TaxTMI 
TaxTMI 
2023 (4) TMI 989
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.... and on facts in deleting the bogus deduction claim u/s 35(l)(ii) of the Act on account of donation made to Hebicure Health Cure Bio Herbal Research Foundation amounting to Rs 2,10,00,000/-, without properly appreciating the facts of the case and the material brought on record?" (2) The appellant craves leave to amend or alter any ground or add a new ground, which may be necessary. (3) It is, therefore, prayed that the order of Id. CIT(A) may be set aside and that of the Assessing Officer be restored." 4. Before taking up case of Department on merit, we observe that the appeal filed by the Department is time barred 15 days. However, we observe that the order passed by ld. CIT(A) was received by the Department on 30-12-2021 and therefore since the date of filing of appeal is falling in the Corona Pandemic period, in the interest of justice, the delay of 15 days in filing of appeal by the Department is hereby being condoned. 5. On merits, the brief facts of the case are that the assessee had claimed weighted deduction of Rs.2,10,00,000/- u/s. 35(1)(ii) of the Act on account of making donation of Rs. 1,20,00,000/- to M/s. Herbicure Healthcare Bio-herbal Research Foundation, Calc....
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....d. (Addition Rs. 2,10,00,000/-)" 6. The assessee filed appeal before the ld. CIT(A) and submitted that though the case of the case was reopened u/s. 148 of the Act, however, the contents of the CBDT letter dated 14-12-2018 on the basis of which the addition has been made, has not been reproduced by the Assessing Officer in the assessment order. Further, the assessee submitted that though the Assessing Officer has made a mention that HHBRF has misused the provisions of section 35(1)(ii) of the Act by engaging in providing bogus donation receipts to the donors/beneficiaries, however, the Assessing Officer has nowhere in the assessment order revealed the source of the information which has been received by the Assessing Officer. Further, the counsel for the assessee submitted that at the time when the donation was made by the assessee to HHBRF, the approval of the said entity i.e. HHBRF was very much in place and it was only subsequently on 06-09-2016 when the approval granted to HHBRF was withdrawn with retrospective effect 01-04- 2007. Further, the assessee also placed reliance on the case of Gujarat High Court in the case of PCIT vs. M/s. Thakkar Govindbhai Ganpatlal HUF in Appe....
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....undation involved in that case had been withdrawn, and on that basis it was held by AO that the assessee is the beneficiary of such bogus donation under section 35(1 )(ii) of the Income Tax Act. Hon'ble ITAT, after observing that the assessee donated the sum to the foundation much before the cancellation dated 06.09.2016 by the CBDT towards the approval granted to such foundation, held that AO cannot penalize the assessee/donar under such circumstances. In some judgements, while granting judgement in favour of assessee, the findings of survey carried out by the investigation wing on "HHBRF" has also been considered and it has been held that findings of survey team have not been independently established by the AO, in order to arrive at the conclusion that assessee was not eligible for deduction u/s 35(1 )(ii). Assessment order clearly shows that entire basis for AO to make disallowances u/s 35(1)(ii) was the letter of CBDT vide letter F.No. 225/351/2018 ITA(ii) dated 14/12/2018 and receiving further information regarding non-genuineness of deduction claimed by the assessee on account of donation made to "HHBRF", as it was informed to AO that "HHBRF" has grossly misused the prov....
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....rded by the ld. CIT(A) in appellate proceedings. Accordingly, the counsel for the assessee submitted that there is no infirmity in the order of ld. CIT(A) who has placed reliance on the aforesaid decision to afford relief to the assessee in respect of donation made to HHBRF. 8. We have heard the rival contentions and perused the material on record. We observe that the ld. CIT(A) has placed reliance on the decision of Hon'ble Gujarat High Court in the case of PCIT vs. M/s. Thakkar Govindbhai Ganpatlal HUF supra in which on similar set of facts the claim of deduction u/s. 35(1)(ii) of the Act in respect of donations made to HHBRF was allowed to the assessee. It would be useful to reproduce the relevant extract of the judgment for ready reference:- "3. The assessee filed its return of income for the year under consideration on 09.09.2014 declaring total income at Rs.31,23,870/-. A notice was issued under Section 143(2) of the Act by the Assessing Officer, calling upon the assesses to explain as to why the deduction of Rs.96,25,000/-, claimed under Section 35(1) (ii) being donation for scientific research of the I.T. Act, 1961, should not be disallowed. According to the Assessing Of....
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...."2. In the first ground of appeal, the grievance of the assesses is that the Id.CIT(A) has erred in confirming addition of Rs.8, 75, 000/- on account of alleged bogus donation to Herbicure Heathcare Bio-Herbal Research Foundation. 3. Brief facts of the case are that the assessee has filed return of income on 20.11.2014 declaring total income at Rs.4,47,910/-. On scrutiny of the accounts, it revealed that the assessee-company has given donation to Herbicure Healthcare Bio- Herbal Research Foundation, Calcutta. A survey action was carried out at the premises of the donee wherein it revealed to the Revenue that this concern was misusing the benefit of notification issued by the Income Tax Department. It has been getting donation from various sources, and after deducting certain amount of commission, these donation were refused in cash. On the basis of that survey report registration granted to its favour was cancelled. On the basis of the outcome of that survey report, the Id.AO construed the donation given by the assessee as bogus. Appeal to the Id.CIT(A) did not bring any relief to the assessee. 4. Before us, the Id. Counsel for the assessee contended that donations were given o....
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.... of the Tribunal. Therefore, the appeal fails and is hereby, dismissed." 8.1 In the light of the observations made by the Hon'ble Gujarat High Court and the detailed order passed by the ld. CIT(A) on the issue by placing reliance on the aforesaid order passed by the Hon'ble Gujarat High Court, we are of the considered view that there is no infirmity in the order of ld. CIT(A) so as to call for any interference. In the result, the appeal of the Department is dismissed. Now, we shall take up the department's appeal for assessment year 2014-15. 9. The Department has taken the following grounds of appeal:- "(1) The Ld.CIT(A) has erred in law and on facts in deleting the bogus deduction claim u/s 35(1 )(ii) of the Act on account of donation made to Hebicure Health Cure Bio Herbal Research Foundation amounting to Rs 1,75,00,000/-, without properly appreciating the facts of the case and the material brought on record?" (2) The Ld.CIT(A) has erred in law and on facts in deleting the commission expense paid on account of donation made to Hebicure Health Cure Bio Herbal Research Foundation amounting to Rs 12,00,000./-, without properly appreciating the facts of the case and the materi....