Appeal details
Counselvise Citation
[2018] 126 COUNSELVISE.COM (IT) 1375 (ITAT-KOLKATA)
Assessee PAN
Bench
Appeal Number
Duration Of Justice
1 year(s) 2 month(s) 9 day(s)
Appellant
Respondent
Appeal Type
Income Tax Appeal
Pronouncement Date
14-03-2018
Appeal Filed By
Department
Order Result
Dismissed
Bench Allotted
B
Assessment Year
2013-2014
Appeal Filed On
05-01-2017
Judgement Text
IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH : KOLKATA [BEFORE HONBLE SHRI M.BALAGANESH, AM & HONBLE S HRI S.S.VISWANETHRA RAVI, JM] I.T.A NO. 16/KOL/2017 ASSESSMENT YEAR : 2013-1 4 DCIT, CIRCLE-12(1), KOLKATA -VS- M/S MA CO CORPORATION (INDIA) PVT. LTD. [PAN: AACCM 8740 L] (APPELLANT) (RESPONDEN T) FOR THE APPELLANT : SHRI S. DASGUPTA, ADDL. CIT(DR) FOR THE RESPONDENT : SHRI MIRAJ D SHAH, A R DATE OF HEARING : 07.03.2018 DATE OF PRONOUNCEMENT : 14.03.2018 ORDER PER M.BALAGANESH, AM 1. THIS APPEAL BY THE REVENUE ARISES OUT OF THE OR DER OF THE LEARNED COMMISSIONER OF INCOME TAX(APPEALS)-4, KOLKATA [IN SHORT THE LD CIT (A)] IN APPEAL NO.10687/CIT(A)- 4/CIRCLE-12(1)/16-17 DATED 24.10.2016 AGAINST THE ORDER PASSED BY THE DCIT, CIRCLE- 12(1), KOLKATA [ IN SHORT THE LD AO] UNDER SECTION 143(3) OF THE INCOME TAX ACT, 1961 (IN SHORT THE ACT) DATED 28.03.2016 FOR THE ASSE SSMENT YEAR 2013-14. 2. THE ONLY EFFECTIVE ISSUE TO BE DECIDED IN THIS A PPEAL IS AS TO WHETHER THE LD CITA WAS JUSTIFIED IN DELETING THE DISALLOWANCE MADE U/S 35( 1)(II) OF THE ACT IN THE SUM OF RS 3,06,25,000/- IN THE FACTS AND CIRCUMSTANCES OF THE CASE. 2 ITA NO.16/KOL/2017 M/S MACO CORPORATION (INDIA) PVT. LTD. A.YR. 2013-14 2 3. THE BRIEF FACTS OF THIS ISSUE IS THAT THE ASSESS EE IS A PRIVATE LIMITED COMPANY ENGAGED IN THE BUSINESS OF IMPORT AND EXPORT OF MACHINERY S PARES, EQUIPMENT & COMPONENT AND PROJECT EXECUTION WORK. THE RETURN OF INCOME FOR T HE ASST YEAR 2013-14 WAS FILED BY THE ASSESSEE ON 29.9.2013 DISCLOSING TOTAL INCOME O F RS 32,41,51,490/-. THE LD AO OBSERVED THAT THE ASSESSEE CLAIMED DONATION OF RS 3 ,06,25,000/- (BEING 175% OF RS 1,75,00,000/-) U/S 35(1)(II) OF THE ACT FOR THE SCI ENTIFIC RESEARCH ORGANIZATION DONATION MADE AS UNDER:- SCHOOL OF HUMAN GENETICS & POPULATION HEALTH (SHGPH IN SHORT) 19.11.2012 25,00,000 SHGPH 27.11.2012 25,00,000 HERBICURE HEALTHCARE BIO-HERBAL RESEARCH FOUNDATION (HHBHRF IN SHORT) 19.3.2013 50,00,0 00 HHBHRF 20.3.2013 50,00,000 HHBHRF 22.3.2013 25,00,000 ------------------- 1,75,00,000 ------------------- SURVEY OPERATIONS U/S 133A OF THE ACT WERE CONDUCTE D ON 27.1.2015 IN THE PREMISES OF SHGPH AND HHBHRF BY THE DIRECTORATE OF INVESTIGATIO N, KOLKATA. IN SUCH SURVEY, IT WAS FOUND THAT THE AFORESAID CONCERNS WERE ENGAGED IN COLLECTING BOGUS DONATIONS U/S 35(1)(II) OF THE ACT TO BENEFICIARIES TO ENABLE THE M TO CLAIM WEIGHTED DEDUCTION OF 175% OF THE AMOUNTS ACTUALLY PAID BY SUCH BENEFICIA RIES. THE LD AO ISSUED A SHOW CAUSE NOTICE ASSERTING THE FOLLOWING :- AS PER TAX AUDIT REPORT COLUMN 15(A), THE AMOUNTS D EBITED AND DEDUCTION ALLOWABLE U/S 35 IS BEING SHOWN AS NA. THESE INSTITUTIONS ARE ENGAGED IN THE BOGUS DONATIO N U/S 35(1)(II) OF THE ACT THROUGH VARIOUS BROKERS IN LIEU OF COMMISSION. BOGU S DONATIONS ARE RECEIVED 3 ITA NO.16/KOL/2017 M/S MACO CORPORATION (INDIA) PVT. LTD. A.YR. 2013-14 3 THROUGH CHEQUES/RTGS AND THEREAFTER CASH IS RETURNE D TO THE DONORS AFTER DEDUCTING COMMISSION. STATEMENTS OF KEY PERSONS LIKE SECRETARY/TREASURES/ PRESIDENT AND OTHER PERSONS RECORDED DURING THE SURVEY HAS CONFIRMED THE ABOVE BOGUS ACTIVITY BY THESE INSTITUTIONS. STATEMENT OF AUDITOR RECORDED DURING THE COURSE OF SURVEY CLEARLY SHOWS LACUNAS IN THE AUDIT DONE BY THEM. STATEMENTS OF NUMBER OF BROKERS/ENTRY OPERATORS REC ORDED IN COURSE OF SURVEY PROCEEDINGS HAVE CONFIRMED THE BOGUS BILLING OR ACC OMMODATION ENTRIES FROM THESE INSTITUTIONS. PRE SURVEY & POST SURVEY ENQUIRIES HAVE FOUND THAT MOST OF THE EXPENSE SIDE PARTIES ARE PAPER & BOGUS CONCERNS. THE BANK STATEMENTS OF THESE INSTITUTIONS SHOW CLEA R PATTERN OF DONATION COMING AND GOING VIDE THE ABOVE MODUS OPERANDI. SHG&PH HAVE GONE IN SETTLEMENT COMMISSION ADMITTING THAT IN LIEU OF SERVICE CHARGE THEY HAVE PROVIDED ACCOMMODATION ENT RIES OF DONATION TO THE DONORS. THE BOOKS OF ACCOUNTS WERE NOT THERE AT THE REGISTE RED OFFICES. IN CASE OF SHG&PH THERE ARE BROKER WISE LEDGERS OF COMMISSION. NO PURCHASE BILLS WERE FOUND FOR FINANCIAL YEAR 2014-15. DOCUMENTS RE LATED TO COMMISSION WERE FOUND AND IMPOUNDED. THESE INSTITUTIONS HAVE FEW PERSONS WITH GOOD CV WH O ARE ASSOCIATED ONLY IN HONORARY POSITION AND THEY ARE NOT INVOLVED IN THE DAY TO DAY ACTIVITIES. THE RESEARCH WORK SHOWN IS JUST REPRODUCTION OF PUB LISHED MATERIAL. DETAILS IN RESPECT OF RESEARCH WORK COULD NOT BE FURNISHED BY THESE INSTITUTIONS. THESE INSTITUTIONS HAVE MINISCULE PRESENCE AND THEI R CONTRIBUTION TO SCIENTIFIC RESEARCH IS TOO NEGLIGIBLE FOR THE KIND OF DONATION THEY RECEIVED. THE RESEARCH FACILITIES ARE NEAR ABOUT MISSING IN THESE INSTITUT ES. 4 ITA NO.16/KOL/2017 M/S MACO CORPORATION (INDIA) PVT. LTD. A.YR. 2013-14 4 THESE INSTITUTES HAVE BLATANTLY VIOLATED RULE 5C, 5 D & 5E OF INCOME TAX RULES WHICH ARE REQUIRED TO BE COMPLIED BY THE INST ITUTES APPROVED U/S 35(1)(II) OF THE ACT. IN THE LIGHT OF ABOVE POINTS THE AO WANTED THE APPE LLANT TO EXPLAIN ITS CLAIM OF DEDUCTION AMOUNTING TO RS. 3,06,25,000/- U/S 35(1)( II) OF THE ACT. 4. THE ASSESSEE IN RESPONSE TO SHOW CAUSE NOTICE RE PLIED AS UNDER:- THESE INSTITUTIONS ARE DULY REGISTERED WITH THE REG ISTRAR OF COMPANIES, INCOME TAX DEPARTMENT, SIRO AND OTHER AUTHORITIES AND ARE ENGAGED IN THE RESEARCH ACTIVITIES. THESE INSTITUTIONS ENJOY REGISTRATIONS U/S 35(1)(II) OF THE ACT. THESE ARE NOT BOGUS DONATIONS AS ALLEGED. THE DONAT IONS ARE GENUINE AND NO COMMISSION WHATSOEVER WAS PAID TO ANY PERSON WITH R ESPECT TO THESE DONATIONS. AT THE TIME OF MAKING THESE DONATIONS NO SUCH DISCR EPANCY CAME TO THE KNOWLEDGE OF THE ASSESSEE COMPANY. THE ASSESSEE COMPANY IS SUBJECTED TO REGULAR ASSESS MENT EVERY YEAR AND IT CAN BE SEEN FROM THE ACCOUNTS THAT FOR SEVERAL YEARS THE A SSESSEE GROUP HAS BEEN SUPPORTING SEVERAL INSTITUTIONS BY GIVING DONATIONS . THIS IS THE PHILOSOPHY OF THE GROUP. THE DEDUCTION CLAIMED IS CORRECT AND SHOULD BE ALLO WED IN FULL. IN SUPPORT OF ITS CLAIM THE ASSESSEE COMPANY FURNISHED FOLLOWING:- A) REGISTRATION & RENEWAL CERTIFICATE OF DEPARTMENT OF SCIENCE & TECHNOLOGY, GOVERNMENT OF INDIA. B) REQUEST LETTER OF HHBHRF. C) INCOME TAX EXEMPTION OF CERTIFICATE. D) RECEIPT OF R.S 50,00,000/- ISSUED BY SHG&PH E) RECEIPT OF RS. 1,25,00,000/- ISSUED BY HHBHRF. 