Jayesh Prabhudas Shah, Ahmedabad V. ITO, Ward-5(3)(1), Ahmedabad

ITA 1150/AHD/2018

• Counselvise Citation: [2020] 111 COUNSELVISE.COM (IT) 5220 (ITAT-AHMEDABAD)
• Duration Of Justice: 1 year(s) 9 month(s) 16 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-02-2020
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2014-2015
• Appeal Filed On: 04-05-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: LALIT P JAIN
• Assessee Lawyers: K C THAKER
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL SMC BENCH, AHMEDABAD BEFORE SHRI AMARJIT SINGH, ACCOUNTANT MEMBER& MS. MADHUMITA ROY, JUDICIAL MEMBER I.T.A. NO. 1150/AHD/2018 (ASSESSMENT YEAR: 2014-15) JAYESH PRABHUDAS SHAH A-11, VATSALYA APPAREMENT, 63, VASANTKUNJ SOCIETY, NEW SHARDA, MANDIR ROAD, PALDI AHMEDABAD VS. ITO WARD-5(3)(1), AHMEDABAD [ PAN NO. AIN PS9 873 J ] ( APPELLANT ) .. ( RESPONDENT ) APPELLANT BY : SHRI K. C. THAKER, AR RESPONDENT BY : SHRI LALIT P. JAIN, SR. D.R. DATE OF HEARING 18.02.2020 DATE OF PRONOUNCEMENT 20.02.2020 O R D E R PER MS. MADHUMITA ROY - JM: THE INSTANT APPEAL AT THE INSTANCE OF THE ASSESSEE IS DIRECTED AGAINST THE ORDER DATED 08.03.2018 PASSED BY THE COMMISSION ER OF INCOME TAX (APPEALS) 5, AHMEDABAD ARISING OUT OF THE ORDER D ATED 29.12.2016 PASSED BY THE ITO, WARD-5(3)(1), AHMEDABAD UNDER SECTION 1 43(3) R.W.S. 147 OF THE INCOME TAX ACT, 1961 (HEREINAFTER REFERRED AS T O THE ACT) FOR ASSESSMENT YEAR 2014-15. ITA NO.1150/AHD/2018 JAYESH PRABHUDAS SHAH VS. ITO ASST.YEAR 2014-15 - 2 - 2. IN THIS PARTICULAR CASE THE ASSESSEE HAS CHALLEN GED THE REASSESSMENT UNDER SECTION 143(3) R.W.S. 147 OF THE ACT AND FURT HER THAT THE DISALLOWANCE OF CLAIM UNDER SECTION 35(1)(II) OF THE ACT TO THE TUNE OF RS. 3,50,000/-. 3. HEARD THE PARTIES, PERUSED THE RELEVANT MATERIAL S AVAILABLE ON RECORD. 4. THE BRIEF FACTS LEADING TO THE CASE IS THIS THAT THE ASSESSEE FILED ITS RETURN OF INCOME OF RS. 8,00,430/- ON 29.11.2014 WH ICH WAS PROCESSED ON 11.12.2015. SUBSEQUENTLY INFORMATION WAS RECEIVED ON THE OFFICE OF THE DDIT(INV.), AHMEDABAD THAT A SURVEY ACTION WAS CARR IED OUT AT KOLKATA DIRECTORATE IN THE FOLLOWING INSTITUTIONS ON THE IS SUE OF FACILITATING BOGUS DONATIONS FOR CLAIMING DEDUCTION UNDER SECTION 35(1 )(II) OF THE ACT. (I) SCHOOL OF HUMAN GENETICS AND POPULATION HEALTH (SGH & PH) (II) HERBICURE HEALTH CARE BIO HERBAL RESEARCH FOU NDATION (HHBRF) (III) MATRIVANA INSTITUTE OF EXPERIMENTAL RESEARCH & EDUCATION (MEIR &E) 5. IT WAS FOUND DURING THE SURVEY ACTION THAT THE D ONORS/BENEFICIARIES IN CONNIVANCE OF THE THREE INSTITUTIONS AND WITH THE A CTIVE HELP OF CERTAIN BROKERS/ENTRY PROVIDERS/BOGUS BILLERS WERE INDULGED IN BOGUS DONATION SYNDICATE AND THE DONATIONS WERE RETURNED TO THE DO NORS IN LIEU OF COMMISSION. FACT REMAINS THAT DURING THE F.Y. 2013 -14 RELEVANT TO A.Y. 2014-15 THE ASSESSEE WAS DONATED RS. 2,00,000/- TO SCHOOL OF HUMAN