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TMI Blog2020 (3) TMI 1270X X X X Extracts X X X X X X X X Extracts X X X X ..... n under section 35AC of the Act was denied to the assessee on the reasoning that the trustee of such trust in the statement given under section 133A during the survey operation has admitted the fact the NCT is engaged in the activity of providing the accommodating entries to the parties. Admittedly there was no cross-examination provided to the assessee of the trustees who have admitted to be engaged in providing accommodating entries. Thus the question arises whether the assessee can be denied the benefit of the deduction under section 35AC on the basis of the statement recorded during survey operation which were not cross verified despite the request was made to the AO by the asssessee. In our considered view the answer stands in favour of the assessee. The statement recorded during survey operation cannot be used against the assessee until and unless it is cross verified in view of the judgment in the case of CIT v/s Chartered Speed Pvt. Ltd [ 2015 (3) TMI 809 - GUJARAT HIGH COURT]. Revenue has not brought any tangible material suggesting that the donation paid by the assessee to NCT has come back to it in the form of cash. Thus in the absence of necessary document ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... us persons in spite of the specific requests made by the appellant. The AO has passed the impugned order in violation of the principle of natural justice and therefore the Order passed is requires to be quashed. 4. The learned CIT(A) grossly erred in law and on facts of the case in confirming the action of the I AO in making the addition/disallowance without providing the appellant an opportunity to cross examine the persons whose statements had been blindly followed by the AO for making the impugned addition. The action of the AO is in clear violation of principles of natural justice and therefore the Order passed is requires to be quashed. 5. The learned CIT(A) grossly erred in law and on facts of the case in confirming the action of the AO in making the addition/disallowance without appreciating the fact that the appellant is legitimately entitled to deduction for a sum of ₹ 1,12,50,000/- in respect of the donation of ₹ 50,00,000/- given to School Human Genetic Population Health @ 175% and donation of ₹ 25,00,0007- @ 100%) given to the Navjivan Charitable Trust which has been duly approved u/s. 35(1 )(ii) and 35AC of the IT. Act respectively and the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... AC/35(1)(ii) by issuing notification in the official gazette of the Central Government which can be verified from the receipts issued by the trust/institution against the donations received. The assessee also furnished the certificate of expenditure in form 58A read with rule 11 of Income Tax Rules. Thus it claimed that it has duly complied the provisions for the claims made by it as discussed above as specified under the Income Tax Act. 3.2 The assessee regarding the donations made to the School of Human Genetics and Population Health (in short SHG PH ) also contended that no cross examination was provided to it of the statement of the office bearers/trustee recorded during the survey operation carried out by the Kolkata Directorate despite of the request made by it upon which the department placed it reliance. In addition the assessee also made reply of the various objection raised by the AO which are available on page nos. 19 to 24 of the assessment order. Thus the assessee was of the view that the question of disallowance of the deductions claimed by it does not arise at all. 3.3 However, the AO found, as per the information received from the Kolkata Directorate, th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... refuses to allow the deduction for the donation made to SHG PH on the ground that Government has withdrawn the approval granted under section 35(1)(ii) of the Income Tax Act. However, the undisputed fact is that at the time of donation, the entity was eligible to accept the donation under section 35(1)(ii) of the Act and the Government has withdrawn the approval granted after two and half year (i.e. 21-09-2016) from the end of the previous year (F.Y. 2013-14) in which donation was made. 4.3 As such the provision of explanation below section 35(1)(ii) provides that the deductions under section 35(1)(ii) on donations made to specified institution cannot be denied merely on the ground that subsequent to payment of donation the approval granted to such institution has been withdrawn. 4.4 However the Ld. CIT-A observed that the survey operation in the case SHG PH and the NCT evidence that it is engaged with the entry operator/bogus billers for receiving donations and returning back the same in the form of cash to the donors after charging nominal commission for providing services to such transactions. As such it was noted by the AO that the assessee was also one of the ben ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Government on a later date. In this regard we place our reliance on the order of this tribunal involving identical issue which has been decided in favour of the assessee in the case of ACIT v/s M/s Thakkar Govindbhai Ganpatlal HUF in ITA No. 2318/AHD/2017 wherein it was held as under: 5. We have duly considered rival contentions and gone through the record carefully. In the case of S.G. Vat care P. Ltd.(supra), the tribunal has recorded the following finding: 2. In the first ground of appeal, the grievance of the assessee is that the ld.CIT(A) has erred in confirming addition of ₹ 8,75,000/- on account of alleged bogus donation to Herbicure Healthcare Bio-Herbal Research Foundation. 3. Brief facts of the case are that the assessee has filed return of income on 20.11.2014 declaring total income at ₹ 4,47,910/-. On scrutiny of the accounts, it revealed that the assessee-company has given donation to Herbicure Healthcare Bio-Herbal Research Foundation, Calcutta. A survey action was carried out at the premises of the donee wherein it revealed to the Revenue that this concern was misusing the benefit of notification issued by the Income Tax Department. It ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssue in dispute is squarely covered in favour of the assessee. Respectfully following the order of the ITAT in the case of S.G.Vat care P.Ltd., we do not find any merit in the appeal of the Revenue. It is dismissed. 7. In the result, appeal of the Revenue is dismissed. 7.1 As the issue decided by this tribunal in the case above, is squarely applicable to the present facts of the case, therefore we disagree with the finding of the authorities below. Accordingly we hold that the assessee is entitled for the benefit of the donation made to SHG PH under section 35(1)(ii) of the Act. 7.2 Regarding the donation made to the NCT , we note that the benefit of the deduction under section 35AC of the Act was denied to the assessee on the reasoning that the trustee of such trust in the statement given under section 133A during the survey operation has admitted the fact the NCT is engaged in the activity of providing the accommodating entries to the parties. However, admittedly there was no cross-examination provided to the assessee of the trustees who have admitted to be engaged in providing accommodating entries. Thus the question arises whether the assessee can be denied the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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