ESTATE OF VANDRAVAN P SHAH,MUMBAI V. ASSISTANT COMISSIONER OF INCOME TAX, CIRCLE 19(3), MUMBAI

ITA 5401/MUM/2024

AI Insights

The case involves appeals by the Estate of Vandravan P Shah against the orders of the Commissioner of Income-tax (Appeals) - National Faceless Appeal Centre, which pertained to the assessment years 2011-12, 2012-13, and 2017-18. The primary issues in the appeals were the validity of the reassessment proceedings and the disallowance of deductions under sections 35AC and 80GGA of the Income Tax Act, 1961. The Tribunal examined whether the reassessment was justified and whether the deductions claimed were valid. The Tribunal concluded that the reassessment was validly initiated and that the deductions were not substantiated by the necessary evidence.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 822710 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 2 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-12-2025
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: E
• Assessment Year: 2011-2012
• Appeal Filed On: 16-10-2024
• Laws Referred To: Income-tax Act, 1961
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: HEMANSHU JOSHI
• Assessee Lawyers: SHIVANI SHAH
• Keywords: Difference of opinion; Change of opinion; Opportunity of being heard; Reassessment proceedings; Bogus purchase; Reopening of assessment; Principle of natural justice; Accommodation entries; Assessment record; Reason to believe; Charitable institution; Recovery proceedings; Borrowed satisfaction; Bogus
• Section: 147; 148; 143(3); 142(1); 271(1)(c); 132; 133(6); 133A; 80G

Judgement Text

"IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH “E” MUMBAI BEFORE SANDEEP GOSAIN (JUDICIAL MEMBER) AND SHRI OM PRAKASH KANT (ACCOUNTANT MEMBER) ITA No. 5401, 5402 & 5403/MUM/2024 Assessment Year: 2011-12, 2012-13 & 2017-18 Estate of Vandravan P Shah, 5/38 Tardeo Airconditioned Market, Tardeo Road, Mumbai-400034. Vs. Asst. CIT Central Circle-19(3), Room No. 206, Matru Mandir, Tardeo, Mumbai-400 007. PAN NO. AAAAE 6452 D Appellant Respondent Assessee by : Ms. Shivani Shah Revenue by : Mr. Hemanshu Joshi, Sr. DR Date of Hearing : 14/10/2025 Date of pronouncement : 23/12/2025 ORDER PER OM PRAKASH KANT, AM The captioned appeals are directed against separate orders passed by the Ld. Commissioner of Income-tax (Appeals) – National Faceless Appeal Centre, Delhi [in short ‘the Ld. CIT(A)’] for assessment years 2011-12, 2012-13 and 2017-18 respectively. 2. In these appeals, the issue on merit relates to denial of deduction u/s 35AC of the Income-tax Act, 1961 (in short ‘the Act’). In assessment years 2011-12 and 2012-13, the validity of the Printed from counselvise.com reopening of the assessment as well as validity of the order issued using the PAN and challenged. As issue same were heard together and disposed off by way of this consolidated order for the sake of convenience. 3. Firstly, we take up the appeal for assessment year 2011 ITA No. 5401/Mum/2024. The grounds raised in appeal are reproduced as under: 1. On the facts and circumstances of the case and in law, the Ld. CIT(A) grossly erred in approving the validity of the re assessment order overlooking the following fats and legal issues: - The reasons recorded clearly indicate that the AO did not possess the documentary evidence as also, the statement recorded on the basis of which the genuineness of contribution made was disbelieve and the re information received from the investigation wing, resulting in re opening of the assessment entirely based on the borrowed satisfaction and total lack of application mind by the assessing officer. - The initiation of re the Act vide notice dated 28.03.2018 issued u/s 148 of the Act contrary to the law and in violation to the first proviso to section 147 of the Act in as much as the reason recorded do not indicate any failure on the part of the assessee to disclose truly and fully all the material facts necessary for assessment. 2. That, the Ld. CIT(A), erred in not appreciating the fact that the re-assessment order passed by the Ld. AO is bad in law and the same is in violation to section 159 of the Act - Notice u/s 148 of the Act was issued on the PAN of the deceased. The proceeding was completed and order was passed on the PAN of the deceased, disregarding the fact that the deceased has executed a separate will and there are no legal heir; further the estate Estate of Vandravan P Shah ITA No. 5401, 5402 & 5403/MUM/2024 reopening of the assessment as well as validity of the using the PAN and name of the deceased . As issue-in-dispute being common in these appeals, me were heard together and disposed off by way of this consolidated order for the sake of convenience. Firstly, we take up the appeal for assessment year 2011 ITA No. 5401/Mum/2024. The grounds raised in appeal are reproduced as under: facts and circumstances of the case and in law, the Ld. CIT(A) grossly erred in approving the validity of the re assessment order overlooking the following fats and legal issues: The reasons recorded clearly indicate that the AO did not the documentary evidence as also, the statement recorded on the basis of which the genuineness of contribution made was disbelieve and the re-opening has been done entirely based on the information received from the investigation wing, resulting in re ing of the assessment entirely based on the borrowed satisfaction and total lack of application mind by the assessing The initiation of re-assessment proceeding under section 147 of the Act vide notice dated 28.03.2018 issued u/s 148 of the Act contrary to the law and in violation to the first proviso to section 147 of the Act in as much as the reason recorded do not indicate any failure on the part of the assessee to disclose truly and fully all the material facts necessary for assessment. That, the Ld. CIT(A), erred in not appreciating the fact that the assessment order passed by the Ld. AO is bad in law and the same is in violation to section 159 of the Act Notice u/s 148 of the Act was issued on the PAN of the deceased. ng was completed and order was passed on the PAN of the deceased, disregarding the fact that the deceased has executed a separate will and there are no legal heir; estate has separately assessed AAAAE6452D. Estate of Vandravan P Shah 2 ITA No. 5401, 5402 & 5403/MUM/2024 reopening of the assessment as well as validity of the reassessment name of the deceased has dispute being common in these appeals, me were heard together and disposed off by way of this Firstly, we take up the appeal for assessment year 2011-12 in ITA No. 5401/Mum/2024. The grounds raised in appeal are facts and circumstances of the case and in law, the Ld. CIT(A) grossly erred in approving the validity of the re-opened assessment order overlooking the following fats and legal issues: The reasons recorded clearly indicate that the AO did not the documentary evidence as also, the statement recorded on the basis of which the genuineness of contribution made was opening has been done entirely based on the information received from the investigation wing, resulting in re- ing of the assessment entirely based on the borrowed satisfaction and total lack of application mind by the assessing assessment proceeding under section 147 of the Act vide notice dated 28.03.2018 issued u/s 148 of the Act is contrary to the law and in violation to the first proviso to section 147 of the Act in as much as the reason recorded do not indicate any failure on the part of the assessee to disclose truly and fully That, the Ld. CIT(A), erred in not appreciating the fact that the assessment order passed by the Ld. AO is bad in law and the Notice u/s 148 of the Act was issued on the PAN of the deceased. ng was completed and order was passed on the PAN of the deceased, disregarding the fact that the deceased has executed a separate will and there are no legal heir; AAAAE6452D. Printed from counselvise.com 3. On the facts and circumstances of CIT(A) erred in not appreciating the fact that the disallowance u/s 35AC of the Act was made by the Ld. AO by relying on the material with which the appellant was never confronted to explain and revert the allegation made again 4. On the facts and circumstances of the case and in law, the Ld. CIT(A) erred in approving the disallowance made by the Ld. AO of Rs.50,00,000/ the following: - The 'Navjeevan Charitable Trust has b notification No. SO - The appellant had duly submitted donation receipt, statement, Form assessing officer and appellate 4. The return of in consideration was filed by the assessee total income of ₹2,92,44,086/ 143(3) of the Income 12.03.2014 determining total income at 4.1 Subsequently, information was received from the Deputy Commissioner of Income search under section 132 of the Act had been conducted in the case of M/s Navjeevan Charitable Trust Trust was engaged in providing accommodation entries by way of bogus donations eligible for ded Act. The modus operandi involved receipt of donations by cheque, followed by return of cash to the donors after deducting commission. The assessee, Shri Vandravan P. Shah (PAN: AAPRS9053J), was identified as one of the bene Estate of Vandravan P Shah ITA No. 5401, 5402 & 5403/MUM/2024 On the facts and circumstances of the case and in law, the Ld. CIT(A) erred in not appreciating the fact that the disallowance u/s 35AC of the Act was made by the Ld. AO by relying on the material with which the appellant was never confronted to explain and revert the allegation made against it. On the facts and circumstances of the case and in law, the Ld. CIT(A) erred in approving the disallowance made by the Ld. AO of Rs.50,00,000/- claimed u/s 35AC of the Act without appreciating The 'Navjeevan Charitable Trust has been notified u/s 35AC vide notification No. SO 121(E) dated 12.01.2009. The appellant had duly submitted donation receipt, Form 58 evidencing the trust registration before the assessing officer and appellate authority. The return of income for the assessment year under was filed by the assessee on 10.09.2011 declaring 2,92,44,086/-. The assessment under section 143(3) of the Income-tax Act, 1961 (“the Act”) was completed on 12.03.2014 determining total income at ₹2,93,67,810/ Subsequently, information was received from the Deputy Commissioner of Income-tax, Central Circle–2(1), Mumbai, that a search under section 132 of the Act had been conducted in the case M/s Navjeevan Charitable Trust. The search revealed that the Trust was engaged in providing accommodation entries by way of bogus donations eligible for deduction under section 35AC of the Act. The modus operandi involved receipt of donations by cheque, followed by return of cash to the donors after deducting commission. The assessee, Shri Vandravan P. Shah (PAN: AAPRS9053J), was identified as one of the beneficiaries, having Estate of Vandravan P Shah 3 ITA No. 5401, 5402 & 5403/MUM/2024 the case and in law, the Ld. CIT(A) erred in not appreciating the fact that the disallowance u/s 35AC of the Act was made by the Ld. AO by relying on the material with which the appellant was never confronted to explain On the facts and circumstances of the case and in law, the Ld. CIT(A) erred in approving the disallowance made by the Ld. AO of claimed u/s 35AC of the Act without appreciating een notified u/s 35AC vide The appellant had duly submitted donation receipt, bank evidencing the trust registration before the come for the assessment year under on 10.09.2011 declaring . The assessment under section tax Act, 1961 (“the Act”) was completed on 2,93,67,810/-. Subsequently, information was received from the Deputy 2(1), Mumbai, that a search under section 132 of the Act had been conducted in the case . The search revealed that the Trust was engaged in providing accommodation entries by way of uction under section 35AC of the Act. The modus operandi involved receipt of donations by cheque, followed by return of cash to the donors after deducting commission. The assessee, Shri Vandravan P. Shah (PAN: ficiaries, having Printed from counselvise.com allegedly made a donation of claimed deduction under section 35AC. 4.2 The search assessment u/s 153C of the Act was completed in the case of M/s Navjeevan Charitable Trust by the DCIT, Central Circle, Mumbai, whereas he gave finding that donors were acting in connivance with the trust to receive back donation in cash. The donors gave cheque payment to the trust to gave deduction u/s 35AC of the Act but the donors also received back cash from the trust against the donation after deducting small commission charge of the trust to facilitate this subterfuge transaction. 4.3 On the basis of the above information, the Assessing Officer recorded reasons to believe that income escaped assessment and accordingly, he issued notice u/s 148 of the Act on 28.03.2018. 4.4 In response to the notice u/s 148 of the Act, the Authorized Representative of the assessee M/s details comprising of profit and loss account, balance sheet, computation of income and original return of income for the assessment year 2011 the assessee requested to treat the original return return filed by the assessee in response to return filed u/s 148 of the Act. Subsequently, vide letter dated 11.04.2018, the AR intimated that the assessee died on 06.02.2013 assessment year 2013 Estate of Vandravan P Shah ITA No. 5401, 5402 & 5403/MUM/2024 allegedly made a donation of ₹50,00,000/- to the said Trust and claimed deduction under section 35AC. The search assessment u/s 153C of the Act was completed in the case of M/s Navjeevan Charitable Trust by the DCIT, Central umbai, whereas he gave finding that donors were acting in connivance with the trust to receive back donation in cash. The donors gave cheque payment to the trust to gave deduction u/s 35AC of the Act but the donors also received back cash from the ainst the donation after deducting small commission charge of the trust to facilitate this subterfuge transaction. On the basis of the above information, the Assessing Officer recorded reasons to believe that income escaped assessment and he issued notice u/s 148 of the Act on 28.03.2018. In response to the notice u/s 148 of the Act, the Authorized Representative of the assessee M/s N.P. Patwa & Company filed the details comprising of profit and loss account, balance sheet, computation of income and original return of income for the assessment year 2011-12. The Authorized Representative (AR) of the assessee requested to treat the original return return filed by the assessee in response to return filed u/s 148 of the Act. Subsequently, vide letter dated 11.04.2018, the AR intimated that the assessee died on 06.02.2013 assessment year 2013-14, the assessee was represented in th Estate of Vandravan P Shah 4 ITA No. 5401, 5402 & 5403/MUM/2024 to the said Trust and The search assessment u/s 153C of the Act was completed in the case of M/s Navjeevan Charitable Trust by the DCIT, Central umbai, whereas he gave finding that donors were acting in connivance with the trust to receive back donation in cash. The donors gave cheque payment to the trust to gave deduction u/s 35AC of the Act but the donors also received back cash from the ainst the donation after deducting small commission charge On the basis of the above information, the Assessing Officer recorded reasons to believe that income escaped assessment and he issued notice u/s 148 of the Act on 28.03.2018. In response to the notice u/s 148 of the Act, the Authorized Company filed the details comprising of profit and loss account, balance sheet, computation of income and original return of income for the 12. The Authorized Representative (AR) of the assessee requested to treat the original return of income as return filed by the assessee in response to return filed u/s 148 of the Act. Subsequently, vide letter dated 11.04.2018, the AR intimated that the assessee died on 06.02.2013 and from 14, the assessee was represented in the Printed from counselvise.com name of M/s Estate having PAN No. AAAE6452D. 4.5 During reassessment proceedings, verification under section 133(6) was attempted in respect of the donee Trust; however, the notice was returned unserved with th Accordingly, the assessee was required to discharge its onus of establishing the truth of claim of deduction u/s 35AC paid to M/s Navjeevan Charitable Trust but the the genuineness of the donation. Con Officer disallowed the claim of deduction under section 35AC and completed reassessment under section 143(3) read with section 147 on 20.12.2018 in the name of the deceased assessee through legal representative, retaining the PAN o Officer declined the deduction u/s 35AC of the Act observing as under: “5. The case of M/s Navjeevan Charitable Trust was centralized with the DCIT- Central Circle by the National Committee has been withdrawn vide Notification dated 