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Issues Involved:
The withdrawal of recognition u/s 35CCA of the Income-tax Act, 1961 with retrospective effect. Summary: The judgment dealt with the issue of withdrawal of recognition granted to a society under section 35CCA of the Income-tax Act, 1961, concerning a donation made by the petitioner. The petitioner had donated a sum based on approval granted by income-tax authorities, which was later sought to be withdrawn with retrospective effect. The withdrawal notice was issued after the approval had already expired, raising questions of legality and jurisdiction. The petitioner argued that the withdrawal of approval cannot have retrospective effect, citing a previous judgment. The court agreed, stating that an executive order cannot prejudice someone who has already acted upon it. The court emphasized that the Department cannot withdraw approval retrospectively, especially when the donation was made and accepted in good faith based on the approval. The respondent contended that the donation was a sham transaction to divert funds back to the assessee, but the court refused to delve into the nature of the transaction at that stage. It held that the Department cannot reopen an assessment based on subsequent events or new material, especially when the approval had already expired before the withdrawal attempt. Ultimately, the court set aside the impugned notice, confirming the interim order and ruling in favor of the petitioner. No costs were awarded, and the parties were directed to obtain certified copies of the judgment.
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