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TMI Blog1991 (5) TMI 122X X X X Extracts X X X X X X X X Extracts X X X X ..... rning the balance to the alleged donors within a day or two of the clearing of the cheque received as donation. He also observed that by claiming such payments, the assessee had furnished inaccurate particulars of the income and has made wilful attempt to evade tax. He, accordingly, asked the assessee to reply to the query as to why such claim should not be disallowed in view of the withdrawal of the recognition accorded to the Society for Integral Development. He pointed out that the assessee in its reply did not meet the point regarding allowability of the donation. But had questioned the legality of withdrawal of recognition to the Society. He, therefore, concluded that the claim of the assessee cannot be allowed and the amount was added back. 3. The assessee took up the matter before the learned CIT(Appeals), who, on the same reasonings sustained the disallowance. He noted that the Assessing Officer by his letter dated 6-7-1989 informed the learned CIT(Appeals) that the certificate accorded under section 35CCA issued by the Government has been cancelled with retrospective effect to the Society for Integral Development, Calcutta. That was the basis for the disallowance. Hence, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e-tax Rules. It is vehemently urged that when there is such jurisdiction for the State Level Committee to exercise powers of withdrawal, such withdrawal would have no legal consequences or would have no effect at all. Various cases in which rulings have been given, are cited before us in order to reinforce the submissions made on different aspects by the assessee's learned counsel. Amongst other things, he refers to the decision of the Hon'ble Delhi High Court in the case of Chhabra Electric Stores v. Chief Commissioner [1972] 30 STC 85, copy of which has been placed in our file. The issue in the Delhi case was under the Sales-tax (Delhi) in which registration granted earlier to the dealer was cancelled and the question was whether such cancellation can be made retrospectively which would affect the person concerned. At page 87 of the said report, it was noted that at the time of the sales made in favour of Jai Hind Stores, the registration certificate of the concern was still subsisting and the dealer could not have any knowledge that the registration certificate of Jai Hind Stores would be cancelled with retrospective effect. It was held that the dealer cannot be deprived of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... has been validly withdrawn by the said prescribed authority and it is submitted that the Assessing Officer as well as the learned CIT(Appeals) have properly taken note of the same and have validly rejected the contentions of the assessee. It is submitted that the assessee in collaboration with the Society had shown certain payments as donation for obtaining deduction and at the same time the money was returned back to the assessee after some time. It is pointed out that the State Level Committee has withdrawn the approval with proper reasons and findings of fact which cannot be challenged at this stage and, in fact, such challenge cannot be raised in appeal before the Income-tax Appellate Tribunal as the issue could be solved in a different forum. In short, it is urged that the orders of the authorities below being proper and valid under the circumstances of the case requires to be maintained. 7. We have given our consideration of the various submissions made by both the sides and we have gone through the orders of the authorities below as well as other papers placed before us for our perusal. It is seen that at the time of giving away the donation by the assessee to the said Soc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n or in the said rule to say that once an approval is given by the prescribed authority, the said authority can withdraw such approval at any time and including also withdrawal with retrospective effect. In fact, a proviso or a rule would have to be considered harmoniously with the main section or main enactment or provision. In the case of CIT v. Ajax Products Ltd. [1965] 55 ITR 741, the Hon'ble Supreme Court on the facts of that case observed that if the words of a statute are precise and unambiguous they must be accepted as declaring the express intention of the Legislature. In another case of CIT v. Madurai Mills Co. Ltd. [1973] 89 ITR 45, on the facts of that case, it was held by the Hon'ble Supreme Court that it is well settled that considerations stemming from the legislative history must not be allowed to override the plain words of a statute and that a proviso cannot be construed as enlarging the scope of an enactment when it can be fairly and properly construed without attributing to it that effect. It was further held that if the language of the enacting part of the statute is plain and unambiguous and does not contain the provisions which are said to occur in it, one ca ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pective operation of the withdrawal of the approval by the prescribed authority which cannot be said to be warranted either by express language of the section or by necessary implication. Similarly in the said rule, we do not find any such provision or authorisation for such withdrawal of approval with retrospective effect. Of course, the said section 35CCA would have to be read with the rule which indicated the intention of the Legislature in enacting the said section. But in doing so, we find no material or provision to support the stand taken by the assessing authority on this point. 13. In our opinion, a machinery section or the rules would have to be construed or considered so as to effectuate the charging section. Assuming without admitting that the said Society has defaulted or omitted to do certain things as intended by the section and as spelt out by the rules, it cannot be said that the assessee who is the donor has committed in a default to disentitle him to claim deduction of the above amount of expenditure in the computation of his income unless there are materials to show or infer that the said sum or part thereof has come back to the assessee in some form or the ot ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ration. A finding is required to be made in respect of this aspect also whether such utilisation of the fund have been used before a specified date. 18. In view of the various discussions, and the authorities available and as noted above, the assessee would stand entitled to claim the amount donated as donation, but subject to such condition as laid down by the section itself, which neither the authorities below have examined properly before outright rejecting the assessee's claim on the ground that the approval given to the society, was withdrawn, although the Assessing Officer has mentioned in the order that withdrawal was made, inter alia, as the society had not utilised the money for approved programme of rural development. But before coming to such conclusion categorically, certain facts are basically required to be brought out particularly so when the assessee itself has obviously no control over the utilisation of such funds for the approved programme for rural development etc., as its required by the section. We consider, therefore, that it will be fair to both the sides if the matter is looked into by the Assessing Officer in respect of this point after bringing correct ..... X X X X Extracts X X X X X X X X Extracts X X X X
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