TMI Blog2024 (2) TMI 103X X X X Extracts X X X X X X X X Extracts X X X X ..... ment? - AO has formed an opinion that on the basis of information received from DDIT, it is found that assessee has taken a bogus donation. How it can be termed as a borrowed opinion. DDIT has transmitted the details exhibiting the fact that donee was engaged in providing accommodation entries to alleged such donors. Therefore, we do not deem it necessary to recite six case laws referred by assessee on this point because it is a question of fact and not any proposition. We agree if there is no specific information to the ld. Assessing Officer, and he has blindly followed some dictum, then reopening is not justified but here the DDIT has remitted the information and on that basis he formed his opinion. Whether CIT(Appeals) has erred in rejecting its ground of reopening by following the case law where original assessment was processed under section 143(1) of the Income Tax Act. ? - We are of the view that Assessing Officer reopened the assessment on the basis of information transmitted to it by the DDIT (Investigation). Therefore, that investigation revealed that more than 1500 donors have taken accommodation entries. AO has gone through these materials and thereafter prima ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... itself that under a criminal conspiracy, these donations have been arranged by the brokers across India for defrauding the nation. We do not find any credence in the belief of bonafide raised by the appellants. It is also pertinent to note that it is not a simple case of claiming deduction on fulfilment of conditions under section 35(1)(ii) of the Income Tax Act, rather it is a case where Revenue has disproved this claim and proved that, with a criminal mind all such donors have layered their transaction in such a manner which apparently appears to be genuine, but in reality not genuine. They took such a step to commit fraud, an economic offence against the economy of the country. The bonafide of the assessees can be appreciated if they have demonstrated that they have given the donations in the past or subsequent periods to some Institution of national importance, such as Tata Research Centre, certain Hospitals, etc. but none of them has given such a donation except a small amount of few thousand in the case of Abhilasha Tradecom Pvt. Limited. The moment Assessing Officers have dispelled onus discharged by the assessee, then it was their duty to prove the genuineness of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Tribunal against the order of ld. Commissioner of Income Tax (Appeals), Kolkata-20 dated 27.03.2023 passed for A.Y. 2012-13. 2. On receipt of notice in the Revenue s appeal, assessee has filed Cross Objection bearing No. 13/KOL/2023. The Revenue has raised five grounds of appeal. However, its grievance revolves around a single issue, namely whether assessee is entitled for deduction of Rs. 1,75,00,000/- under section 35(1)(ii) of the Income Tax Act, 1961. This donation has been made to M/s. School of Human Genetic and Population Health, Kolkata. As far as this issue is concerned, the decision over it is covered in favour of the Revenue and against the assessee by the ITAT, Kolkata in the case of Tarasafe International Pvt. Limited vs.- DCIT in ITA No. 261/KOL/2020 dated 7th March, 2023. However, before taking up the issue on merit, we deem it appropriate to consider the jurisdictional aspect pleaded by the assessee in the Cross Objection. Therefore, we first take the Cross Objection filed by the assessee. C.O. No. 13/KOL/2023 3. The assessee has raised four grounds in the Cross Objection. As far as Ground No. 4 is concerned, it is a general ground, which does not ca ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ee while impugning the order has raised two-fold of submissions. In his first fold of submission, he emphasized that the assessee has filed objections against reopening of the assessment and those objections have not been decided by the ld. Assessing Officer before taking the assessment proceeding. Therefore, the reassessment order is not sustainable. For buttressing this contention, he relied upon a large number of decisions, namely- (i) Jayanthi Natarajan vs.- ACIT 100 taxmann.com511(Madras High Court- Order dated 14.09.2017; (ii) SAK Industries Pvt. Ltd. vs.- DCIT 19 taxmann.com 237 (Delhi)- order dated 16.02.2012; (iii) Bayer Material Science Pvt. Limited vs.