TaxTMI 
TaxTMI 
2026 (4) TMI 484
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....ial precedents at pages 21 to 66 which has no bearing on the facts in the case of appellant for adjudication of grounds of appeal. 4) The notice issued u/s 148 of I.T. Act 1961 is illegal, invalid and bad in law. Thus, reassessment framed thereupon is liable to be cancelled. 5) Reassessment framed without providing reasons recorded for issue of notice u/s 148 is not in accordance with law and contrary to decision of Hon'ble Jurisdictional High Court in the case of CIT vs. Videsh Sanchar Nigam Ltd. reported at 340 ITR 66 (Bom.) and liable to be cancelled. 6) The addition made by A.O. at Rs. 17,50,000/- by disallowing deduction u/s 35(1)(ii) of I.T. Act 1961 is unjustified, unwarranted and bad in law. 7) The learned A.O. erred in holding that donation given by assessee for claim of deduction u/s 35(1)(ii) of I.T. Act 1961 is accommodation payment and is not genuine. 8) The learned A.O. ought to have allowed deduction u/s 35(1)(ii) of I.T. Act 1961 as claimed and allowed in regular assessment proceedings. 9) The addition made by A.O. at Rs. 1,50,000/- u/s 69C of I.T. Act 1961 is unjustified, unwarranted and bad in law. 10)....
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....arlir return of income filed u/s. 139(1) of the Act. Statutory notices u/s. 143(2) & 142(1) of the Act were issued and in response thereto, assessee filed his submissions along with supporting documents and stated therein that assessee is a proprietor concern of M/s. Rana Traders, Khmgaon has received payments towards sale of goods from customers through DDs/Pay Orders during the F.Y. 2013-14 totaling to Rs. 16,70,50,000/-. All these DDs/Pay Orders were deposited in his current bank account maintained with Axis Bank, Khamgaon, copy of which is also furnished. Again, assessee was requested to furnish complete name and address, PAN and email ID of the parties to whom sale were made and consideration was received through accounts held with the Society. In reply, assessee submitted ledger extracts of the customers and the Ld. AO noticed that none of the ledger accounts furnished by the assessee reflects receipts of payment through DD/Pay Order drawn on Society. Therefore, a sum of Rs. 16,70,50,000/- was propose to be added to the income of the assessee u/s. 68 of the Act. The draft assessment order proposing the above addition of Rs. 16,70,50,000/- was sent to the assessee vide show-ca....
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.... of Hon'ble Apex Court in the case of Andaman Timber Industries vs. Commissioner of Central Excise reported at 127 DTR 241(SC). (P- 44 - 48) [Vol.- A] D) Discussion in the assessment order does not indicate that there is any incriminating evidence in regard to transaction of assessee with scientific research association is on record. Disallowance has been made as approval has been cancelled subsequently beyond previous year of assessee in which donation is given. E) The Explanation to section 35(1) of I.T. Act 1961 provides that deduction cannot be denied to assessee's subsequent to cancellation of approval. Disallowance made by A.O. is contrary to statutory provisions of Explanation to section 35(1) of I.T. Act 1961. The Explanation to section 35(1) of I.T. Act 1961 is reproduced hereunder for ready reference. "Explanation.-The deduction, to which the assessee is entitled in respect of any sum paid to a 93[research association], university, college or other institution to which clause (ii) or clause (iii) applies, shall not be denied merely on the ground that, subsequent to the payment of such sum by the assessee, the approval granted to the association,....
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....to such institution u/s 35(1)(ii) of the Act, dated 28/01/2010. Donation given by the assessee was claimed in terms of statutory provisions of section 35(1)(ii) at Rs. 17,50,000/- in the return of income. Regular assessment has been framed in the case of assessee u/s 143(3) of the Act on 27/10/2016 wherein claim of deduction u/s 35(1)(ii) of the Act was accepted. Based on the report of Investigation Wing received by AO at subsequent point of time, a notice u/s 148 of the Act has been issued for escapement of income being deduction allowed u/s 35(1)(ii) of the Act not allowable as the same was bogus donation. The report of Investigation Wing has not been provided to the assessee along with notice u/s. 148 of the Act before using the same adversely to make disallowance of claim of deduction u/s 35(i)(ii) of the Act. We observe from the assessment order that disallowance has been made without pointing out any specific incriminating evidence/information with regard to transaction made by assessee with the aforesaid scientific research association. Subsequent cancellation of approval u/s 35(1)(ii) can be no reason for denial of deduction u/s 35(1)(ii) of the Act in view of specific stat....
