AI Drafter 
TaxTMI 
TaxTMI 
2025 (5) TMI 2265
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....f Rs. 8,34,63,358/- and the same was processed u/s 143(1) of the Act. The case was selected for scrutiny vide notice u/s 143(2) dated 13.08.13 and subsequently, details were called through notice u/s 142(1) dated 20.03.14. The order of assessment u/s 143(3) was passed on 19.02.15 after due verification of particulars and expenses. 3. A notice u/s 147 of the Act was issued on 30.03.16 for reopening of assessment where upon vide letter dated 18.04.16, the assesses asked copy of reasons for reopening and formation of belief by the AO and the AO provided the details of reopening on 25.07.16. From the said information, it is reveled that a survey action u/s 133A of the Act was conducted by the Kolkata Collectorate on 3 institutions and one of them was School of Human Being Genetics and Population Health (SHGPH). It was found by the investigation wing that the donor /beneficiaries in connivance with these institutes, with the help of broker, entry operator were engaged in bogus donation syndicate and the donations were being returned to the donor after taking some commission. The donation received in cheques were returned in cash to the donor after deducting nominal commission. The as....
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....s website and mere providing the website of the trust do not authenticate the credentials of the trust. Secondly, it was alleged that the trust was approved scientific research institution hence falls under deduction on donation u/s. 35(1)(ii) of the Act. Thirdly, the assessee did not submit anything about the trust providing home for senior citizens. Fourthly, assessee has admitted that no one had visited the trust and made the donation through the person who has introduced the trust, but the name of the said person has not been disclosed. Lastly, it is observed that in response to question no. 6, the assessee once again submitted that the trust was not introduced by anyone and it is observed that the assessee neither gave any specific reply to the questionnaire nor justified any of the questions. For these reasons, the deduction of Rs. 35 lakhs is disallowed and added back to the total income of the assessee. Penalty proceedings were also initiated. 5. Aggrieved by the order of AO, assessee challenged the order before the Ld. CIT(A) who observed that the assessee could not answer even simple issues like how it came to know about SHGPH, its activities and how it has ensured cre....
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....5(1)(ii) be deleted. 1.2 Without prejudice to the above, Appellant submits that the Ld. CIT(A) has relied on general statement of one of the Trustees that cash was returned back to the donor after deducting commission at 3%. Hence, the disallowance of deduction under Section 35(1)(ii) of the Income-tax Act be deleted. 1.3 Without prejudice to the above, the Appellant submits that the Ld. AO has not specifically referred to the name of the Appellant that the cash was returned back to the Appellant. Hence, re-opening is based on conjectures and surmises and therefore, reopening is bad in law. 1.4 Without prejudice to the above, Appellant submits that a donation of Rs. 20,00,000/- was given to approved institution scientific research association and the said approval was not rejected by the Commissioner at the time when donation was made. 1.5 Without prejudice to the above, the Appellant submits that allegation by the AO of return of donation money is without concrete evidence. Hence, in the absence of concrete evidence, the said disallowance cannot survive. Further, the Ld. CIT(A) upheld the allegations that the Appellant had received certain commi....
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.... omit any of the aforesaid grounds of appeal as the occasion may arise or demand. 8. On summarizing the grounds, the following points of determination arises for consideration i.e. 1) Whether the donation was given to approved institute u/s 35(1)(ii) of the Act and 2) Whether the donation given to approved trust can been disallowed u/s. 35(1)(ii) of the Act where the CBDT has withdrawn approval with respective effect from the date of approval i.e. 01.04.2007? 9. We have heard Ld. AR and Ld. DR and examined the record. Ld. AR has submitted that certain documents during the hearing with respect to the institute /donee which included request for substantial contribution dated 02.03.2012, donation letter date 30.03.2012 of Rs. 20 lakhs as per notification of registration of institute /trust dated 28th January 2010 specifically mentioned as under:- "Depart of Revenue Central Board of Direct Taxes New Delhi, the 28th January, 2010 S.O. 348.- It is hereby notified for general information that the organization M/s. School of Human Genetics and Population Health, Kolkata, has been approved by the Central Government for the purpose of clause (ii) of sub-section (1) of....
