TaxTMI 
TaxTMI 
2021 (7) TMI 442
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....the assessee debited a sum of Rs. 10 crores to P&L account on account of contribution u/s 35(1)(ii) and clubbed it as part of figure of contribution u/s 35 AC (total of Rs. 23 crores) under the head Administrative, Selling, Distribution & Other expenses and on which deduction has been claimed u/s. 35(l)(ii) of the Act @ 175%. He noted that the payment was made to an institute by the name School of Human Genetics and Population Health (SHGPH), Kolkata. That a Survey action u/s. 133A of the Act, was conducted at the office premises of SHGPH on 27.01.2015. That during the course of survey, it emerged that School of Human Genetics and Population Health is engaged in accepting bogus donation u/s 35(l)(ii) of the Act through various brokers in lieu of commission. That bogus donations were accepted vide cheque/RTGS and thereafter after taking commission, the same was routed back to the donor in the form of cash vide 3-4 layers after bogus billing or other accommodation entries in the books of institute. That the commission rate charged was 12 to 18 per cent. Whereas share of the exempted organization is 8-10 % of total amount and remaining 2 to 8 per cent of total amount was charged by th....
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..... That the situation obtaining in the case of SHGPH is based on pure illegality and misuse of the beneficient provisions of the Act which are meant to promote Scientific research. That hence assessee's contention is rejected. Hence Assessing Officer made disallowance of Rs. 17,50,00,000 7. Upon assessee's appeal learned CIT(A) confirmed the Assessing Officer's action. He inter alia relied upon the same search proceedings as that by the Assessing Officer. He further referred that he had taken into consideration the CBDT notification of withdrawal dated 15.9.2016 wherein it is noted that M/s. SHGPH has not taken any scientific research action. 8. Against the above order assessee is in appeal before us. 9. We have heard both the parties and perused the records. At the outset learned Counsel of the assessee submitted that the issue is covered in favour of the assessee by several decisions of the ITAT on identical facts. He referred to the following decisions : * Motilal Dahyabhai Jhaveri & sons Vs. ACIT (ITA No. 3453/Mum/2018 dt. 24.4.2019) * Borsad Tobacco Co. Pvt. Ltd. Vs. DCIT (ITA No. 2040/Mum/2018 dt. 17.6.2019) * Kitchen Essentials Vs. ACIT....
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....earch & Education' (hereinafter referred to as 'Matrivani') and 'The School of Human Genetics and Population Health' (hereinafter referred to as 'SHG'). The Assessee Firm in A.Y. 2014-15, made donation of Rs,2,00,00,000/ to Matrivani and Rs,4,00,00,000/ to SHG and claimed weighted deduction of Rs. 10,50,00,000 under section 35(l)(ii) of the Income Tax Act, 1961, being 175% of the aggregate sum of Rs. 6,00,00,000/-(Rs,2,00,00,000 + Rs,4,00,00,000) donated to these two institutes which were approved by the Central Government for the purposes of section 35(1) (ii) of the Act read with Rule 5C and SE of the Income Tax Rules, 1962. In the assessment year 2013-14, the assessee claimed weighted deduction of Rs. 4,81,25,000/- under section 35(1) (ii) of the Act, which is 175% of the amount of donation being the sum of Rs. 2,75,00,0007- in respect of the donation given to 'The School of Human Genetics and Population Health'. We note that the Notifications to this effect, that these two institutions viz. 'Matrivani' and 'SHG', were approved by the Central Government for the purpose of section 35(1)(ii) of the Act, was published in the Gazet....
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....ssessee firm denied its knowledge of the statements made by these institutes which were relied on by the Investigation Wing and the Assessing Officer. We note that not providing the opportunity of cross-examination is against the principle of natural justice and for that we rely of-the judgment of Hon'ble Delhi High Court in the case of CIT vs. Dharam Pal Prern Chand Ltd. [2007] 295 ITR 105, 108 (del). We note that on identical facts, the similar proposition was upheld by the Coordinate Bench of Kolkata in the case of Rajda Polymers, ITA No.333/Kol/2017,for Assessment Year 2013-14 wherein it was held as follows: "10. ....Thus we note from the entire facts and circumstances, that the AO got swayed away with the statement recorded on oath of Mr. Swapan Ranjan Dasgupta during survey conducted at the premises of M/s. Herb/cure. We have reproduced Question no. 22 and 23 and answers given by Shri Swapan Ranjan Dasgupta, wherein he admits to provide accommodation entries in lieu of cash. This information we should say can be the tool to start an investigation when the assessee made the claim for weighted deduction. The general statement of Shri Swapan Ranjan Dasgupta against ....
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....e order of the CIT passed under Section 12A is quasi judicial in nature. Second, there was no express provision in the Act vesting the CIT with power of cancellation of registration fill 01.10.2004; and lastly. Section 21 of the General Clauses Act has no application to the order passed by the CIT under Section 12A because the order is quasi judicial in nature and it is for all these reasons the CIT had no jurisdiction to cancel the registration certificate once granted by him under Section 12A till the power was expressly conferred on the CIT by Section I2AAC3) of the Act w.e.f. 01.10.2004. We hold that the ratio decidendi of the aforesaid judgement of the Hon'ble Apex Court would squarely be applicable to the facts of the instant case. In fact the assessee's case herein falls on a much better footing than the facts before the Hon'ble Apex Court. In the case before Hon'ble Apex Court, the power of cancellation of registration us 12A of the Act was conferred by the Act on the Id CIT w.e.f. 1.10.2004 and the Hon'ble Apex Court held that prior to that date , no cancellation of registration could happen. But in the instant case, there is absolutel....