SUPARIWALA EXPORT PVT. LTD, MUMBAI V. DCIT. CENTRAL CIRCLE-8(1), MUMBAI

ITA 2039/MUM/2018

• Counselvise Citation: [2021] 108 COUNSELVISE.COM (IT) 2020 (ITAT-MUMBAI)
• Duration Of Justice: 3 year(s) 2 month(s) 14 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 17-06-2021
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: J
• Assessment Year: 2014-2015
• Appeal Filed On: 03-04-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Opportunity of cross examination; Retrospective amendment; Accommodation entries; Cancellation of registration; Set aside
• Section: 133A; 12A; 201; 13; 22

Judgement Text

THE INCOME TAX APPELLATE TRIBUNAL G BENCH, MUMBAI SHRI SHAMIM YAHYA (AM) & SHRI PAVANKUMAR GADALE ( JM) I.T.A. NO. 2039/MUM/2018 (ASSESSMENT YEAR 2014-15) SOPARIWALA EXPORTS PVT. LTD. 21 ST FLOOR, NIRMAL BUILDING NARIMAN POINT MUMBAI-400 021. PAN : AACCS1620D VS. DCIT, CC-8(1) ROOM NO. 656 AAYAKAR BHAVAN M.K. ROAD MUMBAI-400 020. ( APPELLANT ) ( RESPONDENT ) ASSESSEE BY SHRI SANDEEP BHALLA DEPARTMENT BY SHRI PRABHAT KUMAR GUPTA DATE OF HEARING 22.03.2021 DATE OF PRONOUNCEMENT 17.06.2021 O R D E R PER SHAMIM YAHYA (AM) :- THIS IS AN APPEAL BY THE ASSESSEE DIRECTED AGAINST THE ORDER OF LEARNED CIT(A) DATED 30.1.2018 PERTAINS TO A.Y. 2014-15. 2. THE ISSUE RAISED IN THAT LEARNED CIT(A) ERRED IN SUSTAINING THE DISALLOWANCE OF ITEM OF EXPENDITURE UNDER SECTION 3 5(1)(II) OF THE I.T. ACT WITH REFERENCE TO PAYMENT OF RUPEES TEN CRORES. 3. BRIEF FACTS ARE THAT THE ASSESSEE COMPANY IS ENG AGED IN THE BUSINESS AS BUYERS, PURCHASERS, SELLERS, DISTRIBUTORS, IMPORTER S, EXPORTERS, TRADERS OR OTHERWISE DEALERS OF TOBACOO, TOBACCO LEAVES, BEEDI ES, CIGARS, CIGARETTES, PAN MASALA, TOBACCO MASALA, TOBACCO POWDER, TOB ACCO PASTERN AGRO-BASED PRODUCTS, FLOWERS, ETC. 4. IN THE COURSE OF ASSESSMENT THE ASSESSING OFFICE R EXAMINED THE CLAIM OF EXPENDITURE UNDER SECTION 35(1)(II) OF THE ACT. HE NOTED THAT THE ASSESSEE DEBITED A SUM OF RS. 10 CRORES TO P&L ACCOUNT ON AC COUNT OF CONTRIBUTION U/S 35(1)(II) AND CLUBBED IT AS PART OF FIGURE OF CONTR IBUTION U/S 35 AC (TOTAL OF RS. 23 CRORES) UNDER THE HEAD ADMINISTRATIVE, SELLING, DISTRIBUTION & OTHER SOPARIWALA EXPORTS PVT. LTD. 2 EXPENSES AND ON WHICH DEDUCTION HAS BEEN CLAIMED U/ S. 35(L)(II) OF THE ACT @ 175%. HE NOTED THAT THE PAYMENT WAS MADE TO AN INST ITUTE BY THE NAME SCHOOL OF HUMAN GENETICS AND POPULATION HEALTH (SHG PH), KOLKATA. THAT A SURVEY ACTION U/S. 133A OF THE ACT, WAS CONDUCTED A T THE OFFICE PREMISES OF SHGPH ON 27.01.2015. THAT DURING THE COURSE OF SURV EY, IT EMERGED THAT SCHOOL OF HUMAN GENETICS AND POPULATION HEALTH IS E NGAGED IN ACCEPTING BOGUS DONATION U/S 35(L)(II) OF THE ACT THROUGH