| The Tax Publishers2019 TaxPub(DT) 3888 (Mum-Trib) : (2019) 177 ITD 0364 INCOME TAX ACT, 1961
Section 35(1)(ii)
Where assessee acting upon a valid registration/approval granted to an Institution had donated the amount for which deduction was claimed under section 35(1)(ii), such deduction could not be disallowed if at a later point of time such registration was cancelled with retrospective effect.
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Business deduction under section 35(1)(ii) - Scientific research expenditure - Approval granted to institution got cancelled subsequently -
Assessee- firm claimed deduction of Rs. 17.5 lakhs under section 35(1)(ii) on account of donation of Rs. 10 lakhs made to School of Human Genetics and Population Health (SHG&PH). In the course of such survey operation, it was found that these institutions were not carrying out any activities relating to scientific research but were being used as a front for routing bogus donations through brokers. AO observed, due to the irregularities committed by these institutions and also that they were not involved in research activity, the registration certificates issued to these institutions were cancelled with retrospective effect. AO thus, denied the claim of deduction under section 35(1)(ii). Held: If assessee acting upon a valid registration/approval granted to an Institution had donated the amount for which deduction was claimed, such deduction could not be disallowed if at a later point of time such registration was cancelled with retrospective effect. Thus, assessee was entitled to claim deduction under section 35(1)(ii).
Followed:CIT v. Chotatingrai Tea, (2003) 126 Taxman 399 (SC) : 2002 TaxPub(DT) 1674 (SC); State of Maharashtra v. Suresh Trading Co., 1998 taxmann.com 1747; National Leather Cloth Mfg. Co. v. Indian Council of Agricultural Research, (2000) 110 Taxman 511 (Bom.) : 2000 TaxPub(DT) 0938 (Bom-HC); and Motilal Dahya Bhai Jhaveri & Sons v. ACIT, ITA No. 3453/Mum./2018, dated 24-4-2019.
REFERRED : PCIT v. NRA Iron & Steel Pvt. Ltd., Civil Appeal No. of 2019 (Arising out of SLP (Civil) No. 29855 of 2018), dated 5-3-2019 : 2019 TaxPub(DT) 1628 (SC); PCIT v. NDR Promoters Pvt. Ltd., ITA No. 49/2018, dated 17-1-2019 : 2019 TaxPub(DT) 0886 (Del-HC); CIT v. Navodaya Castle Pvt. Ltd., (2014) 367 ITR 306 (Del.) : 2014 TaxPub(DT) 3789 (Del-HC); Navodaya Castle Pvt. Ltd. v. CIT, 2015--TIOL--314--SC--IT) : 2015 TaxPub(DT) 1868 (SC); CIT v. MAF Academy Pvt. Ltd., (2014) 361 ITR 258 (Del) : 2014 TaxPub(DT) 0087 (Del-HC); Rick Lunsford Trade & Investment Ltd. v. CIT, (2016) 385 ITR 399 (Cal.) : 2016 TaxPub(DT) 3442 (Cal-HC); Rick Lunsford Trade & Investment Ltd. v. CIT, [2016--TIOL--207--SC--IT—SC : 2017 TaxPub(DT) 0915 (SC)] ; CIT v. Nipun Builders & Developers Pvt. Ltd., (2013) 30 taxmann.com 292 (Del) : 2013 TaxPub(DT) 0526 (Del-HC); CIT v. Nova Promoters & Finlease Pvt. Ltd., (2012) 18 taxmann.com 217 (Del) : 2012 TaxPub(DT) 1558 (Del-HC), CIT v. Ultra Modern Exports Pvt. Ltd., (2013) 40 taxmann.com 458 (Del) : 2013 TaxPub(DT) 0917 (Del-HC), CIT v. Frostair Pvt. Ltd., (2012) 26 taxmann.com 11 (Del) : 2012 TaxPub(DT) 3185 (Del-HC), CIT v. N.R. Portfolio Pvt. Ltd. (2013) 29 taxmann.com 291 (Del.) : 2013 TaxPub(DT) 1173 (Del-HC); CIT v. Empire Builtech Pvt. Ltd., (2014) 366 ITR 110 (Del) : 2014 TaxPub(DT) 1850 (Del-HC), CIT v. Focus Exports Pvt. Ltd., (2014) 51 taxmann.com 46 (Del.) : 2014 TaxPub(DT) 4283 (Del-HC), N.K. Proteins Ltd. v. CIT, 2017--TIOL--23--SC—IT : 2017 TaxPub(DT) 1860 (SC); and N.K. Proteins Ltd. v. CIT, 16--TIOL--3165--HC—AHM--IT : 2016 TaxPub(DT) 3862 (Guj-HC).
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