- DCIT 66 taxmann.com 335 (Bombay)- Order dated 27.01.2016; (iv) Swadesh Trading Co. vs.- DCIT 111 taxmann.com 446 (Karnataka)- Order dated 03.09.2019; (v) Torrent Power SEC Ltd. vs.-ACIT 45 taxmann.com 443 (Gujarat)- Order dated 12.03.2014; (vi) Nimitaya Hotel Resorts Ltd. vs.- ACIT 109 taxmann.com 185 (delhi)- Order dated 01.04.2019; (vii) Arvind Sahdeo Gupta vs.- ITO 153 taxmann.com 244 (Bombay) Order dated 08.08.2023; (viii) Ferrous Infra Pvt. Ltd. vs.- DCIT- 63 taxmann.com 20 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the case of SAK Industries Pvt. Limited vs.- DCIT (supra) has set aside the issue to the file of ld. Assessing Officer for disposing of the objections in a time bound period and thereafter framing the assessment. Thus Hon ble Delhi High Court was also of the view that non- disposal of the objection of an assessee against reopening would not be construed fatal to a proceeding. It was a procedural irregularity, which is to be cured and assessment proceeding is to be undertaken again after removal of the procedural irregularity. The finding of the Hon ble High Court in paragraph no. 14 of this decision is worth to note, which reads as under:- We are informed that the Assessing Officer, i.e. respondent No.1, has now changed. The Assessing-Officer will now pass a fresh order on the objections raised by the petitioner in terms of direction issued by the Supreme Court in GKN Driveshafts (India) Ltd. (supra). The petitioner will appear before the Assessing Officer on 5 th March, 2012, when a date of hearing will be fixed and an order disposing of the objections will be passed on or before 16 th March, 2012. In case of an adverse order, the Assessing Officer shall give 15 days time t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... appeal before the Tribunal as second Appellate Authority is continuation of original assessment proceeding. The assessees in those judgments have approached the Hon ble High Court to safeguard themselves from undergoing an assessment proceeding, which would otherwise put cost on their resources for defending such a proceeding. But in the present case, assessee has already undergone that proceeding and raised objections. Therefore, we invited the ld. Counsel for the assessee to explain as to how the acceptance of those objections would render the assessment proceeding in nullity and if that be so, we will drop the proceeding by quashing the reassessment order. Therefore being a Second Appellate Authority assume our powers as of an Assessing Officer for examining those objections on merit because error committed by the ld. Assessing Officer is a curable error, which is procedural one and, therefore, we can consider those objections filed by the assessee before the ld. Assessing Officer. 15. We have perused the letter dated 29.08.2016. The objections are running into 10 pages. However, they are narration of various judgments, which started from page no. 3 of the objections. Apart ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... easons to form belief that income of an assessee has escaped assessment. As it has been held in various judicial pronouncements, the proceedings u/s147, cannot be initiated on the basis of reasons to suspect only, whatever strong the suspicion may be. Mere suspicion of escapement income does not empower to make assessment / reassessment u/s147. Similarly, it has also been held in various judicial pronouncements that the reasons recorded for initiating the proceedings u/s147, have to speak for themselves. The reasons must provide a live link to the formation of the belief that income had escaped assessment. The reasons cannot keep the assessee guessing fur the reasons for initiating the proceedings u/s147. These reasons cannot be supplied subsequent to the recording of such reasons either in the form of an order rejecting the objections or an affidavit filed by the Revenue. Further, it is also well established law that the satisfaction with respect to escapement of assessment of income must be of the A.O. himself and not a borrowed satisfaction. If the proceedings u/s147 is initiated on the satisfaction recorded by some other authority, like Sales Tax, Excise o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on, it has been pleaded by the ld. Counsel for the assessee that the ld. Assessing Officer has used borrowed opinion for harbouring the belief that income has escaped assessment. Copy of the reasons for reopening has been placed by the ld. Counsel for the assessee in the second supplementary