TMI Blog2020 (7) TMI 243X X X X Extracts X X X X X X X X Extracts X X X X ..... disallowance u/s 35(1)(ii) - Decided in favour of assessee. - ITA No.6399/Mum/2019 - - - Dated:- 9-6-2020 - Shri G. Manjunatha, Accountant Member And Shri Ravish Sood, Judicial Member For the Appellant : S/shri Rashmikant Modi And Ketki Rajeshirke, A.Rs For the Respondent : Shri V. Vinod Kumar, D.R ORDER PER RAVISH SOOD, JM The present appeal filed by the assessee is directed against the order passed by the CIT(A)-1, Mumbai, dated 16.09.2019 which in turn arises from the order passed by the A.O under Sec.143(3) of the Income Tax Act, 1961 (for short Act ), dated 28.12.2016 for A.Y. 2014-15. The assessee has assailed the impugned order on the following grounds of appeal before us: 1. On the facts and in the circumstances of the case, the Appellant submits that the Honb1e Commissioner of Income Tax Appeals - 1, Thane erred in upholding the Learned Assessing Officer's view of treating the donation of ₹ 1,00,00,000/ - paid to School of Human Genetics and Population Health as an alleged accommodation entry and bogus merely based on the statement given by the Secretary and Treasurer pursuant to survey u/s I 33A of The Income Tax Act, 1961 car ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dence, viz. (i) receipts of donation depicting name, address, registration no., income tax exemption no. u/s.80G(5)(vi), 10(23C) and 35(1)(ii) of the Act; (ii) copy of the request letter for the aforesaid donation from SHG PH, dated 21.01.2014; (iii) notification of CBDT approving SHG PH for the purpose of clause (ii) of subsection (1) of Sec.35 of the Act r.w. Rule 5C and Rule 5E of the Income Tax Rules, 1962, alongwith other related documents; (iv) copy of PAN Card of SHG PH; (vi) renewal of recognition from Government of India, Ministry of science and technology, Department of Science and Industrial Research and Technologies, dated 01.04.2013 renewing the recognition upto 31.03.2016; (vi) copy of the advisory letter from DDIT(E), Kolkata stating that production of certificate/copies would be enough for a prospective donor to avail the benefit; (vii) documents revealing that SHG PH concentrated on activities related to the awareness generation, vocational training and services in the field of Human Genetics Research and Development; (viii) copy of the bank account of SHG PH i.e current account number 018705009395 (IFSC code No. ICIC0000187) with ICICI Bank, Branch : Chowringhee ; ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s donations to the donors. Also, it was gathered by the A.O, that the aforesaid application of the assessee before the Settlement Commission had thereafter been decided, vide its order dated 01.04.2015. On the basis of the aforesaid facts, it was observed by the A.O that SHG PH had admitted before the Settlement Commission of its earning of additional income by providing of accommodation entries of bogus donations during the years 2011-12, 2012-13 and 2013-14. It was also noticed by the A.O that the CBDT vide its letter dated F. No. 203/09/2015/ITA (ii), dated 25.09.2016 had withdrawn the notification granting approval under Sec.35(1)(ii) of the Act to SHG PH. Further, it was observed by him that the Ministry of Finance, vide its notification No. 82/2016 of F.No. 203/64/2009/ITA (ii) dated 15.09.2016 had also withdrawn its earlier notification no. 4/2010, dated 28.01.2010. On the basis of the aforesaid facts, the A.O was of the view that the assessee in connivance with SHG PH had misused the provision of Sec. 35(1)(ii) of the Act, and as a beneficiary had obtained accommodation entries in the guise of donation. It was noticed by the A.O, that due to extensive efforts of the investi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... approval granted to the institution. In support of his aforesaid contention the ld. A.R had placed reliance on the judgment of the Hon ble Supreme Court in the case of CIT Vs. Chotatingrai Tea (2003) 126 taxman 399 (SC). Apart from that, it was submitted by him, that the issue pertaining to donations made to the same institution viz. SHG PH, involving identical facts had been held as allowable for deduction under Sec. 35(1)(ii) of the Act in a host of judicial pronouncements by the co-ordinate benches of the Tribunal, as under: 1. ACIT, Mumbai Vs. Shirish Lakhamshi Keniya ITA 5385/Mum/2018, A.Y. 2013-14, ITAT Mumbai, dated 29.01.2020. 2. M/s Pooja Hardware Pvt. Ltd Vs. Assistant Commissioner of Income, Mumbai, ITA 3712/Mum/2018, A.Y. 2012-13, dated 28.10.2019. 3. Mahesh C Thakkar Vs. ACIT, Mumbai ITA 5121 5122/Mum/2018, A.Y.2012-13 and 2014-15, dated 21.08.2019. 4. Borsad Tobacco Co. Pvt. ltd. Vs. DCIT Cen Circle 8(1), Mumbai ITA 2040/Mum/2018, A.Y. 2014-15, dated 17.06.2019. 5. Urnish Jewellers Vs. Asst. CIT, Mumbai, ITA 1583/Mum/2019, A.Y. 2012-13, dated 22.05.2019. 6. M/s Motilal Dahyabhai Jhaveri Sons vs. Asst. CIT, Mumbai ITA 3453/Mum/2018 and 1584/Mum/201 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e from the records, it is an admitted fact that at the time of making of such donation SHG PH was having a valid approval granted under the Act by the CBDT. In the backdrop of the aforesaid facts, we have to examine as to whether or not the subsequent cancellation of registration to SHG PH, vide CBDT order dated 15.09.2016, with retrospective effect, can invalidate the assesses claim of deduction under Sec. 35(1)(ii) of the Act. For a fair appreciation of the issue under consideration we would herein cull out the Explanation to Sec. 35(1)(ii) of the Act, which will have a strong bearing on the adjudication of the issue, and reads as under: Explanation.