30.11.2016. The assessee Trust's registration was cancelled vide order u/s 12AA(3) of the I.T. Act dt. 20.12.2016 by the Pr. CIT(Central) case of assessee trust it was noticed from the facts gathered that after receipt of donation, trust booked bogus p accommodation entry providers. The entry providers after receipt of cheque payment from trust, encashes the cheque and returns back cash to the trust/trustee after retaining commission on the accommodation entries. Few entry providers who 133A, have admitted of providing accommodation as donation to M/s Navjeevan Charitable Trust for commission. The assessment of entry providers were completed u/s 153C and commission income on the accommodation transaction was taxed. Few do Estate of Vandravan P Shah ITA No. 5401, 5402 & 5403/MUM/2024 name of M/s Estate of Vandravan P. Shah, through the executor having PAN No. AAAE6452D. During reassessment proceedings, verification under section 133(6) was attempted in respect of the donee Trust; however, the notice was returned unserved with the remark “Trust left”. Accordingly, the assessee was required to discharge its onus of establishing the truth of claim of deduction u/s 35AC paid to M/s Navjeevan Charitable Trust but the assessee failed to substantiate the genuineness of the donation. Consequently, the Assessing Officer disallowed the claim of deduction under section 35AC and completed reassessment under section 143(3) read with section 147 on 20.12.2018 in the name of the deceased assessee through legal representative, retaining the PAN of the deceased. Officer declined the deduction u/s 35AC of the Act observing as 5. The case of M/s Navjeevan Charitable Trust was centralized with Central Circle -2(1), Mumbai. The trusts recognition granted by the National Committee has been withdrawn vide Notification dated 30.11.2016. The assessee Trust's registration was cancelled vide order u/s 12AA(3) of the I.T. Act dt. 20.12.2016 by the Pr. CIT(Central)-1, Mumbai. During assessment proceedings in the case of assessee trust it was noticed from the facts gathered that after receipt of donation, trust booked bogus purchases through accommodation entry providers. The entry providers after receipt of cheque payment from trust, encashes the cheque and returns back cash to the trust/trustee after retaining commission on the accommodation entries. Few entry providers who were covered u/s 133A, have admitted of providing accommodation as donation to M/s Navjeevan Charitable Trust for commission. The assessment of entry providers were completed u/s 153C and commission income on the accommodation transaction was taxed. Few donors covered u/s Estate of Vandravan P Shah 5 ITA No. 5401, 5402 & 5403/MUM/2024 through the executor During reassessment proceedings, verification under section 133(6) was attempted in respect of the donee Trust; however, the e remark “Trust left”. Accordingly, the assessee was required to discharge its onus of establishing the truth of claim of deduction u/s 35AC paid to M/s assessee failed to substantiate sequently, the Assessing Officer disallowed the claim of deduction under section 35AC and completed reassessment under section 143(3) read with section 147 on 20.12.2018 in the name of the deceased assessee through legal f the deceased. The Assessing Officer declined the deduction u/s 35AC of the Act observing as 5. The case of M/s Navjeevan Charitable Trust was centralized with 2(1), Mumbai. The trusts recognition granted by the National Committee has been withdrawn vide Notification dated 30.11.2016. The assessee Trust's registration was also cancelled vide order u/s 12AA(3) of the I.T. Act dt. 20.12.2016 by the 1, Mumbai. During assessment proceedings in the case of assessee trust it was noticed from the facts gathered that urchases through accommodation entry providers. The entry providers after receipt of cheque payment from trust, encashes the cheque and returns back cash to the trust/trustee after retaining commission on the were covered u/s 133A, have admitted of providing accommodation as donation to M/s Navjeevan Charitable Trust for commission. The assessment of entry providers were completed u/s 153C and commission income on the nors covered u/s Printed from counselvise.com 133A have admitted and offered the amount of donation received back for taxation or have revised the return of income. It was concluded that the assessee Campatrust was indulged in bogus activity and not as per its objectives for which tru commission income on the donation amount was taxed as undisclosed income and treating the trust as AOP. 6. In view of the above facts, it was seen that an amount of Rs. 50,00,000/- debited to assessee's profit and loss accounts u/s 35AC is disallowed and added back to the total income of the assessee. Penalty proceedings are initiated u/s 271(1)(c) of the I. T. Act for furnishing inaccurate particulars 4.6 The Assessing Officer passed the order u/s 143(3) r.w.s. 147 of the Act on 20.12.2018 under the name as the Vandravan P. Shah deceased. 4.7 The appeal was filed against the assessment order Ld. CIT(A) in prescribed form No. 35 where the name of the appellant was, however, Premchand Shah having PAN No. AAAE6452D. 5. Before the learned CIT(A), the assessee raised grounds both on the merits of the addition and on the validity of the reassessment, specifically contending that the change of opinion. During the appellate proceedings, the assessee also made submission challenging the very assumption of jurisdiction on the ground that the reassessment proceedings had been initiated in the name of a deceas Estate of Vandravan P Shah ITA No. 5401, 5402 & 5403/MUM/2024 133A have admitted and offered the amount of donation received taxation or have revised the return of income. It was concluded that the assessee Campatrust was indulged in bogus activity and not as per its objectives for which trust was formed and commission income on the donation amount was taxed as undisclosed income and treating the trust as AOP. 6. In view of the above facts, it was seen that an amount of Rs. debited to assessee's profit and loss accounts u/s 35AC s disallowed and added back to the total income of the assessee. Penalty proceedings are initiated u/s 271(1)(c) of the I. T. Act for furnishing inaccurate particulars of income.” The Assessing Officer passed the order u/s 143(3) r.w.s. 147 of on 20.12.2018 under the name as the legal heir of Vandravan P. Shah, having PAN No. AARPSS9053J was filed against the assessment order Ld. CIT(A) in prescribed form No. 35 where the name of the , however, mentioned as Estate of Vandravan Premchand Shah having PAN No. AAAE6452D. Before the learned CIT(A), the assessee raised grounds both on the merits of the addition and on the validity of the reassessment, specifically contending that the reopening was based on a mere change of opinion. During the appellate proceedings, the assessee also made submission challenging the very assumption of jurisdiction on the ground that the reassessment proceedings had been initiated in the name of a deceased person. Estate of Vandravan P Shah 6 ITA No. 5401, 5402 & 5403/MUM/2024 133A have admitted and offered the amount of donation received taxation or have revised the return of income. It was concluded that the assessee Campatrust was indulged in bogus st was formed and commission income on the donation amount was taxed as 6. In view of the above facts, it was seen that an amount of Rs. debited to assessee's profit and loss accounts u/s 35AC s disallowed and added back to the total income of the assessee. Penalty proceedings are initiated u/s 271(1)(c) of the I. T. Act for The Assessing Officer passed the order u/s 143(3) r.w.s. 147 of legal heir of late sh AARPSS9053J of the was filed against the assessment order before the Ld. CIT(A) in prescribed form No. 35 where the name of the Estate of Vandravan Before the learned CIT(A), the assessee raised grounds both on the merits of the addition and on the validity of the reassessment, reopening was based on a mere change of opinion. During the appellate proceedings, the assessee also made submission challenging the very assumption of jurisdiction on the ground that the reassessment proceedings had Printed from counselvise.com 5.1 It was submitted that the notices issued under sections 143(2) and 142(1) of the Act were addressed to the PAN of late Shri Vandravan P. Shah, who had expired, and the assessment was ultimately framed in the name of the legal heir Shah . It was contended that, since Assessment Year 2013 assessee had been represented by the “Estate of Late Shri Vandravan P. Shah”, having a separate PAN, AAAAE6454D) and therefore the assessment, if at all, could been validly completed only in the name and PAN of the estate and not in the name of the deceased individual. 5.2 The assessee further submitted that under the will of the deceased, executors were appointed to administer the estate, discharge the liabilities of the deceased, realise receivables, and pay taxes due to the Government. It was pointed out that probate had been granted by the Hon’ble Jurisdictional High Court vide order dated 30.10.2013, whereby the administration of the properties and credits of the deceased was entrusted to Shri Dilip Dhirajlal Shah, one of the executors named in the will. In this factual background, it was contended that the issuance of notice under section 148 of the Act in the name and PAN of the deceased was legally un 5.3 According to the assessee, proceedings initiated against a dead person are void ab initio, and no valid reassessment could be founded on such notice. It was specifically urged that the Assessing Officer was aware of the death of the assessee, Estate of Vandravan P Shah ITA No. 5401, 5402 & 5403/MUM/2024 It was submitted that the notices issued under sections 143(2) and 142(1) of the Act were addressed to the PAN of late Shri Vandravan P. Shah, who had expired, and the assessment was ultimately framed in the name of the legal heir of Shri Vandravan P. . It was contended that, since Assessment Year 2013 assessee had been represented by the “Estate of Late Shri Vandravan P. Shah”, having a separate PAN, and therefore the assessment, if at all, could been validly completed only in the name and PAN of the estate and not in the name of the deceased individual. The assessee further submitted that under the will of the deceased, executors were appointed to administer the estate, bilities of the deceased, realise receivables, and pay taxes due to the Government. It was pointed out that probate had been granted by the Hon’ble Jurisdictional High Court vide order dated 30.10.2013, whereby the administration of the properties and its of the deceased was entrusted to Shri Dilip Dhirajlal Shah, one of the executors named in the will. In this factual background, it was contended that the issuance of notice under section 148 of the Act in the name and PAN of the deceased was legally un According to the assessee, proceedings initiated against a dead person are void ab initio, and no valid reassessment could be founded on such notice. It was specifically urged that the Assessing Officer was aware of the death of the assessee, yet proceeded to Estate of Vandravan P Shah 7 ITA No. 5401, 5402 & 5403/MUM/2024 It was submitted that the notices issued under sections 143(2) and 142(1) of the Act were addressed to the PAN of late Shri Vandravan P. Shah, who had expired, and the assessment was of Shri Vandravan P. . It was contended that, since Assessment Year 2013–14, the assessee had been represented by the “Estate of Late Shri Vandravan P. Shah”, having a separate PAN, (PAN No. and therefore the assessment, if at all, could have been validly completed only in the name and PAN of the estate and The assessee further submitted that under the will of the deceased, executors were appointed to administer the estate, bilities of the deceased, realise receivables, and pay taxes due to the Government. It was pointed out that probate had been granted by the Hon’ble Jurisdictional High Court vide order dated 30.10.2013, whereby the administration of the properties and its of the deceased was entrusted to Shri Dilip Dhirajlal Shah, one of the executors named in the will. In this factual background, it was contended that the issuance of notice under section 148 of the Act in the name and PAN of the deceased was legally untenable. According to the assessee, proceedings initiated against a dead person are void ab initio, and no valid reassessment could be founded on such notice. It was specifically urged that the Assessing yet proceeded to Printed from counselvise.com issue notice under section 148 in the name of the deceased through legal heir. Reliance was placed on various judicial precedents to contend that a notice issued under section 148 to a deceased person is invalid in law and vitiates the e proceedings. 5.4 The assessee also challenged the reopening on the ground that the reassessment was initiated after the expiry of four years from the end of the relevant assessment year, and there was no failure on the part of the assess facts necessary for the assessment. It was contended that the reasons recorded by the Assessing Officer did not establish any such failure, which is a mandatory jurisdictional precondition for reopening beyond four years. The reasons were further assailed on the ground of non-application of mind. 5.5 The learned CIT(A) condoned the delay in filing the appeal. However, while upholding the addition on merits, the learned CIT(A) rejected the objections raised against proceedings under section 148 of the Act and sustained the reassessment as well as the addition made therein. 6. Before us, the appeal of Vandravan P. Shah having PAN No. AAAAE6454D. has also been filed before us Estate of Vandravan P Shah ITA No. 5401, 5402 & 5403/MUM/2024 issue notice under section 148 in the name of the deceased through legal heir. Reliance was placed on various judicial precedents to contend that a notice issued under section 148 to a deceased person is invalid in law and vitiates the entire reassessment The assessee also challenged the reopening on the ground that the reassessment was initiated after the expiry of four years from the end of the relevant assessment year, and there was no failure on the part of the assessee to disclose fully and truly all material facts necessary for the assessment. It was contended that the reasons recorded by the Assessing Officer did not establish any such failure, which is a mandatory jurisdictional precondition for ur years. The reasons were further assailed on application of mind. The learned CIT(A) condoned the delay in filing the appeal. However, while upholding the addition on merits, the learned CIT(A) rejected the objections raised against the initiation of reassessment proceedings under section 148 of the Act and sustained the reassessment as well as the addition made therein. Before us, the appeal has been filed in the name of the Estate of Vandravan P. Shah having PAN No. AAAAE6454D. has also been filed before us. Estate of Vandravan P Shah 8 ITA No. 5401, 5402 & 5403/MUM/2024 issue notice under section 148 in the name of the deceased through legal heir. Reliance was placed on various judicial precedents to contend that a notice issued under section 148 to a deceased ntire reassessment The assessee also challenged the reopening on the ground that the reassessment was initiated after the expiry of four years from the end of the relevant assessment year, and there was no failure ee to disclose fully and truly all material facts necessary for the assessment. It was contended that the reasons recorded by the Assessing Officer did not establish any such failure, which is a mandatory jurisdictional precondition for ur years. The reasons were further assailed on The learned CIT(A) condoned the delay in filing the appeal. However, while upholding the addition on merits, the learned CIT(A) the initiation of reassessment proceedings under section 148 of the Act and sustained the in the name of the Estate of Vandravan P. Shah having PAN No. AAAAE6454D. A Paper Book Printed from counselvise.com 7. In the ground No. the reassessment order passed by the Assessing Officer primarily on the ground that the notice issued under section 148 of the Act was addressed to the PAN of a deceased person. It is contended that the reassessment proceedings were initiated and concluded in the name and PAN of the deceased, despite the fact that the deceas had left a will executed by appointed executors and that the assessee had, in law, no legal heirs. It is further submitted that the estate of the deceased was being assessed separately under PAN No. AAAAE6454D. 7.1 The assessee has also raised Ground No validity of the reassessment on the additional ground that there was no failure on its part to disclose fully and truly all material facts necessary for the assessment. It is contended that the jurisdictional conditions stipulated in th not satisfied. The assessee also challenged the merit of the addition in Ground No. 3 and 4 of the appeal. 