ESTATE OF VANDRAVAN P SHAH,MUMBAI vs. ASSISTANT COMMISSIONER OF INCOME TAX, CIRCLE 19(3), MUMBAI

ORDER PER OM PRAKASH KANT, AM

The captioned appeals are directed against separate orders passed by the Ld. Commissioner of Income-tax (Appeals) – National Faceless Appeal Centre, Delhi [in short ‘the Ld. CIT(A)’] for assessment years 2011-12, 2012-13 and 2017-18 respectively.

2. In these appeals, the issue on merit relates to denial of deduction u/s 35AC of the Income-tax Act, 1961 (in short ‘the Act’). In assessment years 2011-12 and 2012-13, the validity of the Estate of Vandravan P Shah Estate of Vandravan P Shah 5402 & 5403/MUM/2024 reopening of the assessment as well as validity of the reassessment reopening of the assessment as well as validity of the reopening of the assessment as well as validity of the order issued using the PAN and using the PAN and name of the deceased name of the deceased has challenged. As issue . As issue-in-dispute being common in these appeals, dispute being common in these appeals, same were heard together and disposed off by way of this me were heard together and disposed off by way of this me were heard together and disposed off by way of this consolidated order for the sake of convenience. consolidated order for the sake of convenience.

3. Firstly, we take up the appeal for assessment year 2011 Firstly, we take up the appeal for assessment year 2011 Firstly, we take up the appeal for assessment year 2011-12 in ITA No. 5401/Mum/2024. The grounds raised in appeal are ITA No. 5401/Mum/2024. The grounds raised in appeal are ITA No. 5401/Mum/2024. The grounds raised in appeal are reproduced as under: reproduced as under:

1. On the facts and circumstances of the case and in law, the Ld. facts and circumstances of the case and in law, the Ld. facts and circumstances of the case and in law, the Ld. CIT(A) grossly erred in approving the validity of the re CIT(A) grossly erred in approving the validity of the re CIT(A) grossly erred in approving the validity of the re-opened assessment order overlooking the following fats and legal issues: assessment order overlooking the following fats and legal issues: assessment order overlooking the following fats and legal issues: - The reasons recorded clearly indicate that the AO did not The reasons recorded clearly indicate that the AO did not The reasons recorded clearly indicate that the AO did not possess the documentary evidence as also, the statement recorded the documentary evidence as also, the statement recorded the documentary evidence as also, the statement recorded on the basis of which the genuineness of contribution made was on the basis of which the genuineness of contribution made was on the basis of which the genuineness of contribution made was disbelieve and the re disbelieve and the re-opening has been done entirely based on the opening has been done entirely based on the information received from the investigation wing, resulting in re information received from the investigation wing, resulting in re information received from the investigation wing, resulting in re- opening of the assessment entirely based on the borrowed ing of the assessment entirely based on the borrowed ing of the assessment entirely based on the borrowed satisfaction and total lack of application mind by the assessing satisfaction and total lack of application mind by the assessing satisfaction and total lack of application mind by the assessing officer. - The initiation of re The initiation of re-assessment proceeding under section 147 of assessment proceeding under section 147 of the Act vide notice dated 28.03.2018 issued u/s 148 of the Act the Act vide notice dated 28.03.2018 issued u/s 148 of the Act the Act vide notice dated 28.03.2018 issued u/s 148 of the Act is contrary to the law and in violation to the first proviso to section contrary to the law and in violation to the first proviso to section contrary to the law and in violation to the first proviso to section 147 of the Act in as much as the reason recorded do not indicate 147 of the Act in as much as the reason recorded do not indicate 147 of the Act in as much as the reason recorded do not indicate any failure on the part of the assessee to disclose truly and fully any failure on the part of the assessee to disclose truly and fully any failure on the part of the assessee to disclose truly and fully all the material facts necessary for assessment. all the material facts necessary for assessment.

2. That, the Ld. CIT(A), erred in not appreciating the fact that the That, the Ld. CIT(A), erred in not appreciating the fact that the That, the Ld. CIT(A), erred in not appreciating the fact that the re-assessment order passed by the Ld. AO is bad in law and the assessment order passed by the Ld. AO is bad in law and the assessment order passed by the Ld. AO is bad in law and the same is in violation to section 159 of the Act same is in violation to section 159 of the Act - Notice u/s 148 of the Act was issued on the PAN of the deceased. Notice u/s 148 of the Act was issued on the PAN of the deceased. Notice u/s 148 of the Act was issued on the PAN of the deceased. The proceeding was completed and order was passed on the PAN ng was completed and order was passed on the PAN ng was completed and order was passed on the PAN of the deceased, disregarding the fact that the deceased has of the deceased, disregarding the fact that the deceased has of the deceased, disregarding the fact that the deceased has executed executed executed a separate a separate a separate will and there will will and and there there are no legal heir; are no legal heir; are no legal heir; further the estate estate has separately assessed AAAAE6452D. AAAAE6452D.

Estate of Vandravan P Shah Estate of Vandravan P Shah 5402 & 5403/MUM/2024

3. On the facts and circumstances of On the facts and circumstances of the case and in law, the Ld. the case and in law, the Ld. CIT(A) erred in not appreciating the fact that the disallowance u/s CIT(A) erred in not appreciating the fact that the disallowance u/s CIT(A) erred in not appreciating the fact that the disallowance u/s 35AC of the Act was made by the Ld. AO by relying on the 35AC of the Act was made by the Ld. AO by relying on the 35AC of the Act was made by the Ld. AO by relying on the material with which the appellant was never confronted to explain material with which the appellant was never confronted to explain material with which the appellant was never confronted to explain and revert the allegation made again and revert the allegation made against it.

4. On the facts and circumstances of the case and in law, the Ld. On the facts and circumstances of the case and in law, the Ld. On the facts and circumstances of the case and in law, the Ld. CIT(A) erred in approving the disallowance made by the Ld. AO of CIT(A) erred in approving the disallowance made by the Ld. AO of CIT(A) erred in approving the disallowance made by the Ld. AO of Rs.50,00,000/ Rs.50,00,000/- claimed u/s 35AC of the Act without appreciating claimed u/s 35AC of the Act without appreciating the following: - The 'Navjeevan Charitable Trust has b The 'Navjeevan Charitable Trust has been notified u/s 35AC vide een notified u/s 35AC vide notification No. SO notification No. SO 121(E) dated 12.01.2009. - The appellant had duly submitted donation receipt, The appellant had duly submitted donation receipt, The appellant had duly submitted donation receipt, bank statement, Form Form 58 evidencing the trust registration before the evidencing the trust registration before the assessing officer and appellate assessing officer and appellate authority. 4. The return of in The return of income for the assessment year under come for the assessment year under consideration was filed by the assessee was filed by the assessee on 10.09.2011 declaring on 10.09.2011 declaring total income of ₹2,92,44,086/ 2,92,44,086/-. The assessment under section . The assessment under section 143(3) of the Income 143(3) of the Income-tax Act, 1961 (“the Act”) was completed on tax Act, 1961 (“the Act”) was completed on 12.03.2014 determining total income at ₹2,93,67,810/ 12.03.2014 determining total income at 2,93,67,810/-.

4.1 Subsequently, information was received from the Deputy Subsequently, information was received from the Deputy Subsequently, information was received from the Deputy Commissioner of Income Commissioner of Income-tax, Central Circle–2(1), Mumbai, that a 2(1), Mumbai, that a search under section 132 of the Act had been conducted in the case search under section 132 of the Act had been conducted in the case search under section 132 of the Act had been conducted in the case of M/s Navjeevan Charitable Trust M/s Navjeevan Charitable Trust. The search revealed that the . The search revealed that the Trust was engaged in providing accommodation entries by way of Trust was engaged in providing accommodation entries by way of Trust was engaged in providing accommodation entries by way of bogus donations eligible for ded bogus donations eligible for deduction under section 35AC of the uction under section 35AC of the Act. The modus operandi involved receipt of donations by cheque, Act. The modus operandi involved receipt of donations by cheque, Act. The modus operandi involved receipt of donations by cheque, followed by return of cash to the donors after deducting followed by return of cash to the donors after deducting followed by return of cash to the donors after deducting commission. The assessee, Shri Vandravan P. Shah (PAN: commission. The assessee, Shri Vandravan P. Shah (PAN: commission. The assessee, Shri Vandravan P. Shah (PAN: AAPRS9053J), was identified as one of the bene AAPRS9053J), was identified as one of the beneficiaries, having ficiaries, having

Estate of Vandravan P Shah Estate of Vandravan P Shah 5402 & 5403/MUM/2024 allegedly made a donation of allegedly made a donation of ₹50,00,000/- to the said Trust and to the said Trust and claimed deduction under section 35AC. claimed deduction under section 35AC.

4.2 The search assessment u/s 153C of the Act was completed in The search assessment u/s 153C of the Act was completed in The search assessment u/s 153C of the Act was completed in the case of M/s Navjeevan Charitable Trust by the DCIT, Central the case of M/s Navjeevan Charitable Trust by the DCIT, Central the case of M/s Navjeevan Charitable Trust by the DCIT, Central Circle, Mumbai, whereas he gave finding that donors were acting in umbai, whereas he gave finding that donors were acting in umbai, whereas he gave finding that donors were acting in connivance with the trust to receive back donation in cash. The connivance with the trust to receive back donation in cash. The connivance with the trust to receive back donation in cash. The donors gave cheque payment to the trust to gave deduction u/s donors gave cheque payment to the trust to gave deduction u/s donors gave cheque payment to the trust to gave deduction u/s 35AC of the Act but the donors also received back cash from the 35AC of the Act but the donors also received back cash from the 35AC of the Act but the donors also received back cash from the trust against the donation after deducting small commission charge ainst the donation after deducting small commission charge ainst the donation after deducting small commission charge of the trust to facilitate this subterfuge transaction. of the trust to facilitate this subterfuge transaction.

4.3 On the basis of the above information, the Assessing Officer On the basis of the above information, the Assessing Officer On the basis of the above information, the Assessing Officer recorded reasons to believe that income escaped assessment and recorded reasons to believe that income escaped assessment and recorded reasons to believe that income escaped assessment and accordingly, he issued notice u/s 148 of the Act on 28.03.2018. he issued notice u/s 148 of the Act on 28.03.2018. he issued notice u/s 148 of the Act on 28.03.2018.