paper book, which is available on page 2. The ld. Assessing Officer has formed an opinion that on the basis of information received from DDIT, it is found that assessee has taken a bogus donation. How it can be termed as a borrowed opinion. The DDIT has transmitted the details exhibiting the fact that donee was engaged in providing accommodation entries to alleged such donors. Therefore, we do not deem it necessary to recite six case laws referred by the ld. Counsel for the assessee on this point because it is a question of fact and not any proposition. We agree if there is no specific information to the ld. Assessing Officer, and he has blindly followed some dictum, then reopening is not justified but here the DDIT has remitted the information and on that basis he formed his opinion. 19. The ld. Counsel for the assessee further contended that ld. CIT(Appeals) has erred in rejecting its grou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion 143(3) of the Income Tax Act. The assessee has taken eleven grounds of appeal. However, on perusal of the grounds, it revealed to us that basically three-folds of grievance are being raised by the assessee, namely- (a) in Grounds No. 2 to 6, the assessee has pleaded that ld. CIT(Appeals) has erred in confirming the action of the ld. Assessing Officer for not allowing the deduction of Rs. 87,50,000/- claimed under section 35(1)(ii) of the Income Tax Act, 1961; (b) In Grounds No. 7 8, the assessee has submitted that ld. CIT(Appeals) has erred in confirming the action of the ld. Assessing Officer for considering disallowance of Rs. 87,50,000/- under normal provisions for computing book profit and thereby erred in calculating the book profit at Rs. 4,17,01,736/- as against returned book profit of Rs. 3,29,51,736/-. (c) The ld. Assessing Officer has erred in charging interest under section 234C of the Income Tax Act. 2.1 In rest of the grounds, i.e. Grounds No. 1 11, it has not raised any specific grievance. Similarly Grounds No. 3 to 6 are supporting arguments with Ground No. 2. 2.2 Brief facts of the case are that the assessee-company has filed i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he assessee has taken two grounds of appeal in A.Y. 2013-14 and three grounds of appeal in A.Y. 2014-15. 3.2. Ground No. 1 in A.Y. 2013-14 is similar with Ground No. 1 in A.Y. 2014-15. In this ground of appeal, the assessee has pleaded that ld. CIT(Appeals) has erred in confirming the disallowances of deduction amounting to Rs. 35,00,000/- and Rs. 17,50,000/-, which were claimed by the assessee under section 35(1)(ii) for grant of donation to SHG PH i.e. School of Human Genetics and Population Health. 3.3. Ground No. 2 is common with Ground No. 3 of A.Y. 2014-15. In this ground, the assessee has not raised any specific grievance. In A.Y. 2014-15, it has raised one more ground of appeal whereby it has challenged the disallowance of Rs. 13,12,500/-, which was claimed deduction @ 175% in respect of donation of Rs. 7,50,000/- to Maitribani Institute of Experimental Research Foundation. 3.4. Brief facts of the case are that the assessee has filed its return of income on 30.09.2013 and 29.11.2014 declaring total income of Rs. 61,76,369/- and Rs. 62,00,581/- respectively in A.Y. 2013-14 and 2014-15. The returns of both the years were selected for scrutiny assessment an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... w the donors went to the Settlement Commission and admitted the fact that they have provided only accommodation entries on commission based. All these materials were confronted to the assessee. ITA No. 23/KOL/2020 M/s. Coalsale Co. 5. The present appeal is directed at the instance of assessee against the order of ld. CIT(Appeals) dated 24.12.2019 passed for A.Y. 2015-16. 5.1. The assessee has raised five grounds of appeal, but its grievances revolve around a single issue, namely ld. CIT(Appeals) has erred in confirming the disallowance of deduction claimed under section 35(1)(ii) amounting to Rs. 17,50,000/-. 