The Income Tax Appellate Tribunal (ITAT), Pune Bench has permitted the deduction beneath Section 35(1)(ii) of the Income Tax Act with respect to the donation.
The taxpayer owner of MRC transolutions Pvt ltd furnished a donation of Rs 1.25 cr to the organization known as the school of human Human Genetics and Population Health (hereinafter called SHGPH).
The assessing officer with respect to the verification towards the originality of the claim initiates an inquiry towards the firm by giving the notice beneath section 133(6) of the act.
With respect to the investigation notice, the SHGPH told that the firm has furnished the application beneath section 245C of the act to the settlement commission, before whom it was furnished that it has involved in giving the accommodation entries towards the donations via specific mediators and the donations will be refunded to the donor’s post holding the service charges.
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The donations and the refunds will be filed via the banking system. It was moreover furnished that the application was built to the Settlement Commission. Moreover, the assessing officer had obtained the details through the investigation unit of the council through Kolkata which says that the firm is involved in furnishing the accommodation record of the donation.
But the officer does not permit the claim for deduction beneath section 35(1)(ii) of the Act, keeping unfavourable conclusions with respect to the petitioner.
The taxpayer constitutes that there is no proof which is brought through the council to show that the petitioner firm has obtained back part of the donations furnished to the said firm either in cash or in any other segment and the petitioner was not provided an opportunity to cross-check it.
While beside that CIT-DR consists that via these issues about the research firms i.e SHGPH accepts that the modus operandi to the Hon’ble reimbursement commission is conclusive evidence to display that the donee has been involving in the bogus activity to give the accommodation entries for the donors and the taxpayers had refused to release primary the onus cast on it.
The two Judges S.S. Vishwanethra Ravi and Inturi Rama Rao seek that the assessing officer is not able to implement the attendance of officers of one firm for the purposes of cross-exam through the petitioner through practicing the powers implemented with him.
ITAT held “The legislative intent of Parliament to allow the deduction under section 35(1)(ii) in the hands of the donors, notwithstanding the fact that the approval granted earlier to the Research Organization was withdrawn retrospectively,”
Thus ITAT suggests that the claim produced through the taxpayer’s firm via deduction beneath section 35(1)(ii) of the Act on account of donation addressed to SHGPH is effectively permissible.
