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2020 (12) TMI 663 - AT - Income TaxDeduction u/s 35(1)(ii) - claim disallowed as research institution i.e HHBRF to which donation was given by the assessee was found to be a bogus institution that was not doing any research activity but was in fact laundering ill-gotten money of the donors - HELD THAT:- in the case before us, we find that the research institution i.e HHBRF, as on the date of giving of donation by the assessee was having a valid approval granted under the Act. On a perusal of the aforesaid ‘Explanation’ to Sec. 35(1)(ii) of the Act, it can safely be gathered that a subsequent withdrawal of such approval cannot form a reason to deny deduction claimed by the donor. In the case of National Leather Cloth Mfg. Co. [1999 (10) TMI 55 - BOMBAY HIGH COURT] while dealing with an identical issue of denial of deduction under Sec.35(1)(ii) of the Act due to a subsequent withdrawal of approval with retrospective effect, had observed, that such retrospective cancellation of registration will have no effect upon the deduction claimed by the donor since such donation was given acting upon the registration when it was valid and operative. On a perusal of the aforesaid statutory provision i.e Sec. 35(1)(ii) of the Act, as well as the ratio laid down in the aforesaid judicial pronouncements it can safely be concluded that if the assessee acting upon a valid registration/approval granted to an institution had donated the amount for which deduction is claimed, then, such deduction cannot be disallowed if at a later point of time the registration is cancelled. - Accordingly, we set aside the order of the CIT(A) and vacate the disallowance of the assesse’s claim for deduction under Sec.35(1)(ii) - Decided in favour of assessee.
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