4.4 In response to the notice u/s 148 of the Act, the Authorized In response to the notice u/s 148 of the Act, the Authorized In response to the notice u/s 148 of the Act, the Authorized Representative of the assessee M/s Representative of the assessee M/s N.P. Patwa & Company filed the Company filed the details comprising of profit and loss account, balance sheet, details comprising of profit and loss account, balance sheet, details comprising of profit and loss account, balance sheet, computation of income and original return of income for the computation of income and original return of income for the computation of income and original return of income for the assessment year 2011 assessment year 2011-12. The Authorized Representative (AR) of 12. The Authorized Representative (AR) of the assessee requested to treat the original return of income as the assessee requested to treat the original return the assessee requested to treat the original return return filed by the assessee in response to return filed u/s 148 of return filed by the assessee in response to return filed u/s 148 of return filed by the assessee in response to return filed u/s 148 of the Act. Subsequently, vide letter dated 11.04.2018, the AR the Act. Subsequently, vide letter dated 11.04.2018, the AR the Act. Subsequently, vide letter dated 11.04.2018, the AR intimated that the assessee died on 06.02.2013 and from intimated that the assessee died on 06.02.2013 intimated that the assessee died on 06.02.2013 assessment year 2013 assessment year 2013-14, the assessee was represented in th 14, the assessee was represented in the Estate of Vandravan P Shah Estate of Vandravan P Shah 5402 & 5403/MUM/2024 name of M/s Estate name of M/s Estate of Vandravan P. Shah, through the executor through the executor having PAN No. AAAE6452D. having PAN No. AAAE6452D.

4.5 During reassessment proceedings, verification under section During reassessment proceedings, verification under section During reassessment proceedings, verification under section 133(6) was attempted in respect of the donee Trust; however, the 133(6) was attempted in respect of the donee Trust; however, the 133(6) was attempted in respect of the donee Trust; however, the notice was returned unserved with th notice was returned unserved with the remark “Trust left”. e remark “Trust left”. Accordingly, the assessee was required to discharge its onus of Accordingly, the assessee was required to discharge its onus of Accordingly, the assessee was required to discharge its onus of establishing the truth of claim of deduction u/s 35AC paid to M/s establishing the truth of claim of deduction u/s 35AC paid to M/s establishing the truth of claim of deduction u/s 35AC paid to M/s Navjeevan Charitable Trust but the Navjeevan Charitable Trust but the assessee failed to substantiate assessee failed to substantiate the genuineness of the donation. Con the genuineness of the donation. Consequently, the Assessing sequently, the Assessing Officer disallowed the claim of deduction under section 35AC and Officer disallowed the claim of deduction under section 35AC and Officer disallowed the claim of deduction under section 35AC and completed reassessment under section 143(3) read with section 147 completed reassessment under section 143(3) read with section 147 completed reassessment under section 143(3) read with section 147 on 20.12.2018 in the name of the deceased assessee through legal on 20.12.2018 in the name of the deceased assessee through legal on 20.12.2018 in the name of the deceased assessee through legal representative, retaining the PAN o representative, retaining the PAN of the deceased. f the deceased. The Assessing Officer declined the deduction u/s 35AC of the Act observing as Officer declined the deduction u/s 35AC of the Act observing as Officer declined the deduction u/s 35AC of the Act observing as under:

“5. The case of M/s Navjeevan Charitable Trust was centralized with 5. The case of M/s Navjeevan Charitable Trust was centralized with 5. The case of M/s Navjeevan Charitable Trust was centralized with the DCIT- Central Circle Central Circle -2(1), Mumbai. The trusts recognition granted 2(1), Mumbai. The trusts recognition granted by the National Committee has been withdrawn vide Notification by the National Committee has been withdrawn vide Notification by the National Committee has been withdrawn vide Notification dated 30.11.2016. The assessee Trust's registration was dated 30.11.2016. The assessee Trust's registration was dated 30.11.2016. The assessee Trust's registration was also cancelled vide order u/s 12AA(3) of the I.T. Act dt. 20.12.2016 by the cancelled vide order u/s 12AA(3) of the I.T. Act dt. 20.12.2016 by the cancelled vide order u/s 12AA(3) of the I.T. Act dt. 20.12.2016 by the Pr. CIT(Central) Pr. CIT(Central)-1, Mumbai. During assessment proceedings in the 1, Mumbai. During assessment proceedings in the case of assessee trust it was noticed from the facts gathered that case of assessee trust it was noticed from the facts gathered that case of assessee trust it was noticed from the facts gathered that after receipt of donation, trust booked bogus p after receipt of donation, trust booked bogus purchases through urchases through accommodation entry providers. The entry providers after receipt of accommodation entry providers. The entry providers after receipt of accommodation entry providers. The entry providers after receipt of cheque payment from trust, encashes the cheque and returns back cheque payment from trust, encashes the cheque and returns back cheque payment from trust, encashes the cheque and returns back cash to the trust/trustee after retaining commission on the cash to the trust/trustee after retaining commission on the cash to the trust/trustee after retaining commission on the accommodation entries. Few entry providers who accommodation entries. Few entry providers who were covered u/s were covered u/s 133A, have admitted of providing accommodation as donation to M/s 133A, have admitted of providing accommodation as donation to M/s 133A, have admitted of providing accommodation as donation to M/s Navjeevan Charitable Trust for commission. The assessment of entry Navjeevan Charitable Trust for commission. The assessment of entry Navjeevan Charitable Trust for commission. The assessment of entry providers were completed u/s 153C and commission income on the providers were completed u/s 153C and commission income on the providers were completed u/s 153C and commission income on the accommodation transaction was taxed. Few do accommodation transaction was taxed. Few donors covered u/s nors covered u/s Estate of Vandravan P Shah Estate of Vandravan P Shah 5402 & 5403/MUM/2024 133A have admitted and offered the amount of donation received 133A have admitted and offered the amount of donation received 133A have admitted and offered the amount of donation received back for taxation or have revised the return of income. It was taxation or have revised the return of income. It was taxation or have revised the return of income. It was concluded that the assessee Campatrust was indulged in bogus concluded that the assessee Campatrust was indulged in bogus concluded that the assessee Campatrust was indulged in bogus activity and not as per its objectives for which tru activity and not as per its objectives for which trust was formed and st was formed and commission income on the donation amount was taxed as commission income on the donation amount was taxed as commission income on the donation amount was taxed as undisclosed income and treating the trust as AOP. undisclosed income and treating the trust as AOP.

6. In view of the above facts, it was seen that an amount of Rs.

6. In view of the above facts, it was seen that an amount of Rs.

6. In view of the above facts, it was seen that an amount of Rs. 50,00,000/- debited to assessee's profit and loss accounts u/s 35AC debited to assessee's profit and loss accounts u/s 35AC debited to assessee's profit and loss accounts u/s 35AC is disallowed and added back to the total income of the assessee. s disallowed and added back to the total income of the assessee. s disallowed and added back to the total income of the assessee. Penalty proceedings are initiated u/s 271(1)(c) of the I. T. Act for Penalty proceedings are initiated u/s 271(1)(c) of the I. T. Act for Penalty proceedings are initiated u/s 271(1)(c) of the I. T. Act for furnishing inaccurate particulars furnishing inaccurate particulars of income.” 4.6 The Assessing Officer passed the order u/s 143(3) r.w.s. 147 of The Assessing Officer passed the order u/s 143(3) r.w.s. 147 of The Assessing Officer passed the order u/s 143(3) r.w.s. 147 of on 20.12.2018 under the name as the legal heir of legal heir of late sh the Act on 20.12.2018 under the name as the Vandravan P. Shah Vandravan P. Shah, having PAN No. AARPSS9053J AARPSS9053J of the deceased.

4.7 The appeal was filed against the assessment order was filed against the assessment order was filed against the assessment order before the Ld. CIT(A) in prescribed form No. 35 where the name of the Ld. CIT(A) in prescribed form No. 35 where the name of the Ld. CIT(A) in prescribed form No. 35 where the name of the appellant was, however, , however, mentioned as Estate of Vandravan Estate of Vandravan Premchand Shah having PAN No. AAAE6452D. Premchand Shah having PAN No. AAAE6452D.

5. Before the learned CIT(A), the assessee raised grounds both on Before the learned CIT(A), the assessee raised grounds both on Before the learned CIT(A), the assessee raised grounds both on the merits of the addition and on the validity of the reassessment, the merits of the addition and on the validity of the reassessment, the merits of the addition and on the validity of the reassessment, specifically contending that the specifically contending that the reopening was based on a mere reopening was based on a mere change of opinion. During the appellate proceedings, the assessee change of opinion. During the appellate proceedings, the assessee change of opinion. During the appellate proceedings, the assessee also made submission challenging the very assumption of also made submission challenging the very assumption of also made submission challenging the very assumption of jurisdiction on the ground that the reassessment proceedings had jurisdiction on the ground that the reassessment proceedings had jurisdiction on the ground that the reassessment proceedings had been initiated in the name of a deceas been initiated in the name of a deceased person.

Estate of Vandravan P Shah Estate of Vandravan P Shah 5402 & 5403/MUM/2024 5.1 It was submitted that the notices issued under sections 143(2) It was submitted that the notices issued under sections 143(2) It was submitted that the notices issued under sections 143(2) and 142(1) of the Act were addressed to the PAN of late Shri and 142(1) of the Act were addressed to the PAN of late Shri and 142(1) of the Act were addressed to the PAN of late Shri Vandravan P. Shah, who had expired, and the assessment was Vandravan P. Shah, who had expired, and the assessment was Vandravan P. Shah, who had expired, and the assessment was ultimately framed in the name of the legal heir ultimately framed in the name of the legal heir of Shri Vandravan P. of Shri Vandravan P. Shah . It was contended that, since Assessment Year 2013 . It was contended that, since Assessment Year 2013 . It was contended that, since Assessment Year 2013–14, the assessee had been represented by the “Estate of Late Shri assessee had been represented by the “Estate of Late Shri assessee had been represented by the “Estate of Late Shri Vandravan Vandravan Vandravan P. P. P. Shah”, Shah”, Shah”, having having having a a a separate separate separate PAN, PAN, PAN, (PAN No. AAAAE6454D) and therefore the assessment, if at all, could and therefore the assessment, if at all, could have and therefore the assessment, if at all, could been validly completed only in the name and PAN of the estate and been validly completed only in the name and PAN of the estate and been validly completed only in the name and PAN of the estate and not in the name of the deceased individual. not in the name of the deceased individual.

