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06-06-2019, J.M. Enviro Studies, Section 35(1)(ii), 35(1), 35, Tribunal Jaipur

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1 week 1 day ago #9697 by amit
Section - 35(1)(ii), 35(1), 35, 12A, 21, 12AA
Order Date - 06-06-2019
Favouring - Assessee
Court - Tribunal Jaipur
Appellant - ACIT
Respondent - J.M. Enviro Studies Pvt. Ltd.
Justice - RAMESH C SHARMA, AM & VIJAY PAL RAO, JM
Citation - 619Taxpundit113
Appeal No. - ITA No. 1229/JP/2018
Asstt. Year - 2014-15

Order

PER : R.C. SHARMA

This appeal by the revenue is directed against the order dated 31/08/2018 of ld. CIT(A)-I, Jaipur for the A.Y. 2014-15 in the matter of order passed U/s 143(3) of the Income Tax Act, 1961 (in short, the Act). The grounds taken by the Revenue reads as under:

“(i) Whether in the facts and the circumstances of the case, the ld. CIT(A) was justified in allowing the deduction U/s 35(1)(iii) of donation made to Rs.87,50,000/- to M/s School of Human Genetics & Population Health, Kolkata when the said donation was bogus and the whole transaction a SHAM transaction.

(ii) Whether in the facts and in the circumstances of the case and in law, the ld. CIT(A) was justified in deleting the addition of Rs.7,00,000/- treated as undisclosed expenditure for acquiring accommodation entry in the name of donation.”

2. Rival contentions have been heard and record perused. In this case, the A.O. has declined the assessee’s claim of deduction U/s 35(1)(iii) of the Act inrespect of donation of Rs. 50,00,000/- paid to M/s School of Human Genetics & Population Health, Kolkata, an institution engaged in scientific research and notified by the Central Board of Direct Taxes vide notification No. 4/2010 dated 28/01/2010 The A.O. also made addition of Rs. 7.00 lacs treated as undisclosed expenditure for acquiring accommodation entry in the name of donation to M/s School of Human Genetics & Population Health, Kolkata.

3. By the impugned order, the ld. CIT(A) deleted the addition by following the order of the Coordinate Bench dated 05/07/2018.

4. At the outset, the ld AR of the assessee placed on record the order of the Coordinate Bench wherein under similar facts and circumstances, disallowance of donation given to M/s School of Human Genetics & Population Health, Kolkata was allowed by the Tribunal after having a detailed observation in its order dated 05/7/2018.

5. We have considered the rival contentions and carefully gone through the orders of the authorities below as well as order of the Tribunal dated 05/07/2018 wherein under similar facts and circumstances, donation given to M/s School of Human Genetics & Population Health, Kolkata was allowed by the Tribunal after having the following observation:

“7. The Bench have heard both the sides on the issues raised in appeal, perused the material available on the record and also considered the case laws relied upon. The assessee is a private limited company engaged in manufacturing of rolled steel products. Return of income was filed electronically on 26/09/2014. The assessee has claimed weighted deduction U/s 35(1) (ii) of the Act. The assessee had made donation to an institute engaged in Scientific Research. The authorities below has not allowed the deduction. The assessee had made donation of Rs.1,00,00,000/- to School of Human Genetics & Population Health, an institute engaged in scientific research and notified by the Central Board of Direct Taxes in terms of Section 35(1)(ii) of the Act vide notification No.4/2010 dated 28/01/2010. The institute, whom the donation was made was in existence and notified during the F.Y. 2013-14 when the assessee has made donations. The CBDT has rescinded notification on 15/9/2016. Although it has been made retrospective effect from 01/4/2007. This institute was validly recognized by the CBDT on the date of donation made by the assessee. The approval granted to the institute was very much in force at the time of donation made by the assessee. The assessee had no reason to disbelieve the operation of approval and notification of the institute. In such a situation, the deduction claimed by the assessee is justified. The subsequent notification by the CBDT rescinding the approval retrospectively shall not or should not affect the claim of the assessee. There was no information with the assessee regarding non-genuinity or not observing the standard fixed by the CBDT for making eligible itself for deduction U/s 35 of the Act. The assessee's act was in a bonafide manner. It is well settled proposition of law that no additional tax burden can be put on the assessee by making retrospective operations of certain notifications or withdrawal of notifications. In the case of Hitendra Vishnu Thakur Vs. State of Maharastra (supra), the Hon’ble Supreme Court has held that a procedural statute the result would be to create new disabilities or obligations, or to impose new duties in respect of transactions already accomplished. Further, a statute which not only changes the procedure but also creates new rights and liabilities shall be continued to be prospection in oper tion, unless otherwise provided, either expressly or by necessary implications. Similarly in the case of CIT(Central-1), Delhi Vs Vatika Township Pvt. Ltd. (supra), the Hon'ble Supreme Court has held that the beneficial amendment which effects the public generally and where to confer such benefit appears to have been the legislators object, then the presumption would be that such a legislation, giving it a purposive construction, would warrant it to be given retrospective effect. Thus the retrospective effect can be given only for the beneficial amendments but not to put the additional burden that too on third party. Further the explanation to Section 35(1) of the Act also provides that deduction to 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 association, university, college or other institution, referred to in clause (ii) or clause(iii) has been withdrawn. The assessee has made donation i.e. on 13/01/2014, the institute was having a valid approval from the appropriate authorities and the assessee's claim cannot be denied. The

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