5 ITA NO.16/KOL/2017 M/S MACO CORPORATION (INDIA) PVT. LTD. A.YR. 2013-14 5 ASSESSEE REQUESTED THE AO TO PROVIDE ALL MATERIAL P ROPOSED TO BE USED AGAINST THE ASSESSEE COMPANY IN RESPECT OF TRANSACTION WITH FOUNDATION. THE ASSESSEE ALSO REQUESTED TO CROSS EXAMINE THE PARTIES WHO HAVE GIV EN ADVERSE STATEMENTS. IT WAS ALSO MENTIONED THAT IN VIEW OF THE JUDICIAL CASES, WHERE ANY DONATION IS MADE BY AN ASSESSEE TO AN APPROVED INSTITUTION AND CLAIMED DEDUCTION, THE SUBSEQUENT WITHDRAWAL OF THE APPROVAL OF SUCH INSTI TUTION WOULD NOT ENTITLE THE DEPARTMENT TO DISALLOW THE DEDUCTION TO THE ASSESSE E. IT WAS ALSO SUBMITTED BY THE ASSESSEE THAT MERELY ON SUBMISSION MADE BY THE DONE TRUST DURING THE COURSE OF THEIR INCOME TAX PR OCEEDINGS, THE ASSESSEE COMPANY SHOULD NOT BE DENIED THE BENEFIT OF DEDUCTI ON AS ON THE DATE OF THE DONATION THE DONOR TRUST WAS CARRYING ON ACTIVITIES BASED ON WHICH RECOGNITION WAS GIVEN BY THE INCOME TAX AUTHORITIES. IF FURTHER STATED THAT ASSESSEE COMPANY SHOULD BE G IVEN AN OPPORTUNITY TO CROSS EXAMINE THE DONE TRUST BEFORE MAKING ANY DISALLOWAN CE ON THE PRESUMPTION THAT THE DONATION IS BOGUS. 5. THE LD AO OBSERVED THAT THE DONATIONS MADE THROU GH BANKING CHANNEL REFLECTED THE URGENCY IN MAKING THE ARRANGEMENT AND DONATION BEIN G MADE TOWARDS THE FAG END OF THE FINANCIAL YEAR WHEREIN THE ACTUAL PROFIT EARNED DUR ING THE FINANCIAL YEAR 2012-13 HAD BECOME CRYSTAL CLEAR. THE LD AO FURTHER RELIED ON THE SURVEY REPORT AND OBSERVED THAT THE ASSESSEE COMPANYS NAME APPEAR AT SERIAL NUMBER 301 OF THE SURVEY REPORT AMONGST THE LIST OF NAMES FURNISHED BY THE DDIT (INV.) UNIT 4(1), KOLKATA IN THE CASE OF SGHPH REFLECTING BOGUS DONATION TRANSACTION OF THE ASSESS EE COMPANY. THE LD AO ALSO OBSERVED THAT FROM THE BROKER WISE LIST OF BOGUS DO NATION FOR FY 2012-13 REPRODUCED IN HIS ORDER THAT THE ASSESSEE HAD INDULGED IN THIS TR ANSACTION THROUGH MEDIATOR ABHIJIT. THE LD AO THEN EXTRACTED THE STATEMENTS RECORDED BY THE DDIT, INVESTIGATION WING, KOLKATA FROM VARIOUS PERSONS BELONGING TO SGHPH AND HHBHRF. THE LD AO FINALLY 6 ITA NO.16/KOL/2017 M/S MACO CORPORATION (INDIA) PVT. LTD. A.YR. 2013-14 6 AT PAGE 51 OF HIS ORDER STATED THAT ON PERUSAL OF E XTRACTS OF SURVEY REPORTS AND STATEMENTS OF SRI MANOJ KUMAR KOTHARY AND SRI SWAPAN RANJAN DA SGUPTA, IT IS CLEAR THAT THE ASSESSEE COMPANY HAD PAID BOGUS DONATION. THE LD AO ALSO ISSUED SUMMONS U/S 131 OF THE ACT TO SHRI NAGESH M PATEL, MANAGING DIRECTOR O F THE ASSESSEE COMPANY AND RECORDED STATEMENT FROM HIM. HE CONCLUDED THAT TH E ASSESSEE COMPANY HAD NOT VERIFIED THE CONCERNS PROPERLY. THE MD OF THE ASSESSEE COMP ANY DOES NOT KNOW ANY PERSON OF THESE CONCERNS AND DOES NOT REMEMBER THE NAME OF TH E BROKER WHO HAD BROUGHT THE DETAILS OF THESE CONCERNS. ACCORDINGLY, THE LD AO DISALLOWED THE WEIGHTED DEDUCTION CLAIMED IN THE SUM OF RS 3,06,25,000/- U/S 35(1)(II ) OF THE ACT IN THE ASSESSMENT. 6. THE ASSESSEE FILED A DETAILED WRITTEN SUBMISSION S BEFORE THE LD CITA MEETING OUT EACH AND EVERY POINT OF THE ORDER OF THE THE LD AO WHICH ARE REPRODUCED IN PAGES 7 TO 19 OF THE ORDER OF THE LD CITA WHICH ARE NOT REITER ATED HEREIN FOR THE SAKE OF BREVITY. THE LD CITA DELETED THE DISALLOWANCE BY OBSERVING A S UNDER:- 5.1. I HAVE GONE THROUGH THE ASSESSMENT ORDER, WRI TTEN SUBMISSIONS FILED BY THE AR OF THE APPELLANT COMPANY AS WELL AS THE DOCUMENTS FILE D IN THE FORM OF PAPER BOOK BY THE AR OF THE APPELLANT. THE SOLE ISSUE TO BE DECIDED I N THIS APPEAL IS WHETHER THE DONATION OF RS. 1,75,00,000/- MADE BY THE APPELLANT TO TWO C ONCERNS VIZ. SHG&PH AMOUNTING TO RS. 50,00,000/- AND HHBRF AMOUNTING TO RS. 1,25,00, 000/- IS ELIGIBLE FOR WEIGHTED DEDUCTION OF RS. 3,06,25,000/- I.E. 175% OF THE DON ATED AMOUNT U/S 35(1)(II) OF THE ACT OR NOT. FOR THE SAKE OF CONVENIENCE SECTION 35(1)(I I) OF THE ACT IS REPRODUCED AS FOLLOWS: SEC 35(1): IN RESPECT OF EXPENDITURE ON SCIENTIFIC RESEARCH, THE FOLLOWING DEDUCTION SHALL BE ALLOWED- II) ANY SUM PAID TO A SCIENTIFIC RESEARCH ASSOCIATI ON WHICH HAS ITS OBJECTS THE UNDERTAKING OF SCIENTIFIC RESEARCH OR TO A UNIVERSI TY, COLLEGE, OR OTHER INSTITUTION TO BE USED FOR SCIENTIFIC RESEARCH: PROVIDED THAT SUCH AS SOCIATION, UNIVERSITY, COLLEGE OR INSTITUTION IS FOR THE TIME BEING APPROVED FOR THE PURPOSES OF THIS CLAUSE BY THE PRESCRIBED AUTHORITY BY NOTIFICATION IN THE OFFICIA L GAZETTE. FROM THE ABOVE, IT IS CLEAR THAT ANY ASSESSEE CAN C LAIM DEDUCTION U/S 35(1)(II) OF THE ACT PROVIDED IT GIVES DONATION TO ANY UNDERTAKING WHICH HAS ITS OBJECTS OF SCIENTIFIC RESEARCH AND SUCH UNDERTAKING IS APPROVED FOR THE P URPOSES OF THIS CLAUSE BY THE PRESCRIBED AUTHORITY. AS FAR AS ELIGIBILITY OF THE APPELLANT IS CONCERNED THERE IS NO DOUBT EXPRESSED BY THE AO IN THE ENTIRE ASSESSMENT ORDER THAT THE APPELLANT IS NOT ELIGIBLE TO CLAIM WEIGHTED DEDUCTION OF DONATIONS PAID U/S 35(1 )(II) OF THE ACT. BRIEFLY STATED FACTS OF THE CASE ARE THAT THE APPELLANT IS ENGAGED IN TH E BUSINESS OF IMPORT & EXPORT OF 7 ITA NO.16/KOL/2017 M/S MACO CORPORATION (INDIA) PVT. LTD. A.YR. 2013-14 7 MACHINERY & MACHINERY SPARE, EQUIPMENT & COMPONENT AND PROJECT EXECUTION WORK. FOR THE ASSESSMENT YEAR UNDER CONSIDERATION THE APP ELLANT HAS FILED ITS RETURN OF INCOME ON 29.09.2013 DECLARING TOTAL INCOME AT RS. 32,41,5 1,490/-. IN COURSE OF THE ASSESSMENT PROCEEDINGS THE AO NOTED THAT THE APPELLANT HAS CLA IMED A SUM OF RS. 3,06,25,000/- U/S 35(1 )(II) OF THE ACT. IN SUPPORT OF ITS CLAIM THE APPELLANT HAS FILED COPIES OF DONATION RECEIPTS, NOTIFICATION ISSUED U/S 35(1 )(II) IN FAV OUR OF THE DONEE INSTITUTIONS; ETC. THE AO DISALLOWED THE2CLAIM OF THE APPELLANT ENTIRELY ON T HE GROUND THAT THESE' INSTITUTIONS WERE