8. At the outset, the assessee addressed Ground No. 2 of the appeal and contended that the assessment had b completed in the name of the legal heir/representative while retaining the PAN of the deceased assessee. In this backdrop, the issue that arises for our consideration is whether reassessment proceedings initiated and completed in the name of Estate of Vandravan P Shah ITA No. 5401, 5402 & 5403/MUM/2024 In the ground No. 2 raised before us, the assessee has assailed the reassessment order passed by the Assessing Officer primarily e ground that the notice issued under section 148 of the Act was addressed to the PAN of a deceased person. It is contended that the reassessment proceedings were initiated and concluded in the name and PAN of the deceased, despite the fact that the deceas had left a will executed by appointed executors and that the assessee had, in law, no legal heirs. It is further submitted that the estate of the deceased was being assessed separately under PAN No. The assessee has also raised Ground No. 1 challenging the validity of the reassessment on the additional ground that there was no failure on its part to disclose fully and truly all material facts necessary for the assessment. It is contended that the jurisdictional conditions stipulated in the proviso to section 147 of the Act were The assessee also challenged the merit of the addition in Ground No. 3 and 4 of the appeal. At the outset, the assessee addressed Ground No. 2 of the appeal and contended that the assessment had b completed in the name of the legal heir/representative while retaining the PAN of the deceased assessee. In this backdrop, the issue that arises for our consideration is whether reassessment proceedings initiated and completed in the name of Estate of Vandravan P Shah 9 ITA No. 5401, 5402 & 5403/MUM/2024 before us, the assessee has assailed the reassessment order passed by the Assessing Officer primarily e ground that the notice issued under section 148 of the Act was addressed to the PAN of a deceased person. It is contended that the reassessment proceedings were initiated and concluded in the name and PAN of the deceased, despite the fact that the deceased had left a will executed by appointed executors and that the assessee had, in law, no legal heirs. It is further submitted that the estate of the deceased was being assessed separately under PAN No. . 1 challenging the validity of the reassessment on the additional ground that there was no failure on its part to disclose fully and truly all material facts necessary for the assessment. It is contended that the jurisdictional e proviso to section 147 of the Act were The assessee also challenged the merit of the addition At the outset, the assessee addressed Ground No. 2 of the appeal and contended that the assessment had been invalidly completed in the name of the legal heir/representative while retaining the PAN of the deceased assessee. In this backdrop, the issue that arises for our consideration is whether reassessment proceedings initiated and completed in the name of a deceased Printed from counselvise.com assessee, albeit through a legal representative, are legally sustainable. 8.1 According to the learned counsel for the assessee, under the will of the deceased assessee, the entire estate comprising the properties and liabilities was required to executors appointed thereunder. It was submitted that, pursuant to the order of the Hon’ble Jurisdictional High Court dated 30.10.2013, Shri Dilip Dhirajlal Shah was appointed as one of the executors of the will. In view thereof, it assessment ought to have been framed in the status of the “Estate of the deceased” and not in the capacity of a legal heir. 8.2 On the other hand, the learned Departmental Representative submitted that the Assessing Officer had validly completed the assessment in the capacity of the legal representative of the deceased while retaining the PAN of the deceased assessee. He further contended that the appeal itself was not maintainable as it had been filed in the name of the Estate of Late Shri Vandravan P. Shah. It was argued that, insofar as the income pertaining to the period prior to the death of the assessee is concerned, proceedin are required to be initiated in the name of the deceased through the legal representative, in terms of section 159 of the Act. However, with respect to the period after the death of the assessee, where the properties and liabilities are administered by the estate, the provisions of section 168 of the Act would apply. Estate of Vandravan P Shah ITA No. 5401, 5402 & 5403/MUM/2024 assessee, albeit through a legal representative, are legally According to the learned counsel for the assessee, under the will of the deceased assessee, the entire estate comprising the properties and liabilities was required to be administered by the executors appointed thereunder. It was submitted that, pursuant to the order of the Hon’ble Jurisdictional High Court dated 30.10.2013, Shri Dilip Dhirajlal Shah was appointed as one of the executors of the will. In view thereof, it was contended that the assessment ought to have been framed in the status of the “Estate of the deceased” and not in the capacity of a legal heir. On the other hand, the learned Departmental Representative submitted that the Assessing Officer had validly completed the assessment in the capacity of the legal representative of the deceased while retaining the PAN of the deceased assessee. He ntended that the appeal itself was not maintainable as it had been filed in the name of the Estate of Late Shri Vandravan P. Shah. It was argued that, insofar as the income pertaining to the period prior to the death of the assessee is concerned, proceedin are required to be initiated in the name of the deceased through the legal representative, in terms of section 159 of the Act. However, with respect to the period after the death of the assessee, where the properties and liabilities are administered by the executors through the estate, the provisions of section 168 of the Act would apply. Estate of Vandravan P Shah 10 ITA No. 5401, 5402 & 5403/MUM/2024 assessee, albeit through a legal representative, are legally According to the learned counsel for the assessee, under the will of the deceased assessee, the entire estate comprising the be administered by the executors appointed thereunder. It was submitted that, pursuant to the order of the Hon’ble Jurisdictional High Court dated 30.10.2013, Shri Dilip Dhirajlal Shah was appointed as one of the was contended that the assessment ought to have been framed in the status of the “Estate of the deceased” and not in the capacity of a legal heir. On the other hand, the learned Departmental Representative submitted that the Assessing Officer had validly completed the assessment in the capacity of the legal representative of the deceased while retaining the PAN of the deceased assessee. He ntended that the appeal itself was not maintainable as it had been filed in the name of the Estate of Late Shri Vandravan P. Shah. It was argued that, insofar as the income pertaining to the period prior to the death of the assessee is concerned, proceedings are required to be initiated in the name of the deceased through the legal representative, in terms of section 159 of the Act. However, with respect to the period after the death of the assessee, where the the executors through the estate, the provisions of section 168 of the Act would apply. Printed from counselvise.com Accordingly, it was submitted that income pertaining to the period prior to the death of the assessee is assessable through the legal representative, whereas income ari the hands of the estate through the executor(s). 9. We have heard the rival submissions and perused the material on record. Before adverting to the merits of the additions, it is necessary to address the preliminary object assessee that the reassessment order is invalid, having been framed in the name of the legal representative of the deceased assessee instead of the “estate of the deceased”. 9.1 The relevant facts are not in dispute. The assessee expired 06.02.2013. The assessment years under consideration are assessment years 2010 prior to the date of death. 9.2 Under the provisions of section 159 of the Act, the legal representative is deemed to be liable to di and to face such proceedings as could have been validly initiated against the deceased, had the deceased not died. reference section 159 is reproduced as under: “Legal representatives. 33 159. (1) Where a person dies, his legal representative shall be liable to pay any sum 34 which the deceased would have been liable to pay if he had not died, in the like manner and to the (2) For the purpose of making an reassessment or recomputation under Estate of Vandravan P Shah ITA No. 5401, 5402 & 5403/MUM/2024 Accordingly, it was submitted that income pertaining to the period prior to the death of the assessee is assessable through the legal representative, whereas income arising after death is assessable in the hands of the estate through the executor(s). We have heard the rival submissions and perused the material on record. Before adverting to the merits of the additions, it is necessary to address the preliminary objection raised by the assessee that the reassessment order is invalid, having been framed in the name of the legal representative of the deceased assessee instead of the “estate of the deceased”. The relevant facts are not in dispute. The assessee expired 06.02.2013. The assessment years under consideration are assessment years 2010-11 and 2012-13, which relate to periods prior to the date of death. Under the provisions of section 159 of the Act, the legal representative is deemed to be liable to discharge the tax liabilities and to face such proceedings as could have been validly initiated against the deceased, had the deceased not died. reference section 159 is reproduced as under: Legal representatives. (1) Where a person dies, his legal representative shall be liable to pay which the deceased would have been liable to pay if he had not died, in the like manner and to the same extent as the deceased. (2) For the purpose of making an 34assessment (including an reassessment or recomputation under section 147) of the income of the Estate of Vandravan P Shah 11 ITA No. 5401, 5402 & 5403/MUM/2024 Accordingly, it was submitted that income pertaining to the period prior to the death of the assessee is assessable through the legal sing after death is assessable in We have heard the rival submissions and perused the material on record. Before adverting to the merits of the additions, it is ion raised by the assessee that the reassessment order is invalid, having been framed in the name of the legal representative of the deceased assessee The relevant facts are not in dispute. The assessee expired on 06.02.2013. The assessment years under consideration are 13, which relate to periods Under the provisions of section 159 of the Act, the legal scharge the tax liabilities and to face such proceedings as could have been validly initiated against the deceased, had the deceased not died. For ready (1) Where a person dies, his legal representative shall be liable to pay which the deceased would have been liable to pay if he had not same extent as the deceased. assessment (including an 34assessment, of the income of the Printed from counselvise.com deceased and for the purpose of levying any sum in the hands of the legal representative in accordance with the provisions of sub (a) any proceeding taken against the deceased before his death shall be deemed to have sentative and may be continued against the legal representative from the stage at which it stood on the date of the death of the deceased; (b) any proceeding which could have been taken against the deceased if he had representative; and (c) all the provisions of this Act shall apply accordingly. (3) The legal representative of the deceased shall, for the purposes of this Act, be deemed to be an assessee. (4) Every legal representative shall be personally liable for any tax payable by him in his capacity as legal representative if, while his liability for tax remains undischarged, he creates a charge on or disposes of or parts with any assets 35 of the estate of the deceased, which are in, or may come into, his possession, but such liability shall be limited to the value of the asset so charged, disposed of or parted with. (5) The provisions of sub 167, shall, so far as may be and to the extent to which they are not inconsistent with the provisions of this section, apply in representative. (6) The liability of a legal representative under this section shall, subject to the provisions of sub which the estate is capable of meeting the liability. 9.3 On perusal of the provisions above 159 of the Income-tax Act provides a complete code for assessment, reassessment and recovery of tax in respect of income earned by a deceased person up to the date of his death. The section legal fiction whereby the legal representative steps into the shoes of the deceased for the limited purpose of tax proceedings. By virtue of sub-sections (2) and (3), any proceeding taken or which could have been taken against the deceased may be against the legal representative, who is deemed to be an assessee Estate of Vandravan P Shah ITA No. 5401, 5402 & 5403/MUM/2024 deceased and for the purpose of levying any sum in the hands of the legal representative in accordance with the provisions of sub-section (1), any proceeding taken against the deceased before his death shall be deemed to have been taken against the legal repre sentative and may be continued against the legal representative from the stage at which it stood on the date of the death of the deceased; any proceeding which could have been taken against the deceased if he had survived, may be taken against the legal representative; and all the provisions of this Act shall apply accordingly. (3) The legal representative of the deceased shall, for the purposes of this Act, be deemed to be an assessee. (4) Every legal representative shall be personally liable for any tax payable by him in his capacity as legal representative if, while his liability for tax remains undischarged, he creates a charge on or disposes of or parts with of the estate of the deceased, which are in, or may come into, his possession, but such liability shall be limited to the value of the asset so charged, disposed of or parted with. (5) The provisions of sub-section (2) of section 161, section 162 , shall, so far as may be and to the extent to which they are not inconsistent with the provisions of this section, apply in (6) The liability of a legal representative under this section shall, subject to the provisions of sub-section (4) and sub-section (5), be limited to the extent to which the estate is capable of meeting the liability.” On perusal of the provisions above, we find that the tax Act provides a complete code for assessment, reassessment and recovery of tax in respect of income earned by a deceased person up to the date of his death. The section legal fiction whereby the legal representative steps into the shoes of the deceased for the limited purpose of tax proceedings. By virtue of sections (2) and (3), any proceeding taken or which could have been taken against the deceased may be continued or initiated against the legal representative, who is deemed to be an assessee Estate of Vandravan P Shah 12 ITA No. 5401, 5402 & 5403/MUM/2024 deceased and for the purpose of levying any sum in the hands of the legal section (1),- any proceeding taken against the deceased before his death been taken against the legal repre- sentative and may be continued against the legal representative from the stage at which it stood on the date of any proceeding which could have been taken against the survived, may be taken against the legal all the provisions of this Act shall apply accordingly. (3) The legal representative of the deceased shall, for the purposes of this Act, (4) Every legal representative shall be personally liable for any tax payable by him in his capacity as legal representative if, while his liability for tax remains undischarged, he creates a charge on or disposes of or parts with of the estate of the deceased, which are in, or may come into, his possession, but such liability shall be limited to the value of the asset so section 162, and section , shall, so far as may be and to the extent to which they are not inconsistent with the provisions of this section, apply in relation to a legal (6) The liability of a legal representative under this section shall, subject to the section (5), be limited to the extent to we find that the Section tax Act provides a complete code for assessment, reassessment and recovery of tax in respect of income earned by a deceased person up to the date of his death. The section creates a legal fiction whereby the legal representative steps into the shoes of the deceased for the limited purpose of tax proceedings. By virtue of sections (2) and (3), any proceeding taken or which could have continued or initiated against the legal representative, who is deemed to be an assessee Printed from counselvise.com for such purposes. The liability of the legal representative, however, remains confined to the extent to is capable of meeting such l makes it clear that it does not create a new charge. It merely provides the machinery for assessment and collection of tax which the deceased would have been liable to pay had he not died. The taxable income continues to assessed and recovered through the legal representative. 