-The deduction, to which the assessee is entitled in respect of any sum paid to a research association, university, college or other institution to which clause (ii) or clause (iii) applies, shall not be denied merely on the ground that, subsequent to the payment of such sum by the assessee, the approval granted to the association, university, college or other institution referred to in clause (ii) or clause (iii) has been withdrawn; Now, in the case before us, we find that the aforesaid research institution i.e SHG PH, as o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... G PH by the assessee before them had vacated the disallowance of the assesses claim for deduction under Sec.35(1)(ii) of the Act, observing as under: 6. We have heard the rival submissions of the parties and gone through the material on record including the cases relied upon by the parties. In the case of Mahesh C. Thakker vs. ACIT (supra), the coordinate Bench has decided the identical issue in favour of the assesse holding as under:- 6. In view of the above submissions, it was claimed that exactly on identical issues the co-ordinate Bench of this Tribunal B Bench Kolkata in the case of DCIT vs. Maco Corporation (India) Pvt. Ltd. in ITA No. 16/Kol/2017 vide order dated 14.03.2018 for AY 2013-14 has considered the issue in regard to very same trust i.e. SGHPH and holds that prior to the date of donation under cancellation of registration has happened and there is absolutely no provision of withdrawal of recognition under section 35(1)(ii) of the Act. Hence, allowed the claim of the assessee by observing in Para 8.1 and 8.5 as under: - 8.1. The brief fact pertaining to SGHPH are as under: - a) SGHPH was recognized vide Gazette Notification dated 28.1.2009 issued by the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... we do not find any reason to take a different view from the view already taken by the coordinate Bench. Hence, respectfully following the decision of the coordinate Bench rendered in the case of Mahesh C. Thakker vs. ACIT (supra), we allow ground No 6 7 of the assessee s appeal and direct the AO to allow the claim of the assessee. In the backdrop of our aforesaid deliberations and the fact that the issue involved in the present appeal is squarely covered by the aforesaid orders of the co-ordinate benches of the Tribunal, we finding no justifiable reason to take a different view, respectfully follow the same. 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) of ₹ 1,75,00,000/-. The Ground of appeal No. 1 and 2 are allowed in terms of our aforesaid observations. 7. The Grounds of appeal No.3 and 4 being general are dismissed as not pressed. 8. Before parting, we may herein deal with a procedural issue that though the hearing of the captioned appeal was concluded on 02.03.2020, however, this order is being pronounced much after the expiry of 90 days from the date of conclusio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r not the passing of this order, beyond a period of ninety days in the case before us was necessitated by any extraordinary circumstances. 9. We find that the aforesaid issue after exhaustive deliberations had been answered by a coordinate bench of the Tribunal viz. ITAT, Mumbai F Bench in DCIT, Central Circle-3(2), Mumbai Vs. JSW Limited Ors. [ITA No. 6264/Mum/18; dated 14/05/2020, wherein it was observed as under: Let us in this light revert to the prevailing situation in the country. On 24th March, 2020, Hon ble Prime Minister of India took the bold step of imposing a nationwide lockdown, for 21 days, to prevent the spread of Covid 19 epidemic, and this lockdown was extended from time to time. The epidemic situation being grave, there was not much of a relaxation in subsequent lockdowns also. In any case, there was unprecedented disruption of judicial wok all over the country. As a matter of fact, it has been such an unprecedented situation, causing disruption in the functioning of judicial machinery, that Hon ble Supreme Court of India, in an unprecedented order in the history of India and vide order dated 6.5.2020 read with order dated 23.3.2020, extended the limi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... w the law is required to interpreted. The interpretation so assigned by us is not only in consonance with the letter and spirit of rule 34(5) but is also a pragmatic approach at a time when a disaster, notified under the Disaster Management Act 2005, is causing unprecedented disruption in the functioning of our justice delivery system. Undoubtedly, in the case of Otters Club Vs DIT [(2017) 392 ITR 244 (Bom)], Hon ble Bombay High Court did not approve an order being passed by the Tribunal beyond a period of 90 days, but then in the present situation Hon ble Bombay High Court itself has, vide judgment dated 15th April 2020, held that directed while calculating the time for disposal of matters made time bound by this Court, the period for which the order dated 26th March 2020 continues to operate shall be added and time shall stand extended accordingly . The extraordinary steps taken suo motu by the Hon ble High Court and Hon ble Supreme Court also indicate that this period of lockdown cannot be treated as an ordinary period during which the normal time limits are to remain in force. In our considered view, even without the words ordinarily , in the light of the above analysis of th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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