ENGAGED, IN PROVIDING, BOGUS DONATION TO BENEF ICIARIES IN LIEU OF COMMISSION INCOME. IN DOING SO THE AO HAS RELIED UPON THE SURV EY REPORT OF THE DDIT (INV), KOLKATA. A SURVEY WAS CONDUCTED BY THE DDIT (INV), KOLKATA UPON THESE INSTITUTIONS ON 27.01.2015. PURSUANT TO SUCH SURVEY, STATEMENTS OF VARIOUS PERSONS WERE RECORDED BY THE DDIT (INV), KOLKATA. THE AO HAS HEAVILY RELIED UPON THE SURVEY REPORT AS WELL AS THE STATEMENTS RECORDED BY THE DDIT (INV), KOLKATA. IN FACT, IF THE STATEMENTS RECORDED ARE IGNORED THE INDEPENDENT FINDING OF THE AO REMAI NS MINIMAL. I FIND THAT THE ARGUMENTS OF THE AR ARE MULTIFOLD. HOWEVER HIS ARGU MENTS CAN BE CATEGORIZED INTO TWO LIMBS. FIRST LIMB BEING VIOLATION OF PRINCIPLES OF NATURAL JUSTICE AND SECOND LIMB BEING ON THE MERITS OF THE CASE. THE AR HAS VEHEMENTLY AR GUED THAT THERE HAD BEEN GROSS VIOLATION OF PRINCIPLES OF NATURAL JUSTICE IN THIS CASE AS THE SURVEY REPORT OR THE COPIES OF THE STATEMENT RELIED UPON BY THE AO WERE NEVER PROV IDED TO THE APPELLANT IN SPITE OF SEVERAL WRITTEN AS WELL AS VERBAL REQUESTS MADE BY THE APPELLANT BEFORE THE AO. IN SUPPORT OF ITS CONTENTIONS THE AR DREW MY ATTENTION TOWARDS THE RELEVANT PAGES IN THE PAPER BOOK. THUS THE CONTENTIONS OF THE AR OF THE A PPELLANT WERE FOUND TO BE CORRECT. 5.2 FROM THE FACTS EMERGING FROM RECORDS, IT IS NOT IN DISPUTE THAT INDEED THE AO HAS NEITHER PROVIDED THE COPIES OF STATEMENTS RECORDED BY THE DDIT(INV), KOLKATA OR THE SURVEY REPORT PREPARED BY HIM TO THE APPELLANT FOR REBUTTAL. I FIND THAT THE AO HAS RELIED UPON BY THE ENTIRE FINDINGS OF DDIT (INV), KOLKATA IN FRAMING THE IMPUGNED ASSESSMENT ORDER. THE AO HAS ALSO NOT ALLOWED ANY CROSS EXAMIN ATION OF SUCH PERSONS WHOSE STATEMENTS WERE RELIED UPON BY THE AO IN COURSE OF ASSESSMENT PROCEEDINGS. IN SUPPORT OF HIS CONTENTIONS AR HAS RELIED UPON SEVERAL JUDGM ENTS OF THE HIGH COURTS AND APEX COURT. THUS, BEFORE GIVING ANY FINDING ON THE MERIT S OF THE CASE, IT BECOMES INCUMBENT UPON ME TO DECIDE WHETHER ASSESSMENT DONE IN GROSS VIOLATION OF PRINCIPLES OF NATURAL JUSTICE CAN STAND THE TEST OF LAW OR NOT. I FIND TH AT APART FROM OTHER JUDGMENTS RELIED UPON BY THE AR OR THE APPELLANT THE JUDGMENT OF THE APEX COURT IN THE CASE OF M/S ANDAMAN TIMBER INDUSTRIES VS. COMMISSIONER OF CENTR AL EXCISE, KOLKATA-II BEARING CIVIL APPEAL NO. 4228 OF 2006 DATED 02.09.2015 IS S QUARELY FITTING INTO THE FACTS OF THIS CASE. IT WAS HELD BY THE APEX COURT AS FOLLOWS: 'ACCORDING TO US 1 NOT ALLOWING THE ASSESSEE TO CRO SS-EXAMINE THE WITNESS BY THE ADJUDICATING AUTHORITY THOUGH THE STATEMENTS OF THO SE WITNESSES WERE MADE THE BASIS OF THE IMPUGNED ORDER IS A SERIOUS FLAW WHICH MAKES TH E ORDER NULLITY IN AS MUCH AS IT AMOUNTED TO VIOLATION OF PRINCIPLES OF NATURAL JUST ICE BECAUSE OF WHICH THE ASSESSEE WAS ADVERSELY AFFECTED. IT IS TO BE BORNE IN MIND THAT THE ORDER OF THE COMMISSIONER WAS BASED UPON THE STATEMENTS GIVEN BY THE AFORESAID TW O WITNESSES. EVEN WHEN THE ASSESSEE DISPUTED THE CORRECTNESS OF THE STATEMENTS AND WANT ED TO CROSS-EXAMINE, THE 8 ITA NO.16/KOL/2017 M/S MACO CORPORATION (INDIA) PVT. LTD. A.YR. 2013-14 8 ADJUDICATING AUTHORITY DID NOT GRANT THIS OPPORTUNI TY TO THE ASSESSEE. IT WOULD BE PERTINENT TO NOTE THAT IN THE IMPUGNED ORDER PASSED BY THE ADJUDICATING AUTHORITY HE HAS SPECIFICALLY MENTIONED THAT SUCH AN OPPORTUNITY WAS SOUGHT BY THE ASSESSEE. HOWEVER, NO SUCH OPPORTUNITY WAS GRANTED AND THE A FORESAID PLEA IS NOT EVEN DEALT WITH BY THE ADJUDICATING AUTHORITY. AS FAR AS THE T RIBUNAL IS CONCERNED, WE FIND THAT REJECTION OF THIS PLEA WAS TOTAL/Y UNTENABLE. THE T RIBUNAL HAS SIMPLY STATED THAT CROSS- EXAMINATION OF THE SAID DEALERS COULD NOT HAVE BROU GHT ANY MATERIAL WHICH WOULD NOT BE IN POSSESSION OF THE APPELLANT THEMSELVES TO EXP LAIN AS TO WHY THEIR EX-FACTORY PRICES REMAIN STATIC. IT WAS NOT FOR THE TRIBUNAL TO HAVE GUESS WORK AS TO WHAT PURPOSES THE APPELLANT WANTED TO CROSS-EXAMINE THOSE DEALERS AND WHAT EXTRACTION THE APPELLANT WANTED FROM THEM. AS MENTIONED. ABOVE, THE APPELLANT HAS CONTESTED TH E TRUTHFULNESS OF THE STATEMENTS OF THESE TWO WITNESSES AND WANTED TO DISCREDIT THEIR T ESTIMONY FOR WHICH PURPOSE IT WANTED TO AVAIL THE OPPORTUNITY OF CROSS-EXAMINATION. THAT APART, THE ADJUDICATING AUTHORITY SIMPLY RELIED UPON THE PRICE LIST AS MENTIONED AT T HE DEPOT TO DETERMINE THE PRICE FOR THE PURPOSE OF LEVY OF EXCISE DUTY. WHETHER THE GOODS W ERE, IN FACT, SOLD TO THE SAID DEALERS/WITNESSES AT THE PRICE WHICH IS MENTIONED I N THE PRICE' LIST ITSELF COULD BE THE SUBJECT MATTER OF CROSS-EXAMINATION. THEREFORE, IT WAS NOT FOR THE ADJUDICATING AUTHORITY TO PRESUPPOSE AS TO WHAT COULD BE THE SUB JECT MATTER OF THE CROSS EXAMINATION AND MAKE THE REMARKS AS MENTIONED ABOVE. WE MAY ALS O POINT OUT THAT ON AN EARLIER OCCASION WHEN THE MATTER CAME BEFORE THIS COURT IN CIVIL APPEAL NO. 2216 OF 2000, ORDER DATED 17.03.2005 WAS PASSED REMITTING THE CAS E BACK TO THE TRIBUNAL WITH THE DIRECTION TO DECIDE THE APPEAL ON MERITS GIVING IT S REASONS FOR ACCEPTING OR REJECTING THE SUBMISSIONS. IN VIEW THE ABOVE, WE ARE OF THE OPINION THAT IS T HE TESTIMONY OF THESE TWO WITNESSES IS DISCREDITED/THERE WAS-NO, MATERIAL WITH THE DEPARTM ENT ON THE BASIS OF WHICH IT COULD JUSTIFY ITS ACTION AS THE STATEMENT OF THE -AFORES AID TWO WITNESSES WAS THE OILY BASIS OF ISSUING THE SHOW CAUSE NOTICE. WE, THUS, SET ASIDE THE IMPUGNED ORDER AS PASSED BY THE TRIBUNAL AND ALLOW THIS APPEAL. FROM THE READING OF THE ASSESSMENT ORDER, IT IS APP ARENT THAT THE AO HAS NEVER FURNISHED THE COPIES OF STATEMENTS OF VARIOUS PERSO NS NAMED HEREIN ABOVE RECORDED BY THE DDIT (INV) KOLKATA TO THE APPELLANT, NEITHER AT THE TIME OF ISSUING THE SHOW CAUSE NOTICE DATED 29.01.2016 NOR BEFORE THE COMPLETION O F ASSESSMENT U/S 143(3) OF THE ACT THE STATEMENTS WERE FURNISHED OR CROSS-EXAMINATIONS WERE ALLOWED TO THE APPELLANT. IT IS FURTHER OBSERVED THAT THE APPELLANT WAS NEVER ALLOW ED ANY OPPORTUNITY TO APPEAR EITHER BEFORE THE CONCERNED DDIT (INV) OR BEFORE THE AD TO CONTRADICT THE STATEMENTS OF THE AFORESAID PERSONS RECORDED. IN MY CONSIDERED VIEW I N ANY ASSESSMENT PRINCIPLES