 06.09.2016 read with notification ....