VAR IOUS BROKERS IN LIEU OF COMMISSION. THAT BOGUS DONATIONS WERE ACCEPTED VIDE CHEQUE/RTGS AND THEREAFTER AFTER TAKING COMMISSION, THE SAME WAS ROUTED BACK TO THE DONOR IN THE FORM OF CASH VIDE 3-4 LAYERS AFTER BOGUS BILLIN G OR OTHER ACCOMMODATION ENTRIES IN THE BOOKS OF INSTITUTE. THAT THE COMMISS ION RATE CHARGED WAS 12 TO 18 PER CENT. WHEREAS SHARE OF THE EXEMPTED ORGANIZA TION IS 8-10 % OF TOTAL AMOUNT AND REMAINING 2 TO 8 PER CENT OF TOTAL AMOUN T WAS CHARGED BY THE BROKER. THAT AS THE BENEFIT IS 175% OF DONATED AMOU NT, A LARGE NUMBER OF ASSESSEE WERE LURED BY THESE BROKERS. DURING THE CO URSE OF SURVEY U/S. 133A OF THE IT ACT, THE SMT. MOUMITA RAGHAVAN, TREASURER OF SCHOOL OF HUMAN GENETICS AND POPULATION HEALTH SINCE 2002 STATED TH AT '......THE SOURCE OF INCOME FOR THIS ORGANIZATION IS MAINLY OUT OF DONAT ION FROM CORPORATE BODIES AS WELL AS FROM INDIVIDUALS. IN FACTS, WE RECEIVED DON ATIONS THROUGH CHEQUE, RTGS AND SIMULTANEOUSLY WE ISSUE CHEQUES IN THE NAME OF SOME COMPANIES AND N THE PROCESS OUR ORGANIZATION ORIGINALLY RECEIVED TO 8% OF DONATION AMOUNT. THAT THE TOTAL PROCESS HAS BEEN MAINTAINED BY BROKERS.......... THAT SHE ALSO ACCEPTED THAT THROUGH BROKERS THEY GET DONATION CLIENTS AND DONATION MONEY IS RETURNED BACK TO THE DONORS BY BOGUS BILLING AFTER DEDUCTING COMMISSION OF 8%. THAT SUBSEQUENTLY, VIDE ORDER DATED 15 TH SEPTEMBER, 2016 THE CENTRAL BOARD OF DIRECT TAXES (CBDT), A BODY OF THE MINSITRY OF FINA NCE WITHDREW THE APPROVAL GRANTED U/S 35(L)(II) W.E.F 20.01.2010 I.E THE DATE FROM WHICH APPROVAL U/S. 35(1)(II) HAD BEEN ACCORDED TO SHGPH VIDE NOTIFICAT ION NO. 4/2010 DATED 20.01.2010. PARA 7 OF THE ORDER DATED 15.09.2016 EX PRESSLY STATES THAT, 'SHGPH HAS GROSSLY MISUSED PROVISION OF SEC 35(L)(I I) OF THE ACT BY INDULGING IN MONEY LAUNDERING THROUGH BOGUS RESEARCH CONTRIBUTIO NS AND. REPAYING THEM IN SOPARIWALA EXPORTS PVT. LTD. 3 CASH. IT IS FOUND TO BE INVOLVED IN ILLEGAL ACTIVIT Y OF PROVING ACCOMMODATION ENTRIES TO THE DONORS IN THE NAME OF RESEARCH ACTIV ITIES WHICH HAS ENABLED THE DONORS TO CLAIM FALSE INCOME TAX DEDUCTION' 5. THAT HENCE, VIDE ORDER SHEET ENTRY DATED 15.11.2 016, THE ASSESSEE WAS SHOW-CAUSED TO EXPLAIN WHY THE DEDUCTION CLAIMED U/ S 35(L)(II) BE NOT DISALLOWED AS SHGPH WAS FOUND TO BE INDULGING IN IL LEGAL ACTIVITIES, BLATANTLY FRAUDULENT IN NATURE. THE ASSESSEE REPLIED TO THE S HOW-CAUSE VIDE LETTER DATED 16.11.2016 WHEREIN IT CLAIMED THE BENEFIT OF EXPLAN ATION TO SEC 35(L)(II) WHICH STATES THAT DEDUCTION SHALL NOT BE DENIED MERELY ON THE GROUND THAT SUBSEQUENT TO THE PAYMENT, THE APPROVAL HAS BEEN WI THDRAWN. 