OF NATURAL JUSTICE PLAYS MOST IMPORTANT ROLE AND NO AD DITION OR DISALLOWANCE CAN BE MADE WITHOUT FOLLOWING SUCH PRINCIPLES. NATURAL JUSTICE IS THE ESSENCE OF FAIR ADJUDICATION, DEEPLY ROOTED IN TRADITION AND CONSCIENCE, TO BE RA NKED AS FUNDAMENTAL. I FIND THAT THE PURPOSE OF FOLLOWING THE PRINCIPLES OF NATURAL JUST ICE IS THE PREVENTION OF MISCARRIAGE OF 9 ITA NO.16/KOL/2017 M/S MACO CORPORATION (INDIA) PVT. LTD. A.YR. 2013-14 9 JUSTICE. NO ONE SHOULD BE CONDEMNED UNHEARD. I FIND THAT THE AO HAS RELIED UPON 20 PERSON'S STATEMENT IN THE CASE OF SHG & PH AND 13 P ERSONS IN THE CASE OF HHBFR. THE EXTRACTS OF THE. STATEMENTS HAVE BEEN REPRODUCED IN THE ASSESSMENT ORDER AT VARIOUS PLACES. THE CONTENTS OF SUCH STATEMENTS WERE NEVER SHARED WITH THE .APPELLANT IN COURSE OF THE PROCEEDINGS BEFORE THE DDIT (INV) OR IN COUR SE OF ASSESSMENT PROCEEDINGS, HENCE THERE IS NO DOUBT THAT THERE HAS BEEN GROSS VIOLATI ON OF PRINCIPLES OF NATURAL JUSTICE AND THUS I HAVE NO HESITATION IN HOLDING THAT THE ASSES SMENT-IS DEVOID' OF NATURAL JUSTICE AND THE SAME IS HELD TO A NULLITY. 5.3 WITHOUT PREJUDICE TO THE FINDINGS GIVEN AT PAR A 5.2, I NOW PROCEED TO DECIDE THE MATTER ON THE MERITS OF THE CASE. IN COURSE OF THE ASSESSMENT PROCEEDINGS AO OBSERVED FROM SCHEDULE 22 OF NOTES FORMING PART OF FINANCIAL STATEMENT OF AFFAIRS OF THE APPELLANT COMPANY THAT THE APPELLANT COMPANY HAS DEBITED ITS PROFIT & LOSS ACCOUNT BY A SUM OF RS. 1,75,00,000/- UNDER THE HEAD OTHER EXPENSES TOW ARDS THE DONATIONS PAID TO TWO CONCERNS NAMED HEREIN ABOVE WHO WERE ELIGIBLE CONCE RNS U/S 35(1 )(II) OF THE ACT. IT HAS FURTHER CLAIMED ADDITIONAL DEDUCTION OF RS. 1,31,25 ,000/- REPRESENTING THE WEIGHTED DEDUCTION PORTION IN THE COMPUTATION OF INCOME. THU S THE APPELLANT HAS CLAIMED TOTAL DEDUCTION OF RS. 3,06,25,000/- U/S 35(1 )(II) OF TH E ACT. ON REQUISITION FROM THE AO, I FIND THAT THE APPELLANT FURNISHED COMPLETE DETAILS OF DEDUCTION CLAIMED BY IT U/S 35(1)(II) OF THE ACT. THE AO OBSERVED THAT SUM OF 50,00,000/- WAS PAID TO SCHOOL OF HUMAN GENETICS & POPULATION HEALTH (SHG & PH) AND SUM OF RS. 1,25,00,000/- WAS PAID TO HERBICURE HEALTHCARE BIO-HERBAL RESEARCH FOUNDATION (HHBHRF). THE AO ISSUED A SHOW CAUSE NOTICE DATED 29.01.2016 TO THE APPELLANT SEEKING EXPLANATION AS TO WHY THE DEDUCTION CLAIMED U/S 35 AMOUNTING TO 3,06,25,000/- SHOULD NOT BE DISALLOWED. THE WHOLE BASIS FOR THE SHOW CAUSE WAS THAT ON 27.01.20 16 THE INVESTIGATION WING, KOLKATA CONDUCTED A SURVEY IN THE PREMISES OF THESE CONCERN S AND FOUND THAT THESE CONCERNS ARE ENGAGED IN PROVIDING BOGUS DONATION TO THE BENEFICI ARIES/ DONORS IN LIEU OF COMMISSION PAYMENTS. STATEMENT OF SEVERAL PERSONS ASSOCIATED W ITH THESE CONCERNS WERE RECORDED BY THE DDIT, INVESTIGATION WING, KOLKATA WHO ADMITT ED TO THE MODUS OPERANDI FOLLOWED BY THESE CONCERNS IN PROVIDING BENEFIT OF BOGUS DON ATION TO THE BENEFICIARIES. THE DETAILS OF THE SHOW CAUSE NOTICE IS ALREADY SUMMARI ZED AT PARA 4.1 OF THIS ORDER. THE REPLY OF THE APPELLANT FILED IN THIS REGARD HAS ALS O BEEN SUMMARIZED AT PARA 4.2 OF THIS ORDER. I FIND THAT APPELLANT HAS TRIED TO JUSTIFY I TS CLAIM OF DEDUCTION AMOUNTING TO RS. 3,06,25,000/-. THE AO HAS NOT CONTROVERTED ANY OF T HE SUBMISSIONS OF THE APPELLANT. THE AO HAS NOT BEEN ABLE TO PROVE THAT THE EVIDENCES FI LED BY THE APPELLANT IN THIS REGARD ARE EITHER FALSE OR BOGUS OR NOT GENUINE BY CONDUCT ING ANY ENQUIRY. THE FACTS MENTIONED IN THE REPLY FILED BY THE APPELLANT IN RESPONSE TO THE SHOW CAUSE NOTICE ARE NOT UNDER CHALLENGE BY THE AO. THE APPELLANT EXPLAINED THAT T HE DONATIONS TO THESE CONCERNS WERE MADE PURELY ON THE BASIS OF THE FACT THAT THESE CON CERNS WERE ESTABLISHED SINCE LONG TIME AND ENGAGED IN THE RESEARCH ACTIVITIES 'AND WE RE ALSO GRANTED REGISTRATION U/S 35(1)(II) OF THE ACT. I. FIND THAT THE AO DID NOT BOTHER TO DEAL WITH ANY OF THE SUBMISSIONS OF THE APPELLANT RE-ITERATING THE FACT THAT THE DONATIONS PAID BY THE APPELLANT WERE GENUINE DONATIONS AND THERE WAS NO COMMISSION PAYMENT MADE IN THIS RESPECT. THE AO DID NOT VERIFY THE CORRECTNESS OF S UCH SUBMISSION. I FIND THAT INDEED THE APPELLANT HAD BEEN REGULARLY GIVING DONATIONS TO SE VERAL RELIGIOUS; AND CHARITABLE ORGANIZATIONS. THE APPELLANT ALSO FILED. SUPPORTING EVIDENCES IN RESPECT OF CLAIM OF 10 ITA NO.16/KOL/2017 M/S MACO CORPORATION (INDIA) PVT. LTD. A.YR. 2013-14 10 DONATIONS PAID. I ALSO FIND THAT THE APPELLANT HAS EXPLAINED BEFORE THE AD THAT THE DONATION WAS MADE BY THE APPELLANT DURING THE -RELE VANT 'ASSESSMENT YEAR AND DURING THIS RELEVANT YEAR THESE CONCERNS WERE DULY APPROVE D CONCERNS U/S 35(1 )(II), THEREFORE, THE SUBSEQUENT WITHDRAWAL OF APPROVAL OF SUCH CONCE RNS WOULD NOT ENTITLE THE DEPARTMENT TO DISALLOW THE GENUINE CLAIM OF DONATIO N PAID BY THE APPELLANT. THE AD HAS NOT DISCUSSED ANYTHING ON THE REPLY FILED BY TH E APPELLANT. I FIND THAT THE AD WAS COMPLETELY GUIDED BY THE SURVEY REPORT OF THE DDIT (INV), KOLKATA. HE HAS NOT MADE ANY INDEPENDENT ENQUIRY IN THIS REGARD. THE AD HAS RELIED' UPON STATEMENTS OF SEVERAL PERSONS RECORDED BY THE DDIT (INV) WING, KOLKATA. I FIND THAT THESE ARE JUST PLAIN STATEMENTS WITHOUT ANY SUPPORTING MATERIAL OR EVIDE NCES IN SUPPORT OF SUCH STATEMENTS. I FIND FORCE IN THE ARGUMENT OF THE AR OF THE APPEL LANT THAT THESE STATEMENTS WERE GIVEN BY CONCERNED PERSONS ONLY TO AVOID ANY KIND OF ENQU IRY OR INVESTIGATION BY THE DDIT (INV), KOLKATA INTO THE RESPECTIVE PERSON'S BOOKS O F ACCOUNTS. I ALSO AGREE WITH THE SUBMISSIONS OF THE AR OF THE APPELLANT THAT ALL THE POSITIVE MATERIALS FILED BY THE APPELLANT HAVE BEEN IGNORED BY THE AD AND THE CONCL USION IS DRAWN BY HIM THAT THESE DONATIONS WERE BOGUS DONATIONS. THE COPIES OF SUCH STATEMENTS WERE NEVER FURNISHED TO THE APPELLANT IN COURSE OF ASSESSMENT PROCEEDINGS. IN SPITE OF SEEKING CROSS EXAMINATION OF THESE PERSONS THE AO DID NOT ISSUE A SINGLE SUMM ON U/S 131 TO ENFORCE THE ATTENDANCE OF ANY OF THE PERSONS WHOSE STATEMENTS WERE RELIED UPON BY THE AO. IT IS FOUND THAT THE AD RECORDED STATEMENT OF MANAGING DIRECTOR OF THE A PPELLANT COMPANY IN COURSE OF THE ASSESSMENT PROCEEDINGS WHO CONFIRMED THE