5.2. Brief facts of the case are that the assessee has filed its return of income electronically on 27.09.2015 declaring total income of Rs. 1,43,82,590/-. The case of the assessee was selected for scrutiny assessment and a notice under section 143(2) was issued and served upon the assessee. On scrutiny of the accounts, it revealed to the ld. Assessing Officer that the assessee has paid a donation of Rs. 10,00,000/- to M/s. SHG PH. It has claimed deduction under section 35(1)(ii) of the Income Tax Act @ 175% of the donation given by it. In t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ation Wing in the case of recipient of the donation, but the assessee failed to give any plausible reply to rebut such donation except by submitting that it has given donation under a bonafide belief. Accordingly ld. Assessing Officer has disallowed the claim of the assessee vide assessment order dated 25.10.2016 passed under section 143(3) read with section 147 of the Income Tax Act. Appeal to the ld. CIT(Appeals) did not bring any relief to the assessee. ITA No. 133/KOL/2021 7. The assessee is in appeal before the Tribunal against the order of ld. CIT(Appeals) dated 31.03.2021 passed for A.Y. 2012-13. 7.1. In the grounds of appeal, the assessee has raised six grounds of appeal, however, its grievances revolve around two issues, namely- (a) ld. CIT(Appeals) has erred in upholding the reopening of assessment; (b) ld. CIT(Appeals) has erred in confirming the addition of Rs. 12,25,000/-, which was claimed as a deduction under section 35(1)(ii) of the Income Tax Act. In rest of the grounds, the assessee has raised supporting arguments qua these two issues. 7.2. Brief facts of the case are that the assessee has filed its return of income on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssessment order on 02.03.2016 under section 143(3) of the Income Tax Act. Appeal to the ld. CIT(Appeals) did not bring any relief to the assessee. ITA Nos. 2316 2317/KOL/2019 9. The present two appeals are directed at the instance of assessee against separate orders of ld. CIT(Appeals) dated 28.08.2019 passed in A.Y. 2013-14 and 2014-15. 9.1. The grievance of the assessee is that ld. CIT(Appeals) has erred in confirming the disallowance of Rs. 5,25,000/- in A.Y. 2013-14 and Rs. 5,25,000/- in A.Y. 2014-15. 9.2. Brief facts of the case are that the assessee his filed its return of income on 20.12.2013 and 28.03.2015 declaring total income of Rs. 13,08,950/- and Rs. 13,74,490/- respectively in A.Ys. 2013-14 and 2014-15. All the returns of the assessee involved in both the years were for scrutiny assessment. It was found that the assessee has given bogus donation to School of Human Genetics and Population Health in both the years and such claim of the assessee has been disallowed. The facts of the present appeals are common with ITA No. 2448 2449/KOL/2019 discussed in immediate preceding paragraph in the case of assessee M/s. Hiralal Bhandari as represen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d a deduction of Rs. 35,00,000/- under section 35(1)(ii) on a donation of Rs. 20,00,000/- to School of Human Genetics and Population Health. The ld. Assessing Officer confronted the assessee with regard to the material unearthed during the course of search/survey in the case of recipient of the donations. He confronted the assessee as to how this recipient has admitted before the Settlement Commission that it has provided accommodation entries after receipt of commissions. The assessee was unable to submit any evidence in support of its claim except pleading bonafide belief of its donation. It was submitted by the assessee that since recipient was enjoying the status of a Research Institute when it has made donation. If any subsequent enquiry was made, it unearthed that such recipient was receiving bogus donation beyond the control of the assessee, the ld. Assessing Officer was not satisfied with the explanation of the assessee. He disallowed the claim of the assessee and made the addition of Rs. 35,00,000/- by way of an assessment order dated 29.11.2016 passed under section 143(3) of the Income Tax Act. Appeal to the ld. CIT(Appeals) did not bring any relief to the assessee. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Therefore, if a research institute is approved and notified by the prescribed authorities under the Rules of Income Tax Rules, 1962 and the provision of this Act, then the donors will be entitled for a deduction equivalent to 175% of donation given by them. Therefore, as far as scope of this Section or meaning/instruction of the language employed in this section is concerned, there is no dispute between the parties. In other words, interpretation of the meaning of section is not involved, which requires reference to any judgment from the authoritative pronouncements of Hon ble High Courts as well as Hon ble Supreme Court. 