6. THE ASSESSING OFFICER OBSERVED THAT WHILE THE AS SESSEE'S CONTENTION OF EXPLANATION TO SEC 35(L)(II), DESERVES MERIT, IT CO VERS SITUATIONS IN WHICH THE APPROVAL GRANTED TO INSTITUTIONS ARE SUBSEQUENTLY W ITHDRAWN FOR FAILING TO FULFILL THE REQUIREMENTS AS ENVISAGED TO BE ELIGIBLE FOR AP PROVAL U/S 35(1)(II). THAT THE SITUATION OBTAINING IN THE CASE OF SHGPH IS BASED O N PURE ILLEGALITY AND MISUSE OF THE BENEFICIENT PROVISIONS OF THE ACT WHI CH ARE MEANT TO PROMOTE SCIENTIFIC RESEARCH. THAT HENCE ASSESSEE'S CONTENTI ON IS REJECTED. HENCE ASSESSING OFFICER MADE DISALLOWANCE OF RS. 17,50,00 ,000 7. UPON ASSESSEES APPEAL LEARNED CIT(A) CONFIRMED THE ASSESSING OFFICERS ACTION. HE INTER ALIA RELIED UPON THE SAME SEARCH P ROCEEDINGS AS THAT BY THE ASSESSING OFFICER. HE FURTHER REFERRED THAT HE HAD TAKEN INTO CONSIDERATION THE CBDT NOTIFICATION OF WITHDRAWAL DATED 15.9.2016 WHE REIN IT IS NOTED THAT M/S. SHGPH HAS NOT TAKEN ANY SCIENTIFIC RESEARCH ACTION. 8. AGAINST THE ABOVE ORDER ASSESSEE IS IN APPEAL BE FORE US. 9. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE R ECORDS. AT THE OUTSET LEARNED COUNSEL OF THE ASSESSEE SUBMITTED THAT THE ISSUE IS COVERED IN FAVOUR OF THE ASSESSEE BY SEVERAL DECISIONS OF THE ITAT ON IDENTICAL FACTS. HE REFERRED TO THE FOLLOWING DECISIONS : SOPARIWALA EXPORTS PVT. LTD. 4 MOTILAL DAHYABHAI JHAVERI & SONS VS. ACIT (ITA NO. 3 453/MUM/2018 DT. 24.4.2019) BORSAD TOBACCO CO. PVT. LTD. VS. DCIT (ITA NO. 2040/ MUM/2018 DT. 17.6.2019) KITCHEN ESSENTIALS VS. ACIT (ITA NO. 6672&6673/MUM/20 13 DT. 15.1.2019) 10. PER CONTRA, LEARNED DEPARTMENTAL REPRESENTATIVE RELIED UPON THE ORDERS OF THE AUTHORITIES BELOW. 11. UPON CAREFUL CONSIDERATION WE NOTE THAT IDENTIC AL ISSUE WAS DECIDED IN FAVOUR OF THE ASSESSEE IN THE AFORESAID DECISIONS O F THE ITAT. WE MAY REFER TO THE DECISION IN THE CASE OF KITCHEN ESSENTIALS (SUP RA) AS UNDER :- WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL ON RECORD INCLUDING THE DECISIONS CITED BY THE ID. AR. THE UND ISPUTED FACTS ARE THAT THE ASSESSEE HAS MADE DONATIONS OF RS.50 LAKHS TO THE 'THE SCHOOL OF HUMAN GENETICS AND POPULATION HEALTH' AND CLAIMED DEDUCTION U/S.35(1)(II) OF THE ACT EQUAL TO RS.87,50,000/- BEING 175% OF THE AMOUNT PA ID. A SURVEY WAS CONDUCTED AT THE OFFICE PREMISES OF THE SCHOOL NAMELY, 'THE SCHOOL OF HUMAN GENETICS AND POPULATION HEALTH' U/S.133A OF THE ACT O N 27.01.2015 AND IT WAS OBSERVED BY THE SURVEY TEAM THAT THIS INSTITUTE IN CONNIVANCE WITH DONORS, BROKERS AND ACCOMMODATION ENTRY PROVIDERS HAS INDULGED IN A DUVIOUS SCHEME OF TAX EVASION, UNDER WHICH BOGUS DO NATIONS WERE RECEIVED FROM DONORS AND MONEY USED TO BE RETURNED BACK TO TH E DONORS IN LIEU OF COMMISSION, EVEN WHILE THE DONOR AVAILED OF DEDUCTION S U/S.35(1)(II) OF THE ACT. THE