AI Drafter 
TaxTMI 
TaxTMI 
2025 (12) TMI 478
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....Appeals) has also erred in dismissing the appeal, without considering the submissions given. Hence, it is prayed to quash such order passed by the A.O. for reopening the assessment. 2) The Ld. A.O. has erred in making disallowance of Rs. 52,50,000 being the deduction in lieu of donation given as per section 35(i)(ii) to a recognized institution on the grounds that are imaginary without considering our reply properly. The appellant contends that the disallowance of deduction of Rs. 52,50,000/- (including Rs. 30,00,000/- donation and Rs. 22,50,000/- additional deduction under Section 35) is incorrect and unjustified as the donation was made in good faith and within the prevailing provisions of Income Tax Act, 1961. The learned AO failed to appreciate the material facts of the case and submissions made by the appellant during the course of assessment proceedings. The claim being genuine, addition made by A.O. is requested to be deleted. Further, CIT (Appeals) has also erred in dismissing the appeal, without considering the submissions given. Hence, it is prayed to delete the disallowances made for Rs. 52,50,000/-. 3) The appellant requests the right to add, to amend ....
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....tice along with the draft assessment order was issued on 27.08.2021, requiring submission of reply by 01.09.2021; however, no response was received. Accordingly, the deduction claimed under section 35(1)(ii) was rejected, and Rs. 52,50,000/- was disallowed and added back to the total income of the assessee. 4. Regarding Ground No.1, the assessee paid Rs. 30 lakhs to M/s. Bioved Research Society on 25.03.2015; however, the CBDT vide notification No. 3/ 2019 dated 25.01.2019 withdrew the approval given to M/s. Bioved Research Society with effect form 01.04.2019, and also recorded that the Society had misused the provisions of Section 35(1)(ii) by providing accommodation entries to donors to enable them to claim false weighted deductions. This is a fresh information received by the Assessing Officer to reopen the assessment; therefore, the reopening of the assessment is good in law. 5. Regarding Ground No. 2, we find that the similar issue involving M/s Arvindo Institute of Applied Scientific Research Trust has also been dealt by this Tribunal wherein the bogus donations given by the assessee were disallowed. For the sake of ready reference, the order of this Tribunal in ITA No.....
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....d 09.10.2019. The assessee furnished a reply dated 13.10.2019. The Assessing Officer disallowed the claim of deduction u/s 35(1)(ii) of Rs. 8,75,000/- and added the same as income of the assessee. Further, the Assessing Officer had found a discrepancy in the TDS as per 26AS and as disclosed in the Return of Income. The Assessing Officer added the income of undisclosed TDS of Rs. 8,730/-. During the year the assessee had claimed sales promotion expenses of Rs. 61,975/- and sales commission expenses of Rs. 9,54,524/-. However, during the assessment proceedings the assessee had not furnished any details despite being specifically asked vide notice u/s 142(1) dated 08.10.2019, 07.11.2019 and 15.06.2019. Subsequently, the Assessing Officer completed the assessment u/s. 143(3) r.w.s. 147 of the Act on 18.11.2019, assessing the income of the assessee at Rs. 47,22,659/-, by disallowing an amount of Rs. 10,16,499/- on account of unexplained sales promotion and sales commission expenses. 4. Aggrieved by the order of the Assessing Officer, the assessee preferred appeal before the Ld. CIT(A), who dismissed the appeal of the assessee by following observations:- 4. I have caref....
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.... the statements recorded during the investigation were not against the assessee, they are not entitled to claim any right of cross examination." As mentioned above in the instant case the statement made by Shri Umesh. C. Nagda was not against the appellant but was only to confirm the modus operandi of M/s Arvindo Institute of Applied Scientific Research Trust. In view of the Hon'ble High Court observation cited supra the assessee does not have any right for cross- examination as claimed by it in ground no. 6. 5.1 Further, In the absence of any submission I do not find any infirmity in the order of the Assessing Officer. Accordingly, the appeal on all the grounds is dismissed. 5. At the outset we find that the issue is squarely covered by the decision of Co-ordinate Bench of the ITAT, Ahmedabad in the case of Joshi Technologies International Inc Vs. CIT in ITA No.106/Ahd/2021 dated 07.12.2023. The relevant extract of the order is produced as below: 9. We have heard the rival contentions. We have perused all the documents placed before us and also carefully gone through the orders as well as the decisions referred to before us and also the rele....
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....d for, the AO was satisfied and accordingly allowed the claim of the assessee. The donation was made in the year 2014 and the assessment was completed in the year 2018. As per the notice issued u/s 263 of the Act, the approval of the trust has already expired on 31.03.2006. Accordingly, it is possible that the fact of approval having expired was not available when the donation was made and the assessment order was passed by the AO. Just because there is no mention in the assessment order regarding the reasons for allowing the deduction, it cannot be concluded that the AO has not made necessary enquiry regarding the applicability of section 35 of the Act. While making the payment to the trust, it has issued a receipt which clearly demonstrated that the said trust is eligible for donation u/s 35(1)(ii) of the Act. The trust has also provided the following documents to the assessee regarding approval u/s 35(1)(ii) of the Act: *Notarized copy of CBDT notification SO No. 1856(E) dated 30th October 2006 stating that Shri Arvindo Institute of Applied Scientific Research Puduchery (registration granted earlier under F. N. 0.203/107 / 2000 - ITA II) is one time registration and ren....
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....sessee is that, there was no occasion at all to doubt these documents either by the assessee or by the Assessing Officer and, therefore, there was no occasion for making any further enquiry also. That, accordingly, the allowance of claim of weighted deduction by the Assessing Officer based on the above documents was a probable and bonafide view taken by him which could not be termed as erroneous for the purposes of exercising revisionary jurisdiction u/s.263 of the Act. 12. The Ld.DR, on the other hand, has pointed out that in the year 2018, the CBDT issued an Advisory to its Field Officers pointing out that the said Trust, M/s.Shri Arvindo Institute of Applied Scientific Research Trust had been granted approval u/s.35(1)(ii) of the Act only upto 31/03/2006 and that subsequently it was fraudulently receiving donations from various donors by issuing forged certificates. The relevant Instruction is reproduced hereunder:- "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 T....
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....uld be clearly identified. Also, various provisions 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)" 13. The case of the Revenue is that the fact of the matter is that the impugned Trust was not approved for the purposes of receiving donations u/s.35(1)(ii) of the Act after 31/03/2006 and all donations subsequently received by it were based were forged documents furnished by it. That the said Institute, not being approved for the purposes of section 35(1)(ii) of the Act., there was no question of the assessee being granted weighted deduction on donations made to it u/s.35(1)(ii) of the Act in the impugned year. And there was no doubt therefore that the allowance of claim of deduction to the assessee was an error in the assessment border. 14. The Ld. counsel for the assessee, in counter, has stated that this Notification was issued by the CBDT on 14/12/2018 subsequent to the allowance of assesses c....