TaxTMI 
TaxTMI 
2026 (3) TMI 624
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.... AO to give appropriate relief in accordance with law. 2.0 That on the facts and in the circumstances of the case, the Ld. CIT(A) was not justified and grossly erred in confirming the addition of Rs. 1,29,50,000/- made by the Ld. AO on account of donation made to 'Arvindo Institute of Applied Scientific Research Trust' considering it not to be genuine and thereby disallowing claim u/s. 35(1)(ii) of the Act. 3.0 That on the facts and in the circumstances of the case, the Ld. CIT(A) was not justified and grossly erred in not allowing the deduction u/s. 80IA(4)(ia) of the Action respect of operating and maintaining infrastructure facilities viz. effluent treatment plant amounting to Rs. 14,64.32.441/-by applying the provisions of Section 80-IA(7) of the Act and on the contention that the relevant Form 10CCB was not filed with the return of income. 3.1 That on the facts and in the circumstances of the case, the Ld. CIT(A) was not justified the Ld. CIT(A) was not justified and grossly erred in not allowing the deduction u/s. 80IA(4)(ia) of the Act in respect of operating and maintaining infrastructure facilities viz. effluent treatment plant amounting to Rs. 1....
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....n stating that the Trust was not approved, the Assessing Officer issued a show cause notice on 06.12.2018 asking for reply by 07.12.2018. Since no reply was allegedly received, the Assessing Officer disallowed the entire deduction and completed assessment u/s. 143(3) on 14.12.2018. 3.1 The Assessing Officer also made the disallowance of Rs. 3,32,755/- u/s. 14A, being 1% of aggregate investments in absence of any reply by the assessee in this regard. The assessee contended that the time given for compliance was unreasonably short and that replies dated 14.12.2018 and 15.12.2018 were actually submitted, but not considered. 3.2 In appeal, the Ld. CIT(A) partly allowed the appeal. He confirmed the disallowance u/s. 35(1)(ii), upheld the denial of deduction u/s. 80-IA(4)(ia) & 80- IA(1) for want of Form 10CCB and non-claim in return, but granted relief on some other issues. 4. Aggrieved by the order of the Ld. CIT(A), the assessee is now in appeal before the Tribunal. 5. Ground No. 1 - General Ground This ground is general in nature and requires no separate adjudication. 6. Ground No. 2 - Disallowance of deduction u/s. 35(1)(ii) of the Act. Donation of Rs. 1,29,50,000/....
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....der section 35(1)(ii) of the Act. The assessee has placed on record copies of approval, notification, recognition certificates and other supporting documents which were available at the time of making the donation. The disallowance has been made on the basis of clarification issued by CBDT and information received under RTI indicating that the approval of the Trust had expired earlier. For the sake of ready reference, the Circular dated 14.12.2018 of the Board is reproduced as under:- "F. No. 225/351/2018-ITA (II) Government of India Ministry of Finance Department of Revenue Central Board of Direct Taxes ******************** Room No. 245A, North Block, New Delhi 14th December, 2018 To All Principal Chief Commissioners of Income Tax All Director Generals of Income Tax (Investigation) Sir/Madam Subject: Information regarding bogus donation racket under section 35(1)(ii) of Income-tax Act, 1961-reg.- 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 appro....
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....egistration of the trust was up to 31/03/2006. The Assessing Officer has observed that such trust has issued bogus certificates thereafter and issued bogus donation receipts which were based upon CBDT Instruction. On this basis, the Assessing Officer has denied deduction claimed by the appellant. On the other hand, the assessee has claimed that donation is supported by receipts, payment is made through account payee cheque and there is no evidence that cash has been received against cheque payment hence the Assessing Officer was not justified in making impugned addition. The Ld. CIT(A) has relied on the judgment of the Co-ordinate Bench of ITAT Chennai in the case of Sudhakar Natarajan in ITA No. 2205/Chny/2017 vide order dated 24/05/2019, wherein it was held as under:- "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 jus....
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.... an additional ground along with audit report in Form 10CCB. The CIT(A) admitted the additional ground and called for a remand report from the Assessing Officer. Though the CIT(A) was satisfied on the eligibility and merits of the claim, the deduction was denied solely on the ground that Form 10CCB was not filed along with the return of income and by invoking section 80A(5) of the Act. 7.2 Before us, the Ld. AR submitted that the ETP operated by it is an eligible infrastructure facility, and deduction under section 80-IA(4)(i) is allowable on merits, which has already been accepted by the Ld. CIT(A). The Ld. AR argued that the requirement of filing Form 10CCB along with the return of income is procedural in nature. Since the audit report was duly obtained and furnished during appellate proceedings, and no prejudice has been caused to the Revenue, the deduction cannot be denied on a technical ground. The Ld. AR placed reliance on the judgments of the Hon'ble Delhi High Court in the case of CIT Vs. Contimeters Electricals (P) Ltd (178 Taxman 422), Jaquar and Company P. Ltd. Vs. DCIT and Madhav Construction vs. Principal CIT. The Ld. AR, therefore, prayed that the deduction unde....
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....nterpreted strictly and where substantial compliance is a pre-requisite, in the absence of substantial compliance no benefit can be accorded. For the sake of ready reference, the relevant portion of the judgment of the Hon'ble Apex Court is reproduced hereunder:- "....... 50 In Tata Iron & Steel Co. Ltd. v. State of Jharkhand, (2005) 4 SCC 272, which is another two-Judge Bench decision, this Court laid down that eligibility clause in relation to exemption notification must be given strict meaning and in para 44, it was further held - "The principle that in the event a provision of fiscal statute is obscure such construction which favours the assessee may be adopted, would have no application to construction of an exemption notification, as in such a case it is for the assessee to show that he comes within the purview of exemption (See Novopan India Ltd v. CCE and Customs)." 51. In Hari Chand Case (supra), as already discussed, the question was whether a person claiming exemption is required to comply with the procedure strictly to avail the benefit. The question posed and decided was indeed different. The said decision, which we have already discussed sup....
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.... Following the reasoning and findings recorded above, we hold that the deduction under section 80-IA in respect of the steam generation undertaking is not allowable. The appeal of the assessee on this ground is also thus dismissed. 9. Additional Ground No. 1 - Export Incentives treated as Capital Receipt - Rs. 7,41,96,805/- 9.1 The assessee has raised additional grounds of appeal involving purely legal issues based on facts already available on record. The Ld. AR pleaded that additional grounds involving legal issues be admitted, for which reliance has been placed on the decisions of the Hon'ble Supreme Court in the case of Jute Corporation of India Ltd. vs. CIT (1991) 187 ITR 688 (SC) and NTPC Ltd. vs. CIT (1998) 229 ITR 383(SC), and on the decision of the Bombay High Court in Pruthvi Brokers & Shareholders Pvt. Ltd., 349 ITR 0336. 9.2 We have considered the rival submissions and perused the material on record. The additional ground raised by the assessee involves a pure question of law based on facts already available on record. Respectfully following the decisions of the Hon'ble Supreme Court in NTPC Ltd. and Jute Corporation of India Ltd., we admit the additional gr....