REGISTRATION OF THE INSTITUTION WAS CANCELLED BY THE GOVERNMENT OF INDIA WITH RETROSPECTIVE EFFECT AND IT WAS HELD THAT THE I NSTITUTION HAS MISUSED THE EXEMPTION. HOWEVER, UNDER SIMILAR FACTS AN D CIRCUMSTANCES, VARIOUS COORDINATE BENCHES HAVE TAKEN THE VIEW THAT ME RE ADMISSION ON THE PART OF THE OFFICE BEARERS OF THE BODY/TRUST, THE ASS ESSEE CANNOT BE PENALIZED AND THE AMOUNT OF DONATIONS CLAIMED BY THE ASSESSEE ON ACCOUNT OF PAYMENT TO THE SAID SCHOOL CANNOT BE DENIED. IN THE CASE OF NAR BHERAM VISHRAM QUA, ITA NO.42&43/KOL/2018, ORDER DATED 27.07.2018, THE K OLKATA BENCH OF THE TRIBUNAL UNDER SIMILAR CIRCUMSTANCES AND FACTS HAS HE LD AS UNDER :- '13 WE HAVE GIVEN A CAREFUL CONSIDERATION TO THE RI VAL SUBMISSIONS AND PERUSED THE MATERIALS AVAILABLE ON RECORD, WE NOTE THAT THE ASSESSES HAS CHALLENGED DISALLOWANCE OF WEIGHTED DEDUCTION O F RS.4,81,25,0007- FOR A.Y. 2013-14 AND DISALLOWANCE OF WEIGHTED DEDUC TION OF RS.10,50,00,000/-, FOR A.Y. 2014-15, CLAIMED BY HIM UNDER SECTION 35(L)(II) OF THE ACT IN RESPECT OF THE AMOUNTS OF D ONATIONS MADE TO TWO INSTITUTIONS VIZ. 'MATRIVANI INSTITUTE EXPERIMENTAL RESEARCH & EDUCATION' (HEREINAFTER REFERRED TO AS 'MATRIVANI') AND 'THE S CHOOL OF HUMAN GENETICS AND POPULATION HEALTH' (HEREINAFTER REFERR ED TO AS 'SHG'). THE ASSESSEE FIRM IN A.Y. 2014-15, MADE DONATION OF RS, 2,00,00,000/ TO MATRIVANI AND RS,4,00,00,000/ TO SHG AND CLAIMED WE IGHTED DEDUCTION SOPARIWALA EXPORTS PVT. LTD. 5 OF RS.10,50,00,000 UNDER SECTION 35(L)(II) OF THE I NCOME TAX ACT, 1961, BEING 175% OF THE AGGREGATE SUM OF RS.6,00,00,000/- (RS,2,00,00,000 + RS,4,00,00,000) DONATED TO THESE TWO INSTITUTES WHI CH WERE APPROVED BY THE CENTRAL GOVERNMENT FOR THE PURPOSES OF SECTI ON 35(1) (II) OF THE ACT READ WITH RULE 5C AND SE OF THE INCOME TAX RULE S, 1962. IN THE ASSESSMENT YEAR 2013-14, THE ASSESSEE CLAIMED WEIGH TED DEDUCTION OF RS.4,81,25,000/- UNDER SECTION 35(1) (II) OF THE AC T, WHICH IS 175% OF THE AMOUNT OF DONATION BEING THE SUM OF RS.2,75,00,0007 - IN RESPECT OF THE DONATION GIVEN TO 'THE SCHOOL OF HUMAN GENETICS AND POPULATION HEALTH'. WE NOTE THAT THE NOTIFICATIONS TO THIS EFF ECT, THAT THESE TWO INSTITUTIONS VIZ. 'MATRIVANI' AND 'SHG', WERE APPRO VED BY THE CENTRAL GOVERNMENT FOR THE PURPOSE OF SECTION 35(1)(II) OF THE ACT, WAS PUBLISHED IN THE GAZETTE OF INDIA. HOWEVER, THE DEDUCTION CLA IMED BY THE ASSESSEE WAS DENIED BY THE ASSESSING OFFICER ON THE BASIS OF THE ALLEGATIONS CONTAINED IN THE REPORT OF THE INVESTIGATION WING O F KOLKATA THAT THE SAID DONATIONS WERE BOGUS. THE REASONS STATED THEREIN, I N SHORT, WERE THAT STATEMENTS OF SOME KEY PERSONS OF THESE TWO DONEE I NSTITUTIONS WERE RECORDED BY THE