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2025 (6) TMI 1033
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....erred in law and on facts of the case in confirming the action of the AO in reopening the assessment u/s. 147 and issuance of notice u/s. 148 and ultimately passing an assessment order u/s. 143(3) r.w.s. 147. It is therefore prayed that impugned assessment order may please be cancelled. 3. The learned Commissioner of Income Tax (Appeals), has erred in law and on facts of the case in confirming the action of the Assessing Officer in making addition/disallowance for a sum of Rs. 8,75,000/- u/s 35(1)(ii) in respect of donation of Rs. 5,00,000/- to Shri Arvindo Institute of applied scientific research. Trust Mumbai which is eligible for deduction 175% u/s 35(1)(ii) of the Act. It is prayed that the impugned additions may please be deleted being contrary to law and facts of the case. 4. The learned Commissioner of Income Tax (Appeals) has erred in law and on facts of the case in confirming the action of the Assessing Officer The learned Assessing Officer grossly erred in making the addition/disallowance by arbitrarily holding that the claim for deduction made by the assessee is not genuine without bringing on record even an iota of evidence to substantiate that allegat....
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....nds at the time of hearing of the appeal. 3. The facts of the case are that assessee-company engaged in the business of manufacturing Industrial Valves. The assessee filed its Return of Income for the A.Y. 2012-13 on 23.09.2012 declaring total income of Rs. 28,22,430/-. The Assessing Officer received information from the DCIT (Exemp.) 2(1), Mumbai that during the course of assessment proceedings in the case of Arvindo Institute of Applied Scientific Research Trust, the main trustee Shri Umesh. C. Nagda was summoned u/s 131 and a sworn statement was recorded. During the examination Shri Nagda had admitted in his statement that the said trust is not involved in any research activity and is also not registered u/s 35(1)(ii). The department of Scientific and Industrial Research vide their letter 12.11.2018 have confirmed that M/s Arvindo Institute of Applied Scientific Research Trust is not recognised research institution. Shri Nagda in his statement had admitted that the Trust is used for providing entries to various companies for making bogus claims u/s 35(1)(ii). The present Appellant-Assessee had paid an amount of Rs. 5,00,000/- to M/s Arvindo Institute of Applied Scientific Res....
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.... 147 and the grounds of appeal filed by the assessee. The grounds of appeal raised by the appellant in the appeal in form 35 are reproduced at para 2 supra. As mentioned at para 1.3 supra, the appellant has not furnished any replies to the notices of hearing issued u/s 250. 5. In ground no. 6 the appellant is claiming that opportunity of cross examination was not provided to it. The appellant is placing reliance on the judgment of the Hon'ble Supreme Court of India in the case of Andaman Timber Industries vs CCE(SC) (2015) 281 CTR 241 (2015) 127 DTR 241. In the instant case the Investigation was conducted to examine the affairs of M/s Arvindo Institute of Applied Scientific Research Trust. During the course of such investigation the Assessing Officer thereof examined the chief trustee who confessed that the said trust was providing entries to various entities for claiming bogus deduction u/s 35. The Investigation was not aimed at the appellant. The Hon'ble High Court of Calcutta in the case Swati Bajaj, Dinesh Kumar Bansal (HUF), Suraj Sahana, Tapati Sahana, Souvik Sahana, Mukta Agarwal, Babita Agarwal, Neetu Agarwal, Nand Kishore Agarwala, Rajesh Jhunjhunwala vs. ....
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....inding of error in the assessment order, for exercising revisionary jurisdiction, is with respect to wrong allowance by AO of assesses claim to weighted deduction u/s 35(1)(ii) of the Act on donation made to an Institute, i.e. M/s. Shri Arvindo Institute of Applied Scientific Research Trust,in the absence of approval to the said institute for receiving donations under the said section in the impugned year. The quantum of donation made is of Rs.70 Lakhs and the deduction claimed by the assessee and allowed by the Assessing Officer is of Rs. 1,22,50,000/- i.e. @ 175% of the donation as allowed by section 35(1)(ii) of the Act. 10. During the course of hearing before us, the Ld.counsel for the assessee had pointed out that this claim was duly examined during assessment proceedings when the assessee had placed relevant documents proving its eligibility to the claim of and even the genuineness of the claim by furnishing documents pointing out that the donation had been made through banking channels and the donee Institute had furnished receipts and certificates issued by CBDT showing that it was approved for receiving donations u/s.35(1)(ii) of the Act. Our attention was drawn t....
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....iod for exemption to trust is forever unless and until it is withdrawn and *Letter of CBDT dated 2/7 / 2012 stating that the validity of project expires on 31/3 / 2015 and is subject to further renewal. Based on the documents submitted by the assessee, the AO was satisfied regarding the claim of the assessee and therefore, the deduction has rightly been allowed. Therefore, it was requested by the assessee to withdraw the notice issued u / s 263 of the I.T. Act, 1961." 11. Based on the above facts, the arguments of the Ld. counsel for the assessee are that since the documents fairly exhibited the genuineness and the eligibility of the claim of the assessee to weighted deduction u/s.35(1)(ii) of the Act, the Assessing Officer had committed no error allowing the said claim to the assessee. The case of the assessee is that the CBDT Notification dated 30/10/2006,stating that the registration granted to the impugned Trust was one-time registration and the subsequent renewal letter by the CBDT Notification dated 14/05/2012 stating that the validity period for exemption to the Trust forever along with the letter of the CBDT dated 02/07/20212 stating that the vali....
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.... Subject: Information regarding bogus donation racket under section 35(1)(ii) of Income-tax Act, 1961-reg.- Kindly refer to the subject mentioned above. 2. In this connection, I am directed to state that Section 35(1)(ii) of the Income-tax Act,1961 ('Act') prescribes a weighted deduction @ 150% (175% before 01.04.2018) to a donor for any sum paid to an approved 'research association having as its sole object the undertaking of scientific research or to a 'university, college or other institution' for carrying out scientific research. Very recently, Board has received several references from the field authorities for clarifying whether a Trust namely M/s Shri Arvindo Institute of Applied Scientific Research Trust (PAN:AAFTS7349D) (Hereinafter 'the Trust') having offices at Mumbai & Puducherry is an entity specified by the Central Government through a Notification for purposes of section 35(l)(ii} of the Act or not. Presently, the trust is assessed with CIT(Exemption), Mumbai. 3. In this regard, upon perusal of records, it emerges that the above Trust was earlier approved under section 35(1}(ii} of the Act which expired on 31.03.2006. Thereafter,this ent....
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....e contentions a very important fact which emerges is that the Institute, to which donation was made by the assessee during the impugned year and weighted deduction claimed thereon u/s.35(1)(ii) of the Act, was not approved for the said purposes for the impugned year. The fact on record available with the Ld. CIT is that the approval granted to the said Institute expired on 31/03/2006. Impugned year before us is A.Y 2015-16. The Advisory issued by the CBDT in December-2018 brought this fact to the notice of all its Field Officers. Therefore, the fact on record was that the said Institute was not approved for receiving donations u/s.35(1)(ii) of the Act during the impugned year. ..... Even if the assessee and the AO had bonafidely claimed and allowed respectively the deduction based on documents furnished by the said Institute, the fact still remains that the claim was not allowable as per law. What is material for claiming deduction is its eligibility as per law and not the intention with which it is claimed, whether bonafidely or malafidely. Even a bonafidely claimed deduction if found ineligible in law, it cannot be allowed to the assessee. ..... ....