TMI Blog2019 (1) TMI 1763X X X X Extracts X X X X X X X X Extracts X X X X ..... withdrawal of recognition u/s 35(l)(ii) of the Act. Hence we hold that the withdrawal of recognition u/s 35(l)(ii) of the Act in the hands of the payee organizations would not affect the rights and interests of the assessee herein for claim of weighted deduction u/s 35(1 )(ii) - Decided in favour of assessee. - ITA Nos.6672 & 6673/MUM/2013 - - - Dated:- 15-1-2019 - Shri Rajesh Kumar, Accountant Member And Shri Ram Lal Negi, Judicial Member Assessee by: Shri Firoze B. Andhyarujina And Shri Kirit Sanghvi, AR Revenue by: Shri Manoj Kumar Singh, CITDR ORDER Shri Rajesh Kumar, These appeals by assessee arise out of the order of the CIT(A) 3, Mumbai, both dated 21.09.2017, which in turn has arisen out of the order passed by the Assessing Officer u/s. 143(3) of the Income Tax Act, 1961 (hereinafter referred to as the Act ) relating to A.Y. 2013-2014 20142015. 2. Since the assessee has raised similar grounds of appeal in both the aforesaid appeals, except different figures, therefore, both the appeals of the assessee have been heard together and disposed off by this consolidated order. For the sake of convenience, first, we shall take up the appeal o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... S and notice u/s.143(2) 142(1) of the Act were issued and duly served upon the assessee. During the course of assessment proceedings, the AO noticed that the assessee had made donation of ₹ 50,00,000/- to M/s. School of Human Genetics Population Health (SHG PH), Kolkata. The assessee has claimed deduction of ₹ 87,50,000/-, being 175% of the paid amount. The AO after receiving information from the investigation wing that the said assessee is engaged in accepting bogus donations u/s.35(1)(ii) of the Act. A survey u/s.133A carried out on 27.01,2015 at the office premises of SHG PH. During survey proceedings, statements of Secretary/Treasurer/President and other persons were recorded wherein they admitted to be engaged in providing bogus donations entries to donors and described in details the modus operandi followed. During survey proceedings, survey team concluded that the whole purpose was to receive donations via cheques/RTGS and after deducting commission, the money used to be returned. Summons u/s 131 were issued to various persons , whose statements form part of the order. During the course of assessment proceedings the assessee filed evidences, which included ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... .R.Rolling Mills Pvt. Ltd. Vs. DCIT, ITA No.529/JP/2018, order dated 07.07.2018. Ld. AR submitted that since the facts in these cases are quite common and similar, therefore, following the said decisions the appeal of the assessee should be allowed. 7. Ld.DR, on the other hand, relied heavily on the order of authorities below and submitted that approval granted u/s 35(1)(ii) to The School of Human Genetics and Population Health was withdrawn by the Government of India with retrospective effect when it was found that the said institution was engaged in hawala operations and misused the exemption. The DR further submitted that the office bearers of the trust have categorically admitted that the trust was involved in the bogus tax evasion schemes and, therefore, the order of CIT(A) needs to be upheld. Moreover, the said institution has approached the Settlement Commission and the request of the trust was rejected by the Settlement Commission by observing that the said institution has misused the exemption granted to accept donation u/s 35(1)(ii) , and, therefore, the order of CIT(A) needs to be confirmed. 8. We have heard the rival submissions and perused the material on re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 00,00,000/- (Rs,2,00,00,000 + Rs,4,00,00,000) donated to these two institutes which were approved by the Central Government for the purposes of section 35(l)(ii) of the Act read with Rule 5C and SE of the Income Tax Rules, 1962. In the assessment year 2013-14, the assessee claimed weighted deduction of ₹ 4,81,25,000/- under section 35(1) (ii) of the Act, which is 175% of the amount of donation being the sum of ₹ 2,75,00,000/- in respect of the donation given to 'The School of Human Genetics and Population Health'. We note that the Notifications to this effect, that these two institutions viz; 'Matrivani' and 'SHG', were approved by the Central Government for the purpose of section 35(1)(ii) of the Act, was published in the Gazette of India. However, the deduction claimed by the assessee was denied by the Assessing Officer on the basis of the allegations contained in the report of the Investigation Wing of Kolkata that the said donations were bogus. The reasons stated therein, in short, were that statements of some key persons of these two donee institutions were recorded by the Investigation authority in course of survey proceedings in their case ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oposition was upheld by the Coordinate Bench of Kolkata in the case of Rajda Polymers, ITA No.333/Kol/2017,for Assessment Year 2013-14 wherein it was held as follows: 10. ....Thus we note from the entire facts and circumstances, that the AO got swayed away with the statement recorded on oath of Mr. Swapan Ranjan Dasgupta during survey conducted at the premises of M/s. Herbicure. We have reproduced Question no. 22 and 23 and answers given by Shri Swapan Ranjan Dasgupta, wherein he admits to provide accommodation entries in lieu of cash. This information we should say can be the tool to start an investigation when the assessee made the claim for weighted deduction. The general statement of Shri Swapan Ranjan Dasgupta against donation made the claim of assessee for deduction suspicious. However, when the AO investigated, Shri Swapan Ranjan Dasgupta has confirmed that M/s. Herbicure was in receipt of the donation and it has not given any refund in cash, then the sole basis of disallowance of claim as a matter of fact disappeared. It should be remembered suspicion howsoever strong cannot take the place of evidence. The confirmation from Shri Swapan Ranjan Dasgupla fortifies the clai ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l the power was expressly conferred on the CIT by Section I2AAC3) of the Act w. e.f. 01.10.2004. We hold that the ratio decidendi of the aforesaid judgement of the Hon'ble Apex Court would squarely be applicable to the facts of the instant case. In fact the assessee's case herein falls on a much better footing than the facts before the Hon'ble Apex Court. In the case before Hon'ble Apex Court, the power of cancellation of registration us 12A of the Act was conferred by the Act on the Id CIT w.e.f. 1.10.2004 and the Hon'ble Apex Court held that prior to that date , no cancellation of registration could happen. But in the instant case, there is absolutely no provision for withdrawal of recognition u/s 35(l)(ii) of the Act. Hence we hold that the withdrawal of recognition u/s 35(l)(ii) of the Act in the hands of the payee organizations would not affect the rights and interests of the assessee herein for claim of weighted deduction u/s 35(1 )(H) of the Act. 16.1n view of the aforesaid findings in the facts and circumstances of the case and respectfully following the various judicial precedents relied upon hereinabove, we direct the Id AO to grant deduction u/ ..... X X X X Extracts X X X X X X X X Extracts X X X X
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