9.4 In the case, the assessee died on 06.02.2013 i.e. period corresponding to assessment year 2013 consideration before us 2012-13, which are prior to the death of the assessee Shri Vandravan P. Shah and therefore, under the provisions of section 159 of the Act, his legal representative sum which the deceased would have been liable died, in the like manner Thus, as far as period before the death of the deceased, the legal representatives substitute as if such proceedings are continue 9.5 The term \"Legal Representative\" is defined under Section 2(29) of the Act read with Section 2(11) of the Code of Civil Procedure, 1908. It encompasses a person who in law represents the estate of a deceased person and includes the estate of the deceased. Thus, whether the representative is an Estate of Vandravan P Shah ITA No. 5401, 5402 & 5403/MUM/2024 for such purposes. The liability of the legal representative, however, remains confined to the extent to which the estate of the deceased is capable of meeting such liability. The scheme of section 159 makes it clear that it does not create a new charge. It merely provides the machinery for assessment and collection of tax which the deceased would have been liable to pay had he not died. The taxable income continues to be that of the deceased, though assessed and recovered through the legal representative. In the case, the assessee died on 06.02.2013 i.e. period corresponding to assessment year 2013-14. The assessment consideration before us are for assessment years which are prior to the death of the assessee Shri Vandravan P. Shah and therefore, under the provisions of section his legal representative(s) is/are liable to pay any sum which the deceased would have been liable to pay if he had not manner and to the same extent to as far as period before the death of the deceased, the legal representatives substitute him for all purposes of s if such proceedings are continued against the deceased. The term \"Legal Representative\" is defined under Section 2(29) of the Act read with Section 2(11) of the Code of Civil Procedure, 1908. It encompasses a person who in law represents the estate of a deceased person and includes any person who intermeddles the estate of the deceased. Thus, whether the representative is an Estate of Vandravan P Shah 13 ITA No. 5401, 5402 & 5403/MUM/2024 for such purposes. The liability of the legal representative, however, which the estate of the deceased The scheme of section 159 makes it clear that it does not create a new charge. It merely provides the machinery for assessment and collection of tax which the deceased would have been liable to pay had he not died. The be that of the deceased, though assessed and recovered through the legal representative. In the case, the assessee died on 06.02.2013 i.e. period 14. The assessments in s 2010-11 and which are prior to the death of the assessee Shri Vandravan P. Shah and therefore, under the provisions of section are liable to pay any to pay if he had not to the deceased. as far as period before the death of the deceased, the legal tax proceedings against the deceased. The term \"Legal Representative\" is defined under Section 2(29) of the Act read with Section 2(11) of the Code of Civil Procedure, 1908. It encompasses a person who in law represents the estate of a intermeddles with the estate of the deceased. Thus, whether the representative is an Printed from counselvise.com heir or an executor, for the period prior to death, they act in the capacity of a legal representative under Section 159, not as an executor under Section 1 9.6 Thus in sum and substance, the assessment period before the death of the deceased has to be completed in the name of the deceased through legal representative who may be even legal heir or executor of the estate of the deceased person. But before us, the assessee should have been completed in the name of the estate of the deceased person having a different PAN of deceased person ca person, therefore, it can’t represent for the period before the death of person. 9.7 The assessment of estate of deceased person is governed by the section 168 of the Act. The estate of the deceased perso represented by one executor or if there are more than one executor then as if the executor relevant provision of section 168 of the Act is reproduced as under: “Executors. 92 168. (1) Subject as hereinafter provided, the income of the estate of a deceased person shall be chargeable to tax in the hands of the executor, (a) if there is only one executor, then, as if the executor (b) if there are more executors than one, then, as if the executors were an association of persons; Estate of Vandravan P Shah ITA No. 5401, 5402 & 5403/MUM/2024 heir or an executor, for the period prior to death, they act in the capacity of a legal representative under Section 159, not as an executor under Section 168 of the Act. Thus in sum and substance, the assessment period before the death of the deceased has to be completed in the name of the deceased through legal representative who may be even executor of the estate of the deceased person. But before us, the assessee has raised an question that assessment completed in the name of the estate of the deceased person having a different PAN. In our opinion, rson came into existence only upon the death of a person, therefore, it can’t represent for the period before the death The assessment of estate of deceased person is governed by the section 168 of the Act. The estate of the deceased perso represented by one executor or if there are more than one executor then as if the executors were an association of the persons. The relevant provision of section 168 of the Act is reproduced as under: (1) Subject as hereinafter provided, the income of the estate of a deceased person shall be chargeable to tax in the hands of the executor, if there is only one executor, then, as if the executor 93 if there are more executors than one, then, as if the executors were an association of persons; Estate of Vandravan P Shah 14 ITA No. 5401, 5402 & 5403/MUM/2024 heir or an executor, for the period prior to death, they act in the capacity of a legal representative under Section 159, not as an Thus in sum and substance, the assessment for the period before the death of the deceased has to be completed in the name of the deceased through legal representative who may be even executor of the estate of the deceased person. But question that assessment completed in the name of the estate of the In our opinion, the estate only upon the death of a person, therefore, it can’t represent for the period before the death The assessment of estate of deceased person is governed by the section 168 of the Act. The estate of the deceased person can be represented by one executor or if there are more than one executor association of the persons. The relevant provision of section 168 of the Act is reproduced as under: (1) Subject as hereinafter provided, the income of the estate of a deceased person shall be chargeable to tax in the hands of the executor,- 93 were an individual; or if there are more executors than one, then, as if the executors were an Printed from counselvise.com and for the purposes of this Act, the executor shall be deemed to be resident or non-resident according as the deceased person was a during the previous year in which his death took place. (2) The assessment of an executor under this section shall be made separately from any assessment that may be made on him in respect of his own income. (3) Separate assessment each completed previous year or part thereof as is included in the period from the date of the death to the date of complete distribution to the beneficiaries of the estate according to their severa (4) In computing the total income of any previous year under this section, any income of the estate of that previous year distrib of, any specific legatee of the estate du but the income so excluded shall be included in the total income of the previous year of such specific legatee. Explanation.-In this section, “executor” includes an administra administering the estate of a deceased per 9.8 The Section 168 of the Act, governs taxation of income of the estate of a deceased person distribution to beneficiaries. Thus, the statutory clear distinction: (i) Income earned prior to deceased through legal representative under section 159. legal representative is ‘deemed assessee’ and taxable entity is deceased. (ii) Income earned after death estate under section 168 through executor or administrator or legal heir as ‘representative assessee’. The taxable entity is estate of deceased. 9.9 The mere fact that an estate comes into existence upon death does not mandate that income earned prior to death must be Estate of Vandravan P Shah ITA No. 5401, 5402 & 5403/MUM/2024 and for the purposes of this Act, the executor shall be deemed to be resident or resident according as the deceased person was a resident or non during the previous year in which his death took place. (2) The assessment of an executor under this section shall be made separately from any assessment that may be made on him in respect of his own income. (3) Separate assessments shall be made under this section on the total income of each completed previous year or part thereof as is included in the period from the date of the death to the date of complete distribution to the beneficiaries of the estate according to their several interests 93. (4) In computing the total income of any previous year under this section, any income of the estate of that previous year distributed to, or applied to the benefit of, any specific legatee of the estate during that previous year shall be excluded; but the income so excluded shall be included in the total income of the previous year of such specific legatee. In this section, “executor” includes an administra estate of a deceased person 94.” Section 168 of the Act, governs taxation of income of the estate of a deceased person arising after the date of death distribution to beneficiaries. Thus, the statutory scheme draws a Income earned prior to death: assessable in the name of the deceased through legal representative under section 159. legal representative is ‘deemed assessee’ and taxable entity is Income earned after death: assessable in the hands estate under section 168 through executor or administrator or legal heir as ‘representative assessee’. The taxable entity is estate of deceased. The mere fact that an estate comes into existence upon death does not mandate that income earned prior to death must be Estate of Vandravan P Shah 15 ITA No. 5401, 5402 & 5403/MUM/2024 and for the purposes of this Act, the executor shall be deemed to be resident or resident or non-resident (2) The assessment of an executor under this section shall be made separately from any assessment that may be made on him in respect of his own income. s shall be made under this section on the total income of each completed previous year or part thereof as is included in the period from the date of the death to the date of complete distribution to the beneficiaries of the (4) In computing the total income of any previous year under this section, any uted to, or applied to the benefit ring that previous year shall be excluded; but the income so excluded shall be included in the total income of the previous In this section, “executor” includes an administrator or other person Section 168 of the Act, governs taxation of income of the after the date of death till scheme draws a assessable in the name of the deceased through legal representative under section 159.The legal representative is ‘deemed assessee’ and taxable entity is assessable in the hands of the estate under section 168 through executor or administrator or legal heir as ‘representative assessee’. The taxable entity is The mere fact that an estate comes into existence upon death does not mandate that income earned prior to death must be Printed from counselvise.com assessed under section 168. Such an interpretation would defeat the clear legislative demarcation between the two provisions. 9.10 The Hon'ble Bombay High Court in [1976] 105 ITR 764 between income assessable under Section 159 and Section 168. The date of death serves as the dividing line. Just as the personal income of a legal representative cannot be clubbed with the estate's income, the income assessable under Section 159 (pre cannot be assessed under Section 168 (post overlapping of jurisdiction. 9.11 In the present case, the reassessment exclusively to income pertaining to periods prior to the death of the assessee. Consequently, section 159 alone is attracted. The Assessing Officer was, therefore, legally justified in framing the reassessment in the name of the deceased legal representative, while retaining the PAN of the deceased. The contention that the assessment ought to have been framed in the name of the “estate of the deceased” is misconceived and contrary to the statutory scheme. 9.12 Accordingly, we hold that the reassessment proceedings for the years under consideration have been validly initiated and completed in accordance with section 159 of the Act. The objection Estate of Vandravan P Shah ITA No. 5401, 5402 & 5403/MUM/2024 assessed under section 168. Such an interpretation would defeat the clear legislative demarcation between the two provisions. Hon'ble Bombay High Court in Arvind Bhogilal v. CIT [1976] 105 ITR 764, held that there is a clear demarcation between income assessable under Section 159 and Section 168. The date of death serves as the dividing line. Just as the personal l representative cannot be clubbed with the estate's income, the income assessable under Section 159 (pre cannot be assessed under Section 168 (post-death). There is no overlapping of jurisdiction. In the present case, the reassessment proceedings relate exclusively to income pertaining to periods prior to the death of the assessee. Consequently, section 159 alone is attracted. The Assessing Officer was, therefore, legally justified in framing the reassessment in the name of the deceased assessee through his legal representative, while retaining the PAN of the deceased. The contention that the assessment ought to have been framed in the name of the “estate of the deceased” is misconceived and contrary to the statutory scheme. ngly, we hold that the reassessment proceedings for the years under consideration have been validly initiated and completed in accordance with section 159 of the Act. The objection Estate of Vandravan P Shah 16 ITA No. 5401, 5402 & 5403/MUM/2024 assessed under section 168. Such an interpretation would defeat the clear legislative demarcation between the two provisions. Arvind Bhogilal v. CIT , held that there is a clear demarcation between income assessable under Section 159 and Section 168. The date of death serves as the dividing line. Just as the personal l representative cannot be clubbed with the estate's income, the income assessable under Section 159 (pre-death) death). There is no proceedings relate exclusively to income pertaining to periods prior to the death of the assessee. Consequently, section 159 alone is attracted. The Assessing Officer was, therefore, legally justified in framing the assessee through his legal representative, while retaining the PAN of the deceased. The contention that the assessment ought to have been framed in the name of the “estate of the deceased” is misconceived and contrary ngly, we hold that the reassessment proceedings for the years under consideration have been validly initiated and completed in accordance with section 159 of the Act. The objection Printed from counselvise.com raised by the assessee challenging the validity of the reassessment on this ground is, therefore, rejected. 