DONATIONS MADE AND THE BASIS OF MAKING SUCH DONATION BY THE APPELLANT COMPANY. I ALSO FIND THAT THE APPELLANT HAS, GIVEN ITS COMMENT ON EACH OF THE PERSON WHOSE STATEMENTS WERE RECORDED BY THE DDIT (INV), KOLKATA. I HAVE GONE THROUGH SUCH EXTRACTS OF THE S TATEMENT AND 1. AGREE WITH THE CONTENTIONS OF THE AR OF THE APPELLANT THAT NONE OF THE PERSON HAS MENTIONED ANYTHING SPECIFIC ABOUT THE APPELLANT. I FIND FROM PAGE 9 OF THE ASSESSMENT ORDER WHICH GIVES BROKER WISE LIST OF BOGUS DONATION IN CASE OF SHG & PH FOR THE FY 2012-13 THAT IN FRONT OF THE APPELLANT'S NAME ONE MEDIATOR'S NAME A S 'ABHIJIT' APPEARS. PROBABLY ABHIJIT HAPPENS TO BE MEDIATOR WHO HAS ARRANGED FOR THE DONATION. BUT IN THE STATEMENTS RELIED UPON BY THE AO INCLUDING THE STAT EMENT OF BROKERS/ ENTRY .OPERATORS ETC, I FAIL TO FIND ANY PERSON WITH NAME 'ABHIJIT'. THUS THIS PART OF THE ALLEGATION BY THE AO REMAINS UNSUBSTANTIATED. HOWEVER AT PAGE 29 THE AO HAS RELIED UPON STATEMENT OF ONE SHRI AVIJIT SINHA ROY, RECORDED BY THE DDIT (INV) ON 13.04.2015. EVEN IF IT IS PRESUMED THAT 'ABHIJIT' IS THE SAME PERSON AS SHRI AVIJIT SINHA ROY, THEN ALSO FROM THE PERUSAL OF STATEMENT OF SHRI AVIJIT SINHA ROY I T CAN BE SEEN THAT HE WAS INVOLVED AS A BROKER FOR ARRANGING THE DONATION UPTO THE MONTH OF FEBRUARY 2011 ONLY, THE APPELLANT HAS MADE THE AFORESAID DONATION IN NOVEMBER, 2012. THEREFORE, I AGREE WITH THE CONTENTIONS OF THE AR OF THE APPELLANT THAT. STATEM ENT OF SHRI AVIJIT SINHA ROY CANNOT HAVE ANY APPLICABILITY IN THE APPELLANT'S CASE. IN RESPECT OF HHBHRF NO SUCH SPECIFIC PERSON'S NAME HAS BEEN MENTIONED BY THE AO WHO HAS ACTED AS A MEDIATOR BETWEEN THE APPELLANT AND HHBHRF. 5.4 I FIND THAT THE APPELLANT HAS EXPLAINED THAT IT HAS PAID THE DONATION TO SCH & PH BASED ON THE PROFILE OF THE ORGANIZATION. THE APPEL LANT HAS ALSO EXPLAINED WITH DOCUMENTARY EVIDENCES THAT SCH & PH WAS REGISTERED AS A SOCIETY UNDER THE W.B. 11 ITA NO.16/KOL/2017 M/S MACO CORPORATION (INDIA) PVT. LTD. A.YR. 2013-14 11 SOCIETIES REGISTRATION ACT, 1961 AND IT WAS ALSO RE GISTERED U/S 12AA OF THE ACT. ITS SCIENTIFIC RESEARCH FACILITIES WERE DULY APPROVED U /S 35(1 )(II) OF THE ACT BY THE CENTRAL GOVERNMENT WHEN THE APPELLANT MADE DONATION TO THIS INSTITUTE. SUCH APPROVAL WAS VALID FROM AY 2008-09 ONWARDS. THE APPELLANT HAS AL SO FURNISHED COPY OF THE NOTIFICATION APPROVING THE INSTITUTE UNDER SECTION 35 (1 )(II) OF THE ACT. IT WAS ALSO EXPLAINED THAT THE SAID INSTITUTE WAS CARRYING ON SCIENTIFIC WORK IN THE FIELD OF GENETIC COUNSELING, EPIDEMIOLOGIC STUDY AND HUMAN GENETIC R ESEARCH & DEVELOPMENT. I FIND THAT THE INSTITUTE HAD INDEED BEEN AWARDED BHARAT N IRMAN AWARD FOR THE AREA OF RURAL DEVELOPMENT IN 2005. IT WAS ALSO AWARDED GLOBAL ACH IEVERS FOUNDATION AWARD IN 2012 AND BHARAT VIBHUSHAN SAMMAN PURASKAR IN 2013. I FIN D THAT THE EVIDENCES FILED IN THIS REGARD BEFORE THE AO HAS NOT BEEN REBUTTED BY THE A O. THE AO HAS NOT CONDUCTED ANY EXAMINATION OR ENQUIRY IN THIS REGARD BEFORE ARRIVI NG AT THE CONCLUSION THAT THE CONCERN WAS NOT DOING ANY RESEARCH WORK AND IT WAS ONLY INV OLVED IN RECEIVING BOGUS DONATIONS THROUGH BANKS AND RETURNING CASH IN LIEU' OF SUCH R ECEIPTS. IT IS ALSO FOUND THAT APPROVAL IS GRANTED TO AN ORGANIZATION U/S 35(1)(II) BY CBDT ONLY AFTER STRICT COMPLIANCE OF LAW. THE APPROVAL IS GRANTED AFTER VARIOUS LEVELS OF SCR UTINY AND CHECKS AND TO CONCERNS HAVING TRACK RECORD OF DOING RESEARCH ACTIVITY. IN RESPECT OF DONATION MADE HHBHRF IT WAS EXPLAINED THAT THE SAID CONCERN WAS DULY REGIST ERED WITH THE REGISTRAR OF COMPANIES, INCOME TAX DEPARTMENT AS WELL BY SIRO (S CIENTIFIC AND INDUSTRIAL RESEARCH ORGANIZATION). THE RESEARCH PUBLICATIONS W ERE ALSO FURNISHED BEFORE THE AO. IT WAS ALSO EXPLAINED BY THE APPELLANT THAT THE SAI D INSTITUTE WAS REGISTERED U/S 35(1 )(II) OF THE ACT BY NOTIFICATION ISSUED BY THE GOVERNMENT UNDER NOTIFICATION NO. 35/2008, DATED 14.03.2008. DOCUMENTS IN SUPPORT OF ITS CLAIM WERE ALSO FURNISHED BEFORE THE AD. BUT THE AD IGNORED ALL THESE POSITIVE MATERIALS WIT HOUT EVEN COMMENTING UPON ANY OF THE EVIDENCES FILED IN THIS REGARD. THE AO CHOSE TO REMAIN SILENT ON THESE DOCUMENTARY EVIDENCES FURNISHED BY THE APPELLANT. I FIND THAT T HE AD HAS NOT DEALT WITH THE OBJECTIONS OF THE APPELLANT AT ALL. THE AO HAS NOT BEEN ABLE T O FIND ANY DISCREPANCY IN THE DETAILS FILED BY THE APPELLANT OR CONTROVERT THAT THE CONCE RNS WERE NOT ENGAGED IN ANY SCIENTIFIC RESEARCH WORK. THE EVIDENCES FILED BY THE APPELLANT HAVE NOT BEEN FOUND TO BE FALSE OR INCORRECT. 5.5 IT HAS BEEN BROUGHT TO MY NOTICE THAT VIDE NOTI FICATION NO. 82/2016 DATED 15.09.2016 AND NOTIFICATION NO. 79/2016 DATED 06.09 .2016 THE REGISTRATION OF SHG&PH & HHBHRF RESPECTIVELY HAS BEEN CANCELLED BY CBDT. T HUS THERE REMAINS NO DOUBT THAT THESE CONCERNS WERE ENGAGED IN THE IMPROPER UT ILIZATION OF MONEYS RECEIVED BY THEM. IF THE STATEMENTS ARE TAKEN AT FACE VALUE THE N ON PERUSAL OF EXTRACTS OF STATEMENTS OF BROKERS/MEDIATORS/AND ENTRY OPERATORS AS REPRODU CED IN THE ASSESSMENT ORDER I FIND THAT THERE REMAINS NO DOUBT THAT THE MANAGEMENT OF THESE CONCERNS WERE DIRECTLY OR INDIRECTLY ENGAGED IN MISAPPROPRIATING THE FUNDS AN D NOT UTILIZING THE DONATION AMOUNTS ENTIRELY FOR RESEARCH RELATED ACTIVITIES. HOWEVER T HE CONNIVANCE OF APPELLANT IN THIS SCHEME OF ARRANGEMENTS BETWEEN THESE CONCERNS AS WE LL AS THE BOGUS BILLING PARTIES IS NOT ESTABLISHED EITHER BY DDIT,(LNV), KOLKATA OR BY THE AD. THE ALLEGATION THAT THE CASH WAS REFUNDED TO THE APPELLANT AFTER DEDUCTING COMMI SSION BY THESE CONCERNS REMAINS IN SERIOUS DOUBT. IT IS OBSERVED THAT A SUSPICION HOW SO EVER STRONG IT MAY BE CANNOT FORM BASIS FOR DISALLOWING ANY CLAIM OF THE APPELLANT UN TIL ANY MATERIAL IS BROUGHT ON RECORD. 