TMI Blog1983 (10) TMI 43X X X X Extracts X X X X X X X X Extracts X X X X ..... araj, within Hansot Taluka of Broach District. It should be recalled that by the Finance Act , 1978, s. 35 CCA was enacted and put on the statute book with effect from June 1, 1978. Broadly stated, the scheme of s. 35 CCA, before its amendment as inserted by the aforesaid Finance Act, 1978 was that an assessee was entitled to claim, for the purpose of computation of his income or profits of business, as the case may be, deduction of expenses incurred on account of donation to any institution or association which has as its object the undertaking of any program of rural development, provided both the program and the association or institution were approved . Accordingly, the petitioner-trust had, by its application dated March 1,1980, sought approval of its project of establishing 100 beds' rural hospital in village Utaraj. The Commissioner of Income-tax, Gujarat, had granted approval to the petitioner-trust as well as its programme. This approval was effective for the period commencing from March 7, 1980, to March 31,1981 . The petitioner , therefore, again applied for the renewal of approval by its application dated January 20, 1981, which approval was also granted tothe petitione ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the petitioner to issue certificates to the donors in this behalf. Since the petitioner trust was expecting certain donations before the close of Samvat year, the matter was taken up for urgent hearing" and rule was issued and made returnable today. No reply has been filed on behalf of the respondents since this petition involved merely a question of interpretation of new s. 35CCA. We are of the opinion that this petition must be allowed obviously for the following reasons. Before we briefly describe the scheme incorporated in new s. 35 CCA, it would be profitable to set out the material part of the section which is relevant for our purposes. " 35 CCA. (1) Where an assessee incurs any expenditure by way of payment of any sum (a) to an association or institution which has as its object the undertaking of any programme of rural development, to be used for carrying out any programme of rural development approved by the prescribed authority; or (b) to an association or institution, which has as its object the training of persons for implementing programmes of rural development or (c) to a rural development fund set up and notified by the Central Government in this behalf ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ied by the Central Government. However, the deduction is not absolute but conditional depending upon the requisite certificate to be produced by an assessee. In so far as the deduction claimed for an expenditure by way of payment of any sum to any institution or association for the purpose of utilising it for the implementation of approved rural development programme is concerned, the certificate must be to the effect that the rural development programme was already approved before March, 1983 , and if the payment is made after 28th February, 1983, it must be for the purposes of the capital cost of construction Of all building or structure or laying of a road or boring of a well or tube-well or installation of any plant or machinery, the work in respect of which must have commenced before March 1, 1983. Such a certificate is to be obtained from the institution or association which has as its object the undertaking of any programme of rural development. But before the institution or association concerned can issue such a certificate, it must have been authorised in that behalf by the prescribed authority. It is in the context of this new scheme contained in s. 35 CCA that the petiti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... w to be accorded to the institution for the purpose of issuing a certificate under new s. 35 CCA operate in different fields altogether. The approval which was envisaged to the programme as well as to the institution under old s. 35 CCA was for the purpose of enabling the assessee to claim deduction on account of any expenses made by way of payment to such an institution or association. The authorisation which has now been envisaged under s. 35 CCA is to empower the institution or the association to issue certificate so as to enable the assessee concerned to claim deduction on account of such expenses. The learned counsel for the Revenue, therefore, attempted to persuade us that the prescribed authority must examine and decide whether the two conditions of the certificate as required by sub-s. (2) of s. 35 CCA are satisfied by the institution or association concerned before it can be granted the authorisation. We are afraid that we cannot agree with the learned counsel for the simple reason that the conditions of the certificate which are for the purpose of enabling an assessee to claim deduction cannot be considered to be conditions precedent for grant of authorisation. We are, th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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