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....es Pvt. Ltd. vide order dated 30/10/2023. The relevant extract is reproduced hereunder for ready reference: 10. We note that notification of approval dated 14-03-2008 in the case of Herbicure Healthcare Bio-Herbal Research Foundation is at page 1 of the paper book. The Central Government approved the Herbicure Healthcare Bio-Herbal Research Foundation for the purpose of clause (ii) of subsection (1) of section 35 of the Act subject to the following conditions therein. According to the AO, the Central Government withdrew the said notification vide order dated 21-09-2016 with retrospective effect i.e. for Financial Year 2006-07 onwards. The Kolkata Tribunal held there is no provision in the Act u/s. 35(1)(ii) of the Act withdrawing the recognition with retrospective effect. The assessments before us are 2012-13, 2013-14 and 2014-15 when there is no provision for withdrawing recognition retrospectively the order of CIT(A) in confirming the order of AO in denying weighted deduction at 175% based on withdrawal recognition order dated 14-09-2016 is not justified. Further, the contention of Revenue is that the assessee given donation through Cheque/RTGS to Herbicure Healthcare Bi....
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....a [the Tribunal] in I.T.A. No. 16/Kol/2017 for the assessment year 2013-14. The appeal was admitted on 11th March, 2020 on the following substantial question of law : "(i) Whether on the facts and the circumstances of the case, the impugned order of the tribunal dated 14th March, 2018 is perverse for failing to take into account that the donation in question to the trust was not "genuine" and also not considering the effect of cancellation of registration of the done?" We have heard Ms. Smita. Das De, learned standing Counsel for the appellant/revenue and Mr. J. P. Khaitan, learned senior Advocate assisted by Mr. Anil Dugar and Mr. Rajarshi Chatterjee, advocates for the respondent assessee. The short issue involved in the instant case is whether the donation given by the assessee to two organizations can be held to be not genuine on the ground that the registration granted those organization sunder Section 35C of the Act having been ............................................... effect. On facts, the tribunal noted that there is nothing on record to show that the respondent/assessee connived with the scheme of arrangement between the concerns in....
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....dispute that the assessee's had made donations to the Society for Integral Development, Calcutta, which had as its object the undertaking to carry out approved programmes of rural development. The society had granted a certificate to the assessee which had also been approved by the prescribed authority. According to the Revenue authorities the assessee's were not entitled to deduction as claimed despite the aforesaid because subsequently the approval granted by the prescribed authority was withdrawn with retrospective effect. It was also alleged that the assessee's had received back the donation which had been made by them to the society. When the matter came up before the Tribunal at the instance of the assessee's, the Tribunal found, as a matter of fact that the assessee had fulfilled all the conditions under section 35CCA of the Act for grant of deduction thereunder. The Tribunal also found that the assessee's position could not be affected by any subsequent withdrawal of the certificate granted by the prescribed authority under section 35CCA but found that there was no evidence in support of the Revenue's case that the assessee's had received back the amount donate....
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....e tribunal to be just and proper and cannot be held to be perverse. In the result, the appeal filed by the revenue (ITA/42/2020) is dismissed and the substantial question of law is answered against the revenue." 12. In the light of the above, the order of CIT(A) is not justified in confirming the order of AO in denying weighed deduction at 175% u/s. 35(1)(ii) of the Act basing on the withdrawal of recognition dated 14-09-2016 retrospectively and also for want of evidences in support of allegations made by the AO that the donation is bogus. Therefore, following the order of Kolkata Tribunal which was confirmed by the Hon'ble High Court of Calcutta, we hold that the order of CIT(A) is not justified and the addition made by the AO is deleted. Thus, ground Nos.3 and 4 raised by the assessee are allowed. 12. The aforesaid decision of ITAT, Nagpur Bench has been upheld by the Hon'ble Bombay High Court in ITA No.05/2025 vide its judgement dated 24/12/2025. The relevant extract of judgement is reproduced hereunder: "After having heard for some time, we find that special order to file appeal is absent and its requirement is not superseded by any circular. The counsel fo....