12 ITA NO.16/KOL/2017 M/S MACO CORPORATION (INDIA) PVT. LTD. A.YR. 2013-14 12 5.6 THE AR DREW MY ATTENTION TO THE EXPLANATION ATT ACHED TO SECTION 35(1)(II) OF THE ACT AND THE CBDT CIRCULAR NO.1/2007 DATED 27.04.2007. A CCORDING TO SUCH CIRCULAR THE EXPLANATION HAS BEEN INTRODUCED IN THE STATUTE ITSE LF SO THAT THE DEDUCTION TO WHICH THE DONOR IS ENTITLED IN RESPECT OF ANY SUM PAID TO A R ESEARCH ASSOCIATION, UNIVERSITY, COLLEGE OR OTHER INSTITUTION TO WHICH CLAUSE (II) A PPLIES SHALL NOT BE DENIED MERELY ON THE GROUND THAT SUBSEQUENT TO THE PAYMENT OF SUCH SUM B Y THE ASSESSEE, THE APPROVAL GRANTED-TO THE ASSOCIATION, UNIVERSITY, COLLEGE OR OTHER INSTITUTION REFERRED TO IN CLAUSE(II) OR CLAUSE (HI) HAS BEEN WITHDRAWN. THUS, I FIND THAT THE STATUE HAS ITSELF BROUGHT IT-ALL THE DONORS UNDER THE PROTECTIVE WING S OF EXPLANATION ATTACHED TO SECTION 35(1 )(II) OF THE ACT. FURTHER, EVEN IF IT IS PRESU MED THAT THE APPROVAL GRANTED TO THESE CONCERNS U/S 35(1)(II) HAS BEEN WITHDRAWN WITH RETR OSPECTIVE EFFECT BECAUSE THESE CONCERNS HAD BREACHED THE TERMS OF APPROVAL , AND T HE PURPORTED DONATION TO THE SAID CONCERNS IS A MAKE- BELIEVE TRANSACTION THEN ALSO I N MY CONSIDERED OPINION BY VIRTUE OF THIS EXPLANATION ATTACHED TO SECTION 35(1) ,THE DIS ALLOWANCE MADE BY THE AO AMOUNTING TO F3,06,25,0001- DOES NOT STAND THE TEST OF LAW AN D IS REQUIRED TO BE REVERSED. I FIND THAT THE RATIO OF DECISION OF CALCUTTA HIGH COURT I N THE CASE OF JAI KUMAR KANKARIA RELIED UPON BY THE AR IS RELEVANT TO THE FACTS OF T HE PRESENT CASE AND ACCORDINGLY IT IS HELD THAT SINCE THE DONATION WAS EFFECTED IN FY 201 3-14 AND THE VALIDITY OF SUCH REGISTRATION OF THESE INSTITUTES WERE NOT CANCELLED AT THAT MATERIAL POINT OF TIME HENCE THE BENEFIT OF WEIGHTED DEDUCTION OF 175% CANNOT BE DENIED TO THE DONOR I.E. THE APPELLANT IN THE INSTANT CASE. THE AR ARGUED IN SUP PORT OF THE GROUNDS BY PLACING HIS RELIANCE ON THE DECISION OF CALCUTTA HIGH COURT IN THE CASE OF B.P.AGARWALLA & SONS LTD. REPORTED IN 208 ITR 863 WHEREIN IT IS STATED T HAT THIS ORDER OF WITHDRAWAL OF APPROVAL CANNOT BE GIVEN RETROSPECTIVE EFFECT. I AG REE THAT AN EXECUTIVE ORDER CANNOT HAVE ANY RETROSPECTIVE EFFECT TO THE UTTER DETRIMEN T OF AND PREJUDICE TO THE PERSON WHO HAS ALREADY ACTED UPON IT AND ALTERED HIS POSITION: THEREFORE, APPLYING THE AFORESAID DECISION, IN MY CONSIDERED VIEW THE VERY- BASIS OF THE WITHDRAWING THE APPROVAL GRANTED TO THESE CONCERNS FROM RETROSPECTIVE EFFECT ITSELF IS WITHOUT JURISDICTION AND THUS THE BENEFIT OF CLAIM OF WEIGHTED DEDUCTION CANNOT BE DE NIED TO THE APPELLANT. 5.7 I FIND THAT THE AO HAS OBSERVED THAT THAT-THE A PPELLANT HAS MADE PAYMENT OF DONATION AT THE FAG END OF THE YEAR AFTER FULLY KNO WING THE PROFITS OF THE FINANCIAL YEAR AND THE PAYMENTS OF THE- DONATION THROUGH RTGS FURT HER SUPPORTS THE FACTS WHY IT HAS TO BE DONE HASTILY. OTHERWISE, THERE IS NO REASON F OR DONATION TO BE PAID THROUGH RTGS AND THERE IS NO SUCH REQUIREMENT THAT ,IT SHOULD BE PAID JUST BEFORE THE FINANCIAL YEAR ENDS. THIS SIMPLY SUPPORTS THE BOGUS NATURE OF THE DONATION PAID BY THE ASSESSEE. I D THAT THE OBSERVATION OF AO IS BASED ON SUSPICION AN D SURMISES ONLY. THERE IS NO SUPPORTING MATERIAL FOR ,THIS ALLEGATION. IT IS OBS ERVED THAT THE DONATION TO SHG&PH WERE MADE IN THE MONTH OF NOVEMBER, 2012 ONLY AND N OT THE FAG END OF THE FINANCIAL YEAR; THUS THE ALLEGATION OF AO THAT THE DO S ERE M ADE ONLY AT THE FAG END OF THE FINANCIAL YEAR IS FOUND TO BE INCORRECT AS FAR AS I T RELATES TO SHG&PG. I FIND THAT THE AO HAS MADE SOME ENQUIRIES IN THE BANK ACCOUNT OF THE APPELLANT COMPANY IN RESPECT OF DONATION PAID TO HHBRF. AFTER CONDUCTING ENQUIRI ES IN THE BANK STATEMENTS FILED BY THE APPELLANT IN COURSE OF THE ASSESSMENT PROCEEDIN GS THE AO NOTED THAT THE DONATION WHICH WERE MADE THROUGH RTGS BY THE APPELLANT TO HH BRF GOT TRANSFERRED TO THE ACCOUNT OF TOP LINK DEALERS & SRI SAI ENTERPRISES L TD ON THE VERY SAME DAY. THE AO 13 ITA NO.16/KOL/2017 M/S MACO CORPORATION (INDIA) PVT. LTD. A.YR. 2013-14 13 HAS MADE AN ANALYSIS OF THE MONEY TRAIL WHICH IS SI MILAR TO THE REPORT OF INVESTIGATION WING, KOLKATA AT PAGE 50 OF THE ASSESSMENT ORDER. I T WAS THUS CONCLUDED BY THE AO THAT THROUGH THIS TRAIL HHBRF BOOKED BOGUS EXPENSES AND GENERATED CASH. IT IS OBSERVED THAT THESE CONCERNS MAY HAVE BEEN INDULGED IN BOGUS BILLING OF EXPENDITURE AND SIPHONED OR MISAPPROPRIATED THE MONEY WHICH WAS REC EIVED AS DONATION, BUT THE CLAIM OF DONATION MADE BY THE APPELLANT CANNOT BE DENIED TO IT MERELY ON THIS GROUND. I FIND THAT THESE CONCERNS WERE HEADED BY RENOWNED DOCTORS AND PROFESSIONALS AND WERE AWARDED SEVERAL TIMES BY THE GOVERNMENT OF INDIA FO R THEIR RESEARCH RELATED ACTIVITIES. I AGREE WITH THE SUBMISSIONS OF THE AR OF THE APPELLA NT THAT AFTER MAKING THE DONATION, THE APPELLANT WAS NEITHER AUTHORIZED NOR REQUIRED T O CHECK THE END USE OF THE FUNDS BY THE SAID ORGANIZATIONS. THUS, IF ANY IRREGULARITY H AS HAPPENED IT HAS HAPPENED AT THE LEVEL OF THE SAID CONCERNS AND THE APPELLANT IS IN NO WAY CONNECTED TO THIS SCHEME OF ARRANGEMENT PARTICULARLY IN ABSENCE OF ANY MATERIAL EVIDENCE TO PROVE THAT THE CASH IN LIEU OF THE RTGS MADE BY THE APPELLANT HAS COME BAC K TO EITHER THE APPELLANT OR ANY OF HIS REPRESENTATIVE. I FURTHER FIND FROM THE EXTRACT S OF THE STATEMENT OF SHRI NAGESH PATEL THE MD OF THE APPELLANT COMPANY RECORDED & REPRODUC ED BY THE AO IN THE ASSESSMENT ORDER THAT THE APPELLANT HAS CHECKED THE PREMISES O F THESE CONCERNS AND BASED ON THEIR PERFORMANCE AND APPROVALS GRANTED TO THESE CONCERNS BY VARIOUS GOVERNMENT ORGANIZATIONS THE DONATION WAS MADE BY THE APPELLAN T. I FIND THAT THE AO HAS RECORDED THE STATEMENT OF MD BUT DID NOT PUT A SINGLE QUESTI ON OR DID NOT SEEK ANY EXPLANATION OR CLARIFICATION ON THE STATEMENTS OF VARIOUS PARTIES WHICH WERE INTENDED TO BE RELIED UPON BY THE AO. THE AO HAS CONVENIENTLY IGNORED THIS VI TAL ASPECT. THEREFORE, I AM INCLINED TO HOLD THAT THE ACTION OF AO WAS PREDETERMINED AND COMPLETELY GUIDED BY THE DDIT(INV), KOLKATAS REPORT. THUS, AFTER CAREFUL CO NSIDERATION OF THE ENTIRE GAMUT OF ASSESSMENT ORDER, STATEMENTS RECORDED BY THE DDIT(I NV), WRITTEN SUBMISSIONS AS WELL AS THE PAPER BOOK AND THE DECISIONS RELIED UPON BY THE AR OF THE APPELLANT THE DISALLOWANCE MADE BY AO IS DIRECTED TO BE DELETED I N FULL. THIS GROUND OF APPEAL IS ALLOWED. 7. AGGRIEVED, THE REVENUE IS IN APPEAL BEFORE US ON THE FOLLOWING GROUNDS:- 1. 'THAT ON THE FACTS & CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A) HAS ERRED BY DELETING THE DISALLOWANCE OF DEDUCTION U/S . 