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2021 (10) TMI 554 - AT - Income TaxDeduction u/s 35(1)(ii) - donations given to School of Human Genetics and Population Health, Kolkata, which is a charitable institution and was having registration under section 12A of the Income Tax Act, 1961 - onus to prove - HELD THAT - We find that Hon'ble Gujarat High Court in the case of PCT Vs. Thakkar Ganpatlal HUF 2020 (2) TMI 31 - GUJARAT HIGH COURT has dealt with the issue, and while allowing the claim of the assessee, has also referred to the decision in the case of S.G. Vat Care P. Ltd. 2020 (2) TMI 31 - GUJARAT HIGH COURT which was authored by one of us. In this The Hon'ble Gujarat High Court noted the observation and finding of the Tribunal on this issue, and came to the conclusion that the onus placed on the assessee has been discharged and no interference in the order of the ITAT is required. The Hon'ble Court, thus allowed claim of donation made to M/s. Herbicure Healthcare Bio-Herbal Research Foundation - Decided in favour of assessee.
Issues involved:
Challenge to validity of assessment order under section 143(3) read with section 147 of the Income Tax Act, 1961. Confirmation of rejection of deduction claim under section 35(1)(ii) for donations given to a charitable institution. Analysis: 1. The appeal was filed against the order of the ld. CIT(A)-6, Ahmedabad for the Asstt. Year 2013-14. The assessee raised two grounds, with ground no. 1 challenging the assessment order's validity, which was dismissed as not pressed during the hearing. Ground no. 2 focused on the rejection of the deduction claim under section 35(1)(ii) for donations to a charitable institution in Kolkata. 2. The department received information about the assessee's alleged involvement in giving bogus donations to a particular institution in Kolkata. The assessment was reopened, and it was found that the institution was misusing benefits, leading to cancellation of its registration. The AO disallowed the claimed donation as bogus, adding it to the assessee's total income, a decision upheld by the ld. CIT(A). 3. The assessee argued that similar cases were decided in their favor by the Hon'ble Gujarat High Court and ITAT, Ahmedabad, citing specific judgments. The department contended that the donations were rightly treated as bogus due to laundering of unaccounted money and the assessee's failure to address specific queries during assessment. 4. The Tribunal considered the precedents cited by the assessee, noting that the Hon'ble Gujarat High Court had allowed similar claims based on findings from ITAT, Ahmedabad. The Tribunal emphasized the discharge of onus by the assessee and lack of evidence against the donation's legitimacy. The CIT(A) confirmed the donation's transfer through bank channels and its utilization for scientific research, leading to the dismissal of the department's appeal. 5. Given the similarity of facts with the cited cases and the absence of differing circumstances, the Tribunal allowed the assessee's appeal partially, following the principle of judicial precedence. The appeal was decided in favor of the assessee on 30th September 2021 at Ahmedabad. This detailed analysis covers the challenge to the assessment order's validity and the rejection of the deduction claim for donations, highlighting the legal arguments, evidence presented, and the Tribunal's decision based on relevant precedents and factual findings.
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