INVESTIGATION AUTHORITY IN COURSE O F SURVEY PROCEEDINGS IN THEIR CASES. THE SAID KEY PERSON, IN THEIR STATE MENTS, ACCEPTED TO HAVE RECEIVED DONATIONS FROM VARIOUS ENTITIES IN LI EU OF CASH RETURNED TO THEM AFTER DEDUCTING COMMISSION THERE FROM. 14. WE NOTE THAT, DURING THE COURSE OF HEARING, BEF ORE US, THE ID COUNSEL FOR THE ASSESSEE SUBMITTED THAT, THE SUMS PAID TO ' MATRIVANI AND 'SHG, WERE GENUINE DONATIONS AND BOTH OF THE INSTITUTIONS WERE ADMITTEDLY REGISTERED UNDER SECTION 12A OF THE INCOME TAX ACT, 1961. WE NOTE THAT BOTH OF THE SAID TWO INSTITUTIONS VIZ, 'MATRIVANI' AND 'SHG', ARE SCIENTIFIC RESEARCH ASSOCIATION APPROVED AS SUCH BY CENTRAL GOVERNMENT UNDER SECTION 35(L)(II) OF THE INCOME TA X ACT, 1961 VIDE NOTIFICATION, BEARING NO. 229/2007 (F.N0.203/135/20 07/ITA-II) DATED 21.08.2007 AND NOTIFICATION NO. 4/2010 (F. NO. 2B/A /2009,/ITA-II DATED 28.01.2010 RESPECTIVELY, PUBLISHED IN OFFICIA L GAZETTE OF INDIA. THE ASSESSEE CATEGORICALLY DENIED THAT IT EVER RECE IVED BACK THE AMOUNTS OF DONATIONS IN CASH OR IN KIND FROM THE SA ID INSTITUTIONS AND FROM ANY PERSON WHATSOEVER IN LIEU OF THE VARIOUS A MOUNTS DONATED TO THESE TWO INSTITUTIONS, WE NOTE THAT IN THE STATEME NTS, OF KEY PERSONS AND ALLEGED BROKERS RECORDED BY THE INVESTIGATION W ING IN COURSE OF SURVEY PROCEEDINGS, IN THEIR CASES AND THE EXTRACTS OF WHICH WAS PROVIDED TO THE ASSESSES IN THE SHOW CAUSE NOTICE, THE NAME OF THE ASSESSEE FIRM DOES NOT APPEAR ANYWHERE. IT IS TO BE NOTED THAT NONE OF THOSE PERSONS IMPLICATE THE ASSESSEE TO HAVE MADE B OGUS DONATIONS AND THAT CASH WAS PAID TO THE DONORS ASSESSEE IN LI EU OF THE ALLEGED BOGUS DONATION AFTER DEDUCTING THEIR COMMISSION. WE NOTE THAT THE STATEMENTS OF THE VARIOUS PARTIES AND PERSONS WERE RECORDED BEHIND THE BACK OF THE ASSESSEE AND THE AS SESSING OFFICER DID NOT ALLOW OPPORTUNITY OF CROSS EXAMINATION. WE NOTE THAT IN ABSENCE OF OPPORTUNITY OF CROSS-EXAMINATION NO RELIANCE COULD BE MADE ON SUCH STATEMENTS TO DRAW ANY ADVERSE INFERENCE AGAINST TH E ASSESSEE FIRM. THE ASSESSEE FIRM DENIED ITS KNOWLEDGE OF THE STATE MENTS MADE BY THESE INSTITUTES WHICH WERE RELIED ON BY THE INVEST IGATION WING AND THE SOPARIWALA EXPORTS PVT. LTD. 6 ASSESSING OFFICER. WE NOTE THAT NOT PROVIDING THE O PPORTUNITY OF CROSS- EXAMINATION IS AGAINST THE PRINCIPLE OF NATURAL JUS TICE AND FOR THAT WE RELY OF-THE JUDGMENT OF HON'BLE DELHI HIGH COURT IN THE CASE OF CIT VS. DHARAM PAL PRERN CHAND LTD. [2007] 295 ITR 105, 108 (DEL). WE NOTE THAT ON IDENTICAL FACTS, THE SIMILAR PROPOSITION WA S UPHELD BY THE COORDINATE BENCH OF KOLKATA IN THE CASE OF RAJDA PO LYMERS, ITA NO.333/KOL/2017,FOR ASSESSMENT YEAR 2013-14 WHEREIN IT WAS HELD AS FOLLOWS: '10. ....THUS