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2023 (9) TMI 752 - AT - Income TaxPenalty u/s. 271(1)(c) - deduction u/s 35 of the Act in respect of donation given to M/s. Herbicure Health Care Bio Herbal Research Foundation - HELD THAT:- At the time when deduction was claimed by the assessee, the registration certificate granted to HHBRF u/s 35(1)(ii) of the Act was still in place during the impugned assessment year. Secondly, the return was filed by the assessee in response to notice under Section 147/148 of the Act on 04.04.2017 whereas the reasons recorded for reopening of assessment under Section 147 of the Act were provided to the assessee on 19.04.2017. Therefore, it cannot be presumed that the reasons for reopening of assessment were known to the assessee at the time when return was filed by the assessee in response to notice under Section 147 of the Act withdrawing the claim of deduction under Section 35(1)(ii) of the Act. We observe that the ITAT Ahmedabad in the case of S. G. Vat Care Pvt. Ltd. [2019 (1) TMI 1694 - ITAT AHMEDABAD] has held that assessee is eligible for deduction under Section 35 of the Act in respect of donation given to M/s. Herbicure Health Care Bio Herbal Research Foundation since the donations were given by the assessee and at that point of time, the donee was identified as an eligible institute and fell within the statutory eligibility criteria. The ITAT further observed that the certificate for receiving donation was cancelled only on 05.09.2016 in respect of HHBFR and therefore, the claim of deduction could not be disallowed in the hands of the assessee for A.Y. 2014-15, when the registration for receiving donation was still in existence. In the case of CIT vs. Punjab Tyres [1986 (7) TMI 77 - MADHYA PRADESH HIGH COURT] held that when an amount is surrendered to purchase peace, or for other similar reason, such surrender cannot amount to admission, constituting evidence of concealment in penalty proceedings. The High Court held that unless there is any evidence showing that assessee had consciously concealed particulars of his income, any admission made by him surrendering the said particular amount as his income would not by itself justify imposition of penalty. Accordingly, we are hereby directing deletion of levy of penalty u/s 271(1)(c) - Decided in favour of assessee.
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