5.2 The assessee further submitted that under the will of the The assessee further submitted that under the will of the The assessee further submitted that under the will of the deceased, executors were appointed to administer the estate, deceased, executors were appointed to administer the estate, deceased, executors were appointed to administer the estate, discharge the liabilities of the deceased, realise receivables, and pay bilities of the deceased, realise receivables, and pay bilities of the deceased, realise receivables, and pay taxes due to the Government. It was pointed out that probate had taxes due to the Government. It was pointed out that probate had taxes due to the Government. It was pointed out that probate had been granted by the Hon’ble Jurisdictional High Court vide order been granted by the Hon’ble Jurisdictional High Court vide order been granted by the Hon’ble Jurisdictional High Court vide order dated 30.10.2013, whereby the administration of the properties and dated 30.10.2013, whereby the administration of the properties and dated 30.10.2013, whereby the administration of the properties and credits of the deceased was entrusted to Shri Dilip Dhirajlal Shah, its of the deceased was entrusted to Shri Dilip Dhirajlal Shah, its of the deceased was entrusted to Shri Dilip Dhirajlal Shah, one of the executors named in the will. In this factual background, one of the executors named in the will. In this factual background, one of the executors named in the will. In this factual background, it was contended that the issuance of notice under section 148 of it was contended that the issuance of notice under section 148 of it was contended that the issuance of notice under section 148 of the Act in the name and PAN of the deceased was legally untenable. the Act in the name and PAN of the deceased was legally un the Act in the name and PAN of the deceased was legally un 5.3 According to the assessee, proceedings initiated against a dead According to the assessee, proceedings initiated against a dead According to the assessee, proceedings initiated against a dead person are void ab initio, and no valid reassessment could be person are void ab initio, and no valid reassessment could be person are void ab initio, and no valid reassessment could be founded on such notice. It was specifically urged that the Assessing founded on such notice. It was specifically urged that the Assessing founded on such notice. It was specifically urged that the Assessing Officer was aware of the death of the assessee, Officer was aware of the death of the assessee, yet proceeded to yet proceeded to Estate of Vandravan P Shah Estate of Vandravan P Shah 5402 & 5403/MUM/2024 issue notice under section 148 in the name of the deceased through issue notice under section 148 in the name of the deceased through issue notice under section 148 in the name of the deceased through legal heir. Reliance was placed on various judicial precedents to legal heir. Reliance was placed on various judicial precedents to legal heir. Reliance was placed on various judicial precedents to contend that a notice issued under section 148 to a deceased contend that a notice issued under section 148 to a deceased contend that a notice issued under section 148 to a deceased person is invalid in law and vitiates the e person is invalid in law and vitiates the entire reassessment ntire reassessment proceedings.

5.4 The assessee also challenged the reopening on the ground that The assessee also challenged the reopening on the ground that The assessee also challenged the reopening on the ground that the reassessment was initiated after the expiry of four years from the reassessment was initiated after the expiry of four years from the reassessment was initiated after the expiry of four years from the end of the relevant assessment year, and there was no failure the end of the relevant assessment year, and there was no failure the end of the relevant assessment year, and there was no failure on the part of the assess on the part of the assessee to disclose fully and truly all material ee to disclose fully and truly all material facts necessary for the assessment. It was contended that the facts necessary for the assessment. It was contended that the facts necessary for the assessment. It was contended that the reasons recorded by the Assessing Officer did not establish any reasons recorded by the Assessing Officer did not establish any reasons recorded by the Assessing Officer did not establish any such failure, which is a mandatory jurisdictional precondition for such failure, which is a mandatory jurisdictional precondition for such failure, which is a mandatory jurisdictional precondition for reopening beyond four years. The reasons were further assailed on ur years. The reasons were further assailed on ur years. The reasons were further assailed on the ground of non-application of mind. application of mind.

5.5 The learned CIT(A) condoned the delay in filing the appeal. The learned CIT(A) condoned the delay in filing the appeal. The learned CIT(A) condoned the delay in filing the appeal. However, while upholding the addition on merits, the learned CIT(A) However, while upholding the addition on merits, the learned CIT(A) However, while upholding the addition on merits, the learned CIT(A) rejected the objections raised against rejected the objections raised against the initiation of reassessment the initiation of reassessment proceedings under section 148 of the Act and sustained the proceedings under section 148 of the Act and sustained the proceedings under section 148 of the Act and sustained the reassessment as well as the addition made therein. reassessment as well as the addition made therein.

Estate of Vandravan P Shah Estate of Vandravan P Shah 5402 & 5403/MUM/2024

7.1 The assessee has also raised Ground No The assessee has also raised Ground No. 1 challenging the . 1 challenging the validity of the reassessment on the additional ground that there was validity of the reassessment on the additional ground that there was validity of the reassessment on the additional ground that there was no failure on its part to disclose fully and truly all material facts no failure on its part to disclose fully and truly all material facts no failure on its part to disclose fully and truly all material facts necessary for the assessment. It is contended that the jurisdictional necessary for the assessment. It is contended that the jurisdictional necessary for the assessment. It is contended that the jurisdictional conditions stipulated in th conditions stipulated in the proviso to section 147 of the Act were e proviso to section 147 of the Act were not satisfied. The assessee also challenged the merit of the addition The assessee also challenged the merit of the addition The assessee also challenged the merit of the addition in Ground No. 3 and 4 of the appeal. in Ground No. 3 and 4 of the appeal.

8.1 According to the learned counsel for the assessee, under the According to the learned counsel for the assessee, under the According to the learned counsel for the assessee, under the will of the deceased assessee, the entire estate comprising the will of the deceased assessee, the entire estate comprising the will of the deceased assessee, the entire estate comprising the properties and liabilities was required to properties and liabilities was required to be administered by the be administered by the executors appointed thereunder. It was submitted that, pursuant to executors appointed thereunder. It was submitted that, pursuant to executors appointed thereunder. It was submitted that, pursuant to the order of the Hon’ble Jurisdictional High Court dated the order of the Hon’ble Jurisdictional High Court dated the order of the Hon’ble Jurisdictional High Court dated 30.10.2013, Shri Dilip Dhirajlal Shah was appointed as one of the 30.10.2013, Shri Dilip Dhirajlal Shah was appointed as one of the 30.10.2013, Shri Dilip Dhirajlal Shah was appointed as one of the executors of the will. In view thereof, it executors of the will. In view thereof, it was contended that the was contended that the assessment ought to have been framed in the status of the “Estate assessment ought to have been framed in the status of the “Estate assessment ought to have been framed in the status of the “Estate of the deceased” and not in the capacity of a legal heir. of the deceased” and not in the capacity of a legal heir. of the deceased” and not in the capacity of a legal heir.

8.2 On the other hand, the learned Departmental Representative On the other hand, the learned Departmental Representative On the other hand, the learned Departmental Representative submitted that the Assessing Officer had validly completed the submitted that the Assessing Officer had validly completed the submitted that the Assessing Officer had validly completed the assessment in the capacity of the legal representative of the assessment in the capacity of the legal representative of the assessment in the capacity of the legal representative of the deceased while retaining the PAN of the deceased assessee. He deceased while retaining the PAN of the deceased assessee. He deceased while retaining the PAN of the deceased assessee. He further contended that the appeal itself was not maintainable as it ntended that the appeal itself was not maintainable as it ntended that the appeal itself was not maintainable as it had been filed in the name of the Estate of Late Shri Vandravan P. had been filed in the name of the Estate of Late Shri Vandravan P. had been filed in the name of the Estate of Late Shri Vandravan P. Shah. It was argued that, insofar as the income pertaining to the Shah. It was argued that, insofar as the income pertaining to the Shah. It was argued that, insofar as the income pertaining to the period prior to the death of the assessee is concerned, proceedings period prior to the death of the assessee is concerned, proceedin period prior to the death of the assessee is concerned, proceedin are required to be initiated in the name of the deceased through the are required to be initiated in the name of the deceased through the are required to be initiated in the name of the deceased through the legal representative, in terms of section 159 of the Act. However, legal representative, in terms of section 159 of the Act. However, legal representative, in terms of section 159 of the Act. However, with respect to the period after the death of the assessee, where the with respect to the period after the death of the assessee, where the with respect to the period after the death of the assessee, where the properties and liabilities are administered by properties and liabilities are administered by the executors through the executors through the estate, the provisions of section 168 of the Act would apply. the estate, the provisions of section 168 of the Act would apply. the estate, the provisions of section 168 of the Act would apply.

Estate of Vandravan P Shah Estate of Vandravan P Shah 5402 & 5403/MUM/2024 Accordingly, it was submitted that income pertaining to the period Accordingly, it was submitted that income pertaining to the period Accordingly, it was submitted that income pertaining to the period prior to the death of the assessee is assessable through the legal prior to the death of the assessee is assessable through the legal prior to the death of the assessee is assessable through the legal representative, whereas income ari representative, whereas income arising after death is assessable in sing after death is assessable in the hands of the estate through the executor(s). the hands of the estate through the executor(s).

9.1 The relevant facts are not in dispute. The assessee expired The relevant facts are not in dispute. The assessee expired The relevant facts are not in dispute. The assessee expired on 06.02.2013. The assessment years under consideration are 06.02.2013. The assessment years under consideration are 06.02.2013. The assessment years under consideration are assessment years 2010 assessment years 2010-11 and 2012-13, which relate to periods 13, which relate to periods prior to the date of death. prior to the date of death.