GENETICS AND POPULATION HEALTH (SHG&PH) AND CLAIMED DEDUCTION OF RS. 3,50,000/- UNDER SECTION 35(1)(II) OF THE ACT IN TH E RETURN OF INCOME WHICH ITA NO.1150/AHD/2018 JAYESH PRABHUDAS SHAH VS. ITO ASST.YEAR 2014-15 - 3 - WAS DISALLOWED BY THE LD. AO, ON THE COUNT THAT THE ASSESSEE FAILED TO FURNISH THE CERTIFICATE ISSUED BY THE PRESCRIBED AU THORITY TO SCHOOL OF HUMAN GENETICS AND POPULATION HEALTH (SHG&PH) KOLKATA GRA NTING APPROVAL FOR EXEMPTION OF TAX IN RESPECT OF DONATIONS MADE TO IT . IT IS THE FURTHER CASE OF THE REVENUE THAT THE APP ROVAL OF THE CONCERNED INSTITUTION WAS WITHDRAWN BY A NOTIFICATI ON NO. 82/2016 DATED 15.09.2016. THE CASE OF THE ASSESSEE IS THIS THAT THE ASSESSEE HAD DONATED TO THE IMPUGNED INSTITUTION DURING THE SUBSISTENCE OF SUCH APPROVAL AND, THEREFORE, DISALLOWANCE UNDER SECTION 35(1)(II) FOR A.Y. 2014-15 IS NOT PERMISSIBLE IN EYE OF LAW. IT WAS FURTHER ARGUED B Y THE LD. AR AT THE TIME OF THE HEARING OF THE INSTANT APPEAL THAT THE ISSUE IS SQUARELY COVERED BY SEVERAL JUDGMENTS PASSED BY THE HONBLE TRIBUNAL IN FAVOUR OF THE ASSESSEE. COPY OF THE SAID JUDGMENTS HAVE ALSO BEEN SUBMITTED BEFORE US. 6. WE HAVE ALSO CAREFULLY CONSIDERED THE JUDGMENT P ASSED BY THE LD. TRIBUNAL IN ITA NO. 2318/AHD/2017 FOR A.Y. 2014-15, THE RELEVANT PORTION DEALING WITH THE ISSUE IS AS FOLLOWS:- 5. WE HAVE DULY CONSIDERED RIVAL CONTENTIONS AND G ONE THROUGH THE RECORD CAREFULLY. IN THE CASE OF S.G. VAT CARE P.L TD. (SUPRA), THE TRIBUNAL HAS RECORDED THE FOLLOWING FINDING: 2. IN THE FIRST GROUND OF APPEAL, THE GRIEVANCE OF THE ASSESSEE IS THAT THE LD.CIT(A) HAS ERRED IN CONFIRMING ADDITIO N OF RS. 8,75,000/- ON ACCOUNT OF ALLEGED BOGUS DONATION TO HERBICURE HEALTHCARE BIO- HERBAL RESEARCH FOUNDATION. 3. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE H AS FILED RETURN OF INCOME ON 20.11.2014 DECLARING TOTAL INCOME AT RS. 4,47,910/-. ON SCRUTINY OF THE ACCOUNTS, IT REVEALED THAT THE AS SESSEE-COMPANY HAS GIVEN DONATION TO HERBICURE HEALTHCARE BIO-HERBAL RESEARCH FOUNDATION, CALCUTTA. A SURVEY ACTION WAS CARRIED OUT AT THE PREMISES ITA NO.1150/AHD/2018 JAYESH PRABHUDAS SHAH VS. ITO ASST.YEAR 2014-15 - 4 - OF THE DONEE WHEREIN IT REVEALED TO THE REVENUE TH AT THIS CONCERN WAS MISUSING THE BENEFIT OF NOTIFICATION ISSUED BY THE INCOME TAX DEPARTMENT. IT HAS BEEN GETTING DONATIONS FROM VAR IOUS SOURCES, AND AFTER DEDUCTING CERTAIN AMOUNT OF COMMISSION, THES E DONATIONS WERE REFUNDED IN CASH. ON THE BASIS OF THAT SURVEY REPORT REGISTRATION GRANTED TO ITS FAVOUR WAS CANCELLED. ON THE BASIS OF THE OUTCOME OF THAT SURVEY REPORT, THE LD.AO CONSTRUED THE DONATI ON GIVEN BY THE ASSESSEE AS BOGUS. APPEAL TO THE LD.CIT(A) DID NO T BRING ANY RELIEF TO THE ASSESSEE. 