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.... approved activity, for which the donation could have been made, and admittedly the donation was made without visiting the institution and without having any specific information about the same and the amount has been returned to the assessee after deducting 3% of commission which shows that the donee institute was indulged in providing accommodation entries as fictitious donation. 12. We have considered the rival submission and examined the record. It is strongly contended on behalf of the assessee that the subsequent withdrawal of approval with retrospective effect of the done trust shall have no bearing on the donations given by the assessee to an approved trust during the relevant assessment year, when the deduction were claimed u/s 35(1)(ii) of the Act. Ld. AR placed reliance on the judgment of Coordinated Bench of ITAT in the case of Urnish Jewellers vs. ACIT (2019) 107 taxmann.com 10 (Mumbai Trib ITA No. 1583/Mum/2019 dated 22.05.2019 AY 2012-13) wherein the Coordinate Bench has held as under:- 7. We have considered rival submissions and perused the material on record. Undisputed facts are, in the previous year relevant to the assessment year under dispute, the a....
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....ation was given acting upon registration when it was valid and operative. In case of Motilal Dahya Bhai Jhaveri & Sons (supra), the Co-ordinate Bench while dealing with identical issue of denial of deduction claimed under section 35(1)(ii) of the Act, in respect of donation given to the very same Institution i.e., SHG&PH held that, since, at the time of giving donation the assessee had acted on the strength of a valid registration/approval, which was subsequently cancelled with retrospective effect, assessee's claim of deduction cannot be disallowed. Thus, a reading of Explanation to section 35(1)(ii) of the Act as well as the ratio laid down in the aforesaid decisions would make it clear that if the assessee acting upon a valid registration/approval granted to an Institution has donated the amount for which deduction is claimed, such deduction cannot be disallowed if at a later point of time such registration is cancelled with retrospective effect. Thus, keeping in view the relevant statutory provisions and the ratio laid down in the decisions discussed above, we have no hesitation in holding that assessee is entitled to claim deduction under section 35(1)(ii) of the Act. Accordin....
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....elevant part of the operating portion of the order is reproduced as under:- "5. Heard both the sides and perused the material on record. During the course of assessment on the basis of information received from DDIT(Investigation), Kolkata, the A.O has disallowed the claim of deduction u/s 35(1)(ii) of the Act to the amount of Rs. 19,25,000/- as donation provided to School of Human Genetics & Population Health (SHG& PH) on the ground that said concern was engaged in providing accommodation entries of donations. During the course of appellate proceedings before us the ld. Counsel filed paper book comprising copies of various document filed before the lower authorities i.e donation receipt, copy of registration certificate issue du/s 12A, copy of notification of approval issued u/s 35(1)(ii) of the Act by the CBDT in the name of School of Human Genetics & Population Health (SHG& PH) etc. During the year under consideration the assessee has claimed deduction u/s 35(1)(ii) amounting to Rs. 19,25,000/- on account of donation of Rs.11 lac made to School of Human Genetics & Population Health (SHG& PH) in F.Y. 2013-14. It is further noticed that CBDT vide its notification no. 82/2....
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...., Mumbai as referred above, we direct the Assessing Officer to allow the claim of deduction under section 35(1)(ii) of the Act. Therefore, grounds of appeal of the assessee are allowed. 7. In the result, appeal filed by the assessee is allowed. 14. Ld. AR further relied on the judgment of Hon'ble Calcutta High court in the case of CIT vs. Balaram Hanumandas Charitable Trust (2022) 138 taxmann.com 13 (Calcutta HC) dated 16.02.2022 wherein the Hon'ble High Court referred the Hon'ble Supreme Court case of CIT vs. S. Khader Khan Son (2012) 25 taxmnann.com 413 wherein it was held that section 133A of the Act does not empower the income tax authorities to examine any person on oath, hence any such statement has no evidentiary value and any admission made during such statement cannot, by itself be made on the basis of addition. 15. On perusal of the judgment of Coordinate Bench of ITAT in ITA No. 1583/Mum 2019 (supra). It is noticed that in the case of Motilal Dahya Bhai Jhaveri & Sons (ITA No. 3453/Mum/2018, the Co-ordinate Bench while dealing with identical issue of denial of deduction claimed under section 35(1)(ii) of the Act, in respect of donation given to the very sa....