35(1)(II) OF THE ACT OF RS. 3,06,25,000/-.' 2. 'THAT ON THE FACTS & CIRCUMSTANCES OF THE CASE A ND IN LAW, THE LD. CIT(A) HAS ERRED BY NOT APPRECIATING THE FACTS THAT THE A.O. H AD MADE ENQUIRIES AND ESTABLISHED THE SAME IN THE ASSESSMENT ORDER BEFORE MAKING DISALLOWANCE OF DEDUCTION U/S. 35(1)(II) OF THE ACT.' 3. 'THAT ON THE FACTS & CIRCUMSTANCES OF THE CASE A ND IN LAW, THE LD. CIT(A) HAS ERRED BY NOT APPRECIATING THE FACTS THAT AGAINST TH E SAID CONCERN I.E. SCHOOL OF HUMAN GENETICS & POPULATION HEALTH AND HERBICURE HE ALTHCARE BIO-HERBAL 14 ITA NO.16/KOL/2017 M/S MACO CORPORATION (INDIA) PVT. LTD. A.YR. 2013-14 14 RESEARCH FOUNDATION, A SURVEY OPERATION WAS CONDUCT ED BY THE INVESTIGATION WING OF THE DEPARTMENT, KOLKATA ON 27.01.2015 IN TH E PREMISES OF AFOREMENTIONED CONCERN IN WHICH IT HAD BEEN FOUND T HAT THE SAID CONCERN IS ENGAGED IN PROVIDING BOGUS DONATION U/S. 35(1)(II) IN THE NAME OF VARIOUS PARTIES SO AS TO ENABLE THEM TO AVAIL 175% DEDUCTION U/S. 3 5(1)(II) OF THE IT. ACT.' 4. 'THAT ON THE FACTS & CIRCUMSTANCES OF THE CASE A ND IN LAW, THE LD. CIT(A) HAS ERRED BY NOT APPRECIATING THE FACTS THAT THE NAME O F THE ASSESSEE COMPANY WAS APPEARING IN SERIAL NO. 272 & 301 OF THE SURVEY REP ORT AMONGST THE NAMES OF LIST FURNISHED BY THE DDIT(INVESTIGATION), UNIT-4(1), KO LKATA IN THE CASE OF SCHOOL OF HUMAN GENETICS & POPULATION HEALTH AND HERBICURE HE ALTHCARE BIO- HERBAL RESEARCH FOUNDATION REFLECTING WHEREIN BOGUS DONATI ON HAD BEEN AVAILED.' 5. 'THAT ON THE FACTS & CIRCUMSTANCES OF THE CASE A ND IN LAW, THE LD. CIT(A) HAS ERRED BY NOT APPRECIATING THE FACTS THAT CBDT, VIDE NOTIFICATION NO. 79/20 16/F. NO. 203/ 135/2007 /IT A.II DT. 06.09.2016 & 82/20 1 6/F. NO. 203/64/ 2009/ITA.II DT. 15.09.2016 HAS WITHDRAWN THE APPROVAL NOTIFICAT ION OF DONEES CONCERN NAMELY SCHOOL OF HUMAN GENETICS & POPULATION HEALTH , KOLKATA AND HERBICURE HEALTHCARE BIO-HERBAL RESEARCH FOUNDATION, KOLKATA WITH EFFECT FROM 1 ST APRIL, 2007.' 6. THAT ON THE FACTS & CIRCUMSTANCES OF THE CASE AN D IN LAW, THE LD. CIT(A) HAS ERRED BY NOT APPRECIATING THE FACTS THAT ON THE BAS IS OF ENQUIRY MADE ON SURVEY & POST SURVEY OPERATIONS BY THE INVESTIGATION WING OF THE DEPARTMENT IN THE CASE OF THE DONE CONCERNS, THE HON'BLE CBDT HAS WITHDRAW N THE APPROVAL NOTIFICATION OF THE DONE CONCERN W.E.F. 1 ST APRIL, 2007. 8. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIALS AVAILABLE ON RECORD. THE BRIEF FACTS PERTAINING TO HHBHRF ARE AS UNDER:- A) HHBHRF WAS REGISTERED U/S 12AA OF THE ACT BY THE LD DIT(EXEMPTIONS), KOLKATA WITH EFFECT FROM 26.12.2003. B) HHBHRF WAS ALSO RECOGNIZED IN THE YEAR 2006-07 A S A SCIENTIFIC INDUSTRIAL RESEARCH ORGANIZATION (SIRO) BY MINISTRY OF SCIENCE & TECHNO LOGY, GOVERNMENT OF INDIA. THE RENEWAL OF RECOGNITION AS SIRO BY THE DEPARTMENT OF SCIENTIFIC AND INDUSTRIAL RESEARCH UNDER THE SCHEME ON RECOGNITION OF SCIENTIFIC AND I NDUSTRIAL RESEARCH ORGANISATION , 1988 WAS MADE FOR THE PERIOD FROM 1.4.2012 TO 31.3. 2015 VIDE COMMUNICATION IN F.NO. 14/444/2006-TU-V DATED 13.8.2012. 15 ITA NO.16/KOL/2017 M/S MACO CORPORATION (INDIA) PVT. LTD. A.YR. 2013-14 15 C) HHBHRF WAS RECOGNIZED VIDE GAZETTE NOTIFICATION NO. 35/2008 DATED 14.3.2008 ISSUED BY THE CENTRAL BOARD OF DIRECT TAXES (CBDT I N SHORT), MINISTRY OF FINANCE, GOVERNMENT OF INDIA, U/S 35(1)(II) OF THE ACT. 8.1. THE BRIEF FACT PERTAINING TO SGHPH ARE AS UNDE R:- A) SGHPH WAS RECOGNIZED VIDE GAZETTE NOTIFICATION D ATED 28.1.2009 ISSUED BY THE CENTRAL BOARD OF DIRECT TAXES (CBDT IN SHORT), MINI STRY OF FINANCE (DEPARTMENT OF REVENUE), GOVERNMENT OF INDIA, U/S 35(1)(II) OF THE ACT. B) SGHPH WAS ALSO RECOGNIZED AS A SCIENTIFIC INDUST RIAL RESEARCH ORGANIZATION (SIRO) BY MINISTRY OF SCIENCE & TECHNOLOGY, GOVERNMENT OF INDIA. THE RENEWAL OF RECOGNITION AS SIRO BY THE DEPARTMENT OF SCIENTIFIC AND INDUSTRIAL RESEARCH UNDER THE SCHEME ON RECOGNITION OF SCIENTIFIC AND INDUSTRIAL RESEARCH ORGANISATION , 1988 WAS MADE FOR THE PERIOD FROM 1.4.2010 TO 31.3.2013 VIDE COMMUNICATION IN F.NO. 14/473/2007-TU-V DATED 17.6.2010. 8.2. AT THE OUTSET, WE FIND THAT THE TAXATION LAWS (AMENDMENT) ACT, 2006 WITH RETROSPECTIVE EFFECT FROM 1.4.2006 HAD INTRODUCED A N EXPLANATION IN SECTION 35 OF THE ACT WHICH READS AS UNDER:- SECTION 35(1)(II) EXPLANATION THE DEDUCTION, TO WHICH THE ASSESSEE IS ENTITLED IN RESPECT OF ANY SUM PAID TO A RESEARCH ASSOCIATION, UNIVERSITY, COLLEGE OR OTHER INSTITUTION TO WHICH CLAUSE (II) OR CLAUSE (III) APPLIES, SHALL NOT BE DENIED MERELY ON THE GROUND THAT, SUBSEQUENT TO THE PAYMENT OF SUCH SUM BY THE ASSESSEE, THE APP ROVAL GRANTED TO THE ASSOCIATION, UNIVERSITY, COLLEGE OR OTHER INSTITUTI ON REFERRED TO IN CLAUSE (II) OR CLAUSE (III) HAS BEEN WITHDRAWN. HENCE THE AFORESAID PROVISIONS OF THE ACT ARE VERY CLEAR THAT THE PAYER (THE ASSESSEE HEREIN) WOULD NOT GET AFFECTED IF THE RECOGNITION G RANTED TO THE PAYEE HAD BEEN WITHDRAWN SUBSEQUENT TO THE DATE OF CONTRIBUTION BY THE ASSESSEE. HENCE NO DISALLOWANCE U/S 35(1)(II) OF THE ACT COULD BE MADE IN THE INSTANT CASE. 16 ITA NO.16/KOL/2017 M/S MACO CORPORATION (INDIA) PVT. LTD. A.YR. 2013-14 16 8.3. WE FIND THAT THERE IS NO PROVISION IN SECTION 35(1)(II) OF THE ACT TO WITHDRAW THE RECOGNITION GRANTED TO THE ASSESSEE THEREIN. WHE N THERE IS NO PROVISION FOR WITHDRAWAL OF RECOGNITION IN THE ACT, THE ACTION OF THE REVENU E IN WITHDRAWING THE RECOGNITION WITH RETROSPECTIVE EFFECT FROM 1.4.2007 IS UNWARRANTED. IN THIS REGARD, THE RECENT DECISION OF THE HONBLE SUPREME COURT IN THE CASE OF INDUSTRIAL INF RASTRUCTURE DEVELOPMENT CORPORATION (GWALIOR) M.P. LTD VS CIT GWALIOR REPOR TED IN (2018) 90 TAXMANN.COM 281 (SC) WHEREIN IT WAS HELD THAT :- 21. IN OUR CONSIDERED OPINION, THE CIT HAD NO EXPRESS POWER OF CANCELLATION OF THE REGISTRATION CERTIFICATE ONCE GRANTED BY HIM TO THE ASSESSEE UNDER SECTION 12A TILL 01.10.2004. IT IS FOR THE REASONS THAT, FIRST, THER E WAS NO EXPRESS PROVISION IN THE ACT VESTING THE CIT WITH THE POWER TO CANCEL THE REGIST RATION CERTIFICATE GRANTED UNDER SECTION 12A OF THE ACT. SECOND, THE ORDER PASSED UN DER SECTION 12A BY THE CIT IS A QUASI JUDICIAL ORDER AND BEING QUASI JUDICIAL IN NA TURE, IT COULD BE WITHDRAWN/RECALLED BY THE CIT ONLY WHEN THERE WAS EXPRESS POWER VESTED IN HIM UNDER THE ACT TO DO SO. IN THIS CASE THERE WAS NO SUCH EXPRESS POWER. 