10. Now, the question arise whether the appeal the name of the ‘estate of deceased person have been validly filed assessment year 2012 specifically raised to the assessee and hearing was fixed to hear the assessee on this issue. 10.1 The ld counsel for the was no legal heir in the apply. Alternatively it was also deemed to be as representative assessee as defined under section 160 of the Act. He submitted that section 160(iii) specifically provided that in respect of income of which the court of wards, the Administrator -General , the official trustee or any receiver or manager ( including any person , whatever, his designation, who in fact manages property on behalf of another) appointed by or under any order of a court , receives or is entitled to receive on behalf or for the benefit of any person, such court of wards, Administrator General, official trustee , receiver or manager. contested that administrator was managing the prope death of the assessee, of deceased Vandravan P shah as representative assessee. Estate of Vandravan P Shah ITA No. 5401, 5402 & 5403/MUM/2024 raised by the assessee challenging the validity of the reassessment ground is, therefore, rejected. Now, the question arise whether the appeals filed estate of deceased person’ having PAN of the estate been validly filed for assessment years assessment year 2012-13 and maintainable ? This question was specifically raised to the assessee and hearing was fixed to hear the assessee on this issue. The ld counsel for the assessee, firstly, submitted that was no legal heir in the case so provisions of section 159 does not apply. Alternatively it was submitted that legal representative is also deemed to be as representative assessee as defined under section 160 of the Act. He submitted that section 160(iii) specifically in respect of income of which the court of wards, the General , the official trustee or any receiver or manager ( including any person , whatever, his designation, who in fact manages property on behalf of another) appointed by or under ny order of a court , receives or is entitled to receive on behalf or for the benefit of any person, such court of wards, Administrator General, official trustee , receiver or manager. Accordingly, it was contested that administrator was managing the prope assessee, so appeal has been validly filed by the estate Vandravan P shah as representative assessee. Estate of Vandravan P Shah 17 ITA No. 5401, 5402 & 5403/MUM/2024 raised by the assessee challenging the validity of the reassessment filed before us in having PAN of the estate 2011-12 and This question was specifically raised to the assessee and hearing was fixed to hear the submitted that there case so provisions of section 159 does not submitted that legal representative is also deemed to be as representative assessee as defined under section 160 of the Act. He submitted that section 160(iii) specifically in respect of income of which the court of wards, the General , the official trustee or any receiver or manager ( including any person , whatever, his designation, who in fact manages property on behalf of another) appointed by or under ny order of a court , receives or is entitled to receive on behalf or for the benefit of any person, such court of wards, Administrator– Accordingly, it was contested that administrator was managing the property after the so appeal has been validly filed by the estate Vandravan P shah as representative assessee. Printed from counselvise.com 10.2 In our opinion, years was correctly framed in the name of the legal representative, it necessarily follows that any appeal therefrom ought to have been filed in the same capacity i.e. i deceased person through the PAN of the deceased 10.3 The estate of a deceased person comes into upon death and is assessable under section 168 only in respect of post-death income. The estate did not come into existence for the period before the death of assessee and therefore, for the period prior to the death assessment could be comp of the deceased through legal representative and not in the status of estate of deceased, therefore, the appeal was also to be filed in the name of the deceased person through legal representative. present appeals pertain t estate had no locus to maintain the appeals. 10.4 Even though an executor may be a legal representative, the appeal was required to be filed in the name of the deceased assessee through such legal representative and P and not in the status of the estate with a separate PAN. Consequently, the appeals filed in the name of the estate for assessment years prior to death and 2012-13, are not maintainable and are liable to be on this ground alone. Estate of Vandravan P Shah ITA No. 5401, 5402 & 5403/MUM/2024 In our opinion, having held that reassessment for the relevant years was correctly framed in the name of the deceased through legal representative, it necessarily follows that any appeal therefrom ought to have been filed in the same capacity i.e. in the name of the deceased person through the PAN of the deceased. The estate of a deceased person comes into upon death and is assessable under section 168 only in respect of The estate did not come into existence for the period before the death of assessee and therefore, for the period prior to the death assessment could be completed only in the name of the deceased through legal representative and not in the status of estate of deceased, therefore, the appeal was also to be filed in the name of the deceased person through legal representative. present appeals pertain to assessment years prior to death, the estate had no locus to maintain the appeals. Even though an executor may be a legal representative, the appeal was required to be filed in the name of the deceased assessee through such legal representative and PAN of and not in the status of the estate with a separate PAN. Consequently, the appeals filed in the name of the estate for assessment years prior to death i.e. the assessment year are not maintainable and are liable to be on this ground alone. We order accordingly. Estate of Vandravan P Shah 18 ITA No. 5401, 5402 & 5403/MUM/2024 having held that reassessment for the relevant deceased through legal representative, it necessarily follows that any appeal therefrom n the name of the The estate of a deceased person comes into existence only upon death and is assessable under section 168 only in respect of The estate did not come into existence for the period before the death of assessee and therefore, for the period leted only in the name of the deceased through legal representative and not in the status of estate of deceased, therefore, the appeal was also to be filed in the name of the deceased person through legal representative. Since the o assessment years prior to death, the Even though an executor may be a legal representative, the appeal was required to be filed in the name of the deceased AN of deceased, and not in the status of the estate with a separate PAN., Consequently, the appeals filed in the name of the estate for assessment years 2011-12 are not maintainable and are liable to be dismissed Printed from counselvise.com 11. Since we have already dismissed the appeals for assessment year 2011-12 as non required to be disposed the validity of the reassessment and merit are also adjudicated. 12. The ground No. 1 of the appeal of the assessee reassessment proceedings on the ground that reopening was based on ‘borrowed satisfaction the Assessing Officer. of the assessee observing as under: Grounds 02 & 03: In this ground of appeal the appellant objected the assumption for reopening the or 143(3) based on the findings of the search party in the case of third party and such action of the assessing officer is at the best be consider as difference of opinion and there was no concrete evidence of escapem assessment under section 143(3). The contention of the appellant has been considered. I have gone through the facts and found that the proceedings against appellant were opened u/s 147 of the Income Tax Act, 1961 after obtain from the Pr. Commissioner of Income Tax the course of proceedings, the Assessing Officer issued the notice u/s 148 on 28.03.2018 and duly served upon appellant through speed post and Email to the appellant. In response to the same, appellant has filed the return of Income as treated in original return. However, the Assessing Officer issued notice u/s 142(1) on various dates. The Attention is drawn to highlight the importance of reports of the investigating agencies and that be true that when transactions are through cheques it looks like real transactions but the authority is entitled to look behind the transactions and ascertain the motive behind the transactions. It was further argued by the app DDIT is a third independently subjected to further verification by the assessing Estate of Vandravan P Shah ITA No. 5401, 5402 & 5403/MUM/2024 Since we have already dismissed the appeals for assessment 12 as non-maintainable the ground on merit are not required to be disposed, yet for completeness, the grounds raised on the validity of the reassessment and merit are also adjudicated. The ground No. 1 of the appeal of the assessee reassessment proceedings on the ground that reopening was based faction’ and total lack of ‘application of mind the Assessing Officer. The ld CIT(A) has dismissed these objections of the assessee observing as under: Grounds 02 & 03: In this ground of appeal the appellant objected the assumption for reopening the original assessment which was completed u/s 143(3) based on the findings of the search party in the case of third party and such action of the assessing officer is at the best be consider as difference of opinion and there was no concrete evidence of escapement of income for reopening of assessment under section 143(3). The contention of the appellant has been considered. I have gone through the facts and found that the proceedings against appellant were opened u/s 147 of the Income Tax Act, 1961 after obtaining approval from the Pr. Commissioner of Income Tax - 19, Mumbai. During the course of proceedings, the Assessing Officer issued the notice u/s 148 on 28.03.2018 and duly served upon appellant through speed post and Email to the appellant. In response to the same, appellant has filed the return of Income as treated in original return. However, the Assessing Officer issued notice u/s 142(1) on various dates. The Attention is drawn to highlight the importance of reports of the investigating agencies and that would point out that it may be true that when transactions are through cheques it looks like real transactions but the authority is entitled to look behind the transactions and ascertain the motive behind the transactions. It was further argued by the appellant that the report of the DDIT is a third-party information which has not been independently subjected to further verification by the assessing Estate of Vandravan P Shah 19 ITA No. 5401, 5402 & 5403/MUM/2024 Since we have already dismissed the appeals for assessment maintainable the ground on merit are not yet for completeness, the grounds raised on the validity of the reassessment and merit are also adjudicated. The ground No. 1 of the appeal of the assessee assails the reassessment proceedings on the ground that reopening was based application of mind’ by The ld CIT(A) has dismissed these objections Grounds 02 & 03: In this ground of appeal the appellant iginal assessment which was completed u/s 143(3) based on the findings of the search party in the case of third party and such action of the assessing officer is at the best be consider as difference of opinion and there was no ent of income for reopening of assessment under section 143(3). The contention of the appellant has been considered. I have gone through the facts and found that the proceedings against appellant were opened ing approval 19, Mumbai. During the course of proceedings, the Assessing Officer issued the notice u/s 148 on 28.03.2018 and duly served upon appellant through speed post and Email to the appellant. In response to the same, appellant has filed the return of Income as treated in original return. However, the Assessing Officer issued notice The Attention is drawn to highlight the importance of reports of would point out that it may be true that when transactions are through cheques it looks like real transactions but the authority is entitled to look behind the transactions and ascertain the motive behind the transactions. ellant that the report of the party information which has not been independently subjected to further verification by the assessing Printed from counselvise.com officer, whereas the appellant had in the said case discharged the initial burden of substantiating the purc various documents is in violation of principle of natural justice. In view of the discussion, it is pertinent to note that the Assessing Officer has granted ample opportunities for proving the supporting documents. However, the appellant has furnished partially reply to the notices as discussed supra. I have carefully considered appellant submission. After careful perusal of assessment order, it is seen that the reopening is based on cogent evidence and clear facts brought out by the Assessing Officer while recording satisfaction for issuance of notices u/s 148. Accordingly, I do not see any reason to intervene at this juncture as I don't see any anomaly in initiation of assessment proceedings u/s 148 initiated by the Assessing Officer which is case of the appellant. Therefore, in my considered opinion, the AO is justified in rejecting the objections of the Appellant. Hence, the Ground is noted 12.1 We have heard rival submission of the parties the relevant material on record. reproduce the reasons recorded by the Assessing Officer which is available on Paper Book page 3 “Reasons for re IT Act. 1. Brief details of the Assessee: The assessee has filed return of income for the year under consideration on 25.08.2012 declaring the total income at Rs. 3,54,43,851/ on 2.01.2013. Order u/s 143(3) r.w.s. 147 has also passed on 20.02.2015 assessing total income of Rs. 3,54,92,280/ 2. Brief details of information received by the A.O. In this case, information was received from DDIT (Inv.) Unit Mumbai vide letter No. DDIT(Inv.) Unit dated 11.03.2019 wherein it is stated that information was received from the Directorate of Investigation (Kolkata) that the Estate of Vandravan P Shah ITA No. 5401, 5402 & 5403/MUM/2024 officer, whereas the appellant had in the said case discharged the initial burden of substantiating the purchases through various documents is in violation of principle of natural justice. In view of the discussion, it is pertinent to note that the Assessing Officer has granted ample opportunities for proving the supporting documents. However, the appellant has furnished partially reply to the notices as discussed supra. I have carefully considered appellant submission. After careful perusal of assessment order, it is seen that the reopening is based on cogent evidence and clear facts brought out by the Officer while recording satisfaction for issuance of notices u/s 148. Accordingly, I do not see any reason to intervene at this juncture as I don't see any anomaly in initiation of assessment proceedings u/s 148 initiated by the Assessing Officer which is based on specific information in the case of the appellant. Therefore, in my considered opinion, the AO is justified in rejecting the objections of the Appellant. Hence, the Ground is noted as dismissed.” We have heard rival submission of the parties the relevant material on record. In this regard, it is relevant to reproduce the reasons recorded by the Assessing Officer which is available on Paper Book page 3: Reasons for re-opening of the assessment u/s 147 of the details of the Assessee: The assessee has filed return of income for the year under consideration on 25.08.2012 declaring the total income at Rs. 3,54,43,851/-. The same was processed u/s 143(1) of the Act on 2.01.2013. Order u/s 143(3) r.w.s. 147 has also passed on 20.02.2015 assessing total income of Rs. 3,54,92,280/-. 