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Income Tax Appellate Tribunal, “SMC” BENCH, AHMEDABAD
Before: SHRI AMARJIT SINGH&
The instant appeal at the instance of the assessee is directed against the order dated 08.03.2018 passed by the Commissioner of Income Tax (Appeals) – 5, Ahmedabad arising out of the order dated 29.12.2016 passed by the ITO, Ward-5(3)(1), Ahmedabad under section 143(3) r.w.s. 147 of the Income Tax Act, 1961 (hereinafter referred as to ‘the Act’) for Assessment Year 2014-15.
Bipin Prabhudas Shah-HUF vs. ITO Asst.Year –2014-15 - 2 - 2. In this particular case the assessee has challenged the reassessment under section 143(3) r.w.s. 147 of the Act and further that the disallowance of claim under section 35(1)(ii) of the Act to the tune of Rs. 3,50,000/-.
Heard the parties, perused the relevant materials available on record.
The brief facts leading to the case is this that the assessee filed its return of income of Rs. 8,87,860/- on 29.11.2014 which was processed on 19.12.2014. Subsequently information was received on the office of the DDIT(Inv.), Ahmedabad that a survey action was carried out at Kolkata Directorate in the following institutions on the issue of facilitating bogus donations for claiming deduction under section 35(1)(ii) of the Act.
(i) School of Human Genetics and Population Health (SGH & PH) (ii) Herbicure Health Care Bio Herbal Research Foundation (HHBRF) (iii) Matrivana Institute of Experimental Research & Education (MEIR &E)
5. It was found during the survey action that the donors/beneficiaries in connivance of the three institutions and with the active help of certain brokers/entry providers/bogus billers were indulged in bogus donation syndicate and the donations were returned to the donors in lieu of commission. Fact remains that during the F.Y. 2013-14 relevant to A.Y. 2014-15 the assessee was donated Rs. 2,00,000/- to School of Human Genetics and Population Health (SHG&PH) and claimed deduction of Rs. 3,50,000/- under section 35(1)(ii) of the Act in the return of income which Bipin Prabhudas Shah-HUF vs. ITO Asst.Year –2014-15 - 3 - was disallowed by the Ld. AO, on the count that the assessee failed to furnish the certificate issued by the prescribed authority to School of Human Genetics and Population Health (SHG&PH) Kolkata granting approval for exemption of tax in respect of donations made to it.
It is the further case of the Revenue that the approval of the concerned institution was withdrawn by a notification No. 82/2016 dated 15.09.2016. The case of the assessee is this that the assessee had donated to the impugned institution during the subsistence of such approval and, therefore, disallowance under section 35(1)(ii) for A.Y. 2014-15 is not permissible in eye of law. It was further argued by the Ld. AR at the time of the hearing of the instant appeal that the issue is squarely covered by several judgments passed by the Hon’ble Tribunal in favour of the assessee. Copy of the said judgments have also been submitted before us.
6. We have also carefully considered the judgment passed by the Ld. Tribunal in for A.Y. 2014-15, the relevant portion dealing with the isue is as follows:-
“5. We have duly considered rival contentions and gone through the record carefully. In the case of S.G. Vat care P.Ltd. (Supra), the Tribunal has recorded the following finding: 2. In the first ground of appeal
, the grievance of the assessee is that the ld.CIT(A) has erred in confirming addition of Rs. 8,75,000/- on account of alleged bogus donation to Herbicure Healthcare Bio- Herbal Research Foundation.
3. Brief facts of the case are that the assessee has filed return of income on 20.11.2014 declaring total income at Rs.4,47,910/-. On scrutiny of the accounts, it revealed that the assessee-company has given donation to Herbicure Healthcare Bio-Herbal Research Foundation, Calcutta. A survey action was carried out at the premises Bipin Prabhudas Shah-HUF vs. ITO Asst.Year –2014-15 - 4 - of the donee wherein it revealed to the Revenue that this concern was misusing the benefit of notification issued by the Income Tax Department. It has been getting donations from various sources, and after deducting certain amount of commission, these donations were refunded in cash. On the basis of that survey report registration granted to its favour was cancelled. On the basis of the outcome of that survey report, the ld.AO construed the donation given by the assessee as bogus. Appeal to the ld.CIT(A) did not bring any relief to the assessee.
4. Before us, the ld.counsel for the assessee contended that donations were given on 25.3.2014. At that point of time, donee was notified as eligible institution and fall within the statutory eligibility criterion. Certificate for receiving donation was cancelled on 5.9.2016. There is no mechanism with the assessee to verify whether such donee was a genuine institute or not, which can avail donation from the society.
The ld.DR, on the other hand, contended that in the investigation it came to know about bogus affairs conducted by the donee. Hence, these donations are rightly been treated as bogus, and addition is rightly made.
6. We have duly considered rival contentions and gone through the record carefully. The AO is harping upon an information supplied by the survey tem of Calcutta. He has not specifically recorded statement of representatives of the donee. He has not brought on record a specific evidence wherein donee has deposed that donations received from the assessee was paid back in cash after deducting commission. On the basis of a general information collected from the donee, the donation made by the assessee cannot be doubted. Neither representatives of the donee have been put to cross-examination, nor any specific reply deposing that such donation was not received, or if received the same was repaid in cash, has been brought on record. In the absence of such circumstances, donation given by the assessee to the donee, on which the assessee no mechanism to check the veracity, can be doubted, more particularly, when certificate to obtain donation has been cancelled after two years of the payment of donation. It is fact which has been unearthed subsequent to the donations. Therefore, there cannot be any disallowance on this issue. We allow this ground.”
There is no disparity on the facts. On the basis same survey report, the genuineness of the donation has been doubted in the case of the assessee
Bipin Prabhudas Shah-HUF vs. ITO Asst.Year –2014-15 - 5 - also. Therefore, the issue in dispute is squarely covered in favour of the assessee. Respectfully following the order of the ITAT in the case of S.G. Vat care P.Ltd., We do not find any merit in the appeal of the Revenue. It is dismissed. In the result, appeal of the Revenue is dismissed.” 7.
From the above judgments it appears that the case is squarely covered in favour of the assessee and in the absence of any changed facts and circumstances of the case we find it fit to allow the appeal preferred by the assessee. Thus, addition is hereby deleted.