9.2 Under the provisions of section 159 of the Act, the legal Under the provisions of section 159 of the Act, the legal Under the provisions of section 159 of the Act, the legal representative is deemed to be liable to di representative is deemed to be liable to discharge the tax liabilities scharge the tax liabilities and to face such proceedings as could have been validly initiated and to face such proceedings as could have been validly initiated and to face such proceedings as could have been validly initiated against the deceased, had the deceased not died. For ready against the deceased, had the deceased not died. against the deceased, had the deceased not died. reference section 159 is reproduced as under: reference section 159 is reproduced as under: “Legal representatives. Legal representatives. 33 159. (1) Where a person dies, his legal representative shall be liable to pay (1) Where a person dies, his legal representative shall be liable to pay (1) Where a person dies, his legal representative shall be liable to pay any sum 34 which the deceased would have been liable to pay if he had not which the deceased would have been liable to pay if he had not which the deceased would have been liable to pay if he had not died, in the like manner and to the died, in the like manner and to the same extent as the deceased. same extent as the deceased. (2) For the purpose of making an (2) For the purpose of making an 34assessment (including an assessment (including an 34assessment, reassessment or recomputation under reassessment or recomputation under section 147) of the income of the of the income of the Estate of Vandravan P Shah Estate of Vandravan P Shah 5402 & 5403/MUM/2024 deceased and for the purpose of levying any sum in the hands of the legal deceased and for the purpose of levying any sum in the hands of the legal deceased and for the purpose of levying any sum in the hands of the legal representative in accordance with the provisions of sub representative in accordance with the provisions of sub-section (1), section (1),- (a) any proceeding taken against the deceased before his death any proceeding taken against the deceased before his death any proceeding taken against the deceased before his death shall be deemed to have been taken against the legal repre shall be deemed to have been taken against the legal repre- sentative sentative sentative and and and may may may be be be continued continued continued against against against the the the legal legal legal representative from the stage at which it stood on the date of representative from the stage at which it stood on the date of representative from the stage at which it stood on the date of the death of the deceased; the death of the deceased; (b) any proceeding which could have been taken against the any proceeding which could have been taken against the any proceeding which could have been taken against the deceased if he had survived, may be taken against the legal deceased if he had survived, may be taken against the legal representative; and representative; and (c) all the provisions of this Act shall apply accordingly. all the provisions of this Act shall apply accordingly. all the provisions of this Act shall apply accordingly. (3) The legal representative of the deceased shall, for the purposes of this Act, (3) The legal representative of the deceased shall, for the purposes of this Act, (3) The legal representative of the deceased shall, for the purposes of this Act, be deemed to be an assessee. be deemed to be an assessee. (4) Every legal representative shall be personally liable for any tax payable (4) Every legal representative shall be personally liable for any tax payable (4) Every legal representative shall be personally liable for any tax payable by him in his capacity as legal representative if, while his liability for tax by him in his capacity as legal representative if, while his liability for tax by him in his capacity as legal representative if, while his liability for tax remains undischarged, he creates a charge on or disposes of or parts with remains undischarged, he creates a charge on or disposes of or parts with remains undischarged, he creates a charge on or disposes of or parts with any assets 35 of the estate of the deceased, which are in, or may come into, of the estate of the deceased, which are in, or may come into, of the estate of the deceased, which are in, or may come into, his possession, but such liability shall be limited to the value of the asset so his possession, but such liability shall be limited to the value of the asset so his possession, but such liability shall be limited to the value of the asset so charged, disposed of or parted with. charged, disposed of or parted with. (5) The provisions of sub (5) The provisions of sub-section (2) of section 161, section 162 section 162, and section 167, shall, so far as may be and to the extent to which they are not , shall, so far as may be and to the extent to which they are not , shall, so far as may be and to the extent to which they are not inconsistent with the provisions of this section, apply in inconsistent with the provisions of this section, apply in inconsistent with the provisions of this section, apply in relation to a legal representative. (6) The liability of a legal representative under this section shall, subject to the (6) The liability of a legal representative under this section shall, subject to the (6) The liability of a legal representative under this section shall, subject to the provisions of sub provisions of sub-section (4) and sub-section (5), be limited to the extent to section (5), be limited to the extent to which the estate is capable of meeting the liability. which the estate is capable of meeting the liability.”

9.3 On perusal of the provisions above On perusal of the provisions above, we find that the we find that the Section 159 of the Income-tax Act provides a complete code for assessment, tax Act provides a complete code for assessment, tax Act provides a complete code for assessment, reassessment and recovery of tax in respect of income earned by a reassessment and recovery of tax in respect of income earned by a reassessment and recovery of tax in respect of income earned by a deceased person up to the date of his death. The section creates a deceased person up to the date of his death. The section deceased person up to the date of his death. The section legal fiction whereby the legal representative steps into the shoes of legal fiction whereby the legal representative steps into the shoes of legal fiction whereby the legal representative steps into the shoes of the deceased for the limited purpose of tax proceedings. By virtue of the deceased for the limited purpose of tax proceedings. By virtue of the deceased for the limited purpose of tax proceedings. By virtue of sub-sections (2) and (3), any proceeding taken or which could have sections (2) and (3), any proceeding taken or which could have sections (2) and (3), any proceeding taken or which could have continued or initiated been taken against the deceased may be been taken against the deceased may be continued or initiated against the legal representative, who is deemed to be an assessee against the legal representative, who is deemed to be an assessee against the legal representative, who is deemed to be an assessee

Estate of Vandravan P Shah Estate of Vandravan P Shah 5402 & 5403/MUM/2024 for such purposes. The liability of the legal representative, however, for such purposes. The liability of the legal representative, however, for such purposes. The liability of the legal representative, however, remains confined to the extent to remains confined to the extent to which the estate of the deceased which the estate of the deceased is capable of meeting such l is capable of meeting such liability. The scheme of section 159 The scheme of section 159 makes it clear that it does not create a new charge. It merely makes it clear that it does not create a new charge. It merely makes it clear that it does not create a new charge. It merely provides the machinery for assessment and collection of tax which provides the machinery for assessment and collection of tax which provides the machinery for assessment and collection of tax which the deceased would have been liable to pay had he not died. The the deceased would have been liable to pay had he not died. The the deceased would have been liable to pay had he not died. The taxable income continues to taxable income continues to be that of the deceased, though be that of the deceased, though assessed and recovered through the legal representative. assessed and recovered through the legal representative. assessed and recovered through the legal representative.

9.4 In the case, the assessee died on 06.02.2013 i.e. period In the case, the assessee died on 06.02.2013 i.e. period In the case, the assessee died on 06.02.2013 i.e. period corresponding to assessment year 2013 corresponding to assessment year 2013-14. The assessment 14. The assessments in consideration before us consideration before us are for assessment years s 2010-11 and 2012-13, which are prior to the death of the assessee Shri which are prior to the death of the assessee Shri which are prior to the death of the assessee Shri Vandravan P. Shah and therefore, under the provisions of section Vandravan P. Shah and therefore, under the provisions of section Vandravan P. Shah and therefore, under the provisions of section 159 of the Act, his legal representative his legal representative(s) is/are liable to pay any are liable to pay any sum which the deceased would have been liable sum which the deceased would have been liable to pay if he had not to pay if he had not died, in the like manner manner and to the same extent to to the deceased. Thus, as far as period before the death of the deceased, the legal as far as period before the death of the deceased, the legal as far as period before the death of the deceased, the legal representatives substitute representatives substitute him for all purposes of tax proceedings as if such proceedings are continue s if such proceedings are continued against the deceased. against the deceased.

9.5 The term "Legal Representative" is defined under Section 2(29) The term "Legal Representative" is defined under Section 2(29) The term "Legal Representative" is defined under Section 2(29) of the Act read with Section 2(11) of the Code of Civil Procedure, of the Act read with Section 2(11) of the Code of Civil Procedure, of the Act read with Section 2(11) of the Code of Civil Procedure, 1908. It encompasses a person who in law represents the estate of a 1908. It encompasses a person who in law represents the estate of a 1908. It encompasses a person who in law represents the estate of a deceased person and includes deceased person and includes any person who intermeddles intermeddles with the estate of the deceased. Thus, whether the representative is an the estate of the deceased. Thus, whether the representative is an the estate of the deceased. Thus, whether the representative is an Estate of Vandravan P Shah Estate of Vandravan P Shah 5402 & 5403/MUM/2024 heir or an executor, for the period prior to death, they act in the heir or an executor, for the period prior to death, they act in the heir or an executor, for the period prior to death, they act in the capacity of a legal representative under Section 159, not as an capacity of a legal representative under Section 159, not as an capacity of a legal representative under Section 159, not as an executor under Section 1 executor under Section 168 of the Act.

9.6 Thus in sum and substance, the assessment for the Thus in sum and substance, the assessment Thus in sum and substance, the assessment period before the death of the deceased has to be completed in the period before the death of the deceased has to be completed in the period before the death of the deceased has to be completed in the name of the deceased through legal representative who may be even name of the deceased through legal representative who may be even name of the deceased through legal representative who may be even legal heir or executor of the estate of the deceased person. But executor of the estate of the deceased person. But executor of the estate of the deceased person. But before us, the assessee before us, the assessee has raised an question that assessment question that assessment should have been completed in the name of the estate of the completed in the name of the estate of the completed in the name of the estate of the deceased person having a different PAN deceased person having a different PAN. In our opinion, In our opinion, the estate of deceased person ca rson came into existence only upon the death of a only upon the death of a person, therefore, it can’t represent for the period before the death person, therefore, it can’t represent for the period before the death person, therefore, it can’t represent for the period before the death of person.

9.7 The assessment of estate of deceased person is governed by The assessment of estate of deceased person is governed by The assessment of estate of deceased person is governed by the section 168 of the Act. The estate of the deceased person can be the section 168 of the Act. The estate of the deceased perso the section 168 of the Act. The estate of the deceased perso represented by one executor or if there are more than one executor represented by one executor or if there are more than one executor represented by one executor or if there are more than one executor then as if the executor then as if the executors were an association of the persons. The association of the persons. The relevant provision of section 168 of the Act is reproduced as under: relevant provision of section 168 of the Act is reproduced as under: relevant provision of section 168 of the Act is reproduced as under: “Executors. 92 168. (1) Subject as hereinafter provided, the income of the estate of a deceased (1) Subject as hereinafter provided, the income of the estate of a deceased (1) Subject as hereinafter provided, the income of the estate of a deceased person shall be chargeable to tax in the hands of the executor,- person shall be chargeable to tax in the hands of the executor, person shall be chargeable to tax in the hands of the executor, (a) if there is only one executor, then, as if the executor if there is only one executor, then, as if the executor 93 93 were an individual; or (b) if there are more executors than one, then, as if the executors were an if there are more executors than one, then, as if the executors were an if there are more executors than one, then, as if the executors were an association of persons; association of persons;

Estate of Vandravan P Shah Estate of Vandravan P Shah 5402 & 5403/MUM/2024 and for the purposes of this Act, the executor shall be deemed to be resident or and for the purposes of this Act, the executor shall be deemed to be resident or and for the purposes of this Act, the executor shall be deemed to be resident or non-resident according as the deceased person was a resident according as the deceased person was a resident or non resident or non-resident during the previous year in which his death took place. during the previous year in which his death took place. (2) The assessment of an executor under this section shall be made separately (2) The assessment of an executor under this section shall be made separately (2) The assessment of an executor under this section shall be made separately from any assessment that may be made on him in respect of his own income. from any assessment that may be made on him in respect of his own income. from any assessment that may be made on him in respect of his own income. (3) Separate assessment (3) Separate assessments shall be made under this section on the total income of s shall be made under this section on the total income of each completed previous year or part thereof as is included in the period from the each completed previous year or part thereof as is included in the period from the each completed previous year or part thereof as is included in the period from the date of the death to the date of complete distribution to the beneficiaries of the date of the death to the date of complete distribution to the beneficiaries of the date of the death to the date of complete distribution to the beneficiaries of the estate according to their severa estate according to their several interests 93. (4) In computing the total income of any previous year under this section, any (4) In computing the total income of any previous year under this section, any (4) In computing the total income of any previous year under this section, any income of the estate of that previous year distrib income of the estate of that previous year distributed to, or applied to the benefit uted to, or applied to the benefit of, any specific legatee of the estate du of, any specific legatee of the estate during that previous year shall be excluded; ring that previous year shall be excluded; but the income so excluded shall be included in the total income of the previous but the income so excluded shall be included in the total income of the previous but the income so excluded shall be included in the total income of the previous year of such specific legatee. year of such specific legatee. Explanation.-In this section, “executor” includes an administra In this section, “executor” includes an administrator or other person In this section, “executor” includes an administra administering the estate of a deceased per estate of a deceased person 94.” 9.8 The Section 168 of the Act, governs taxation of income of the Section 168 of the Act, governs taxation of income of the Section 168 of the Act, governs taxation of income of the estate of a deceased person estate of a deceased person arising after the date of death after the date of death till distribution to beneficiaries. Thus, the statutory distribution to beneficiaries. Thus, the statutory scheme draws a scheme draws a clear distinction:

(i) Income earned prior to Income earned prior to death: assessable in the name of the assessable in the name of the deceased through legal representative under section 159. deceased through legal representative under section 159. deceased through legal representative under section 159.The legal representative is ‘deemed assessee’ and taxable entity is legal representative is ‘deemed assessee’ and taxable entity is legal representative is ‘deemed assessee’ and taxable entity is deceased. (ii) Income earned after death Income earned after death: assessable in the hands assessable in the hands of the estate under section 168 through executor or administrator or estate under section 168 through executor or administrator or estate under section 168 through executor or administrator or legal heir as ‘representative assessee’. The taxable entity is legal heir as ‘representative assessee’. The taxable entity is legal heir as ‘representative assessee’. The taxable entity is estate of deceased. estate of deceased.