22. INDEED, THE FUNCTIONS EXERCISABLE BY THE CIT UNDER SECTION 12A ARE NEITHER LEGISLATIVE AND NOR EXECUTIVE BUT AS MENTIONED ABOV E THEY ARE ESSENTIALLY QUASI JUDICIAL IN NATURE. 23. THIRD, AN ORDER OF THE CIT PASSED UNDER SECTION 12 A DOES NOT FALL IN THE CATEGORY OF 'ORDERS' MENTIONED IN SECTION 21 OF THE GENERAL CLA USES ACT. THE EXPRESSION 'ORDER' EMPLOYED IN SECTION 21 WOULD SHOW THAT SUCH 'ORDER' MUST BE IN THE NATURE OF A 'NOTIFICATION', 'RULES' AND 'BYE LAWS' ETC. (SEE - INDIAN NATIONAL CONGRESS(I) V. INSTITUTE OF SOCIAL WELFARE [2002] 5 SCC 685. 24. IN OTHER WORDS, THE ORDER, WHICH CAN BE MODIFIED O R RESCINDED BY APPLYING SECTION 21, HAS TO BE EITHER EXECUTIVE OR LEGISLATIVE IN NA TURE WHEREAS THE ORDER, WHICH THE CIT IS REQUIRED TO PASS UNDER SECTION 12A OF THE ACT, I S NEITHER LEGISLATIVE NOR AN EXECUTIVE ORDER BUT IT IS A 'QUASI JUDICIAL ORDER'. IT IS FOR THIS REASON, SECTION 21 HAS NO APPLICATION IN THIS CASE. 25. THE GENERAL POWER, UNDER SECTION 21 OF THE GENERAL CLAUSES ACT, TO RESCIND A NOTIFICATION OR ORDER HAS TO BE UNDERSTOOD IN THE L IGHT OF THE SUBJECT MATTER, CONTEXT AND THE EFFECT OF THE RELEVANT PROVISIONS OF THE STATUT E UNDER WHICH THE NOTIFICATION OR ORDER IS ISSUED AND THE POWER IS NOT AVAILABLE AFTER AN E NFORCEABLE RIGHT HAS ACCRUED UNDER THE NOTIFICATION OR ORDER. MOREOVER, SECTION 21 HAS NO APPLICATION TO VARY OR AMEND OR REVIEW A QUASI JUDICIAL ORDER. A QUASI JUDICIAL ORD ER CAN BE GENERALLY VARIED OR REVIEWED WHEN OBTAINED BY FRAUD OR WHEN SUCH POWER IS CONFERRED BY THE ACT OR RULES 17 ITA NO.16/KOL/2017 M/S MACO CORPORATION (INDIA) PVT. LTD. A.YR. 2013-14 17 UNDER WHICH IT IS MADE. (SEE INTERPRETATION OF STAT UTES, NINTH EDITION BY G.P. SINGH PAGE 893). 26. 27. IT IS NOT IN DISPUTE THAT AN EXPRESS POWER WAS CON FERRED ON THE CIT TO CANCEL THE REGISTRATION FOR THE FIRST TIME BY ENACTING SUB-SEC TION (3) IN SECTION 12AA ONLY WITH EFFECT FROM 01.10.2004 BY THE FINANCE (NO.2) ACT 20 04 (23 OF 2004) AND HENCE SUCH POWER COULD BE EXERCISED BY THE CIT ONLY ON AND AFT ER 01.10.2004, I.E., (ASSESSMENT YEAR 2004-2005) BECAUSE THE AMENDMENT IN QUESTION W AS NOT RETROSPECTIVE BUT WAS PROSPECTIVE IN NATURE. 28. THE ISSUE INVOLVED IN THIS APPEAL HAD ALSO COME UP FOR CONSIDERATION BEFORE THREE HIGH COURTS, NAMELY, DELHI HIGH COURT IN THE CASE O F DIT (EXEMPTIONS) V. MOOL CHAND KHAIRATI RAM TRUST [2011] 11 TAXMANN.COM 42/199 TAXMAN 1/339 ITR 622 , UTTARANCHAL HIGH COURT IN THE CASE OF WELHAM BOYS' SCHOOL SOCIETY V. CBDT [2006] 285 ITR 74/[2007] 158 TAXMAN 199 AND ALLAHABAD HIGH COURT IN THE CASE OF OXFORD ACADEMY FOR CAREER DEVELOPMENT V. CHIEF CIT [2009] 315 ITR 382 . 29. ALL THE THREE HIGH COURTS AFTER EXAMINING THE ISSU E, IN THE LIGHT OF THE OBJECT OF SECTION 12A OF THE ACT AND SECTION 21 OF THE GENERA L CLAUSES ACT HELD THAT THE ORDER OF THE CIT PASSED UNDER SECTION 12A IS QUASI JUDICIAL IN NATURE. SECOND, THERE WAS NO EXPRESS PROVISION IN THE ACT VESTING THE CIT WITH P OWER OF CANCELLATION OF REGISTRATION TILL 01.10.2004; AND LASTLY, SECTION 21OF THE GENER AL CLAUSES ACT HAS NO APPLICATION TO THE ORDER PASSED BY THE CIT UNDER SECTION 12A BECAU SE THE ORDER IS QUASI JUDICIAL IN NATURE AND IT IS FOR ALL THESE REASONS THE CIT HAD NO JURISDICTION TO CANCEL THE REGISTRATION CERTIFICATE ONCE GRANTED BY HIM UNDER SECTION 12A TILL THE POWER WAS EXPRESSLY CONFERRED ON THE CIT BY SECTION 12AA(3) O F THE ACT W.E.F. 01.10.2004. WE HOLD THAT THE RATIO DECIDENDI OF THE AFORESAID J UDGEMENT OF THE HONBLE APEX COURT WOULD SQUARELY BE APPLICABLE TO THE FACTS OF THE I NSTANT CASE. INFACT THE ASSESSEES CASE HEREIN FALLS ON A MUCH BETTER FOOTING THAN THE FACT S BEFORE THE HONBLE APEX COURT. IN THE CASE BEFORE HONBLE APEX COURT, THE POWER OF CA NCELLATION OF REGISTRATION US 12A OF THE ACT WAS CONFERRED BY THE ACT ON THE LD CIT W.E. F. 1.10.2004 AND THE HONBLE APEX COURT HELD THAT PRIOR TO THAT DATE , NO CANCELLATIO N OF REGISTRATION COULD HAPPEN. BUT IN THE INSTANT CASE, THERE IS ABSOLUTELY NO PROVISION FOR WITHDRAWAL OF RECOGNITION U/S 35(1)(II) OF THE ACT . HENCE WE HOLD THAT THE WITH DRAWAL OF RECOGNITION U/S 35(1)(II) OF THE ACT IN THE HANDS OF THE PAYEE ORGANIZATIONS WOU LD NOT AFFECT THE RIGHTS AND INTERESTS OF THE ASSESSEE HEREIN FOR CLAIM OF WEIGHTED DEDUCT ION U/S 35(1)(II) OF THE ACT. 18 ITA NO.16/KOL/2017 M/S MACO CORPORATION (INDIA) PVT. LTD. A.YR. 2013-14 18 8.4. WE ALSO FIND THAT THE CO-ORDINATE BENCH OF THI S TRIBUNAL IN EXACTLY SIMILAR FACTS HAD DECIDED THE ISSUE IN FAVOUR OF THE ASSESSEE IN THE FOLLOWING CASES:- A) RAJDA POLYMERS VS DCIT IN ITA NO. 333/KOL/2017 F OR ASST YEAR 2013-14 DATED 8.11.2017. B) SAIMED INNOVATION VS ITO IN ITA NO. 2231/KOL/201 6 FOR ASST YEAR 2013-14 DATED 13.9.2017. THE FINDINGS OF THOSE DECISIONS ARE NOT REITERATED HEREIN FOR THE SAKE OF BREVITY. 8.5. IN VIEW OF THE AFORESAID FINDINGS IN THE FACTS AND CIRCUMSTANCES OF THE CASE AND RESPECTFULLY FOLLOWING THE VARIOUS JUDICIAL PRECEDE NTS RELIED UPON HEREINABOVE, WE HOLD THAT THE LD CITA HAD RIGHTLY DELETED THE DISALLOWAN CE U/S 35(1)(II) OF THE ACT IN THE SUM OF RS 3,06,25,000/- MADE BY THE LD AO. ACCORDINGLY , THE GROUNDS RAISED BY THE REVENUE ARE DISMISSED. 9. IN THE RESULT, THE APPEAL OF THE REVENUE IS DISM ISSED. ORDER PRONOUNCED IN THE COURT ON 14.03.2018 SD/- SD/- [S.S. VISWANETHRA RAVI] [ M.BAL AGANESH ] JUDICIAL MEMBER ACCOUNTANT MEM BER DATED : 14.03.2018 SB, SR. PS 19 ITA NO.16/KOL/2017 M/S MACO CORPORATION (INDIA) PVT. LTD. A.YR. 2013-14 19 COPY OF THE ORDER FORWARDED TO: 1. DCIT, CIRCLE-12(1), KOLKATA, AAYAKAR BHAWAN, P- 7, CHOWRINGHEE SQUARE, KOLKATA- 700069. 2. M/S MACO CORPORATION (INDIA) PVT. LTD., 7A, SUKH SAGAR APPT., 2/5, SARAT BOSE ROAD, BHOWANIPORE, KOLKATA-700020. 3..C.I.T.- 4. C.I.T.- KOLKATA. 5. CIT(DR), KOLKATA BENCHES, KOLKATA. TRUE COPY BY ORDER SENIOR PRIVAT E SECRETARY HEAD OF OFFICE/D.D.O., ITAT, KOLKATA BENCHE S