2. Brief details of information received by the A.O. In this case, information was received from DDIT (Inv.) Unit Mumbai vide letter No. DDIT(Inv.) Unit-7(4)/35(1)(ii)/2018 ted 11.03.2019 wherein it is stated that information was received from the Directorate of Investigation (Kolkata) that the Estate of Vandravan P Shah 20 ITA No. 5401, 5402 & 5403/MUM/2024 officer, whereas the appellant had in the said case discharged hases through various documents is in violation of principle of natural justice. In view of the discussion, it is pertinent to note that the Assessing Officer has granted ample opportunities for proving the supporting documents. However, the appellant has furnished partially reply to the notices as discussed supra. I have carefully considered appellant submission. After careful perusal of assessment order, it is seen that the reopening is based on cogent evidence and clear facts brought out by the Officer while recording satisfaction for issuance of notices u/s 148. Accordingly, I do not see any reason to intervene at this juncture as I don't see any anomaly in initiation of assessment proceedings u/s 148 initiated by the based on specific information in the case of the appellant. Therefore, in my considered opinion, the AO is justified in rejecting the objections of the Appellant. We have heard rival submission of the parties and persused In this regard, it is relevant to reproduce the reasons recorded by the Assessing Officer which is opening of the assessment u/s 147 of the The assessee has filed return of income for the year under consideration on 25.08.2012 declaring the total income at Rs. . The same was processed u/s 143(1) of the Act on 2.01.2013. Order u/s 143(3) r.w.s. 147 has also been passed on 20.02.2015 assessing total income of Rs. 2. Brief details of information received by the A.O. In this case, information was received from DDIT (Inv.) Unit-7(4), 7(4)/35(1)(ii)/2018-19 ted 11.03.2019 wherein it is stated that information was received from the Directorate of Investigation (Kolkata) that the Printed from counselvise.com following institution vide a network of brokers is engaged in the bogus donation u/s 35(1)(ii) of the Income Tax Act, 1961: School of Human Genetics and Population Health, after referred as SHGPH) PAN – AABAS4570M Registered Office: 7, Nilamber Mukherjee Street, Kolkata 700004 A Survey action u/s 133A of the Income Tax Act, 1961 (hereafter, referred as Act) was carried out on registered / administrative offices of the above institute and it is found that the above institute in connivance with donors, brokers and accommodation entry providers has indulged in a dubious scheme of tax evasion, defrauding revenue a profited from the government intention to increase & encourage scientific research or research in social science or statistical research in the country. The institutes' activities are not genuine. 3. Analysis of information received: On perusal of list of beneficiaries, it is seen that during AY 2012-13 (AY 2011 has also made bogus donation of Rs. 60,00,000/ of Human Genetics and Population Health and claimed deduction u/s 35(1)(ii) of the Inc 2012-13 as per following details: Sl. No. Name of Assessee 1 Vandravan P Shah 4. Findings of the A.O. In view of the above, it is abundantly clear that Vandravan P Shah (PAN AARPS9053J) has claimed bogus donation of Rs. 60,00,000/- u/s 35(1)(ii) of the Income Tax Act, 1961 during AY 2012-13 on the donation made to M/s School of Human Genetics and Population Health. T claimed u/s 35(1)(ii) has to be added to the total income of Vandravan P Shah of AY 2012 Estate of Vandravan P Shah ITA No. 5401, 5402 & 5403/MUM/2024 following institution vide a network of brokers is engaged in the bogus donation u/s 35(1)(ii) of the Income Tax Act, 1961: Human Genetics and Population Health, after referred as SHGPH) AABAS4570M Registered Office: 7, Nilamber Mukherjee Street, Kolkata A Survey action u/s 133A of the Income Tax Act, 1961 (hereafter, referred as Act) was carried out on 27.01.2015 at the registered / administrative offices of the above institute and it is found that the above institute in connivance with donors, brokers and accommodation entry providers has indulged in a dubious scheme of tax evasion, defrauding revenue and has ill profited from the government intention to increase & encourage scientific research or research in social science or statistical research in the country. The institutes' activities are not 3. Analysis of information received: of list of beneficiaries, it is seen that during AY 13 (AY 2011-12), Vandravan P Shah (PAN AARPS9053J) has also made bogus donation of Rs. 60,00,000/- to M/s School of Human Genetics and Population Health and claimed deduction u/s 35(1)(ii) of the Income Tax Act, 1961 during AY 13 as per following details: Name of Assessee Name of Trust PAN Vandravan P Shah School of Human Genetics and Population Health AARPS9053J 4. Findings of the A.O. the above, it is abundantly clear that Vandravan P Shah (PAN AARPS9053J) has claimed bogus donation of Rs. u/s 35(1)(ii) of the Income Tax Act, 1961 during AY 13 on the donation made to M/s School of Human Genetics and Population Health. Therefore, the deduction claimed u/s 35(1)(ii) has to be added to the total income of Vandravan P Shah of AY 2012-13. Estate of Vandravan P Shah 21 ITA No. 5401, 5402 & 5403/MUM/2024 following institution vide a network of brokers is engaged in the bogus donation u/s 35(1)(ii) of the Income Tax Act, 1961: Human Genetics and Population Health, (Here Registered Office: 7, Nilamber Mukherjee Street, Kolkata- A Survey action u/s 133A of the Income Tax Act, 1961 27.01.2015 at the registered / administrative offices of the above institute and it is found that the above institute in connivance with donors, brokers and accommodation entry providers has indulged in a nd has ill- profited from the government intention to increase & encourage scientific research or research in social science or statistical research in the country. The institutes' activities are not of list of beneficiaries, it is seen that during AY 12), Vandravan P Shah (PAN AARPS9053J) to M/s School of Human Genetics and Population Health and claimed ome Tax Act, 1961 during AY Amount of Bogus Donation 60,00,000 the above, it is abundantly clear that Vandravan P Shah (PAN AARPS9053J) has claimed bogus donation of Rs. u/s 35(1)(ii) of the Income Tax Act, 1961 during AY 13 on the donation made to M/s School of Human herefore, the deduction claimed u/s 35(1)(ii) has to be added to the total income of Printed from counselvise.com 5. Basis of forming reason to believe and details of escapement of income: On the basis of the aforesaid information available with the undersigned, I have reason to believe that the assessee has escaped the income of Rs. 60,00,000/ chargeable to tax... 12.2 Upon a careful perusal of the reasons recorded, we observe that the Assessing Officer was in possession of specifi material originating from the Invest and findings from the assessment proceedings of Charitable Trust, , which Officer of the assessee. The contention of the as reasons were recorded on the basis of \"borrowed satisfaction\" is, in our view, legally unsustainable. While the material may stem from an external source (in this case, the findings regarding the Trust), the was that of the Assessing Officer himself. The law does not prohibit the Assessing Officer from relying on information received from other jurisdictions; rather, it requires that he independently applies his mind to such material to for has escaped assessment. Furthermore, under the un provisions of Section 148 as they stood at the relevant time, there was no statutory mandate requiring the Assessing Officer to conduct a preliminary enquiry or seek an explanati assessee prior to the issuance of notice. The Assessing Officer was only required to examine the material available on record and form a reasonable belief. We find that the Assessing Officer has duly Estate of Vandravan P Shah ITA No. 5401, 5402 & 5403/MUM/2024 5. Basis of forming reason to believe and details of escapement of income: On the basis of the aforesaid information available with the ersigned, I have reason to believe that the assessee has escaped the income of Rs. 60,00,000/- or any other income chargeable to tax...” Upon a careful perusal of the reasons recorded, we observe that the Assessing Officer was in possession of specifi material originating from the Investigation Wing of the Department findings from the assessment proceedings of , which was duly forwarded to the Assessing Officer of the assessee. The contention of the assessee that the reasons were recorded on the basis of \"borrowed satisfaction\" is, in our view, legally unsustainable. While the information may stem from an external source (in this case, the findings regarding the Trust), the belief formed upon such material was that of the Assessing Officer himself. The law does not prohibit the Assessing Officer from relying on information received from other jurisdictions; rather, it requires that he independently applies his mind to such material to form a prima facie belief that income has escaped assessment. Furthermore, under the un provisions of Section 148 as they stood at the relevant time, there was no statutory mandate requiring the Assessing Officer to conduct a preliminary enquiry or seek an explanati assessee prior to the issuance of notice. The Assessing Officer was only required to examine the material available on record and form a reasonable belief. We find that the Assessing Officer has duly Estate of Vandravan P Shah 22 ITA No. 5401, 5402 & 5403/MUM/2024 5. Basis of forming reason to believe and details of On the basis of the aforesaid information available with the ersigned, I have reason to believe that the assessee has or any other income Upon a careful perusal of the reasons recorded, we observe that the Assessing Officer was in possession of specific and tangible igation Wing of the Department M/s. Navjeevan was duly forwarded to the Assessing sessee that the reasons were recorded on the basis of \"borrowed satisfaction\" is, in information or the may stem from an external source (in this case, the upon such material was that of the Assessing Officer himself. The law does not prohibit the Assessing Officer from relying on information received from other jurisdictions; rather, it requires that he independently applies belief that income has escaped assessment. Furthermore, under the un-amended provisions of Section 148 as they stood at the relevant time, there was no statutory mandate requiring the Assessing Officer to conduct a preliminary enquiry or seek an explanation from the assessee prior to the issuance of notice. The Assessing Officer was only required to examine the material available on record and form a reasonable belief. We find that the Assessing Officer has duly Printed from counselvise.com appreciated the material and established a l information received and the formation of his belief. Consequently, the plea that the action was taken without application of mind is rejected. 12.3 The assessee has further challenged the validity of the notice on the ground that the material facts fully and truly, thereby invoking the bar under the first proviso to Section 147. This argument is devoid of merit. The concept of \"full and true disclosure\" presupposes the genuineness of the transaction disclosed. In the reasons recorded, the Assessing Officer has explicitly set out the modus operandi whereby the assessee obtained accommodation entries in the guise of deductions under Section 35AC. The specific allegation is that the assessee paid amounts by cheque and received cash back from the donee, M/s. Navjeevan Charitable Trust which is essentially sham or bogus cannot be termed as a \"true\" disclosure within the meaning of the Act. When the primary asserted by the assessee, are found to be false based on credible material, the protection of the proviso is no longer available. Therefore, the jurisdictional condition regarding the failure to disclose material facts truly stands satisfied. of the reassessment are the appeal is dismissed. Estate of Vandravan P Shah ITA No. 5401, 5402 & 5403/MUM/2024 appreciated the material and established a live link between the information received and the formation of his belief. Consequently, the plea that the action was taken without application of mind is The assessee has further challenged the validity of the notice on the ground that there was no failure on its part to disclose all material facts fully and truly, thereby invoking the bar under the first proviso to Section 147. This argument is devoid of merit. The concept of \"full and true disclosure\" presupposes the genuineness ansaction disclosed. In the reasons recorded, the Assessing Officer has explicitly set out the modus operandi whereby the assessee obtained accommodation entries in the guise of deductions under Section 35AC. The specific allegation is that the assessee id amounts by cheque and received cash back from the donee, M/s. Navjeevan Charitable Trust. A disclosure of a transaction which is essentially sham or bogus cannot be termed as a \"true\" disclosure within the meaning of the Act. When the primary rted by the assessee, namely, the genuineness of the donation, are found to be false based on credible material, the protection of the proviso is no longer available. Therefore, the jurisdictional condition regarding the failure to disclose material facts truly stands satisfied. The objections of the assessee against validity of the reassessment are accordingly rejected. The ground no. the appeal is dismissed. Estate of Vandravan P Shah 23 ITA No. 5401, 5402 & 5403/MUM/2024 ive link between the information received and the formation of his belief. Consequently, the plea that the action was taken without application of mind is The assessee has further challenged the validity of the notice re was no failure on its part to disclose all material facts fully and truly, thereby invoking the bar under the first proviso to Section 147. This argument is devoid of merit. The concept of \"full and true disclosure\" presupposes the genuineness ansaction disclosed. In the reasons recorded, the Assessing Officer has explicitly set out the modus operandi whereby the assessee obtained accommodation entries in the guise of deductions under Section 35AC. The specific allegation is that the assessee id amounts by cheque and received cash back from the donee, . A disclosure of a transaction which is essentially sham or bogus cannot be termed as a \"true\" disclosure within the meaning of the Act. When the primary facts uineness of the donation, are found to be false based on credible material, the protection of the proviso is no longer available. Therefore, the jurisdictional condition regarding the failure to disclose material facts fully and objections of the assessee against validity The ground no. 1 of Printed from counselvise.com 13. The ground Nos the addition. The ld CIT(A) rejected the contention of the assessee on merit observing as under: “15. During the appeal proceedings, Grounds of appeal, Facts of the case, Assessment order, submission filed by the appellant are perused. There is merit in the assessment the Assessing Officer in view of the following as under: Ground 01: In this ground of appeal the appellant objected the addition made by the the A.Y. 2011 considered. I have gone through the facts and found that in the instant case information received from DCIT Central Circle 2(1), Mumbai mentioning that a search u/s 132 was carried out at the premise of M/s Navjeevan Charitable Trust wherein it was seen that Shri Vandravan P Shah has given donation u/s 35AC an amounting to Rs. 50,00,000/ Trust and the received back in cash after deduction small commission charge by the trust to facilitate this subterfuge, and also claim deduct However, it is also noted that M/s Navjeevan Charitable Trust was centralized with the DCIT Central Circle trusts recognition granted by the National Committee has been withdrawn vide Notification dated Trust's registration was also cancelled vide order u/s 12AA(3) of the I.T' Act dt. 20.12.2016 by the Principal Commissioner of Income Tax (Central) proceedings in the case of assessee trust it was noti the facts gathered that after receipt of donation, trust booked bogus purchases through accommodation entry providers. The entry providers after receipt of cheque payment from trust, encashes the cheque and returns back cash to the trust/trustee after retaining commission on the accommodation entries. Few entry providers who were covered u/s 133A, have admitted of providing accommodation as donation to M/s Navjeevan Charitable Trust for commission. The assessment of entry providers were completed u the accommodation transaction was taxed. Few donors covered u/s i-33A have admitted and offered the amount of donation received back taxation or have revised the return of income. It was concluded that the assessee was indu activity and not as per its objectives for which trust was formed Estate of Vandravan P Shah ITA No. 5401, 5402 & 5403/MUM/2024 s. 3 and 4 of the appeal relate to the merit of ld CIT(A) rejected the contention of the assessee on merit observing as under: 15. During the appeal proceedings, Grounds of appeal, Facts of the case, Assessment order, submission filed by the appellant are perused. There is merit in the assessment order passed by the Assessing Officer in view of the following as under: Ground 01: In this ground of appeal the appellant objected the addition made by the Assessing Officer is Rs. 50,00,000/ the A.Y. 2011-12. The contention of the appellant has bee considered. I have gone through the facts and found that in the instant case information received from DCIT Central Circle 2(1), Mumbai mentioning that a search u/s 132 was carried out at the premise of M/s Navjeevan Charitable Trust wherein it was that Shri Vandravan P Shah has given donation u/s 35AC an amounting to Rs. 50,00,000/- to M/s Navjeevan Charitable Trust and the received back in cash after deduction small commission charge by the trust to facilitate this subterfuge, and also claim deduction u/s 35AC against the donation. However, it is also noted that M/s Navjeevan Charitable Trust was centralized with the DCIT Central Circle -2(L), Mumbai. The trusts recognition granted by the National Committee has been withdrawn vide Notification dated 30.11.2016. The assessee Trust's registration was also cancelled vide order u/s 12AA(3) of the I.T' Act dt. 20.12.2016 by the Principal Commissioner of Income Tax (Central)-1, Mumbai. During assessment proceedings in the case of assessee trust it was noti the facts gathered that after receipt of donation, trust booked bogus purchases through accommodation entry providers. The entry providers after receipt of cheque payment from trust, encashes the cheque and returns back cash to the trust/trustee fter retaining commission on the accommodation entries. Few entry providers who were covered u/s 133A, have admitted of providing accommodation as donation to M/s Navjeevan Charitable Trust for commission. The assessment of entry providers were completed u/s 153C and commission income on the accommodation transaction was taxed. Few donors covered 33A have admitted and offered the amount of donation received back taxation or have revised the return of income. It was concluded that the assessee was indulged in bogus activity and not as per its objectives for which trust was formed Estate of Vandravan P Shah 24 ITA No. 5401, 5402 & 5403/MUM/2024 . 