UDAY K LAPSIA,MUMBAI vs. ACIT 17(3), MUMBAI

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ITA 1203/MUM/2020Status: DisposedITAT Mumbai20 October 2022AY 2014-159 pages

In favour of the Revenue: the assessee's appeal was dismissed. From the AI summary of this appeal.

AI SummaryDismissed

What did the Tribunal hold?

The Tribunal held that the deduction claimed under Section 35(1)(ii) was not allowable as the institution's registration was cancelled retrospectively and it was found to be involved in bogus donation schemes.

What were the facts?

The assessee claimed a deduction under Section 35(1)(ii) for donations made to an institution. Investigations revealed that the institution was not engaged in scientific research and that donations were returned to donors after retaining a commission.

What were the issues?

Whether the assessee is entitled to a deduction under Section 35(1)(ii) when the donee institution's registration was cancelled retrospectively due to fraudulent activities.

Which sections of the Income-tax Act were involved?

Section 35(1)(ii),Section 143(3),Section 147

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, SMC BENCH, MUMBAI

IN THE INCOME TAX APPELLATE TRIBUNAL "SMC" BENCH, MUMBAI SHRI M. BALAGANESH, ACCOUNTANT MEMBER SHRI RAHUL CHAUDHARY, JUDICIAL MEMBER Uday K Lapsia, A-43, Bharat Thirth CHS, V N Purav Marg, Chembur - 400071 ……………… Appellant [PAN:ABXPL3176C] Vs Assistant Commissioner of Income Tax – 17(3), Mumbai, R. No. 137, Aayakar Bhavan, ……………. Respondent M.K. Road, Mumbai - 400020 Appearances For the Appellant/Assessee : Shri M. Subramanian For the Respondent/Department : Shri Rajiv Singh Date of conclusion of hearing : 25.07.2022 Date of pronouncement of order : 20.10.2022 O R D E R Per Rahul Chaudhary, Judicial Member: 1. By way of the present appeal the Appellant has challenged the order, dated 21.11.2019, passed by the Ld. Commissioner of Income Tax (Appeals)-28, Mumbai [hereinafter referred to as „the CIT(A)‟] for the Assessment Year 2014-15, whereby the Ld. CIT(A) had dismissed the appeal against the Assessment Order, dated 22.12.2017, passed under Section 143(3) read with Section 147 of the Income Tax Act, 1961 (hereinafter referred to as „the Act‟).

Assessment Year: 2014-15 2. The Appellant has raised multiple grounds challenging the assessment framed under Section 147 read with Section 143(3) of the Act on the ground that jurisdiction as well as on merits.

3.

The brief facts of the case are that the Appellant filed return of income for the Assessment Year 2014-15 declaring income of INR 12,01,090/- after claiming deduction of INR 19,25,000/- under Section 35(1)(ii) of the Act at the rate of 175% of the donation amount of INR 11,00,000/- made to School of Human Genetics and Population Health (SHGPH). The aforesaid return was processed under Section 143(1) of the Act. Subsequently, survey operations were conducted in case of SHGPH and another two institutions viz. Matrvani Industries of Experiential Research and Education (MIER&E) and Herbicure Healthcare Bio-Herbal Research Foundation (HHBRF). In the course of such survey operation, it was found that these institutions were not carrying out any activities relating to scientific research. From the statements recorded of persons attached to such institutions it was found that donations were received through brokers and after retaining some commission amount, the money is returned back to the donors. Due to the irregularities committed by these institutions, the registration certificates issued to these institutions under the Act were cancelled with retrospective effect.

4.

Subsequently, re-assessment proceedings were initiated against the Appellant and notice under Section 148 of the Act was issued on 23.03.2017 after information was received from the Investigation Wing Kolkata that the Appellant has obtained bogus donation receipts from SHGPH. The re-assessment proceedings culminated into the order, dated 29.11.2017 Assessment Year: 2014-15 passed, under Section 147 read with Section 143(3) of the Act, whereby income of the Appellant was assessed at INR.31,26,090/- after making disallowance of deduction of INR.19,25,000/- claimed by the Appellant under Section 35(1)(ii) of the Act.

5.

The appeal preferred by the Appellant against the assessment order was dismissed by the CIT(A), vide order, dated 21.11.2019 leading to the filing of the present appeal.

6.

When the matter was taken up for hearing, the Ld. Authorised Representative for the Appellant placed on record paper-book containing the following documents: - Copy of money receipt dated 08.03.2014 issued by the SHG&PH) for donation of INR 11,00,000/-. - Copy of Certificate of Registration issued by the

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