9911796707
TMI Blog1992 (1) TMI 157X X X X Extracts X X X X X X X X Extracts X X X X ..... Mission without its authority and encashed these cheques in Delhi on 25-3-1983, paid only a sum of Rs. 2,000 into this account and retained the balance of Rs. 1,98,000 with him. Subsequent events showed that the balance money of Rs. 1,98,000 also was sent to Ramakrishna Vivekanand Mission in 1986. The assessee claimed deduction under section 80GGA of the sum of Rs. 2 lacs in his assessment. The assessee filed the original return on1-6-1983disclosing an income of Rs. 1,16,737 after claiming deduction for the above sum. Subsequently a revised return was filed on5-12-1983showing an income of Rs. 3,16,740. The assessee then again revised the return and made the claim for Rs. 2 lacs in other words the original claim was restored. 3. In September 1983, the Income-tax Department conducted raids under section 132 of the Income-tax Act on the premises of certain persons who are alleged to be connected with a racket of making false claims under section 80GGA by making bogus donations. The assessee's premises was also one of those which was searched and during the search operations, it came to light that the said sum of Rs. 2 lacs did not reach the Ramakrishna Vivekanand Mission (hereinafte ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cted the assessee's contentions, declined to place any reliance on the receipt dated28-3-1983as proof of the donation having a bearing in the assessment year 1983-84. The Income-tax Officer also made a mention of the expiry of the approval given by the Commissioner of Income-tax-I,West Bengalto theMissionto hold that since the purpose for which the donation under section 80GGA was allowed had expired, the receipt given by theMissioncould not be of any avail to the assessee. The Income-tax Officer thus concluded that the claim made by the assessee for the deduction of the donation under section 80GGA was a bogus claim intended to conceal his income by furnishing inaccurate particulars. Therefore, he accepted the income returned in the first revised return of Rs. 3,16,740 which meant disallowing the donation. 4. There was then an appeal before the Commissioner of Income-tax who virtually agreeing with the Income-tax Officer's view confirmed the disallowance. He held that the assessee never intended to give any genuine contribution to theMissionin March 1983 and that if at all any contribution was made to theMission, it was only in January 1986 and not earlier. However, since an amo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... onsequence of the search that was conducted in his premises, he somehow got over Mr. Mehra as well as the Mission and got the money deposited with the Mission in January 1986 and managed to get a receipt of the date of 28-3-1983, all with a view to create evidence of a genuine donation without ever making a genuine donation. If the search had not been conducted in the premises of the assessee, the assessee would have walked away with getting the deduction for this sum defrauding thereby the Revenue. Since the search had exposed the assessee the evidence created by the assessee subsequent to the search should not be relied upon as genuine, supporting the claim of the assessee. He, therefore, defended the view taken by the authorities below in rejecting the claim of the assessee. He also laid great emphasis on the filing of two revised returns--one as soon as the Department came to know about the falsification of the claim and secondly, after he was able to manage the middleman of theMissionto get them agree to the donation. He concluded his arguments by urging that the entire transaction should be seen in the light of the discoveries made during the search. 8. In our opinion, cert ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pt of the donation by the assessee. Insofar as the assessee is concerned, the date of donation is the date when he issued the cheque not even the date of encashment of the cheque, provided the cheque was issued (a) in favour of the Mission, (b) either to the Mission or to its authorised agent, (c) the cheque was encashed and (d) absence of any proof even a suggestion that the money so encashed had come back to the assessee in one form or the other. The correspondence and the evidence on record more than clearly established that the facts mentioned at (a), (b) and (c) are proved and (d) was not at all even attempted to be proved. Therefore, the conclusion can only be that the assessee issued in all good faith and with a genuine desire to help the laudable cause of theMission, a donation of a sum of Rs. 2 lacs and was waiting for the receipt from theMission. It may be that the assessee wanted to take advantage of the relief provided under the Income-tax Act if donations were made to the specified Institutions for specified purposes as stipulated under section 80GGA. This desire to help a cause and to gain advantage in tax as provided for in the Income-tax Act cannot be frowned upon. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ogramme from one Sh. N.R. Dongre of D-7/5, Vasant Vihar,Delhi- 57." It was then pointed out to the Income-tax Officer in that letter that since the payment was made to an approved Institution under section 35CCA, the assessee was eligible for the deduction of the sum under section 80GGA by pointing out that what happened between the authorised representative of the Mission and the Mission was a matter wholly irrelevant for the purpose of determining whether the assessee was eligible for the deduction under section 80GGA of the Act. It is also noteworthy that theMissionaddressed letters directly to the Commissioner of Income-tax, Delhi-III New Delhi and also to the Chief Commissioner of Income-tax,West Bengalthat the assessee is entitled to the deduction under the provisions of section 80GGA for the assessment year 198384. These facts were not controverted anywhere by the Department except drawing adverse conclusions based upon suspicions. 11. The assessee received on5-12-1983a registered letter dated3-12-1983from theMissionstating that they received a donation of Rs. 2,000 and asked for his confirmation. The assessee was then shocked to learn the situation and pending further e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sed returns not in a proper perspective. It is to be remembered that the basic law of contracts is that an act of an agent is an act done by the principal and the principal when he ratifies the act it becomes an act done by himself under the law. The ratification by theMissionof the act of the agent not having been proved to be a bogus affair or a sham affair it has to take its effect which is establishment of the fact that there was a genuine donation made in March 1983 in all good faith. We do not wish to burden this order with the relevant law on the subject as it is accepted during the course of hearing before us about the legal position. The payment made by the assessee to the agent having been ratified by the Mission, it should be taken as payment to the Mission itself in 1983 and the fact that the agent misappropriated the money in the meantime cannot be taken as a ground to say that the assessee did not make the payment to the Mission. In this context the letter written on 6-2-1986 by the Mission to the Chief Commissioner of Income-tax, Calcutta, to which we have alluded to above, categorically admits that Mr. Mehra collected the funds from the assessee and misappropriated ..... 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