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TMI Blog2024 (7) TMI 438X X X X Extracts X X X X X X X X Extracts X X X X ..... the donation amount, which worked out to Rs. 96,25,000/-. In the financial year relevant to the assessment year 2014-15, the assessee had donated 75,00,000/- to M/s. School of Human Genetics and Population Health, Kolkata for Scientific Research and claimed deduction u/s 35(1)(ii) of the Act @ 175% of the donation amount, which worked out to Rs. 1,31,25,000/-. 4. The Investigation Wing of Kolkata, carried out survey operations u/s 133A of the Act in the hands of both the organizations referred above and it was found that both these organizations were providing bogus donation certificates through various broker in lieu of receiving commission. Based on the above said information of the Investigation wing, the Assessing Officer (AO) took the view that the donation claimed to have been paid by assessee in both these years are bogus in nature and accordingly the deduction claimed u/s 35(1)(ii) of the Act in both the years under consideration are not to be allowed. Accordingly, he disallowed the deduction claimed in both the years by the assessee u/s 35(1)(ii) of the Act. The learned CIT(A) also confirmed the disallowance made in both the years. Hence the assessee has filed these appe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 50 lakhs to the "The School of Human Genetics and Population Health" and claimed deduction u/s. 35(1)(ii) of the Act equal to Rs. 87,50,000/- being 175% of the amount paid. A survey was conducted at the office premises of the school namely, "The School of Human Genetics and Population Health" u/s. 133A of the Act on 27.01.2015 and it was observed by the survey team that this institute in connivance with donors, brokers and accommodation entry providers has indulged in a dubious scheme of tax evasion, under which bogus donations were received from donors and money used to be returned back to the donors in lieu of commission, even while the donor availed of deductions u/s. 35(1)(ii) of the Act. The registration of the institution was cancelled by the Government of India with retrospective effect and it was held that the institution has misused the exemption. However, under similar facts and circumstances, various coordinate benches have taken the view that mere admission on the part of the office bearers of the body/trust, the assessee cannot be penalized and the amount of donations claimed by the assessee on account of payment to the said school cannot be denied. In the case of Nar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ucting commission there from. 14. We note that, during the course of hearing, before us, the Id Counsel for the assessee submitted that, the sums paid to "Matrivani and "SHG, were genuine donations and both of the Institutions were admittedly registered under section 12A of the Income Tax Act, 1961. We note that both of the said two Institutions viz, "Matrivani" and "SHG", are Scientific Research Association approved as such by Central Government under section 35(l)(ii) of the Income Tax Act, 1961 vide Notification, bearing No. 229/2007 (F.N0.203/135/2007/ITA-II) dated 21.08.2007 and Notification No. 4/2010 (F. No. 2B/A/2009,/ITA-II dated 28.01.2010 respectively, published in Official Gazette of India. The assessee categorically denied that it ever received back the amounts of donations in cash or in kind from the said Institutions and from any person whatsoever in lieu of the various amounts donated to these two institutions, we note that in the statements, of key persons and alleged brokers recorded by the Investigation Wing in course of survey proceedings, in their cases and the extracts of which was provided to the assesses in the show cause notice, the name of the assessee f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oath during survey cannot be allowed as held by Hon'ble Supreme Court in Kader Khan & sons (supra). Moreover, we note that if the AO was hell bent determined to disallow the claim of the assessee, then he should have granted an opportunity to cross examine Shri Swapan Ranjan Das Gupta and Shri Kishan Bhawasingka as held by Hon'ble Supreme Court in Andaman Timber (supra). 11. In the light of the aforesaid facts and circumstances, we cannot sustain the order of the authorities below. Therefore, we set aside the impugned order and direct the AO to allow the deduction of Rs. 26,28,500/- u/s. 35(l)(ii) of the Act. 15. Now, we deal with the arguments of Id DR for the Revenue. We note that the solitary grievance of the Id DR for the Revenue is that since the registration had been cancelled by the CBDT, with retrospective effect that is, with effect from 1sl April 2007, by issuing notification dated 06.09.2016, for both the institutions viz: 'Matrivani' and 'The School of Human Genetics and Population Health', therefore these institutions are not entitled to claim benefit under section 35 (1) (ii) of the Act. We note that the withdrawal of recognition u/s 35(l)( ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion 35(l)(ii) of the Act in respect of the amounts of donations made to two Institutions viz. 'Matrivani Institute Experimental Research & Education' and The School of Human Genetics and Population Health'. Accordingly, the Grounds 1 to 4 raised by the assessee for A.Y. 2013-14 and the Grounds 1 to 5 raised by the assessee for A. Y. 2014-15 are allowed." 9. Similarly in various other decisions the issue has been decided by the Tribunal in favour of the assessee by disregarding the revenue's contentions that the registration of the school has been cancelled by the CBDT with retrospective effect by issuing Notification and, therefore, the assessee is not entitled to benefit u/s. 35(1)(ii) of the Act. The facts before us being materially same involving the same school, namely, "The School of Human Genetics and Population Health", we, therefore, respectfully following the decisions of the coordinate benches of the Tribunal, hold that the deduction u/s. 35(1)(ii) of the Act cannot be denied to the assessee. Accordingly, we direct the AO to grant deduction u/s. 35(1)(ii) of the Act. Appeal of the assessee for the assessment year 2013-2014 (ITA No.6672/Mum/2017) is here ..... X X X X Extracts X X X X X X X X Extracts X X X X
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