TaxTMI 
TaxTMI 
TaxTMI 
2025 (9) TMI 1006
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....rom CBDT from time to time granting approval under Section 35(1)(ii) upto 31-03-2019 and that the assessee is not aware that such certificates are false certificates, if any, and therefore the donation of Rs. 70,00,000 is given to Shri Arvindo Institute of Applied Scientific Research Trust on 28-03-2018 is as per approval by CBDT to 31-03-2019 and therefore it is allowable as deduction under Section 35(1)(ii). 2. The demand of Rs. 6,09,507 is wrongly charged the under Section 115BBE" 3. The brief facts of the case are that during the impugned assessment year, the assessee had claimed a sum of Rs. 1,05,00,000/- as deduction under Section 35(1)(ii) of the Act, being 150% of deduction made to specified scientific research institution. On perusal of the records, the Assessing Officer observed that the assessee had claimed to have donated a sum of Rs. 70,00,000/- to Shri Arvindo Institute of Applied Science and Research Institute Trust. The Assessing Officer observed that the said trust was found to have indulged in large scale scam of issuing bogus donation received for the purpose of claiming weighted deduction under Section 35(1)(ii) of the Act and many assessee's had ben....
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....9;t have recognition to accept donation u/s 35(1)(ii). Accordingly, I disallow a sum of Rs 1,05,00,000 claimed as weighted deduction and same is added back to the income of the assessee." 4. In appeal, the Ld. CIT(A) observed that Shri Arvindo Institute of Applied Science and Research Institute did not have requisite registration under Section 35(1)(ii) of the Act and hence, the claim of weighted deduction under Section 35(1)(ii) was prima facie inadmissible. Ld. CIT(A) also observed that from the advisory issued by the CBDT, it is an undeniable fact that the said trust Shri Arvindo Institute of Applied Science and Research Institute did not any valid registration or approval required under law to receive donation from the public and therefore, the donation claimed to have been made by the assessee is not eligible for claiming weighted deduction under Section 35(1)(ii) of the Act. Thirdly, Ld. CIT(A) observed that as per information in public domain, Shri Arvindo Institute of Applied Science and Research Institute was involved in the large scam running into hundreds of crores and the trustees of the aforesaid trust were certain individuals operating out of Ahmedabad. A complaint....
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.... Act with the following observations: "6. The next issue arises for consideration is disallowance made by the Assessing Officer under Section 35(1)(ii) of the Act. 7. Shri S. Sridhar, the Ld.counsel for the assessee, submitted that the assessee has filed an application under Rule 27 of Income-Tax (Appellate Tribunal) Rules, 1963. The Ld.counsel submitted that the assessee claimed weighted deduction under Section 35(1)(ii) of the Act before the Assessing Officer in respect of the donation made to Shri Arvindo Institute of Applied Scientific Research Trust. According to the Ld. counsel, the assessee was misrepresented by the Trust saying that the approval granted for deduction under Section 35(1)(ii) of the Act was renewed. A forged gazette notification was also said to be obtained by the Trust. According to the Ld. counsel, the Assessing Officer subsequently found that the Trust was not approved by the Government of India as scientific and industrial organization under Section 35(1)(ii) of the Act. The Assessing Officer has also found that the said Trust was not doing any research activity in the field of medical science. The Ld.counsel further submitted that the A....
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....fication dated 14th December, 2018 that the approval was not extended beyond 31.03.2006. It is not known from where the CIT(Appeals) found that the CBDT's approval was extended upto 31st March, 2019. It is also not the case of the assessee that Shri Arvindo Institute of Applied Scientific Research Trust was recognized beyond 31.03.2006. The assessee claims that on the basis of forged document, the Trust misrepresented, therefore, now making an alternative claim by making application under Rule 27 of Income-Tax (Appellate Tribunal) Rules, 1963. 10. We have carefully gone through the circular of the CBDT dated 14.12.2018. For the purpose of convenience, we are reproducing the same as follows:- Bogus donation racket for approved research association u/s 35(1)(ii) by Shri Arvindo Institute of Applied Scientific Research Trust-CBDT Advisory F.No. 225/351/2018-ITA (II) Government of India Ministry of Finance Department of Revenue Central Board of Direct Taxes **** Room N0. 245A, North Block New Delhi, the 14th December, 2018 To All Principal Chief Commissioners of Income Tax All Director Generals of Income Tax (Investig....
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....sions pertaining to enquiry and investigation under the Act should be effectively used and assessment orders should be passed under the monitoring of supervisory authorities. 6. This issues with approval of Member (IT&C), CBDT. Yours faithfully, (Rajarajeswari R.) Under Secretary (ITA.II) 11. In view of the above, it is obvious that Shri Arvindo Institute of Applied Scientific Research Trust was not recognized beyond 31.03.2006. Forged document has been filed before the authorities to misrepresent as if the said Trust was recognized beyond 31.03.2006. Moreover, it is also not the case of the assessee that the recognition was extended beyond 31.03.2006. Therefore, the CIT(Appeals) is not justified in allowing the claim of the assessee under Section 35(1)(ii) of the Act. When the Trust was not renewed beyond 31.03.2006, it is not known what made the assessee to make donation. 12. The assessee now claims that he is a science graduate connected with pharmaceutical research and consultancy, therefore, it has to be allowed as business loss / expenditure under Section 37(1) of the Act. This Tribunal is of the considered opinion that the claim of the assessee can....
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....e, grounds of appeal and submissions made in this regard Briefly, the facts of the case are that the appellant M/s. C.K. Zipper Private Limited (PAN-AADCC7700M) filed its return of income for A.Y. 2016-17 an 16/08/2016 declaring total income of Rs. 66,15,430/-. The return was processed us. 143(1) of I. T. Act, 1961 on 02/10/2016. The case was selected for limited scrutiny and assessment was completed u/s. 143(3) of I.T. Act on 02/08/2018 determining income at Rs. 66,15,430/- Subsequently, it was found that the claim of the assessee towards deduction u/s 35(1)(ii) has been allowed on the basis of document given by an entity not authorized to issue the same. Apparently the documents were forged. Section 35(1)(ii) of the Income Tax Act, prescribes a weighted deduction @150% (175% before 01-04-2018) to a donor for any sum paid to an approved research association' having its sole object the undertaking of scientific research or to a university college or other institution for carrying out scientific research. This came to light when CBDT provided information Vide Letter F.No. 225/351/2018-ITA(II) dated 14-12-2018 issued to all field offices regarding bogus donation racket under sect....
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....served that the said entity M/s. Shri Arvindo Institute of Applied Scientific Research Trust(PAN: AAFTS 7349D) do not have requisite recognition duly approved by CBDT. Thus in light of letter issued by CBDT, the deduction so claimed by assessee M/s C.K. Zipper Private Limited (PAN:AADCC7700M) is not allowable deduction." Satisfaction of this office: In view of the above facts, the provisions of clause(c) of explanation 2 to section 147 are applicable to facts of this case and the assessment year under consideration is deemed to be a case where income chargeable to tax escaped assessment. The office of undersigned is satisfied that in the case of assessee M/s C.K Zipper Private Limited (PAN AADCG7700M) income chargeable to fax has escaped assessment for A. Y. 2016-17. 4.5. It is observed that in this case, assessment u/s. 143(3) was made and the only requirement to initiate proceeding u/s 147 is reason to believe which has been recorded above. The provisions of clause(c) of Explanation (2) to section 147 are applicable to facts of this case and the assessment year under consideration is deemed to be a case where income chargeable to tax has escaped assessm....