3 and 4 of the appeal relate to the merit of ld CIT(A) rejected the contention of the assessee 15. During the appeal proceedings, Grounds of appeal, Facts of the case, Assessment order, submission filed by the appellant order passed by the Assessing Officer in view of the following as under:- Ground 01: In this ground of appeal the appellant objected the Assessing Officer is Rs. 50,00,000/- for 12. The contention of the appellant has been considered. I have gone through the facts and found that in the instant case information received from DCIT Central Circle 2(1), Mumbai mentioning that a search u/s 132 was carried out at the premise of M/s Navjeevan Charitable Trust wherein it was that Shri Vandravan P Shah has given donation u/s 35AC to M/s Navjeevan Charitable Trust and the received back in cash after deduction small commission charge by the trust to facilitate this subterfuge, and However, it is also noted that M/s Navjeevan Charitable Trust 2(L), Mumbai. The trusts recognition granted by the National Committee has been 30.11.2016. The assessee Trust's registration was also cancelled vide order u/s 12AA(3) of the I.T' Act dt. 20.12.2016 by the Principal Commissioner of 1, Mumbai. During assessment proceedings in the case of assessee trust it was noticed from the facts gathered that after receipt of donation, trust booked bogus purchases through accommodation entry providers. The entry providers after receipt of cheque payment from trust, encashes the cheque and returns back cash to the trust/trustee fter retaining commission on the accommodation entries. Few entry providers who were covered u/s 133A, have admitted of providing accommodation as donation to M/s Navjeevan Charitable Trust for commission. The assessment of entry /s 153C and commission income on the accommodation transaction was taxed. Few donors covered 33A have admitted and offered the amount of donation received back taxation or have revised the return of income. It lged in bogus activity and not as per its objectives for which trust was formed Printed from counselvise.com and commission income on the donation amount was taxed as undisclosed income and treating the trust as AOP. In view of the above facts, it was seen that an amount of Rs. 50,00,000/-, donation given to M/s Navjeevan Charitable Trust on 14.08.2010, debited to profit and loss accounts of assessee u/s 35AC is bogus on the basis of information received from DCIT Central Circle 2(1), Mumbai. Thereafter, Notice u/s 133(6) of the income Navjeevan charitable Trust for verifying donation of Rs. 50,00,000/-. That notice was returned back with remark \"Trust left\". Further, the contention of the appellant with regard to donation given to M/s Navjeeva unverified in absence of documentary evidence. The contention of the appellant remained unjustified and unsubstantiated. Hence, the Assessment Order is upheld the ground is noted as dismissed. 13.1 During the course of assessmen furnished documents in support of its claim for deduction under section 35AC of the Act, including a receipt purportedly issued by the donee trust. In order to verify the genuineness of the claim, the Assessing Officer issued a M/s Navjeevan Charitable Trust. However, the notice was returned unserved with the remark “party left”. 13.2 In these circumstances, the onus squarely shifted to the assessee to substantiate its claim by producing verification and by establishing the genuineness of the transaction. No such effort was made by the assessee. This failure assumes greater significance in view of the adverse material noticed during the investigation, indicating that the cash against the cheques received towards donation. In the face of Estate of Vandravan P Shah ITA No. 5401, 5402 & 5403/MUM/2024 and commission income on the donation amount was taxed as undisclosed income and treating the trust as AOP. In view of the above facts, it was seen that an amount of Rs. , donation given to M/s Navjeevan Charitable Trust on 14.08.2010, debited to profit and loss accounts of assessee u/s 35AC is bogus on the basis of information received from DCIT Central Circle 2(1), Mumbai. Thereafter, Notice u/s 133(6) of the income Tax Act issued by Assessing Officer to M/s Navjeevan charitable Trust for verifying donation of Rs. . That notice was returned back with remark \"Trust left\". Further, the contention of the appellant with regard to donation given to M/s Navjeevan charitable Trust remains unverified in absence of documentary evidence. The contention of the appellant remained unjustified and unsubstantiated. Hence, the Assessment Order is upheld the ground is noted as dismissed. During the course of assessment proceedings, the assessee furnished documents in support of its claim for deduction under section 35AC of the Act, including a receipt purportedly issued by the donee trust. In order to verify the genuineness of the claim, the Assessing Officer issued a notice under section 133(6) of the Act to M/s Navjeevan Charitable Trust. However, the notice was returned unserved with the remark “party left”. In these circumstances, the onus squarely shifted to the assessee to substantiate its claim by producing the said donee for verification and by establishing the genuineness of the transaction. No such effort was made by the assessee. This failure assumes greater significance in view of the adverse material noticed during the investigation, indicating that the donee had allegedly returned cash against the cheques received towards donation. In the face of Estate of Vandravan P Shah 25 ITA No. 5401, 5402 & 5403/MUM/2024 and commission income on the donation amount was taxed as In view of the above facts, it was seen that an amount of Rs. , donation given to M/s Navjeevan Charitable Trust on 14.08.2010, debited to profit and loss accounts of assessee u/s 35AC is bogus on the basis of information received from DCIT Central Circle 2(1), Mumbai. Thereafter, Notice u/s 133(6) Tax Act issued by Assessing Officer to M/s Navjeevan charitable Trust for verifying donation of Rs. . That notice was returned back with remark \"Trust left\". Further, the contention of the appellant with regard to n charitable Trust remains The contention of the appellant remained unjustified and unsubstantiated. Hence, the Assessment Order is upheld the t proceedings, the assessee furnished documents in support of its claim for deduction under section 35AC of the Act, including a receipt purportedly issued by the donee trust. In order to verify the genuineness of the claim, the notice under section 133(6) of the Act to M/s Navjeevan Charitable Trust. However, the notice was returned In these circumstances, the onus squarely shifted to the the said donee for verification and by establishing the genuineness of the transaction. No such effort was made by the assessee. This failure assumes greater significance in view of the adverse material noticed during donee had allegedly returned cash against the cheques received towards donation. In the face of Printed from counselvise.com such serious allegations, a higher degree of proof was required from the assessee to rebut the findings of the Assessing Officer. 13.3 Mere production of docum in favour of the trust, donation receipts, bank statements, Form No. 58, or evidence of registration of the trust, cannot, by themselves, discharge the burden cast upon the assessee, particularly when such documents onl ordinary course of affairs. When adverse facts emerge during the course of verification, it becomes incumbent upon the assessee to affirmatively establish the genuineness of the transaction by producing the concerned party for examination. 13.4 In the absence of any such corroboration, and the assessee having failed to discharge the onus cast upon it, we find no infirmity in the action of the ld CIT(A) in confirming the disallowance of claim of deduction under Accordingly, the claim of deduction is rejected and Ground Nos. 3 and 4 raised by the assessee are dismissed. 14. Now, we take up the appeal for AY 2012 The grounds raised in assessment year 2012 grounds raised in AY 2011 15. Insofar as the appeal for Assessment Year 2017 concerned, the assessee, by Ground No. 1, has contended that Estate of Vandravan P Shah ITA No. 5401, 5402 & 5403/MUM/2024 such serious allegations, a higher degree of proof was required from the assessee to rebut the findings of the Assessing Officer. Mere production of documents such as the notification issued in favour of the trust, donation receipts, bank statements, Form No. 58, or evidence of registration of the trust, cannot, by themselves, discharge the burden cast upon the assessee, particularly when such documents only constitute a paper trail maintained in the ordinary course of affairs. When adverse facts emerge during the course of verification, it becomes incumbent upon the assessee to affirmatively establish the genuineness of the transaction by erned party for examination. In the absence of any such corroboration, and the assessee having failed to discharge the onus cast upon it, we find no infirmity in the action of the ld CIT(A) in confirming the disallowance of claim of deduction under section 35AC of the Act. Accordingly, the claim of deduction is rejected and Ground Nos. 3 and 4 raised by the assessee are dismissed. Now, we take up the appeal for AY 2012-13 for adjudication. The grounds raised in assessment year 2012-13 being ident grounds raised in AY 2011-12, same are decided mutatis mutandis. Insofar as the appeal for Assessment Year 2017 concerned, the assessee, by Ground No. 1, has contended that Estate of Vandravan P Shah 26 ITA No. 5401, 5402 & 5403/MUM/2024 such serious allegations, a higher degree of proof was required from the assessee to rebut the findings of the Assessing Officer. ents such as the notification issued in favour of the trust, donation receipts, bank statements, Form No. 58, or evidence of registration of the trust, cannot, by themselves, discharge the burden cast upon the assessee, particularly when y constitute a paper trail maintained in the ordinary course of affairs. When adverse facts emerge during the course of verification, it becomes incumbent upon the assessee to affirmatively establish the genuineness of the transaction by In the absence of any such corroboration, and the assessee having failed to discharge the onus cast upon it, we find no infirmity in the action of the ld CIT(A) in confirming the section 35AC of the Act. Accordingly, the claim of deduction is rejected and Ground Nos. 3 13 for adjudication. 13 being identical to are decided mutatis mutandis. Insofar as the appeal for Assessment Year 2017–18 is concerned, the assessee, by Ground No. 1, has contended that Printed from counselvise.com adequate opportunity of being heard was not afforded by the learned Commissioner of Income Tax (Appeals). 15.1 We have heard the rival submissions and carefully perused the material available on record. On examination of the impugned appellate order, it is evident that the learned CIT(A) had issued as many as five notices of hearing under section 250 of the Act. The record further shows that the assessee sought adjournments on two occasions and filed partial submissions in response to the remaining notices. The relevant portion of the impugned order, detailing the dates of hearing and the nature of compliance, reproduced as under: “6. Decision on Grounds of appeal; Following Notices u/s 250 of the IT Act was issued to the appellant. Sr. No. 1. Notice dated 06.01.2021 2. Notice 3. Notice dated 24.03.2022 4. Notice dated 28.09.2022 5. Notice dated 12.08.2024 15.2 In these circumstances, we are of the considered view that reasonable and sufficient opportunity was afforded to the assessee to present its case. The principles of natural justice do not mandate endless opportunities, and where adequate notice has been gi and the assessee has participated in the proceedings, albeit partially, no infirmity can be found in the appellate proceedings. Estate of Vandravan P Shah ITA No. 5401, 5402 & 5403/MUM/2024 adequate opportunity of being heard was not afforded by the learned Commissioner of Income Tax (Appeals). We have heard the rival submissions and carefully perused the material available on record. On examination of the impugned appellate order, it is evident that the learned CIT(A) had issued as notices of hearing under section 250 of the Act. The record further shows that the assessee sought adjournments on two occasions and filed partial submissions in response to the remaining notices. The relevant portion of the impugned order, ates of hearing and the nature of compliance, reproduced as under: Decision on Grounds of appeal; Following Notices u/s 250 of the IT Act was issued to the appellant. Hearing Notice Remarks Notice dated 06.01.2021 Adjournment Notice dated 13.12.2021 Adjournment Notice dated 24.03.2022 Partially Submission filed Notice dated 28.09.2022 Partially Submission filed Notice dated 12.08.2024 Partially Submission filed In these circumstances, we are of the considered view that reasonable and sufficient opportunity was afforded to the assessee to present its case. The principles of natural justice do not mandate endless opportunities, and where adequate notice has been gi and the assessee has participated in the proceedings, albeit partially, no infirmity can be found in the appellate proceedings. Estate of Vandravan P Shah 27 ITA No. 5401, 5402 & 5403/MUM/2024 adequate opportunity of being heard was not afforded by the We have heard the rival submissions and carefully perused the material available on record. On examination of the impugned appellate order, it is evident that the learned CIT(A) had issued as notices of hearing under section 250 of the Act. The record further shows that the assessee sought adjournments on two occasions and filed partial submissions in response to the remaining notices. The relevant portion of the impugned order, ates of hearing and the nature of compliance, is Following Notices u/s 250 of the IT Act was issued to the appellant. Remarks Adjournment Adjournment Partially Submission filed Partially Submission filed Partially Submission filed In these circumstances, we are of the considered view that reasonable and sufficient opportunity was afforded to the assessee to present its case. The principles of natural justice do not mandate endless opportunities, and where adequate notice has been given and the assessee has participated in the proceedings, albeit partially, no infirmity can be found in the appellate proceedings. Printed from counselvise.com Accordingly, Ground No. 1 raised by the assessee is devoid of merit and is dismissed. 