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2001 (6) TMI 195 - AT - Income TaxDeduction u/s 80G - donation receipts - whether the donation paid by cheques dated 31-3-1992, even though realised on 11-4-1992 can still be treated as donation made during the accounting year ending 31-3-1992 relevant to the assessment year 1992-93 or the same would fall in the accounting year 1992-93 relevant to the assessment year 1993-94? - HELD THAT:- Apex Court in Ogale Glass Works Ltd.'s case [1954 (4) TMI 3 - SUPREME COURT] has held that when the cheque is not dishonoured but is encashed, the payment relates back to the date of the receipt of the cheque and in law the date of payment would be the date of the delivery of the cheque. We are unable to subscribe to the view of the learned departmental representative that the decision of the Gujarat High Court [1998 (11) TMI 90 - GUJARAT HIGH COURT] deals with the payment of tax and cannot be applied for payment of donation. The assessee's contentions are also supported by the CBDT Circular No. 261 dated 8-8-1979. Thus we are inclined to hold that the cheques issued on 31-3-1992 are to be treated as donation made during the accounting year ending on 31-3-1992, relevant to the assessment year 1992-93, by applying the decisions of the Gujarat High Court, the Apex Court and the CBDT Circular. Whether for claiming deduction u/s 80G payment of donation should be out of thegross total income of the relevant accounting year only? - On a comparison of the provisions of section 80G with those of the then sections 80C, 80D, 80E and 80F, it emerges out that the donations eligible for deduction under section 80G, have not been riddled with the condition that the same must come out of the income chargeable to tax and that too of the previous year concerned. Even if the donations are made out of exempted income of the relevant previous year or out of chargeable income of earlier years or out of capital, the same may be eligible for deduction under section 80G on fulfilment of all the other conditions laid down in that regard. It may be that wider considerations of public benefit might have induced the Legislature to free the donations from such shackles. In this case on hand it has been shown by the assessee's learned counsel by adverting to the profit and loss account that the assessee has debited the donations paid by these cheques in the profit and loss account of the accounting year relevant to the assessment year 1992-93, which would mean that the donations have been made out of the current year's income only, even though it is not a pre-condition according to section 80G as observed above. Assessee appeal allowed.
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