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2024 (1) TMI 62 - AT - Income TaxDeduction u/s 35-AC - donation made to Navjeevan Charitable Trust was denied - HELD THAT - It is the claim of the Revenue that Navjeevan Charitable Trust has been involved in a bogus transaction of accommodation entry and has returned the donation to the donors in cash after deducting the commission. The Revenue has also relied on the statement of the trustee recorded during the course of search action under section 132 of the Act at the premises of Navjeevan Charitable Trust. We find that a similar issue came up for consideration before the Co-ordinate Bench of the Tribunal in assessee s own case in Ravindra K. Reshamwala v/s DCIT 2023 (6) TMI 108 - ITAT MUMBAI for the assessment year 2009-10, wherein assessee claimed deduction u/s 35-AC in respect of donation made to Navjeevan Charitable Trust. From the perusal of the aforesaid order, we find that the deduction claimed u/s 35AC of the Act in respect of the donation made to Navjeevan Charitable Trust was denied on a similar basis as in the present case. Therefore, AO is directed to allow the claim of deduction under section 35-AC of the Act. Appeal by the assessee is allowed.
Issues Involved:
The judgment involves issues related to the validity of the notice issued under section 148, the disposal of objections raised during reassessment proceedings, the basis for reopening the assessment, the approval and exemptions granted to a charitable trust, and the availability of deduction under section 35-AC of the Income Tax Act. Validity of Notice Issued under Section 148: The appeal challenged the impugned order confirming the notice issued under section 148, alleging that the notice was void ab initio and bad in law as the requisite satisfaction under section 151(2) was not obtained. The appellant contended that the notice was issued without proper basis, questioning the authority's actions. Disposal of Objections Raised During Reassessment: The appellant raised objections during the reassessment proceedings, arguing that the assessing officer did not dispose of the complete objections as required under section 147. Reference was made to the case of GKN Driveshafts (India) Ltd, emphasizing the importance of addressing all objections raised by the assessee during such proceedings. Basis for Reopening the Assessment: The appellant challenged the reopening notice issued under section 148, claiming that no tangible material was presented to support the reason to believe that income had escaped assessment. The appellant disputed the validity of the reasons provided for initiating the reassessment proceedings. Approval and Exemptions Granted to Charitable Trust: The appellant argued that the approvals and exemptions in force at the time of making a donation to Navjeevan Charitable Trust should have been considered. It was contended that the proper approvals and exemptions were valid when the donation was made, supporting the genuineness of the claim made by the appellant. Availability of Deduction under Section 35-AC: The main contention revolved around the availability of deduction under section 35-AC of the Act concerning the donation made to Navjeevan Charitable Trust. The assessing officer disallowed the deduction, citing alleged activities of the trust involving accommodation entries. However, the Tribunal, based on previous decisions, directed the AO to allow the claim of deduction under section 35-AC, emphasizing the lack of concrete evidence to deny the deduction. Separate Judgement Delivered: The judgment was delivered by Shri Sandeep Singh Karhail, Judicial Member, and Shri B.R. Baskaran, Accountant Member. The appeal was allowed, directing the assessing officer to grant the deduction under section 35-AC and recompute the assessee's income. The decision was based on the lack of substantial evidence to refute the genuineness of the donation made to Navjeevan Charitable Trust, as highlighted in previous tribunal decisions.
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