9.9 The mere fact that an estate comes into existence upon death The mere fact that an estate comes into existence upon death The mere fact that an estate comes into existence upon death does not mandate that income earned prior to death must be does not mandate that income earned prior to death must be does not mandate that income earned prior to death must be Estate of Vandravan P Shah Estate of Vandravan P Shah 5402 & 5403/MUM/2024 assessed under section 168. Such an interpretation would defeat assessed under section 168. Such an interpretation would defeat assessed under section 168. Such an interpretation would defeat the clear legislative demarcation between the two provisions. the clear legislative demarcation between the two provisions. the clear legislative demarcation between the two provisions.

Hon'ble Bombay High Court in Arvind Bhogilal v. CIT Arvind Bhogilal v. CIT 9.10 The Hon'ble Bombay High Court in [1976] 105 ITR 764 [1976] 105 ITR 764, held that there is a clear demarcation , held that there is a clear demarcation between income assessable under Section 159 and Section 168. The between income assessable under Section 159 and Section 168. The between income assessable under Section 159 and Section 168. The date of death serves as the dividing line. Just as the personal date of death serves as the dividing line. Just as the personal date of death serves as the dividing line. Just as the personal income of a legal representative cannot be clubbed with the estate's l representative cannot be clubbed with the estate's l representative cannot be clubbed with the estate's income, the income assessable under Section 159 (pre-death) income, the income assessable under Section 159 (pre income, the income assessable under Section 159 (pre cannot be assessed under Section 168 (post cannot be assessed under Section 168 (post-death). There is no death). There is no overlapping of jurisdiction. overlapping of jurisdiction.

9.11 In the present case, the reassessment In the present case, the reassessment proceedings relate proceedings relate exclusively to income pertaining to periods prior to the death of the exclusively to income pertaining to periods prior to the death of the exclusively to income pertaining to periods prior to the death of the assessee. Consequently, section 159 alone is attracted. The assessee. Consequently, section 159 alone is attracted. The assessee. Consequently, section 159 alone is attracted. The Assessing Officer was, therefore, legally justified in framing the Assessing Officer was, therefore, legally justified in framing the Assessing Officer was, therefore, legally justified in framing the reassessment in the name of the deceased reassessment in the name of the deceased assessee through his assessee through his legal representative, while retaining the PAN of the deceased. The legal representative, while retaining the PAN of the deceased. The legal representative, while retaining the PAN of the deceased. The contention that the assessment ought to have been framed in the contention that the assessment ought to have been framed in the contention that the assessment ought to have been framed in the name of the “estate of the deceased” is misconceived and contrary name of the “estate of the deceased” is misconceived and contrary name of the “estate of the deceased” is misconceived and contrary to the statutory scheme. to the statutory scheme.

9.12 Accordingly, we hold that the reassessment proceedings for ngly, we hold that the reassessment proceedings for ngly, we hold that the reassessment proceedings for the years under consideration have been validly initiated and the years under consideration have been validly initiated and the years under consideration have been validly initiated and completed in accordance with section 159 of the Act. The objection completed in accordance with section 159 of the Act. The objection completed in accordance with section 159 of the Act. The objection

Estate of Vandravan P Shah Estate of Vandravan P Shah 5402 & 5403/MUM/2024 raised by the assessee challenging the validity of the reassessment raised by the assessee challenging the validity of the reassessment raised by the assessee challenging the validity of the reassessment on this ground is, therefore, rejected. ground is, therefore, rejected.

10.1 The ld counsel for the The ld counsel for the assessee, firstly, submitted that submitted that there was no legal heir in the was no legal heir in the case so provisions of section 159 does not case so provisions of section 159 does not apply. Alternatively it was apply. Alternatively it was submitted that legal representative is submitted that legal representative is also deemed to be as representative assessee as defined under also deemed to be as representative assessee as defined under also deemed to be as representative assessee as defined under section 160 of the Act. He submitted that section 160(iii) specifically section 160 of the Act. He submitted that section 160(iii) specifically section 160 of the Act. He submitted that section 160(iii) specifically provided that in respect of income of which the court of wards, the in respect of income of which the court of wards, the in respect of income of which the court of wards, the Administrator -General , the official trustee or any receiver or General , the official trustee or any receiver or General , the official trustee or any receiver or manager ( including any person , whatever, his designation, who in manager ( including any person , whatever, his designation, who in manager ( including any person , whatever, his designation, who in fact manages property on behalf of another) appointed by or under fact manages property on behalf of another) appointed by or under fact manages property on behalf of another) appointed by or under any order of a court , receives or is entitled to receive on behalf or for ny order of a court , receives or is entitled to receive on behalf or for ny order of a court , receives or is entitled to receive on behalf or for the benefit of any person, such court of wards, Administrator– the benefit of any person, such court of wards, Administrator the benefit of any person, such court of wards, Administrator General, official trustee , receiver or manager. Accordingly, it was Accordingly, it was General, official trustee , receiver or manager. contested that administrator was managing the property after the contested that administrator was managing the prope contested that administrator was managing the prope death of the assessee, assessee, so appeal has been validly filed by the estate so appeal has been validly filed by the estate of deceased Vandravan P shah as representative assessee. Vandravan P shah as representative assessee. Vandravan P shah as representative assessee.

Estate of Vandravan P Shah Estate of Vandravan P Shah 5402 & 5403/MUM/2024 10.2 In our opinion, In our opinion, having held that reassessment for the relevant having held that reassessment for the relevant years was correctly framed in the name of the years was correctly framed in the name of the deceased through deceased through legal representative, it necessarily follows that any appeal therefrom legal representative, it necessarily follows that any appeal therefrom legal representative, it necessarily follows that any appeal therefrom ought to have been filed in the same capacity i.e. i ought to have been filed in the same capacity i.e. in the name of the n the name of the deceased person through the PAN of the deceased deceased person through the PAN of the deceased.

10.3 The estate of a deceased person comes into The estate of a deceased person comes into The estate of a deceased person comes into existence only upon death and is assessable under section 168 only in respect of upon death and is assessable under section 168 only in respect of upon death and is assessable under section 168 only in respect of post-death income. The estate did not come into existence for the The estate did not come into existence for the The estate did not come into existence for the period before the death of assessee and therefore, for the period period before the death of assessee and therefore, for the period period before the death of assessee and therefore, for the period prior to the death assessment could be comp prior to the death assessment could be completed only in the name leted only in the name of the deceased through legal representative and not in the status of of the deceased through legal representative and not in the status of of the deceased through legal representative and not in the status of estate of deceased, therefore, the appeal was also to be filed in the estate of deceased, therefore, the appeal was also to be filed in the estate of deceased, therefore, the appeal was also to be filed in the name of the deceased person through legal representative. Since the name of the deceased person through legal representative. name of the deceased person through legal representative. present appeals pertain t present appeals pertain to assessment years prior to death, the o assessment years prior to death, the estate had no locus to maintain the appeals. estate had no locus to maintain the appeals.

10.4 Even though an executor may be a legal representative, the Even though an executor may be a legal representative, the Even though an executor may be a legal representative, the appeal was required to be filed in the name of the deceased appeal was required to be filed in the name of the deceased appeal was required to be filed in the name of the deceased assessee through such legal representative and P assessee through such legal representative and PAN of AN of deceased, and not in the status of the estate with a separate PAN., and not in the status of the estate with a separate PAN. and not in the status of the estate with a separate PAN. Consequently, the appeals filed in the name of the estate for Consequently, the appeals filed in the name of the estate for Consequently, the appeals filed in the name of the estate for assessment years prior to death assessment years prior to death i.e. the assessment year assessment years 2011-12 and 2012-13, are not maintainable and are liable to be are not maintainable and are liable to be are not maintainable and are liable to be dismissed on this ground alone. on this ground alone. We order accordingly.

Estate of Vandravan P Shah Estate of Vandravan P Shah 5402 & 5403/MUM/2024

Grounds 02 & 03: In this ground of appeal the appellant Grounds 02 & 03: In this ground of appeal the appellant Grounds 02 & 03: In this ground of appeal the appellant objected the assumption objected the assumption for reopening the or for reopening the original assessment which was completed u/s iginal assessment which was completed u/s 143(3) based on the findings of the search party in the case of 143(3) based on the findings of the search party in the case of 143(3) based on the findings of the search party in the case of third party and such action of the assessing officer is at the third party and such action of the assessing officer is at the third party and such action of the assessing officer is at the best be consider as difference of opinion and there was no best be consider as difference of opinion and there was no best be consider as difference of opinion and there was no concrete evidence of escapem concrete evidence of escapement of income for reopening of ent of income for reopening of assessment under section 143(3). The contention of the assessment under section 143(3). The contention of the assessment under section 143(3). The contention of the appellant has been considered. I have gone through the facts appellant has been considered. I have gone through the facts appellant has been considered. I have gone through the facts and found that the proceedings against appellant were opened and found that the proceedings against appellant were opened and found that the proceedings against appellant were opened u/s 147 of the Income Tax Act, 1961 after obtain u/s 147 of the Income Tax Act, 1961 after obtaining approval ing approval from the Pr. Commissioner of Income Tax from the Pr. Commissioner of Income Tax - 19, Mumbai. During 19, Mumbai. During the course of proceedings, the Assessing Officer issued the the course of proceedings, the Assessing Officer issued the the course of proceedings, the Assessing Officer issued the notice u/s 148 on 28.03.2018 and duly served upon appellant notice u/s 148 on 28.03.2018 and duly served upon appellant notice u/s 148 on 28.03.2018 and duly served upon appellant through speed post and Email to the appellant. In response to through speed post and Email to the appellant. In response to through speed post and Email to the appellant. In response to the same, appellant has filed the return of Income as treated in the same, appellant has filed the return of Income as treated in the same, appellant has filed the return of Income as treated in original return. However, the Assessing Officer issued notice original return. However, the Assessing Officer issued notice original return. However, the Assessing Officer issued notice u/s 142(1) on various dates. u/s 142(1) on various dates. The Attention is drawn to highlight the importance of reports of The Attention is drawn to highlight the importance of reports of The Attention is drawn to highlight the importance of reports of the investigating agencies and that the investigating agencies and that would point out that it may would point out that it may be true that when transactions are through cheques it looks like be true that when transactions are through cheques it looks like be true that when transactions are through cheques it looks like real transactions but the authority is entitled to look behind the real transactions but the authority is entitled to look behind the real transactions but the authority is entitled to look behind the transactions and ascertain the motive behind the transactions. transactions and ascertain the motive behind the transactions. transactions and ascertain the motive behind the transactions. It was further argued by the app It was further argued by the appellant that the report of the ellant that the report of the DDIT is a third DDIT is a third-party information which has not been party information which has not been independently subjected to further verification by the assessing independently subjected to further verification by the assessing independently subjected to further verification by the assessing