16. The dispute relates to the factum of giving donations to a genuine institution for claiming deduction under section 35(1)(ii) of the Income Tax Act. Arguments: 17. Shri S.M. Surana, ld. Sr. Advocate has led the arguments on behalf of the assessees. He could not dispute to the proposition that as far as interpretation and scope of section 35(1)(ii) is concerned, there is no dispute. He submitted that neither the ld. Assessing Officer nor the ld. CIT(Appeals) have denied the fact that payments of donation by all these appellants were mad ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ons, or to impose new duties in respect of transactions are not accomplished. The ld. Counsel for the assessees thereafter made reference to a series of decisions, where ITAT has allowed such a deduction to the assesses. He pointed out that some of the decisions in Kolkata have been upheld upto the Hon ble High Court also. He pointed out that across India, such deductions have been allowed to the assessees. 19. All the ld. Counsels have been by and large took the same line of argument. They only placed on record different ITAT orders in their paper book, wherein identical issues were involved. 20. Originally Shri Amal Kamat, ld. CIT(DR) appeared in the case of Tarasafe International Private Limited assisted with Smt. Ranu Biswas, Addl. CIT, Sr. D.R. Thereafter Shri Arup Chatterjee, ld. Sr. D.R. represented the Revenue. In the case of Tarasafe International Pvt. Limited, a paper book has been filed by the Revenue running into 268 pages. In this paper book, the Revenue has placed on record the papers recovered during the course of survey conducted at the premises of the recipient of the donations. It has also placed on record the copy of the Settlement Order passed in the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ll as the finding recorded by the Tribunal. Both these findings are based upon the material discovered during the survey upon SHG PH and, therefore, in view of this latest decision of the Hon ble Supreme Court, he emphasized all other orders of the ITAT and the decisions of the Hon ble High Court are not to be followed. 22. Since this decision was supplied by the Revenue after conclusion of the arguments, therefore, we re-fixed the hearing and confronted the assessee with this latest position of law. However, Shri Soumitra Chowdhury, ld. Counsel for the assessee has placed on record the judgment of the Hon ble Calcutta High Court in the case of Commissioner of Income Tax (Exemption), Kolkata vs.- Sanskriti Sagar. In this decision, the Hon ble High Court has considered the judgment of the Hon ble Supreme Court in the case of Batanagar Education Research Trust and dismissed the appeal of the Revenue. In this case also, registration under section 12AA was cancelled by the ld. Commissioner by exercising the powers under section 12AA(3) of the Act. This cancellation was set aside by the Tribunal and Revenue carried the matter before the Hon ble High Court, who upheld the order ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Director of Income Tax (Exemption), Kolkata Registration u/s 10(23C) of the I.T. Act Initial order no. 49 Renewal vide No. CCITIII/10(23C)(iv)/1112/245 27.02.2004 16.01.2014 CCIT-III, Kolkata Recognition of Scientific and Industrial Research Organization Renewal till 31.03.2016 vide Communication No. 14/473/2007-TU-V(for 01.04.10 to 31.03.13) For 01.04.08 to 31.03.10) 01.04.2013 01.04.2013 17.06.2010 Government of India, Ministry of Science and Technology Gazette Notification u/s 35(1)(ii) of the I.T. Act, 1961 Notification No. 4/2010 28.01.2010 Government of India, Ministry of Finance (Department of Revenue) (Central Board of Direct Taxes) 24. The Governing Body members of the recipient are as under: (a) Dr. Madhumita Roychoudhury President (b) Dr. Shyamal Kumar Nandy Vice-President ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o lack of financial flows and for the need for meeting their financial requirements, the Secretary and Treasurer of the Society accepted such donations' during the F.Y. 2011-12, 2012-13 and 2013-14, which were accommodating entries for donations through mediators. The refunds were made by debiting the payments, mainly under the head Research Development Expenditures and some other heads i.e. SHG Advances etc. in the books of account and returned to the donors . 