WE NOTE FROM THE ENTIRE FACTS AND CIR CUMSTANCES, THAT THE AO GOT SWAYED AWAY WITH THE STATEMENT RECO RDED ON OATH OF MR. SWAPAN RANJAN DASGUPTA DURING SURVEY CO NDUCTED AT THE PREMISES OF M/S. HERB/CURE. WE HAVE REPRODUC ED QUESTION NO. 22 AND 23 AND ANSWERS GIVEN BY SHRI SWAPAN RANJ AN DASGUPTA, WHEREIN HE ADMITS TO PROVIDE ACCOMMODATIO N ENTRIES IN LIEU OF CASH. THIS INFORMATION WE SHOULD SAY CAN BE THE TOOL TO START AN INVESTIGATION WHEN THE ASSESSEE MADE THE C LAIM FOR WEIGHTED DEDUCTION. THE GENERAL STATEMENT OF SHRI S WAPAN RANJAN DASGUPTA AGAINST DONATION MADE THE CLAIM OF ASSESSEE FOR DEDUCTION SUSPICIOUS. HOWEVER, WHEN THE AO INVE STIGATED, SHRI SWAPAN RANJAN DASGUPTA HAS CONFIRMED THAT M/S. HERB/CURE WAS IN RECEIPT OF THE DONATION AND IT HAS NOT GIVEN ANY REFUND IN CASH, THEN THE SOLE BASIS OF DISALLOW ANCE OF CLAIM AS A MATTER OF FACT DISAPPEARED. IT SHOULD BE REMEM BERED SUSPICION HOWSOEVER STRONG CANNOT TAKE THE PLACE OF EVIDENCE. THE CONFIRMATION FROM SHRI SWAPAN RANJAN DASGUPLA F ORTIFIES THE CLAIM OF THE ASSESSEE FOR WEIGHTED DEDUCTION U/S. 3 5(1 )(II) OF THE ACT. THE SOLE BASIS OF THE ADDITION/DISALLOWANCE BA SED ON STATEMENT RECORDED ON OATH DURING SURVEY CANNOT BE ALLOWED AS HELD BY HON'BLE SUPREME COURT IN KADER KHAN & SONS (SUPRA). MOREOVER, WE NOTE THAT IF THE AO WAS HELL BENT DETE RMINED TO DISALLOW THE CLAIM OF THE ASSESSEE, THEN HE SHOULD HAVE GRANTED AN OPPORTUNITY TO CROSS EXAMINE SHRI SWAPAN RANJAN DAS GUPTA AND SHRI KISHAN BHAWASINGKA AS HELD BY HON'BLE SUPR EME COURT IN ANDAMAN TIMBER (SUPRA). 11. IN THE LIGHT OF THE AFORESAID FACTS AND CIRCUMS TANCES, WE CANNOT SUSTAIN THE ORDER OF THE AUTHORITIES BELOW. THEREFORE, WE SET ASIDE THE IMPUGNED ORDER AND DIRECT THE AO TO A LLOW THE DEDUCTION OF RS.26,28,500/- U/S. 35(L)(II) OF THE A CT. 15. NOW, WE DEAL WITH THE ARGUMENTS OF ID DR FOR TH E REVENUE. WE NOTE THAT THE SOLITARY GRIEVANCE OF THE ID DR FOR THE RE VENUE IS THAT SINCE THE REGISTRATION HAD BEEN CANCELLED BY THE CBDT, WITH R ETROSPECTIVE EFFECT THAT IS, WITH EFFECT FROM 1 SL APRIL 2007, BY ISSUING NOTIFICATION DATED 06.09.2016, FOR BOTH THE INSTITUTIONS VIZ: 'MATRIVA NI' AND 'THE SCHOOL OF HUMAN GENETICS AND POPULATION HEALTH', THEREFORE TH ESE INSTITUTIONS ARE NOT ENTITLED TO CLAIM BENEFIT UNDER SECTION 35 (1) (II) OF THE ACT. WE NOTE THAT THE WITHDRAWAL OF RECOGNITION U/S 35(L )(II) OF THE ACT IN THE HANDS OF THE PAYEE ORGANIZATIONS WOULD NOT AFFECT T HE RIGHTS AND INTERESTS OF THE ASSESSES HEREIN FOR CLAIM OF WEIGHTED DEDUCTION U/S SOPARIWALA EXPORTS PVT. LTD. 7 35(1 )(II) OF THE ACT, FOR THAT WE RELY ON THE JUDG MENT OF THE COORDINATE BENCH, KOLKATA, IN THE CASE OF M/S MACO CORPORATION INDIA (P) LTD, ITA NO.L6/KOL/2017, FOR ASSESSMENT YEAR 2013-14, WHEREI N IT WAS HELD AS FOLLOWS: '29. ALL THE THREE HIGH COURTS AFTER EXAMINING THE ISSUE, IN THE LIGHT OF THE OBJECT OF SECTION 12A OF THE ACT AND S ECTION 21 OF THE GENERAL CLAUSES ACT HELD THAT THE ORDER OF THE CIT PASSED UNDER SECTION 12A IS QUASI JUDICIAL IN NATURE. SECOND, TH ERE WAS NO EXPRESS PROVISION IN THE ACT VESTING THE CIT WITH P OWER OF CANCELLATION OF REGISTRATION FILL 01.10.2004; AND L ASTLY. SECTION 21 OF THE GENERAL CLAUSES ACT HAS NO APPLICATION TO TH E ORDER PASSED BY THE CIT UNDER SECTION 12A BECAUSE THE ORDER IS Q UASI JUDICIAL IN NATURE AND IT IS FOR ALL THESE REASONS THE CIT H AD 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 I2AAC3) OF THE ACT W.E.F. 01.10.2004. WE HOLD THAT THE RATIO DECIDENDI OF THE AFORESAID J UDGEMENT OF THE HON'BLE APEX COURT WOULD SQUARELY BE APPLICABLE TO THE FACTS OF THE INSTANT CASE. IN FACT THE ASSESSEE'S CASE HE REIN FALLS ON A MUCH BETTER FOOTING THAN THE FACTS BEFORE THE HON'B LE APEX COURT. IN THE CASE BEFORE HON'BLE APEX COURT, THE POWER OF CANCELLATION OF REGISTRATION US 12A OF THE ACT WAS CONFERRED BY THE ACT ON THE ID CIT W.E.F. 1.10.2004 AND THE HON'BLE APEX COURT HELD THAT PRIOR TO THAT DATE , NO CANCELLATION OF REGISTRATIO N COULD HAPPEN. BUT IN THE INSTANT CASE, THERE IS ABSOLUTELY NO PRO VISION FOR WITHDRAWAL OF RECOGNITION U/S 35(L)(II) OF THE ACT. HENCE WE HOLD THAT THE WITHDRAWAL OF RECOGNITION U/S 35(L)(II) OF THE ACT IN THE HANDS OF THE PAYEE ORGANIZATIONS WOULD NOT AFFECT T HE RIGHTS AND INTERESTS OF THE ASSESSEE HEREIN FOR CLAIM OF WEIGH TED DEDUCTION U/S 35(1)(H) OF THE ACT.' 16.1N VIEW OF THE AFORESAID FINDINGS IN THE FACTS A ND CIRCUMSTANCES OF THE CASE AND RESPECTFULLY FOLLOWING THE VA RIOUS JUDICIAL PRECEDENTS RELIED UPON HEREINABOVE, WE DIRECT THE ID AO TO GRA NT DEDUCTION U/S 35(1 )(II) OF THE ACT, IN THE SUM OF RS. 4,81,25,00 0/- FOR A. Y, 2013-14 AND IN THE SUM OF RS. 10,50,00,000/-, FOR A. Y. 201 4-15, AS CLAIMED BY HIM UNDER SECTION 35(L)(II) OF THE ACT IN RESPECT O F THE AMOUNTS OF DONATIONS MADE TO TWO INSTITUTIONS VIZ. 'MATRIVANI INSTITUTE EXPERIMENTAL RESEARCH & EDUCATION' AND THE SCHOOL OF HUMAN GENET ICS AND POPULATION HEALTH'. ACCORDINGLY, THE GROUNDS 1 TO 4 RAISED BY THE ASSESSEE FOR A.Y. 2013-14 AND THE GROUNDS 1 TO 5 RAISED BY THE ASSESSEE FOR A. Y. 2014-15 ARE ALLOWED.' 