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TMI Blog1995 (5) TMI 62X X X X Extracts X X X X X X X X Extracts X X X X ..... purchase made from unregistered dealers who were not traceable. The return was stated to have been field under Amnesty Scheme. As per the Assessing Officer the return filed was as a result of the investigations carried out on the purchases which were found to be bogus. Accordingly it was held that the same could not be covered under the Amnesty Scheme. In order, however, to regularise the return so filed on 30-9-1986 notice under section 148 was issued on 3-3-1988. In the meanwhile the assessee filed another return on 9th Feb., 1989 withdrawing its claim in respect of deduction already allowed at Rs. 10 lakhs under section 35CCA. Taking this too into consideration the total income was adopted at Rs. 28,30,736. Before the learned CIT(A) the assessee contended that the revised return declaring an amount of Rs. 10,00,000 was filed under a mistaken impression. As per provisions of section 35CCA, there was no requirement that the amount so donated should be spent by the association or institution to whom the donation made before the donor is entitled to deduction under the aforesaid provisions. The assessee had paid the amount by cheque and the same was accepted. Therefore, the additio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 148 of the Act which would amount to change of opinion on the part of the Assessing Officer. The revised return could be considered in the proceedings under section 139 of the Act only and not under section 148 of the Act. Even on technical grounds the addition could not be sustained as would be apparent from the reasons recorded under section 148 of the Act. The proceedings under section 147 were initiated for a limited purpose to bring in its fold the income of Rs. 1,20,000 and no other income. it could not be extended to Rs. 10 lakhs as done by the Assessing Officer. The revised return filed surrendering a deduction of Rs. 10 lakhs was therefore a nullity in law and as such should have been ignored. A brave injustice has been done to the assessee in withdrawing its claim specifically when not only the assessee had parted with substantial sum of money but had not recoverd the same back. Till dated it has not been shown that the approval under section 35CCA to Seva Charitable Trust stands withdrawn. On the other hand, the assessee is not barred from withdrawing the surrender at any stage. Support was derived from the decision of the Hon'ble Supreme Court in the case of Pullangode ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cheme as contended by the assessee or it was as a result of an investigation in respect of amount of purchases surrendered as is the case of the department. The reasons recorded under section 148 merely make a mention of the revised return filed by the assessee reflecting an income of Rs. 1,20,000 towards the purchases made from unregistered dealers. The fact however remains that the proceedings under section 147 of the Act were initiated to regular the revised return filed by the assessee declaring an income of Rs. 1,20,000. Thus what is material for determination of the issue is whether proceedings under section 147 were validly initiated or not. The assessee itself came forward to disclose an income Rs. 1,20,000. In order to bring the aforesaid income to tax, proceedings under section 147 were initiated which are valid. Having once done so the service of notice under section 148 of the Act results in the commencement of assessment proceedings which are governed in turn by all the other provisions of the Act. Notice under section 148 of the Act is therefore deemed to be one under section 139 of the Act. It may so happen that in some cases it may lead to supplementary assessment w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion, yet embedded in the same is the requirement that the institution or association must carry out programmes of rural development approved by the prescribed authority. The prescribed authority as mentioned under Rule 6AAA is the Chief Commissioner or Commissioner of Income-tax. As per sub-section (2) of section 35CCA of the Income-tax Act, the expenditure by way of payment of any sum to any association or any institution is to be in respect of the programme of rural development to be approved by the prescribed authority. This clearly shows that there has to be a programme of rural development to be specified by the association or institution which is to be approved by the prescribed authority in respect of which a certificate is to be issued to enable the donor to get deduction. Thus from the wordings in which the section is couched, it is clear that not only the association or institution must have an object of carrying out a programme of rural development but the latter has to be implemented. The prescribed authority is duty bound to give authorisation only to those institutions or associations which have undertaken and are implementing the approved programmes. In our view we a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nstitutions or associations which are approved and which have undertaken and are implementing approved rural development programmes after March 1, 1983. This view is fortified by sub-sections (2) and (2A) of section 35CCA. The said sub-section provide that the deduction under sub-section (1)(a) or (1)(b) shall not be allowed for payment to institutions or associations referred to in the said clause unless certificate is produced from such institution or association. The word "such" gives an indication that the institution or association must be such which must be carrying on, in furtherance of its objects, the approved rural development programme. If any such institution or association approached the prescribed authority it cannot be refused the authorisation on the ground that new section 35CCA does not envisage renewal of the approval to the institution and/or the programme." Thus the scope of section 35CCA as originally inserted by the Finance Act, 1978 and effect of amendment made by Finance Act, 1983 has been explained by their Lordships of Gujarat High Court as stated above. The proposition that underlying object is the carrying out of rural developments has been more than ..... X X X X Extracts X X X X X X X X Extracts X X X X
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