27. It was also submitted before Settlement Commission that a survey operation under section 133A of the Act was carried out at the premises of the done Society at 6A, Malanga Lane, Kolkat-12 on 27.01.2015. During the course of survey following documents were found and impounded:- Name Address Items Annexure Documents found Documents impounded School of Human Genetics Population Health, 6A, Malanga Lane, Kolkata- 700012 Books of accounts Cash Bank A/c. Debit/Credit Card A 3 2 4 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... are Bio-Herbal Research Foundation, Calcutta. A survey action was carried out at the premises of the donee wherein it revealed to the Revenue that this concern was misusing the benefit of notification issued by the Income Tax Department. It has been getting donation from various sources, and after deducting certain amount of commission, these donations were refused in cash. On the basis of that survey report registration granted to its favour was cancelled. On the basis of the outcome of that survey report, the Id.AO construed the donation given by the assessee as bogus. Appeal to the ld.CIT(A) did not bring any relief to the assessee. 4. Before us, the !d. Counsel for the assessee contended that donations were given on 25.03.2014. At that point of time, donee was notified as eligible institution and fall within the statutory eligibility criterion. Certificate for receiving donation was cancelled on 6.9.2016. There is no mechanism with the assessee to verify whether such donee was a genuine institute or not, which can avail donation from the society. 5. The Id. DR, on the other hand, contended that in the investigation it came to know about bogus affairs conducted by th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . CIT vs.- Mackaw Corporation (2022) 8 TMI 1750, ITA 42 of 2020, G.A. No. 2 of 2019, Old G.A. No. 1477 of 2019. 31. The ld. Counsels have emphasized that under identical circumstances, deductions have been allowed by the ITAT and the order of ITAT has been upheld by the Hon ble High Courts. Therefore, these appeals are to be allowed and deductions be granted to the appellants. 32. With respect to all the case laws including our own order, which has been upheld by the Hon ble Gujarat High Court, we are of the view that all the decisions are based on the set of facts in those cases. In these cases, the Department did not file paper book, did not bring it to the notice of the ITAT about the nature and quantum of the material discovered during the course of survey exhibiting as to how a modus operandi in an organized manner was adopted by the recipients with the help of brokers to fraud the nation. There was no question of law involved in the factual finding given by the Tribunal in all the cases. Thus on facts the orders of the Tribunal were upheld. 33. Let us take note of the material placed before us persuading us to record a finding of fact being a last authorit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on Health (SHGPH)? Ans.: Initially, I came with the contact of Smt. Moumita Raghavan, President and Smt. Samadrita Mukherjee Sardar, Secretary of School of Human Genetics Population Health through a market broker named Shri Sailesh Gupta, residing at howrah who approached me for bogus billing. After that, I have direct contact with Smt. Moumita Raghavan Smt. Samadrita Mukherjee Sardar of SHGPH regularly and raise bogus bills for SHGPH over the years as per their directions. I shall furnish the details of bogus billing on 10.03.2015. Q. 6: Please explain the nature of business done by you in detail. Ans.: I am an accommodation entry operator and I am engaged in the business of providing accommodation entries in the form of bogus share capital/unsecured loans/bogus bills etc. to various beneficiaries/parties through various jama-kharchi /paper companies/proprietorship concerns controlled by me in lieu commission. Q. 7. Kindly go through the Annexure-A which is submitted by you in the case of SHG PH. Kindly provide the bank account along with the bank name and branch addresses of 21 concerns mentioned in the Annexure-A. Ans.: I will submit all the re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of all these appellants right from the ld. Assessing Officer upto the Tribunal is that since Institution was approved by the Competent Authority to receive donation. This approval was intact when they have made the donation. Therefore, under bonafide belief, they have given the donations and on the basis of post donation, material collected by the Revenue should not be used against them for doubting the genuineness of the donation. The scheme of the Income Tax Act provides that a claim made by an assessee has to be