Estate of Vandravan P Shah Estate of Vandravan P Shah 5402 & 5403/MUM/2024 officer, whereas the appellant had in the said case discharged officer, whereas the appellant had in the said case discharged officer, whereas the appellant had in the said case discharged the initial burden of substantiating the purc the initial burden of substantiating the purchases through hases through various documents is in violation of principle of natural justice. various documents is in violation of principle of natural justice. various documents is in violation of principle of natural justice. In view of the discussion, it is pertinent to note that the In view of the discussion, it is pertinent to note that the In view of the discussion, it is pertinent to note that the Assessing Officer has granted ample opportunities for proving Assessing Officer has granted ample opportunities for proving Assessing Officer has granted ample opportunities for proving the supporting documents. However, the appellant has the supporting documents. However, the appellant has the supporting documents. However, the appellant has furnished partially reply to the notices as discussed supra. I furnished partially reply to the notices as discussed supra. I furnished partially reply to the notices as discussed supra. I have carefully considered appellant submission. After careful have carefully considered appellant submission. After careful have carefully considered appellant submission. After careful perusal of assessment order, it is seen that the reopening is perusal of assessment order, it is seen that the reopening is perusal of assessment order, it is seen that the reopening is based on cogent evidence and clear facts brought out by the based on cogent evidence and clear facts brought out by the based on cogent evidence and clear facts brought out by the Assessing Officer while recording satisfaction for issuance of Officer while recording satisfaction for issuance of Officer while recording satisfaction for issuance of notices u/s 148. Accordingly, I do not see any reason to notices u/s 148. Accordingly, I do not see any reason to notices u/s 148. Accordingly, I do not see any reason to intervene at this juncture as I don't see any anomaly in intervene at this juncture as I don't see any anomaly in intervene at this juncture as I don't see any anomaly in initiation of assessment proceedings u/s 148 initiated by the initiation of assessment proceedings u/s 148 initiated by the initiation of assessment proceedings u/s 148 initiated by the Assessing Officer which is Assessing Officer which is based on specific information in the based on specific information in the case of the appellant. Therefore, in my considered opinion, the case of the appellant. Therefore, in my considered opinion, the case of the appellant. Therefore, in my considered opinion, the AO is justified in rejecting the objections of the Appellant. AO is justified in rejecting the objections of the Appellant. AO is justified in rejecting the objections of the Appellant. Hence, the Ground is noted Hence, the Ground is noted as dismissed.” 12.1 We have heard rival submission of the parties We have heard rival submission of the parties We have heard rival submission of the parties and persused the relevant material on record. the relevant material on record. In this regard, it is relevant to In this regard, it is relevant to reproduce the reasons recorded by the Assessing Officer which is reproduce the reasons recorded by the Assessing Officer which is reproduce the reasons recorded by the Assessing Officer which is available on Paper Book page 3 available on Paper Book page 3:

“Reasons for re Reasons for re-opening of the assessment u/s 147 of the opening of the assessment u/s 147 of the IT Act.

2. Brief details of information received by the A.O.

2. Brief details of information received by the A.O.

Estate of Vandravan P Shah Estate of Vandravan P Shah 5402 & 5403/MUM/2024

Estate of Vandravan P Shah Estate of Vandravan P Shah 5402 & 5403/MUM/2024 appreciated the material and established a l appreciated the material and established a live link between the ive link between the information received and the formation of his belief. Consequently, information received and the formation of his belief. Consequently, information received and the formation of his belief. Consequently, the plea that the action was taken without application of mind is the plea that the action was taken without application of mind is the plea that the action was taken without application of mind is rejected.

12.3 The assessee has further challenged the validity of the notice The assessee has further challenged the validity of the notice The assessee has further challenged the validity of the notice on the ground that the on the ground that there was no failure on its part to disclose all re was no failure on its part to disclose all material facts fully and truly, thereby invoking the bar under the material facts fully and truly, thereby invoking the bar under the material facts fully and truly, thereby invoking the bar under the first proviso to Section 147. This argument is devoid of merit. The first proviso to Section 147. This argument is devoid of merit. The first proviso to Section 147. This argument is devoid of merit. The concept of "full and true disclosure" presupposes the genuineness concept of "full and true disclosure" presupposes the genuineness concept of "full and true disclosure" presupposes the genuineness of the transaction disclosed. In the reasons recorded, the Assessing ansaction disclosed. In the reasons recorded, the Assessing ansaction disclosed. In the reasons recorded, the Assessing Officer has explicitly set out the modus operandi whereby the Officer has explicitly set out the modus operandi whereby the Officer has explicitly set out the modus operandi whereby the assessee obtained accommodation entries in the guise of deductions assessee obtained accommodation entries in the guise of deductions assessee obtained accommodation entries in the guise of deductions under Section 35AC. The specific allegation is that the assessee under Section 35AC. The specific allegation is that the assessee under Section 35AC. The specific allegation is that the assessee paid amounts by cheque and received cash back from the donee, id amounts by cheque and received cash back from the donee, id amounts by cheque and received cash back from the donee, M/s. Navjeevan Charitable Trust M/s. Navjeevan Charitable Trust. A disclosure of a transaction . A disclosure of a transaction which is essentially sham or bogus cannot be termed as a "true" which is essentially sham or bogus cannot be termed as a "true" which is essentially sham or bogus cannot be termed as a "true" disclosure within the meaning of the Act. When the primary facts disclosure within the meaning of the Act. When the primary disclosure within the meaning of the Act. When the primary asserted by the assessee, rted by the assessee, namely, the genuineness of the donation, uineness of the donation, are found to be false based on credible material, the protection of are found to be false based on credible material, the protection of are found to be false based on credible material, the protection of the proviso is no longer available. Therefore, the jurisdictional the proviso is no longer available. Therefore, the jurisdictional the proviso is no longer available. Therefore, the jurisdictional condition regarding the failure to disclose material facts fully and condition regarding the failure to disclose material facts condition regarding the failure to disclose material facts truly stands satisfied. truly stands satisfied. The objections of the assessee against validity objections of the assessee against validity of the reassessment are of the reassessment are accordingly rejected. The ground no. The ground no. 1 of the appeal is dismissed. the appeal is dismissed.

Estate of Vandravan P Shah Estate of Vandravan P Shah 5402 & 5403/MUM/2024

“15. During the appeal proceedings, Grounds of appeal

, Facts of 15. During the appeal proceedings, Grounds of appeal

, Facts of 15. During the appeal proceedings, Grounds of appeal, Facts of the case, Assessment order, submission filed by the appellant the case, Assessment order, submission filed by the appellant the case, Assessment order, submission filed by the appellant are perused. There is merit in the assessment are perused. There is merit in the assessment order passed by order passed by the Assessing Officer in view of the following as under: the Assessing Officer in view of the following as under: the Assessing Officer in view of the following as under:- Ground 01: In this ground of appeal the appellant objected the Ground 01: In this ground of appeal the appellant objected the Ground 01: In this ground of appeal the appellant objected the addition made by the addition made by the Assessing Officer is Rs. 50,00,000/ Assessing Officer is Rs. 50,00,000/- for the A.Y. 2011 the A.Y. 2011-12. The contention of the appellant has bee

12. The contention of the appellant has been considered. I have gone through the facts and found that in the considered. I have gone through the facts and found that in the considered. I have gone through the facts and found that in the instant case information received from DCIT Central Circle 2(1), instant case information received from DCIT Central Circle 2(1), instant case information received from DCIT Central Circle 2(1), Mumbai mentioning that a search u/s 132 was carried out at Mumbai mentioning that a search u/s 132 was carried out at Mumbai mentioning that a search u/s 132 was carried out at the premise of M/s Navjeevan Charitable Trust wherein it was the premise of M/s Navjeevan Charitable Trust wherein it was the premise of M/s Navjeevan Charitable Trust wherein it was seen that Shri Vandravan P Shah has given donation u/s 35AC that Shri Vandravan P Shah has given donation u/s 35AC that Shri Vandravan P Shah has given donation u/s 35AC an amounting to Rs. 50,00,000/ an amounting to Rs. 50,00,000/- to M/s Navjeevan Charitable to M/s Navjeevan Charitable Trust and the received back in cash after deduction small Trust and the received back in cash after deduction small Trust and the received back in cash after deduction small commission charge by the trust to facilitate this subterfuge, and commission charge by the trust to facilitate this subterfuge, and commission charge by the trust to facilitate this subterfuge, and also claim deduct also claim deduction u/s 35AC against the donation. However, it is also noted that M/s Navjeevan Charitable Trust However, it is also noted that M/s Navjeevan Charitable Trust However, it is also noted that M/s Navjeevan Charitable Trust was centralized with the DCIT Central Circle was centralized with the DCIT Central Circle -2(L), Mumbai. The 2(L), Mumbai. The trusts recognition granted by the National Committee has been trusts recognition granted by the National Committee has been trusts recognition granted by the National Committee has been withdrawn vide Notification dated withdrawn vide Notification dated 30.11.2016. The assessee 30.11.2016. The assessee Trust's registration was also cancelled vide order u/s 12AA(3) Trust's registration was also cancelled vide order u/s 12AA(3) Trust's registration was also cancelled vide order u/s 12AA(3) of the I.T' Act dt. 20.12.2016 by the Principal Commissioner of of the I.T' Act dt. 20.12.2016 by the Principal Commissioner of of the I.T' Act dt. 20.12.2016 by the Principal Commissioner of Income Income Tax Tax (Central) (Central)-1, 1, Mumbai. Mumbai. During During assessment assessment proceedings in the case of assessee trust it was noti proceedings in the case of assessee trust it was noti proceedings in the case of assessee trust it was noticed from the facts gathered that after receipt of donation, trust booked the facts gathered that after receipt of donation, trust booked the facts gathered that after receipt of donation, trust booked bogus purchases through accommodation entry providers. The bogus purchases through accommodation entry providers. The bogus purchases through accommodation entry providers. The entry providers after receipt of cheque payment from trust, entry providers after receipt of cheque payment from trust, entry providers after receipt of cheque payment from trust, encashes the cheque and returns back cash to the trust/trustee encashes the cheque and returns back cash to the trust/trustee encashes the cheque and returns back cash to the trust/trustee after retaining commission on the accommodation entries. Few fter retaining commission on the accommodation entries. Few fter retaining commission on the accommodation entries. Few entry providers who were covered u/s 133A, have admitted of entry providers who were covered u/s 133A, have admitted of entry providers who were covered u/s 133A, have admitted of providing accommodation as donation to M/s Navjeevan providing accommodation as donation to M/s Navjeevan providing accommodation as donation to M/s Navjeevan Charitable Trust for commission. The assessment of entry Charitable Trust for commission. The assessment of entry Charitable Trust for commission. The assessment of entry providers were completed u providers were completed u/s 153C and commission income on /s 153C and commission income on the accommodation transaction was taxed. Few donors covered the accommodation transaction was taxed. Few donors covered the accommodation transaction was taxed. Few donors covered u/s i-33A have admitted and offered the amount of donation 33A have admitted and offered the amount of donation 33A have admitted and offered the amount of donation received back taxation or have revised the return of income. It received back taxation or have revised the return of income. It received back taxation or have revised the return of income. It was concluded that the assessee was indu was concluded that the assessee was indulged in bogus lged in bogus activity and not as per its objectives for which trust was formed activity and not as per its objectives for which trust was formed activity and not as per its objectives for which trust was formed