4. BEFORE US, THE LD.COUNSEL FOR THE ASSESSEE CONT ENDED THAT DONATIONS WERE GIVEN ON 25.3.2014. AT THAT POINT O F TIME, DONEE WAS NOTIFIED AS ELIGIBLE INSTITUTION AND FALL WITHIN T HE STATUTORY ELIGIBILITY CRITERION. CERTIFICATE FOR RECEIVING DONATION WAS CANCELLED ON 5.9.2016. THERE IS NO MECHANISM WITH THE ASSESSEE TO VERIFY WHETHER SUCH DONEE WAS A GENUINE INSTITUTE OR NOT, WHICH CAN AVAIL DONATION FROM THE SOCIETY. 5. THE LD.DR, ON THE OTHER HAND, CONTENDED THAT IN THE INVESTIGATION IT CAME TO KNOW ABOUT BOGUS AFFAIRS CONDUCTED BY THE DONEE. HENCE, THESE DONATIONS ARE RIGHTLY BEEN TR EATED AS BOGUS, AND ADDITION IS RIGHTLY MADE. 6. WE HAVE DULY CONSIDERED RIVAL CONTENTIONS AND G ONE THROUGH THE RECORD CAREFULLY. THE AO IS HARPING UPON AN IN FORMATION SUPPLIED BY THE SURVEY TEM OF CALCUTTA. HE HAS NOT SPECIFIC ALLY RECORDED STATEMENT OF REPRESENTATIVES OF THE DONEE. HE HAS NOT BROUGHT ON RECORD A SPECIFIC EVIDENCE WHEREIN DONEE HAS DEPOS ED THAT DONATIONS RECEIVED FROM THE ASSESSEE WAS PAID BACK IN CASH A FTER DEDUCTING COMMISSION. ON THE BASIS OF A GENERAL INFORMATION COLLECTED FROM THE DONEE, THE DONATION MADE BY THE ASSESSEE CANNOT BE DOUBTED. NEITHER REPRESENTATIVES OF THE DONEE HAVE BEEN PUT TO CROS S-EXAMINATION, NOR ANY SPECIFIC REPLY DEPOSING THAT SUCH DONATION WAS NOT RECEIVED, OR IF RECEIVED THE SAME WAS REPAID IN CASH, HAS BEEN BRO UGHT ON RECORD. IN THE ABSENCE OF SUCH CIRCUMSTANCES, DONATION GIVEN BY THE ASSESSEE TO THE DONEE, ON WHICH THE ASSESSEE NO MECHANISM TO C HECK THE VERACITY, CAN BE DOUBTED, MORE PARTICULARLY, WHEN CERTIFICAT E TO OBTAIN DONATION HAS BEEN CANCELLED AFTER TWO YEARS OF THE PAYMENT OF DONATION. IT IS FACT WHICH HAS BEEN UNEARTHED SUB SEQUENT TO THE DONATIONS. THEREFORE, THERE CANNOT BE ANY DISALL OWANCE ON THIS ISSUE. WE ALLOW THIS GROUND. 6. THERE IS NO DISPARITY ON THE FACTS. ON THE BASI S SAME SURVEY REPORT, THE GENUINENESS OF THE DONATION HAS BEEN DOUBTED IN THE CASE OF THE ASSESSEE ITA NO.1150/AHD/2018 JAYESH PRABHUDAS SHAH VS. ITO ASST.YEAR 2014-15 - 5 - ALSO. THEREFORE, THE ISSUE IN DISPUTE IS SQUARELY COVERED IN FAVOUR OF THE ASSESSEE. RESPECTFULLY FOLLOWING THE ORDER OF THE ITAT IN THE CASE OF S.G. VAT CARE P.LTD., WE DO NOT FIND ANY MERIT IN THE APPEAL OF THE REVENUE. IT IS DISMISSED. 7. IN THE RESULT, APPEAL OF THE REVENUE IS DISMISSE D. FROM THE ABOVE JUDGMENTS IT APPEARS THAT THE CASE IS SQUARELY COVERED IN FAVOUR OF THE ASSESSEE AND IN THE ABSENC E OF ANY CHANGED FACTS AND CIRCUMSTANCES OF THE CASE WE FIND IT FIT TO ALL OW THE APPEAL PREFERRED BY THE ASSESSEE. THUS, ADDITION IS HEREBY DELETED. 7. IN THE RESULT, ASSESSEES APPEAL IS ALLOWED. THIS ORDER PRONOUNCED IN OPEN COURT ON 20/02/2020 SD/- SD/- (AMRJIT SINGH) (MS. MADHUMITA ROY) ACCOUNTANT MEMBER JUDICIAL MEMBER AHMEDABAD; DATED 20/02/2020 TANMAY, SR. PS TRUE COPY / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. / CONCERNED CIT 4. ( ) / THE CIT(A)- 5. , ! ' , #$%% / DR, ITAT, AHMEDABAD 6. &' () / GUARD FILE. / BY ORDER, / (DY./ASSTT. REGISTRAR) !, #$ / ITAT, AHMEDABAD