proved by the assessee. Thus the first onus is upon the assessee about the claim made by him. This onus was discharged by the assessee by pointing out that Institution to whom donations were given. They are approved by the Income Tax Authority and, therefore, their claim is to be allowed. However, if the first onus discharged by the assessee was dispelled by the ld. Assessing Officer by confronting them with the material recovered during the survey and post survey enquiries, then the questions posed before us is, whether this belief harped by all the appellants was such a bonafide that could not be questioned in any circumstances. To our mind, it is a misplaced argument ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ut their bonafide belief for giving such donations, vis-a-vis huge materials collected by the Revenue demonstrating the fact how such a belief is misplaced, then, the scale would tilt in favour of the revenue. It is to be appreciated that roughly 720 entities including individuals available in a partlist on pages no. 72 to 81 of the paper book compiled by the Revenue would have not formed a bonafide belief about giving donation to one entity across India in Kolkata. This material speaks in itself that under a criminal conspiracy, these donations have been arranged by the brokers across India for defrauding the nation. We do not find any credence in the belief of bonafide raised by the appellants. 39. We are aware of the facts that a large number of orders have been passed in favour of the assessee by ITAT and some of those were upheld by Hon ble High Courts also. We have extracted one of the orders from Hon ble Gujarat High Court. The Hon ble Supreme Court in the case of CIT vs.- Batanagar Education Research Trust reported in 129 taxmann.com 30, whose copy has been placed on the record by the ld. CIT(DR), has considered the identical material, which has been placed before ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n of Rs. 85,000/- from Herbicure and on the basis of receipt of this donation, its registration was sought to be cancelled. The Hon ble High Court has propounded that the decision in the case of Batanagar Education Research Trust is not applicable on the facts of that case because Sanskriti Sagar has neither given any donation to this Trust and claimed deduction under section 35(1)(ii) nor it has returned the money in cash out of a small donation received by it from Herbicure, a similar Trust to SHG PH. Hon ble High Court has held that Tribunal has rightly set aside the order passed by the ld. Commissioner vide which registration was cancelled. In our opinion, it is purely a fact-based decision without laying down any particular proposition of law, rather an inference could be drawn from it that if there is no element of fraud committed by an assessee, then such an assessee does not deserve to be punished. This case cannot buttress any of the contentions of the appellants before us. 42. It is also pertinent to note that it is not a simple case of claiming deduction on fulfilment of conditions under section 35(1)(ii) of the Income Tax Act, rather it is a case where Revenue h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... stocks or indulging any accommodation entry business. If we apply the ratio of this judgment upon these cases, then it would reveal that the benefit of claim under section 35(1)(ii) is outcome of an organized fraud with the help of certain manipulators. Therefore, we do not find any material in the first fold of arguments raised by the ld. Counsels for the assessees. The appellants are not entitled for deduction under section 35(1)(ii) of the Income Tax Act. This finding is subject to our finding on other preliminary issues in the case of Abhilasha Tradecom Pvt. Limited i.e. ITA Nos. 132 133/KOL/2021. In ITA Nos. 132 133/KOL/2021, assessee has challenged the reopening of the assessment. We will be deciding this issue in the following part of the judgment. 22. We find that the Tribunal has gone into all these aspects including the case law relied upon by the assessee before us. We do not see any reason to deviate ourselves from the conclusions drawn by the earlier Coordinate Bench and respectfully following the above, we allow the appeal of the Revenue, set aside the finding of the ld. CIT(Appeals) and restore that of ld. Assessing Officer that assessee is not entitled for ..... X X X X Extracts X X X X X X X X Extracts X X X X
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