2016 (9) TMI 105 - AT - Income Tax

Eligibility of deduction u/s 35AC - Held that - The assessee complied the twin condition. Ld. CIT(A) considered the contention of the assessee and the notification No. SO121(E) dated 12.01.2009 notifying the Institution as eligible Institution for health and protection activities for elderly persons for three Financial Year i.e. 2008-09, 2009-10 & 2011-12. The CIT(A) concluded that AO has recorded the statement of Dr. Sonia Sharma (Chairperson of MUS) which clearly established the fact that assessee has actually made the payment of ₹ 1,00,00,000/- to the MUS. The AO despite recording the statement confirmed the donation conveniently avoided referring to such evidence including statement while disallowing the claim of assessee in the assessment order. The CIT (A) concluded that the assessee satisfied both the condition enumerated u/s 35AC. The Ld. CIT(A) also considered the fact that even if any discrepancy or forgery has been occurred in case of Donee i.e. MUS, the AO cannot denied the claim of deduction and allowed the appeal of assessee. - Decided against revenue

Summary

Issues involved:
- Allowance of deduction u/s 35AC based on donation to Mahila Utkarsh Sansthan, Indore
- Contradictory statements by Dr. Sonia Sharma regarding donation receipt
- Discrepancies in the statements of Mahila Utkarsh Sansthan
- Compliance with conditions for deduction u/s 35AC

Analysis:
1. The Revenue challenged the allowance of deduction u/s 35AC for a donation made to Mahila Utkarsh Sansthan, Indore. The Revenue argued that the organization denied receiving the donation and highlighted discrepancies in the statements provided by Dr. Sonia Sharma, the Chairperson. They contended that the denial of donation and allegations of a bogus account raised concerns about the legitimacy of the claim.

2. The Assessee, engaged in land development, claimed the deduction u/s 35AC for the donation made. The Assessing Officer (AO) observed discrepancies and issued notices to Mahila Utkarsh Sansthan, which initially denied receiving the donation. The Assessee provided evidence of payment through pay orders and argued that all conditions for deduction u/s 35AC were met. The Assessee emphasized compliance with Form No. 58A and the approval of the institution for the donation.

3. The Tribunal considered the contentions of both parties and reviewed the evidence on record. It noted that Mahila Utkarsh Sansthan eventually confirmed the receipt of the donation, despite initial denials. The Tribunal found that the Assessee fulfilled the conditions for deduction u/s 35AC, as required by law. The Tribunal also highlighted the importance of complying with the provisions and certification specified under section 35AC.

4. The Tribunal upheld the decision of the CIT(A) to allow the deduction, emphasizing that the Assessee had met the necessary criteria for claiming the benefit under section 35AC. The Tribunal found no fault in the CIT(A)'s analysis of the case and dismissed the Revenue's appeal, affirming the legitimacy of the deduction claimed by the Assessee.

In conclusion, the Tribunal's detailed analysis and consideration of the evidence presented by both parties led to the dismissal of the Revenue's appeal, upholding the allowance of the deduction u/s 35AC for the donation made to Mahila Utkarsh Sansthan, Indore by the Assessee.