TaxTMI 
TaxTMI 
TaxTMI 
2025 (11) TMI 333
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....dence adduced by the appellant. 3. In not adjudicating on the issue of the assessment order being passed without any date or DIN. The appellant retains the right to add, alter or amend the grounds as may be advised from time to time. ITA No. 6265/Mum/2024 1. In confirming the disallowance u/s 35AC of donation given of Rs. 10,00,000 to Navjeevan Charitable Trust. 2. In doing so basis statements made by some trustees of Navjeevan Charitable Trust without giving the appellant an opportunity to cross examine them and without considering the evidence adduced by the appellant. 3. In not adjudicating on the issue of the assessment order being passed without any date or DIN." ITA No. 6266/MUM/2024 (Assessment Year: 2012-13) As identical issues are involved in both the appeals, these are being disposed off by a common order. 3. Brief facts of the case are that the assessee company filed its return for A.Y. 2012-13 on 28.09.2012 declaring total income of Rs. 6,94,59,246/-. The case was selected for scrutiny and assessment u/s. 143(3) was completed at an income of Rs. 7,19,10,030/-. Subsequently the case was reopened based on t....
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....ently withdrawn on 30.11.2016. Ld. AR pointed out that the assessee could not be denied the claim of deduction in view of specific provision in section 35AC, whereas an explanation has been inserted by the Taxation Laws (Amendment) Act, 2006 w.e.f 01.04.2006 relevant provisions are as under: "Section 35AC Expenditure on eligible projects or schemes 35AC. (1) Where an assessee incurs any expenditure by way of payment of any sum to a public sector company or a local authority or to an association or institution approved by the National Committee for carrying out any eligible project or scheme, the assessee shall, subject to the provisions of this section, be allowed a deduction of the amount of such expenditure incurred during the previous year : Provided that a company may, for claiming the deduction under this subsection, incur expenditure either by way of payment of any sum as aforesaid or directly on the eligible project or scheme. (2) The deduction under sub-section (1) shall not be allowed unless the assessee furnishes along with his return of income a certificate- (a) where the payment is to a public sector company or a loc....
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....g cause against the proposed withdrawal to the concerned association or institution, withdraw the approval: Provided that a copy of the order withdrawing the approval shall be forwarded by the [Principal Chief Commissioner of Income-tax (Exemption) or the Chief Commissioner of Income-tax (Exemption)] to the Assessing Officer having jurisdiction over the concerned association or institution. (5) Where any project or scheme has been notified as an eligible project or scheme under clause (b) of the Explanation, and subsequently- (i) the [Principal Chief Commissioner of Income-tax (Exemption) or the Chief Commissioner of Income-tax (Exemption)] is satisfied that the project or the scheme is not being carried on in accordance with all or any of the conditions subject to which such project or scheme was notified; or (ii) a report in respect of such eligible project or scheme has not been furnished after the end of each financial year, in such form and setting forth such particulars and within such time as may be prescribed, such notification may be withdrawn in the same manner in which it was issued: Provided that a reasonable opportunity of showing ca....
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.... amongst persons of eminence in public life, in accordance with the rules made under this Act; (b) "eligible project or scheme" means such project or scheme for promoting the social and economic welfare of, or the uplift of, the public as the Central Government may, by notification in the Official Gazette, specify in this behalf on the recommendations of the National Committee." Ld. AR has further placed reliance on the explanatory memorandum to the Finance Act 2003 which explains as under: "Amounts/donations received to be taxed as income in cases of withdrawal of approval to associations/institutions or withdrawal of notification in respect of eligible projects or schemes Under the existing provisions of section 35AC a deduction of the amount of expenditure incurred during the previous year by way of payment of any sum to a public sector company or a local authority or to an association or institution approved by the National Committee for carrying out any eligible project or scheme is allowed. Eligible project or scheme means a project or a scheme for promoting the social and economic welfare of, or upliftment of, the public as the Central Gov....
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....was only providing accommodation entries by taking bogus donations in cheque which were returned in cash on commission basis. The trust had accordingly been assessed on the commission income. Ld. DR further placed reliance on the decision of the co-ordinate bench in the case of M/s. Govindram & Co. V ACIT in ITA No. 1474 & 1475/Mum/2019 wherein it has been held as under: "The facts remain uncontroverted are i. M/s. Navjeevan Charitable Trust is a bogus trust only run for the purpose of accommodation entry for interested parties who want to obtain the certificate for non-genuine donation for claiming deduction u/s.35AC of the Act. ii. Neither M/s. Navjeevan Charitable Trust, nor by any of the beneficiary or broker has been able to lay down an iota of evidence to show that the trust has carried out any charitable activity during its entire existence. iii. During Search and Seizure operation u/s. 132 and Survey operation u/s. 133A covering the main player of the scam, no trace of any documents, no books of accounts has been found which can indicate any actual charitable activity by the Trust. iv. The crucial finding of the investigation ....
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.... "(6) Notwithstanding anything contained in any other provision of this Act, where- (i) the approval of the National Committee, granted to an association or institution, is withdrawn under sub-section (4) or the notification in respect of eligible project or scheme is withdrawn in the case of a public sector company or local authority or an association or institution under subsection (5); or (ii) a company has claimed deduction under the proviso to sub-section (1) in respect of any expenditure incurred directly on the eligible project or scheme and the approval for such project or scheme is withdrawn by the National Committee 29 [or the Principal Chief Commissioner of Income-tax (Exemption) or the Chief Commissioner of Income-tax (Exemption), as the case may be,] under sub-section (5), the total amount of the payment received by the public sector company or the local authority or the association or the institution, as the case may be, in respect of which such company or authority or association or institution has furnished a certificate referred to in clause (a) of sub-section (2) or the deduction claimed by a company under the proviso to sub-section (1) shall be ....