NADIA DISTRICT CENTRAL CO-OPERATIVE BANK LTD.,NADIA vs. THE LD. PR. CIT, KOLKATA 1, KOLKATA

आयकर अपीलीय अधिकरण,“एस.एम.सी” न्यायपीठ, कोलकाता

IN THE INCOME TAX APPELLATE TRIBUNAL “SMC” BENCH, KOLKATA
श्री जाजज माथन, न्याययक सदस्य के समक्ष ।
BEFORE SHRI GEORGE MATHAN, JUDICIAL MEMBER
Cathy Commercial Pvt. Ltd.
Model House, 3rd Floor,
Room No.10, 40, Strand Road,
Kolkata-700001
AADCC 5211 H
Vs ITO Ward-5 (2), Kolkata

(अपीलार्थी /Appellant)
..
(प्रत्यर्थी / Respondent)

नििााररती की ओर से /Assessee by : Shri Miraz D. Shah, AR
राजस्व की ओर से /Revenue by : Shri S.B.Chakraborthy, Sr. DR
सुनवाई की तारीख / Date of Hearing
:
01/07/2025
घोषणा की तारीख/Date of Pronouncement
:
01.07.2025
आदेश / O R D E R

This is an appeal filed by the assessee against the order of the ld.
CIT(A), National Faceless Appeal Centre (NFAC), Delhi, dated 28.03.2023, passed in DIN & Order No.ITBA/NFAC/S/250/2022-23/1051484765(1) for the Assessment Year 2012-2013. 2. Shri Miraj D. Shah, ld. AR appeared on behalf of the assessee and Shri S.B.Chakraborthy, ld.Sr. DR appeared on behalf of the revenue.
3. It was submitted by the ld.AR that in the course of assessment the AO had disallowed the assessee's donation of Rs.7 lakhs made to M/s
Herbicure health Care Bio Herbal Research Foundation (HHBRF) which have the approval u/s.35(1)(ii) of the Act. It was the submission that consequently the disallowance made was to an extent of Rs.12,25,000/-. it was the submission that on appeal, ld. CIT(A) without considering the submissions of the assessee nor the reply to the remand report confirmed

ITANo.361/KOL/20235

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the action of the AO. it was the submission that the issue was now squarely covered by the decision of the Hon'ble Juri ictional High Court of Kolkata in the case of Pr.CIT Vs JP Financial Services Pvt. Ltd. in ITAT/153/2023
IA No: GA/2/2023, dated 02.08.2023, wherein the Hon'ble High Court has held as follows :-
B. Whether the Learned Income Tax Appellate Tribunal has committed substantial error in law in giving relief to the assessee by allowing the claim of bogus donations under Section 35(1)(ii) by stating that the CBDT had recognized such bogus entry providing concerns namely M/s. Herbicure Healthcare Bio-Herbal Research
Foundation under section 35(1)(ii) whereas on the contrary such approval and recognition had been withdrawn by the CBDT vide
Gazettee Notification S.O. 2882(E) dated 6th September, 2016 and O.M. vide F. No. 203/09/2015/ITA.II dated 21st September, 2016
considering the nature of unscrupulous activities carried on by these donee concerns ? We have heard Mr. Om Narayan Rai, learned standing counsel along with Mr. Soumen Bhattacharjee, learned
Advocate for the appellant/revenue.

The short issue which falls for consideration in this appeal is whether the Tribunal was right in allowing the deductions claimed by the assessee under Section 35(1)(ii) of the Act for the donation to a organization who initially enjoyed a registration under Section 35(1) of the Act, which was subsequently withdrawn with retrospective effect. The learned Tribunal followed the decision of a co-ordinate
Bench of the Tribunal dated 27.07.2018 in the case of Narbheram
Vishram in I.T.A. Nos. 42&43/Kol/2018. Apart from certain factual similarities the Tribunal in the said decision has also taken note of the decisions of the Hon'ble Supreme Court holding that there is no provision for withdrawal of recognition under Section 35(1)(ii) of the Act. The view taken by the learned Tribunal in the impugned order is supported by the decision of the Hon'ble Division Bench of this Court in the case of Commissioner of Income Tax Versus General Magnets
Ltd.; (2002) 256 ITR 471 wherein the Court after taking note of various decisions namely CIT v. Ethelbari Tea Co. (1931) Ltd., [2002]
256 ITR 470 (Cal), B.P. Agarwalla and Sons Ltd. v. CIT [1994] 208
ITR 863 (Cal), K.M. Scientific Research Centre v. Lakshman Prasad
[1998] 229 ITR 23, Seksaria Biswan Sugar Factory Ltd.v. IAC [1990]
184 ITR 123, CIT v. Bhartia Cutler Hammer Co.[1998] 232 ITR 785,
Chotatingrai Tea Estate Pvt. Ltd. v. CIT [1999] 236 ITR 644, held that for the mistake committed by the department the assessee should not suffer. The withdrawal of approval to the society for retrospective effect is itself bad and no assessee should suffer for the mistake of the department. The department has power of withdrawal but in such cases withdrawal can be only with prospective effect. Further it was held that if the donation to the approved society is genuine, in that case withdrawal with retrospective effect does not affect the right of ITANo.361/KOL/20235

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the assessee for deduction of the amount which has accrued to the assessee on the basis of the payment to an approved society under Section 35CCA of the Act.

In the light of the above, the order passed by the learned Tribunal does not call for any interference.

ITANo.361/KOL/20235

आदेश की प्रनतललपप अग्रेपर्त/Copy of the Order forwarded to :

आदेशािुसार/ BY ORDER,

(