TaxTMI 
TaxTMI 
TaxTMI 
2023 (10) TMI 1592
X X X X Extracts X X X X
X X X X Extracts X X X X
....is dismissed as not pressed. 6. Ground Nos. 3 and 4 raised by the assessee challenging the action of CIT(A) in confirming the action of AO in disallowing the claim of deduction u/s. 35(1)(ii) of the Act. 7. We note that the assessee is a company engaged in the business of manufacturing and trading in explosives. The assessee filed return of income declaring a total income of Rs. 13,98,23,600/- which was accepted in the scrutiny assessment u/s. 143(3) of the Act vide order dated 28-10- 2014. Thereafter, the said assessment was reopened by issuing a notice u/s. 148 of the Act, wherein, the AO held donation of Rs. 20,00,000/- claimed as deduction u/s. 35(1)(ii) of the Act to an extent of Rs. 35,00,000/- as bogus and disallowed the same as not eligible for deduction. The CIT(A) confirmed the same. Having aggrieved with the same, the assessee is before us by raising ground Nos. 3 and 4 mentioned above. 8. The ld. AR submits that the assessee paid donation of Rs. 20,00,000/- to Herbicure Healthcare Bio-Herbal Research Foundation and referred to bank statements at pages 6 to 9 of the paper book. Further, he drew our attention at page 1 of the paper book and submits that the Centr....
X X X X Extracts X X X X
X X X X Extracts X X X X
....chnology, Government of India. The renewal of recognition as SIRO by the Department of Scientific and Industrial Research under the Scheme on Recognition of Scientific and Industrial Research Organisation, 1988 was made for the period from 1.4.2012 to 31.3.2015 vide communication in F.No. 14/444/2006-TU-V dated 13.8.2012. c) HHBHRF was recognized vide Gazette Notification No. 35/2008 dated 14.3.2008 issued by the Central Board of Direct Taxes (CBDT in short), Ministry of Finance, Government of India, u/s 35(1)(ii) of the Act. 8.1. The brief fact pertaining to SGHPH are as under:- a) SGHPH was recognized vide Gazette Notification dated 28.1.2009 issued by the Central Board of Direct Taxes (CBDT in short), Ministry of Finance (Department of Revenue), Government of India, u/s 35(1)(ii) of the Act. b) SGHPH was also recognized as a scientific industrial research organization (SIRO) by Ministry of Science & Technology, Government of India. The renewal of recognition as SIRO by the Department of Scientific and Industrial Research under the Scheme on Recognition of Scientific and Industrial Research Organisation, 1988 was made for the period from 1.4.20....
X X X X Extracts X X X X
X X X X Extracts X X X X
....nor executive but as mentioned above they are essentially quasi judicial in nature. 23. Third, an order of the CIT passed under Section 12A does not fall in the category of "orders" mentioned in Section 21 of the General Clauses Act. The expression "order" employed in Section 21 would show that such "order" must be in the nature of a "notification", "rules" and "bye laws" etc. (see - Indian National Congress(I) v. Institute of Social Welfare [2002] 5 SCC 685. 24. In other words, the order, which can be modified or rescinded by applying Section 21, has to be either executive or legislative in nature whereas the order, which the CIT is required to pass under Section 12A of the Act, is neither legislative nor an executive order but it is a "quasi judicial order". It is for this reason, Section 21 has no application in this case. 25. The general power, under Section 21 of the General Clauses Act, to rescind a notification or order has to be understood in the light of the subject matter, context and the effect of the relevant provisions of the statute under which the notification or order is issued and the power is not available after an enforceable right has ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....power of cancellation of registration us 12A of the Act was conferred by the Act on the ld CIT w.e.f. 1.10.2004 and the Hon'ble Apex Court held that prior to that date, no cancellation of registration could happen. But in the instant case, there is absolutely no provision for withdrawal of recognition u/s 35(1)(ii) of the Act . Hence we hold that the withdrawal of recognition u/s 35(1)(ii) of the Act in the hands of the payee organizations would not affect the rights and interests of the assessee herein for claim of weighted deduction u/s 35(1)(ii) of the Act. 8.4. We also find that the co-ordinate bench of this tribunal in exactly similar facts had decided the issue in favour of the assessee in the following cases:- a) Rajda Polymers vs DCIT in ITA No. 333/Kol/2017 for Asst Year 2013-14 dated 8.11.2017. b) Saimed Innovation vs ITO in ITA No. 2231/Kol/2016 for Asst Year 2013-14 dated 13.9.2017. The findings of those decisions are not reiterated herein for the sake of brevity. 8.5. In view of the aforesaid findings in the facts and circumstances of the case and respectfully following the various judicial precedents relied upon hereinabove....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... present case that the AO proceeded to deny deduction u/s. 35(1)(ii) of the Act basing on the report of Investigation Wing, Kolkata, wherein, it was claimed to have found that the Herbicure Healthcare Bio-Herbal Research Foundation was engaged in bogus to donation through various brokers in lieu of commission which is evident from para 3 of the assessment order, further, withdrawal of notification of exemption by competent authority vide order dated 21-09- 2016 with retrospective effect, thereby the AO held the assessee is not entitled to any deduction u/s. 35(1)(ii) of the Act. 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....
X X X X Extracts X X X X
X X X X Extracts X X X X
....question raised therein by the Revenue, the order of which at page 30 of the paper book. The relevant portion of Calcutta High Court in the case of MACO Corporation (India) Pvt. Ltd. (supra) is reproduced hereunder for ready reference : "This appeal filed by the revenue under Section 260A of the Income Tax Act, 1961 (the 'Act' for brevity) is directed against the order dated 14th March, 2018 passed by the Income Tax Appellate Tribunal, "B" Bench, Kolkata [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 donee?" 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. ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....tion, university etc. shall not be denied merely on the ground that subsequent to the payment of such sum by the assessee, the approval granted to the research organisation or university etc. has been withdrawn. This issue was considered by the Hon'ble Supreme Court in the case of Commissioner of Income Tax vs. Chotatingrai Tea & Ors. reported in (2002) 258 ITR 529 (SC). The operative portion of the said decision is as follows: "It is not in dispute that the assessees 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 assessees 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 assessees 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, the Tribuna....