16. So far as the grounds on merits are concerned, the assessee, for the year under consideration, claimed deduction of under section 80GGA of the Act in respect of a donation allegedly made to M/s St. Jude India Child Care Centre. In order to verif genuineness and eligibility of the claim, the Assessing Officer issued a notice under section 133(6) of the Act to the said institution. response, M/s St. Jude India Child Care Centre furnished a certificate under section 80G of the Act but failed certificate or approval under section 80GGA. Since the deduction was specifically claimed under section 80GGA, the primary onus lay upon the assessee to establish that the donee institution was eligible for donations qualifying for deductio provision. Section 80GGA grants deduction in respect of donations made for scientific research or rural development. On examination of the material on record, the Assessing Officer found that M/s St. Jude India Child Care Centre was neithe association nor engaged in any programme of rural development. The assessee was afforded an opportunity to explain and substantiate its claim; however, no compliance was made either during the assessment proceedings or before the le certificate as required under section 80GGA was produced at any stage. The learned CIT(A), after examining the assessment record Estate of Vandravan P Shah ITA No. 5401, 5402 & 5403/MUM/2024 Accordingly, Ground No. 1 raised by the assessee is devoid of merit So far as the grounds on merits are concerned, the assessee, for the year under consideration, claimed deduction of under section 80GGA of the Act in respect of a donation allegedly made to M/s St. Jude India Child Care Centre. In order to verif genuineness and eligibility of the claim, the Assessing Officer issued a notice under section 133(6) of the Act to the said institution. response, M/s St. Jude India Child Care Centre furnished a certificate under section 80G of the Act but failed certificate or approval under section 80GGA. Since the deduction was specifically claimed under section 80GGA, the primary onus lay upon the assessee to establish that the donee institution was eligible for donations qualifying for deduction under the said provision. Section 80GGA grants deduction in respect of donations made for scientific research or rural development. On examination of the material on record, the Assessing Officer found that M/s St. Jude India Child Care Centre was neither a scientific research association nor engaged in any programme of rural development. The assessee was afforded an opportunity to explain and substantiate its claim; however, no compliance was made either during the assessment proceedings or before the learned CIT(A). No certificate as required under section 80GGA was produced at any stage. The learned CIT(A), after examining the assessment record Estate of Vandravan P Shah 28 ITA No. 5401, 5402 & 5403/MUM/2024 Accordingly, Ground No. 1 raised by the assessee is devoid of merit So far as the grounds on merits are concerned, the assessee, for the year under consideration, claimed deduction of ₹74,40,000 under section 80GGA of the Act in respect of a donation allegedly made to M/s St. Jude India Child Care Centre. In order to verify the genuineness and eligibility of the claim, the Assessing Officer issued a notice under section 133(6) of the Act to the said institution. In response, M/s St. Jude India Child Care Centre furnished a to produce any certificate or approval under section 80GGA. Since the deduction was specifically claimed under section 80GGA, the primary onus lay upon the assessee to establish that the donee institution was n under the said provision. Section 80GGA grants deduction in respect of donations made for scientific research or rural development. On examination of the material on record, the Assessing Officer found that M/s St. r a scientific research association nor engaged in any programme of rural development. The assessee was afforded an opportunity to explain and substantiate its claim; however, no compliance was made either arned CIT(A). No certificate as required under section 80GGA was produced at any stage. The learned CIT(A), after examining the assessment record Printed from counselvise.com and the submissions, upheld the disallowance, holding that in the absence of the requisite statutory approval the donation did not qualify for deduction under the said provision and that the assessee had failed to substantiate the claim with cogent evidence. T relevant finding of t as under: “9. During the appeal pr case, Assessment order, submission filed by the appellant are perused. There is merit in the assessment order passed by the Assessing Officer in view of the following as under: Grounds 01 & 02: In this ground of the addition made by the Assessing Officer is Rs. 74,40,000/ the A.Y. 2017 considered. I have gone through the facts and found that Shri Vandravan P Shah has given donation u/s to Rs. 74,40,000/ claimed deduction u/s 80GGA against the donation. During the course of assessment proceedings, the AO has verified the said transaction with St. Jude India Child Care Centre the same, M/s St. Jude India Child Care Centre has produced Certificate under section 80G of the IT Act, 1961 and did not produce any certificate under section 80GGA while the appellant has claimed deduction of Rs. 74,40,000/ account of donation to M/s St. Jude India Child Care Centre. The Assessing Officer has clearly mentioned in assessment order and same reproduced as under: Section 80GGA refers to 'Donation in respect of certain donations for Scientific Researc submission by M/s St. Jude India Child Care Centre in response to notice u/s 133(6) of the IT Act, 1961, M/s St. Jude India Child Care Centre is neither a scientific research association nor undertaking any program of India Child Care Centre is not recognized for purpose of section 35(1)(ii) of the IT Act, 1961 and hence not eligible to raise donation for undertaking scientific research. Any donation made to this organization is bog 80GGA. Further, the assessee was show caused vide dated 25.10.2019 as to why the deduction claimed u/s 80GGA of Rs. 74,40,000/- on account of donation given to St. Jude India Child Estate of Vandravan P Shah ITA No. 5401, 5402 & 5403/MUM/2024 and the submissions, upheld the disallowance, holding that in the absence of the requisite statutory approval under section 80GGA, the donation did not qualify for deduction under the said provision and that the assessee had failed to substantiate the claim with cogent evidence. T relevant finding of the Ld. CIT(A) 9. During the appeal proceedings, Grounds of appeal, Facts of the case, Assessment order, submission filed by the appellant are perused. There is merit in the assessment order passed by the Assessing Officer in view of the following as under:- Grounds 01 & 02: In this ground of appeal the appellant objected the addition made by the Assessing Officer is Rs. 74,40,000/ the A.Y. 2017-18. The contention of the appellant has been considered. I have gone through the facts and found that Shri Vandravan P Shah has given donation u/s 80GGA an amounting to Rs. 74,40,000/- to M/s St. Jude India Child Care Centre and claimed deduction u/s 80GGA against the donation. During the course of assessment proceedings, the AO has verified the said transaction with St. Jude India Child Care Centre. In response to the same, M/s St. Jude India Child Care Centre has produced Certificate under section 80G of the IT Act, 1961 and did not produce any certificate under section 80GGA while the appellant has claimed deduction of Rs. 74,40,000/- under sectio account of donation to M/s St. Jude India Child Care Centre. The Assessing Officer has clearly mentioned in assessment order and same reproduced as under:- Section 80GGA refers to 'Donation in respect of certain donations for Scientific Research or Rural Development. On perusal of submission by M/s St. Jude India Child Care Centre in response to notice u/s 133(6) of the IT Act, 1961, M/s St. Jude India Child Care Centre is neither a scientific research association nor undertaking any program of rural development. Also, M/s St. Jude India Child Care Centre is not recognized for purpose of section 35(1)(ii) of the IT Act, 1961 and hence not eligible to raise donation for undertaking scientific research. Any donation made to this organization is bogus and not subject to any deduction u/s 80GGA. Further, the assessee was show caused vide dated 25.10.2019 as to why the deduction claimed u/s 80GGA of Rs. on account of donation given to St. Jude India Child Estate of Vandravan P Shah 29 ITA No. 5401, 5402 & 5403/MUM/2024 and the submissions, upheld the disallowance, holding that in the under section 80GGA, the donation did not qualify for deduction under the said provision and that the assessee had failed to substantiate the claim with he Ld. CIT(A) is reproduced oceedings, Grounds of appeal, Facts of the case, Assessment order, submission filed by the appellant are perused. There is merit in the assessment order passed by the appeal the appellant objected the addition made by the Assessing Officer is Rs. 74,40,000/- for 18. The contention of the appellant has been considered. I have gone through the facts and found that Shri 80GGA an amounting to M/s St. Jude India Child Care Centre and claimed deduction u/s 80GGA against the donation. During the course of assessment proceedings, the AO has verified the said . In response to the same, M/s St. Jude India Child Care Centre has produced Certificate under section 80G of the IT Act, 1961 and did not produce any certificate under section 80GGA while the appellant under section 80GGA on account of donation to M/s St. Jude India Child Care Centre. The Assessing Officer has clearly mentioned in assessment order and Section 80GGA refers to 'Donation in respect of certain donations h or Rural Development. On perusal of submission by M/s St. Jude India Child Care Centre in response to notice u/s 133(6) of the IT Act, 1961, M/s St. Jude India Child Care Centre is neither a scientific research association nor rural development. Also, M/s St. Jude India Child Care Centre is not recognized for purpose of section 35(1)(ii) of the IT Act, 1961 and hence not eligible to raise donation for undertaking scientific research. Any donation made to this us and not subject to any deduction u/s 80GGA. Further, the assessee was show caused vide dated 25.10.2019 as to why the deduction claimed u/s 80GGA of Rs. on account of donation given to St. Jude India Child Printed from counselvise.com Care Centre should not be added to assessee. However, the assessee did not make any compliance. In view of the above facts, it was seen that an amount of Rs. 74,40,000/-, donation given to M/s St. Jude India Child Care Centre, debited to profit and loss accounts of a claimed deduction u/s 80GGA of the Income Tax Act, 1961 Further, the contention of the appellant with regard to donation given to M/s St. Jude India Child Care Centre remains unverified in absence of documentary evidence. It is clear evident t said trust does not possess certificate u/s 80GGA and it does not have exemption u/s 35(1)(ii) and any donation is not eligible for claiming deduction u/s 80GGA. Since, deduction claimed of Rs. 74,40,000/- under section 80GGA is disallowed by the A the donation amount of Rs. 74,40,000/ The contention of the appellant remained unjustified and unsubstantiated ground is noted Ground 03: The ground being general i separate adjudication. In view of the above discussion, it is held that the appellant had given bogus donation of Rs. 74,40,000/ Child Care Centre for the A.Y. 2017 u/s 80GGA of the appellant remained unjustified and unsubstantiated. Therefore, the undersigned sees no reason to interfere with the orders of the Assessing Officer. Hence, the Assessment Order is upheld the ground dismissed.” 16.1 We have heard the rival submissions and perused the material placed on record. Even before us, the assessee has not produced any certificate as contemplated under section 80GGA of the Act to demonstrate the eligibility of the donee institut such foundational evidence, the claim for deduction cannot be sustained. We, therefore, find no infirmity in the order of the learned CIT(A) in confirming the disallowance of deduction under Estate of Vandravan P Shah ITA No. 5401, 5402 & 5403/MUM/2024 Care Centre should not be added to the total income of the assessee. However, the assessee did not make any compliance. In view of the above facts, it was seen that an amount of Rs. , donation given to M/s St. Jude India Child Care Centre, debited to profit and loss accounts of appellant and claimed deduction u/s 80GGA of the Income Tax Act, 1961 Further, the contention of the appellant with regard to donation given to M/s St. Jude India Child Care Centre remains unverified in absence of documentary evidence. It is clear evident t said trust does not possess certificate u/s 80GGA and it does not have exemption u/s 35(1)(ii) and any donation is not eligible for claiming deduction u/s 80GGA. Since, deduction claimed of Rs. under section 80GGA is disallowed by the A the donation amount of Rs. 74,40,000/- is treated as non The contention of the appellant remained unjustified and unsubstantiated. Hence, the Assessment Order is upheld the ground is noted dismissed. Ground 03: The ground being general in nature does not require adjudication. In view of the above discussion, it is held that the appellant had given bogus donation of Rs. 74,40,000/- to M/s St. Jude India Child Care Centre for the A.Y. 2017- 18 and claimed deduction u/s 80GGA of the Income Tax Act, 1961. The contention of the appellant remained unjustified and unsubstantiated. Therefore, the undersigned sees no reason to interfere with the orders of the Assessing Officer. Hence, the Assessment Order is upheld the ground We have heard the rival submissions and perused the material placed on record. Even before us, the assessee has not produced any certificate as contemplated under section 80GGA of the Act to demonstrate the eligibility of the donee institution. In the absence of such foundational evidence, the claim for deduction cannot be sustained. We, therefore, find no infirmity in the order of the learned CIT(A) in confirming the disallowance of deduction under Estate of Vandravan P Shah 30 ITA No. 5401, 5402 & 5403/MUM/2024 the total income of the assessee. However, the assessee did not make any compliance. In view of the above facts, it was seen that an amount of Rs. , donation given to M/s St. Jude India Child Care ppellant and claimed deduction u/s 80GGA of the Income Tax Act, 1961 Further, the contention of the appellant with regard to donation given to M/s St. Jude India Child Care Centre remains unverified in absence of documentary evidence. It is clear evident that the said trust does not possess certificate u/s 80GGA and it does not have exemption u/s 35(1)(ii) and any donation is not eligible for claiming deduction u/s 80GGA. Since, deduction claimed of Rs. under section 80GGA is disallowed by the AO. Hence, is treated as non-genuine. The contention of the appellant remained unjustified and Hence, the Assessment Order is upheld the n nature does not require In view of the above discussion, it is held that the appellant had to M/s St. Jude India 18 and claimed deduction Income Tax Act, 1961. The contention of the appellant remained unjustified and unsubstantiated. Therefore, the undersigned sees no reason to interfere with the orders of the is noted as We have heard the rival submissions and perused the material placed on record. Even before us, the assessee has not produced any certificate as contemplated under section 80GGA of the Act to ion. In the absence of such foundational evidence, the claim for deduction cannot be sustained. We, therefore, find no infirmity in the order of the learned CIT(A) in confirming the disallowance of deduction under Printed from counselvise.com section 80GGA.Accordingly, the grounds rai this issue are dismissed. 17. In the result all the three captioned appeals are dismissed. Order pronounced in the open Court on Sd/- (SANDEEP GOSAIN JUDICIAL MEMBER Mumbai; Dated: 23/12/2025 Rahul Sharma, Sr. P.S. Copy of the Order forwarded to 1. The Appellant 2. The Respondent. 3. CIT 4. DR, ITAT, Mumbai 5. Guard file. //True Copy// Estate of Vandravan P Shah ITA No. 5401, 5402 & 5403/MUM/2024 section 80GGA.Accordingly, the grounds raised by the assessee on this issue are dismissed. In the result all the three captioned appeals are dismissed. ounced in the open Court on 23/12/2025. Sd/ SANDEEP GOSAIN) (OM PRAKASH KANT JUDICIAL MEMBER ACCOUNTANT MEMBER Copy of the Order forwarded to : BY ORDER, (Assistant Registrar) ITAT, Mumbai Estate of Vandravan P Shah 31 ITA No. 5401, 5402 & 5403/MUM/2024 sed by the assessee on In the result all the three captioned appeals are dismissed. /12/2025. Sd/- OM PRAKASH KANT) ACCOUNTANT MEMBER BY ORDER, (Assistant Registrar) ITAT, Mumbai Printed from counselvise.com "