9. SIMILARLY IN VARIOUS OTHER DECISIONS THE ISSUE HAS BEEN DECIDED BY THE TRIBUNAL IN FAVOUR OF THE ASSESSEE BY DISREGARDING THE REVENUE'S CONTENTIONS THAT THE REGISTRATION OF THE SCHOOL HAS BEEN CANCELLED B Y THE CBDT WITH RETROSPECTIVE EFFECT BY ISSUING NOTIFICATION AND, THE REFORE, THE ASSESSEE IS NOT ENTITLED TO BENEFIT U/S.35(1)(II) OF THE ACT. THE FACTS B EFORE US BEING MATERIALLY SAME INVOLVING THE SAME SCHOOL, NAMELY, 'THE SCHOOL OF HUMAN GENETICS AND SOPARIWALA EXPORTS PVT. LTD. 8 POPULATION HEALTH', WE, THEREFORE, RESPECTFULLY FOLLOW ING THE DECISIONS OF THE COORDINATE BENCHES OF THE TRIBUNAL, HOLD THAT THE DE DUCTION U/S.35(1 )(II) OF THE ACT CANNOT BE DENIED TO THE ASSESSEE. ACCORDINGLY, WE DIRECT THE AO TO GRANT DEDUCTION U/S.35(1 )(II) OF THE ACT. APPEAL OF TH E ASSESSEE FOR THE ASSESSMENT YEAR 2013-2014 (ITA NO.6672/MUM/2017) IS HEREBY ALLOWED. 12. WE NOTE THAT FACTS IN THE PRESENT CASE ARE IDEN TICAL. THE WITHDRAWAL OF THE APPROVAL TO THE PAYEE HAS TAKEN PLACE SUBSEQUEN T TO THE PAYMENT BY THE ASSESSEE. THE ASSESSEES CASE DULY FOLLOWS UNDER SE CTION 35(1)(II) OF THE ACT WHICH READ AS UNDER :- SECTION 35(1)(II) : AN AMOUNT EQUAL TO ONE AND ONE HA LF TIMES OF ANY SUM PAID TO A RESEARCH ASSOCIATION WHICH HAS AS ITS OBJECT THE U NDERTAKING OF SCIENTIFIC RESEARCH OR TO A UNIVERSITY, COLLEGE OR O THER INSTITUTION TO BE USED FOR SCIENTIFIC RESEARCH : PROVIDED THAT SUCH ASSOCIATION, UNIVERSITY, COLLEGE OR OTHER IN STITUTION FOR THE PURPOSES OF THIS CLAUSE ( A ) IS FOR THE TIME BEING APPROVED, IN ACCORDANCE WIT H THE GUIDELINES, IN THE MANNER AND SUBJECT TO SUCH CONDITIONS AS MAY BE PRE SCRIBED; AND ( B ) SUCH ASSOCIATION, UNIVERSITY, COLLEGE OR OTHER INST ITUTION IS SPECIFIED AS SUCH, BY NOTIFICATION IN THE OFFICIAL GAZETTE, BY THE CENTRAL GOVERNMENT : PROVIDED FURTHER THAT WHERE ANY SUM IS PAID TO SUCH ASSOCIATION, UNIVE RSITY, COLLEGE OR OTHER INSTITUTION IN A PREVIOUS YEAR RELE VANT TO THE ASSESSMENT YEAR BEGINNING ON OR AFTER THE 1ST DAY OF APRIL, 2021, TH E DEDUCTION UNDER THIS CLAUSE SHALL BE EQUAL TO THE SUM SO PAID; 13. HENCE THE PAYEE WAS DULY APPROVED WHEN THE PAYM ENT WAS DONE. BY NO STRETCH OF IMAGINATION IT CAN BE SAID THAT THE ASSE SSEE COULD HAVE DONE THE IMPOSSIBLE AND KNOWN THAT SUBSEQUENTLY THE APPROVAL WILL BE WITHDRAWN. ACCORDINGLY, FOLLOWING THE ABOVE SAID PRECEDENT AND NOTING THAT IT IS NOT THE CASE THAT HON'BLE BOMBAY HIGH COURT HAS REVERSED TH E DECISION, WE SET ASIDE THE ORDER OF AUTHORITIES BELOW. THE ASSESSEE IS THE REFORE HELD TO BE ELIGIBLE FOR DEDUCTION UNDER SECTION 35(1)(II) OF THE ACT. SOPARIWALA EXPORTS PVT. LTD. 9 15. IN THE RESULT, APPEAL FILED BY THE ASSESSEE IS ALLOWED. PRONOUNCED IN THE OPEN COURT ON 17.6.2021. SD/- SD/- (PAVANKUMAR GADALE) (SHAMIM YAHYA) JUDICIAL MEMBER ACCOUNTAN T MEMBER MUMBAI; DATED : 17/06/2021 COPY OF THE ORDER FORWARDED TO : 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT(A) 4. CIT 5. DR, ITAT, MUMBAI 6. GUARD FILE. BY ORDER, //TRUE COPY// ( ASSISTANT REGISTRAR) PS ITAT, MUMBAI