Estate of Vandravan P Shah Estate of Vandravan P Shah 5402 & 5403/MUM/2024 and commission income on the donation amount was taxed as and commission income on the donation amount was taxed as and commission income on the donation amount was taxed as undisclosed income and treating the trust as AOP. undisclosed income and treating the trust as AOP. In view of the above facts, it was seen that an amount of Rs. In view of the above facts, it was seen that an amount of Rs. In view of the above facts, it was seen that an amount of Rs. 50,00,000/-, donation given to M/s Navjeevan Charitable Trust , donation given to M/s Navjeevan Charitable Trust , donation given to M/s Navjeevan Charitable Trust on 14.08.2010, debited to profit and loss accounts of assessee on 14.08.2010, debited to profit and loss accounts of assessee on 14.08.2010, debited to profit and loss accounts of assessee u/s 35AC is bogus on the basis of information received from u/s 35AC is bogus on the basis of information received from u/s 35AC is bogus on the basis of information received from DCIT Central Circle 2(1), Mumbai. Thereafter, Notice u/s 133(6) DCIT Central Circle 2(1), Mumbai. Thereafter, Notice u/s 133(6) DCIT Central Circle 2(1), Mumbai. Thereafter, Notice u/s 133(6) of the income of the income Tax Act issued by Assessing Officer to M/s Tax Act issued by Assessing Officer to M/s Navjeevan charitable Trust for verifying donation of Rs. Navjeevan charitable Trust for verifying donation of Rs. Navjeevan charitable Trust for verifying donation of Rs. 50,00,000/-. That notice was returned back with remark "Trust . That notice was returned back with remark "Trust . That notice was returned back with remark "Trust left". Further, the contention of the appellant with regard to left". Further, the contention of the appellant with regard to left". Further, the contention of the appellant with regard to donation given to M/s Navjeeva donation given to M/s Navjeevan charitable Trust remains n charitable Trust remains unverified in absence of documentary evidence. unverified in absence of documentary evidence. The contention of the appellant remained unjustified and The contention of the appellant remained unjustified and The contention of the appellant remained unjustified and unsubstantiated. Hence, the Assessment Order is upheld the unsubstantiated. Hence, the Assessment Order is upheld the unsubstantiated. Hence, the Assessment Order is upheld the ground is noted as dismissed. ground is noted as dismissed. 13.1 During the course of assessmen During the course of assessment proceedings, the assessee t proceedings, the assessee furnished documents in support of its claim for deduction under furnished documents in support of its claim for deduction under furnished documents in support of its claim for deduction under section 35AC of the Act, including a receipt purportedly issued by section 35AC of the Act, including a receipt purportedly issued by section 35AC of the Act, including a receipt purportedly issued by the donee trust. In order to verify the genuineness of the claim, the the donee trust. In order to verify the genuineness of the claim, the the donee trust. In order to verify the genuineness of the claim, the Assessing Officer issued a Assessing Officer issued a notice under section 133(6) of the Act to notice under section 133(6) of the Act to M/s Navjeevan Charitable Trust. However, the notice was returned M/s Navjeevan Charitable Trust. However, the notice was returned M/s Navjeevan Charitable Trust. However, the notice was returned unserved with the remark “party left”. unserved with the remark “party left”.

13.2 In these circumstances, the onus squarely shifted to the In these circumstances, the onus squarely shifted to the In these circumstances, the onus squarely shifted to the assessee to substantiate its claim by producing assessee to substantiate its claim by producing the said donee for the said donee for verification and by establishing the genuineness of the transaction. verification and by establishing the genuineness of the transaction. verification and by establishing the genuineness of the transaction. No such effort was made by the assessee. This failure assumes No such effort was made by the assessee. This failure assumes No such effort was made by the assessee. This failure assumes greater significance in view of the adverse material noticed during greater significance in view of the adverse material noticed during greater significance in view of the adverse material noticed during the investigation, indicating that the the investigation, indicating that the donee had allegedly returned donee had allegedly returned cash against the cheques received towards donation. In the face of cash against the cheques received towards donation. In the face of cash against the cheques received towards donation. In the face of Estate of Vandravan P Shah Estate of Vandravan P Shah 5402 & 5403/MUM/2024 such serious allegations, a higher degree of proof was required from such serious allegations, a higher degree of proof was required from such serious allegations, a higher degree of proof was required from the assessee to rebut the findings of the Assessing Officer. the assessee to rebut the findings of the Assessing Officer. the assessee to rebut the findings of the Assessing Officer.

13.3 Mere production of docum Mere production of documents such as the notification issued ents such as the notification issued in favour of the trust, donation receipts, bank statements, Form No. in favour of the trust, donation receipts, bank statements, Form No. in favour of the trust, donation receipts, bank statements, Form No. 58, or evidence of registration of the trust, cannot, by themselves, 58, or evidence of registration of the trust, cannot, by themselves, 58, or evidence of registration of the trust, cannot, by themselves, discharge the burden cast upon the assessee, particularly when discharge the burden cast upon the assessee, particularly when discharge the burden cast upon the assessee, particularly when such documents onl such documents only constitute a paper trail maintained in the y constitute a paper trail maintained in the ordinary course of affairs. When adverse facts emerge during the ordinary course of affairs. When adverse facts emerge during the ordinary course of affairs. When adverse facts emerge during the course of verification, it becomes incumbent upon the assessee to course of verification, it becomes incumbent upon the assessee to course of verification, it becomes incumbent upon the assessee to affirmatively establish the genuineness of the transaction by affirmatively establish the genuineness of the transaction by affirmatively establish the genuineness of the transaction by producing the concerned party for examination. erned party for examination.

13.4 In the absence of any such corroboration, and the assessee In the absence of any such corroboration, and the assessee In the absence of any such corroboration, and the assessee having failed to discharge the onus cast upon it, we find no having failed to discharge the onus cast upon it, we find no having failed to discharge the onus cast upon it, we find no infirmity in the action of the ld CIT(A) in confirming the infirmity in the action of the ld CIT(A) in confirming the infirmity in the action of the ld CIT(A) in confirming the disallowance of claim of deduction under disallowance of claim of deduction under section 35AC of the Act. section 35AC of the Act. Accordingly, the claim of deduction is rejected and Ground Nos. 3 Accordingly, the claim of deduction is rejected and Ground Nos. 3 Accordingly, the claim of deduction is rejected and Ground Nos. 3 and 4 raised by the assessee are dismissed. and 4 raised by the assessee are dismissed.

15.1 We have heard the rival submissions and carefully perused the We have heard the rival submissions and carefully perused the We have heard the rival submissions and carefully perused the material available on record. On examination of the impugned material available on record. On examination of the impugned material available on record. On examination of the impugned appellate order, it is evident that the learned CIT(A) had issued as appellate order, it is evident that the learned CIT(A) had issued as appellate order, it is evident that the learned CIT(A) had issued as many as five notices of hearing under section 250 of the Act. The notices of hearing under section 250 of the Act. The notices of hearing under section 250 of the Act. The record further shows that the assessee sought adjournments on two record further shows that the assessee sought adjournments on two record further shows that the assessee sought adjournments on two occasions and filed partial submissions in response to the occasions and filed partial submissions in response to the occasions and filed partial submissions in response to the remaining notices. The relevant portion of the impugned order, remaining notices. The relevant portion of the impugned order, remaining notices. The relevant portion of the impugned order, detailing the dates of hearing and the nature of compliance, ates of hearing and the nature of compliance, is ates of hearing and the nature of compliance, reproduced as under: reproduced as under:

“6. Decision on Grounds of appeal

; Decision on Grounds of appeal; Following Notices u/s 250 of the IT Act was issued to the appellant. Following Notices u/s 250 of the IT Act was issued to the appellant. Following Notices u/s 250 of the IT Act was issued to the appellant. Sr. No. Hearing Notice Remarks Remarks

1. Notice dated 06.01.2021 Notice dated 06.01.2021 Adjournment Adjournment

2. Notice dated 13.12.2021 Notice Adjournment Adjournment

3. Notice dated 24.03.2022 Notice dated 24.03.2022 Partially Submission filed Partially Submission filed

4. Notice dated 28.09.2022 Notice dated 28.09.2022 Partially Submission filed Partially Submission filed

5. Notice dated 12.08.2024 Notice dated 12.08.2024 Partially Submission filed Partially Submission filed 15.2 In these circumstances, we are of the considered view that In these circumstances, we are of the considered view that In these circumstances, we are of the considered view that reasonable and sufficient opportunity was afforded to the assessee reasonable and sufficient opportunity was afforded to the assessee reasonable and sufficient opportunity was afforded to the assessee to present its case. The principles of natural justice do not mandate to present its case. The principles of natural justice do not mandate to present its case. The principles of natural justice do not mandate endless opportunities, and where adequate notice has been given endless opportunities, and where adequate notice has been gi endless opportunities, and where adequate notice has been gi and the assessee has participated in the proceedings, albeit and the assessee has participated in the proceedings, albeit and the assessee has participated in the proceedings, albeit partially, no infirmity can be found in the appellate proceedings. partially, no infirmity can be found in the appellate proceedings. partially, no infirmity can be found in the appellate proceedings.

Estate of Vandravan P Shah Estate of Vandravan P Shah 5402 & 5403/MUM/2024 Accordingly, Ground No. 1 raised by the assessee is devoid of merit Accordingly, Ground No. 1 raised by the assessee is devoid of merit Accordingly, Ground No. 1 raised by the assessee is devoid of merit and is dismissed.

Estate of Vandravan P Shah Estate of Vandravan P Shah 5402 & 5403/MUM/2024 and the submissions, upheld the disallowance, holding that in the and the submissions, upheld the disallowance, holding that in the and the submissions, upheld the disallowance, holding that in the absence of the requisite statutory approval absence of the requisite statutory approval under section 80GGA, under section 80GGA, the donation did not qualify for deduction under the said provision the donation did not qualify for deduction under the said provision the donation did not qualify for deduction under the said provision and that the assessee had failed to substantiate the claim with and that the assessee had failed to substantiate the claim with and that the assessee had failed to substantiate the claim with cogent evidence. T relevant finding of t cogent evidence. T relevant finding of the Ld. CIT(A) he Ld. CIT(A) is reproduced as under:

“9. During the appeal pr 9. During the appeal proceedings, Grounds of appeal

, Facts of the oceedings, Grounds of appeal

, Facts of the case, Assessment order, submission filed by the appellant are case, Assessment order, submission filed by the appellant are case, Assessment order, submission filed by the appellant are perused. There is merit in the assessment order passed by the perused. There is merit in the assessment order passed by the perused. There is merit in the assessment order passed by the Assessing Officer in view of the following as under: Assessing Officer in view of the following as under:- Grounds 01 & 02: In this ground of Grounds 01 & 02: In this ground of appeal the appellant objected appeal the appellant objected the addition made by the Assessing Officer is Rs. 74,40,000/ the addition made by the Assessing Officer is Rs. 74,40,000/ the addition made by the Assessing Officer is Rs. 74,40,000/- for the A.Y. 2017 the A.Y. 2017-18. The contention of the appellant has been 18. The contention of the appellant has been considered. I have gone through the facts and found that Shri considered. I have gone through the facts and found that Shri considered. I have gone through the facts and found that Shri Vandravan P Shah has given donation u/s Vandravan P Shah has given donation u/s 80GGA an amounting 80GGA an amounting to Rs. 74,40,000/ to Rs. 74,40,000/- to M/s St. Jude India Child Care Centre and to M/s St. Jude India Child Care Centre and claimed deduction u/s 80GGA against the donation. During the claimed deduction u/s 80GGA against the donation. During the claimed deduction u/s 80GGA against the donation. During the course of assessment proceedings, the AO has verified the said course of assessment proceedings, the AO has verified the said course of assessment proceedings, the AO has verified the said transaction with St. Jude India Child Care Centre transaction with St. Jude India Child Care Centre. In response to . In response to the same, M/s St. Jude India Child Care Centre has produced the same, M/s St. Jude India Child Care Centre has produced the same, M/s St. Jude India Child Care Centre has produced Certificate under section 80G of the IT Act, 1961 and did not Certificate under section 80G of the IT Act, 1961 and did not Certificate under section 80G of the IT Act, 1961 and did not produce any certificate under section 80GGA while the appellant produce any certificate under section 80GGA while the appellant produce any certificate under section 80GGA while the appellant has claimed deduction of Rs. 74,40,000/ has claimed deduction of Rs. 74,40,000/- under sectio under section 80GGA on account of donation to M/s St. Jude India Child Care Centre. The account of donation to M/s St. Jude India Child Care Centre. The account of donation to M/s St. Jude India Child Care Centre. The Assessing Officer has clearly mentioned in assessment order and Assessing Officer has clearly mentioned in assessment order and Assessing Officer has clearly mentioned in assessment order and same reproduced as under: same reproduced as under:- Section 80GGA refers to 'Donation in respect of certain donations Section 80GGA refers to 'Donation in respect of certain donations Section 80GGA refers to 'Donation in respect of certain donations for Scientific Researc for Scientific Research or Rural Development. On perusal of h or Rural Development. On perusal of submission by M/s St. Jude India Child Care Centre in response submission by M/s St. Jude India Child Care Centre in response submission by M/s St. Jude India Child Care Centre in response to notice u/s 133(6) of the IT Act, 1961, M/s St. Jude India Child to notice u/s 133(6) of the IT Act, 1961, M/s St. Jude India Child to notice u/s 133(6) of the IT Act, 1961, M/s St. Jude India Child Care Centre is neither a scientific research association nor Care Centre is neither a scientific research association nor Care Centre is neither a scientific research association nor undertaking any program of undertaking any program of rural development. Also, M/s St. Jude rural development. Also, M/s St. Jude India Child Care Centre is not recognized for purpose of section India Child Care Centre is not recognized for purpose of section India Child Care Centre is not recognized for purpose of section 35(1)(ii) of the IT Act, 1961 and hence not eligible to raise donation 35(1)(ii) of the IT Act, 1961 and hence not eligible to raise donation 35(1)(ii) of the IT Act, 1961 and hence not eligible to raise donation for undertaking scientific research. Any donation made to this for undertaking scientific research. Any donation made to this for undertaking scientific research. Any donation made to this organization is bog organization is bogus and not subject to any deduction u/s us and not subject to any deduction u/s 80GGA. Further, the assessee was show caused vide dated 80GGA. Further, the assessee was show caused vide dated 80GGA. Further, the assessee was show caused vide dated 25.10.2019 as to why the deduction claimed u/s 80GGA of Rs. 25.10.2019 as to why the deduction claimed u/s 80GGA of Rs. 25.10.2019 as to why the deduction claimed u/s 80GGA of Rs. 74,40,000/- on account of donation given to St. Jude India Child on account of donation given to St. Jude India Child on account of donation given to St. Jude India Child

Estate of Vandravan P Shah Estate of Vandravan P Shah 5402 & 5403/MUM/2024

Care Centre should not be added to Care Centre should not be added to the total income of the the total income of the assessee. However, the assessee did not make any compliance. assessee. However, the assessee did not make any compliance. assessee. However, the assessee did not make any compliance. In view of the above facts, it was seen that an amount of Rs. In view of the above facts, it was seen that an amount of Rs. In view of the above facts, it was seen that an amount of Rs. 74,40,000/-, donation given to M/s St. Jude India Child Care , donation given to M/s St. Jude India Child Care , donation given to M/s St. Jude India Child Care Centre, debited to profit and loss accounts of a Centre, debited to profit and loss accounts of appellant and ppellant and claimed deduction u/s 80GGA of the Income Tax Act, 1961 claimed deduction u/s 80GGA of the Income Tax Act, 1961 claimed deduction u/s 80GGA of the Income Tax Act, 1961 Further, the contention of the appellant with regard to donation Further, the contention of the appellant with regard to donation Further, the contention of the appellant with regard to donation given to M/s St. Jude India Child Care Centre remains unverified given to M/s St. Jude India Child Care Centre remains unverified given to M/s St. Jude India Child Care Centre remains unverified in absence of documentary evidence. It is clear evident t in absence of documentary evidence. It is clear evident t in absence of documentary evidence. It is clear evident that the said trust does not possess certificate u/s 80GGA and it does not said trust does not possess certificate u/s 80GGA and it does not said trust does not possess certificate u/s 80GGA and it does not have exemption u/s 35(1)(ii) and any donation is not eligible for have exemption u/s 35(1)(ii) and any donation is not eligible for have exemption u/s 35(1)(ii) and any donation is not eligible for claiming deduction u/s 80GGA. Since, deduction claimed of Rs. claiming deduction u/s 80GGA. Since, deduction claimed of Rs. claiming deduction u/s 80GGA. Since, deduction claimed of Rs. 74,40,000/- under section 80GGA is disallowed by the A under section 80GGA is disallowed by the AO. Hence, under section 80GGA is disallowed by the A the donation amount of Rs. 74,40,000/ the donation amount of Rs. 74,40,000/- is treated as non is treated as non-genuine. The contention of the appellant remained unjustified and The contention of the appellant remained unjustified and The contention of the appellant remained unjustified and unsubstantiated unsubstantiated. Hence, the Assessment Order is upheld the Hence, the Assessment Order is upheld the ground is noted ground is noted dismissed. Ground 03: The ground being general i Ground 03: The ground being general in nature does not require n nature does not require separate adjudication. adjudication. In view of the above discussion, it is held that the appellant had In view of the above discussion, it is held that the appellant had In view of the above discussion, it is held that the appellant had given bogus donation of Rs. 74,40,000/ given bogus donation of Rs. 74,40,000/- to M/s St. Jude India to M/s St. Jude India Child Care Centre for the A.Y. 2017 Child Care Centre for the A.Y. 2017- 18 and claimed deduction 18 and claimed deduction u/s 80GGA of the u/s 80GGA of the Income Tax Act, 1961. The contention of the Income Tax Act, 1961. The contention of the appellant remained unjustified and unsubstantiated. Therefore, appellant remained unjustified and unsubstantiated. Therefore, appellant remained unjustified and unsubstantiated. Therefore, the undersigned sees no reason to interfere with the orders of the the undersigned sees no reason to interfere with the orders of the the undersigned sees no reason to interfere with the orders of the Assessing Officer. Assessing Officer. Hence, the Assessment Order is upheld the ground Hence, the Assessment Order is upheld the ground is noted as dismissed.” 16.1 We have heard the rival submissions and perused the material We have heard the rival submissions and perused the material We have heard the rival submissions and perused the material placed on record. Even before us, the assessee has not produced placed on record. Even before us, the assessee has not produced placed on record. Even before us, the assessee has not produced any certificate as contemplated under section 80GGA of the Act to any certificate as contemplated under section 80GGA of the Act to any certificate as contemplated under section 80GGA of the Act to demonstrate the eligibility of the donee institut demonstrate the eligibility of the donee institution. In the absence of ion. In the absence of such foundational evidence, the claim for deduction cannot be such foundational evidence, the claim for deduction cannot be such foundational evidence, the claim for deduction cannot be sustained. We, therefore, find no infirmity in the order of the sustained. We, therefore, find no infirmity in the order of the sustained. We, therefore, find no infirmity in the order of the learned CIT(A) in confirming the disallowance of deduction under learned CIT(A) in confirming the disallowance of deduction under learned CIT(A) in confirming the disallowance of deduction under Estate of Vandravan P Shah Estate of Vandravan P Shah 5402 & 5403/MUM/2024 section 80GGA.Accordingly, the grounds rai section 80GGA.Accordingly, the grounds raised by the assessee on sed by the assessee on this issue are dismissed. this issue are dismissed.

Order pronounced in the open Court on ounced in the open Court on 23/12/2025. /12/2025.