BORSAD TOBACCO CO. P.LTD, MUMBAI V. DCIT CEN CIR 8(1), MUMBAI

ITA 2040/MUM/2018

• Counselvise Citation: [2019] 116 COUNSELVISE.COM (IT) 9667 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 2 month(s) 17 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-06-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2014-2015
• Appeal Filed On: 03-04-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: AMIT MOHAN MITTAL
• Assessee Lawyers: SWETA FURIA
• Keywords: Principle of natural justice; Opportunity of cross examination; Retrospective amendment; Accommodation entries; Cancellation of registration; Set aside
• Section: 12A

Judgement Text

IN THE INC OME TAX APPELLATE TRIBUNAL B BENCH, MUMBAI BEFORE HONBLE SH. SANDEEP GOSAIN, JM & HONBLE SH. RAJESH KUMAR, AM ./ I.T.A. NO . 2040 /MU M/201 8 ( / ASSESSMENT YEAR: 20 14 - 15 ) IN THE MATTER OF: BORSAD TOBACCO CO. PVT. LTD. 21 ST FLOOR, NIRMAL BLDG, NARIMAN POINT, MUMBAI - 400 021 / VS. DCIT CEN CIR - 8 (1 ), ROOM NO. 656, 6 TH FLOOR, AAYAKAR BHAVAN, M. K. ROAD, MUMBAI - 400 020 ./ ./ PAN NO. A A ACB5089 K ( / APPELLANT ) : ( / RESPONDENT ) / APPELLANT BY : MS. SWETA FURIA , AR / RESPONDENTBY : SHRI AMIT MOHAN MITTAL , DR / DATE OF HEARING : 07.05 .2019 / DATE OF PRONOUNCEMENT : 17.06.2019 / O R D E R PER SANDEEP GOSAIN, J UDICIAL MEMBER : THE PRESENT A PPEAL HAS BEEN FILED BY THE ASSESSEE AGAINST THE ORDER OF COMMIS S IONER OF INCOME TAX (APPEALS) - 50 , MUMBAI, DATED 30.01 .18 FOR AY 2014 - 15 . 2 I.T.A. NO. 2040 /MUM/201 8 BORSAD TOBACCO CO. PVT. LTD. 2 . THE SOLITARY GROUND RAISED BY THE ASSESSEE RELATES TO CHALLENGING THE ORDER OF LD. CIT(A) IN DENYING THE DEDUCTION CLAIMED BY THE ASSESSEE U/S 35(1)(II) OF THE I.T. ACT IN RESPECT OF DONATION PAID BY IT TO SCHOOL OF HUMAN GENETIC AND POPULATION HEALTH, KOLKATA. IT WAS SUBMITTED THAT THE PRESENT ISSUE IS RAISED BY THE ASSESSEE IS SQUARELY COVERED BY A SE RIES OF DECISIONS MADE BY THE COORDINATE BENCHES OF ITAT MUMBAI. 3 . ON THE OTHER HAND, LD. DR REFUTED THE CLAIM OF THE ASSESSEE AND RELIED UPON THE ORDERS PASSED BY BOTH THE REVENUE AUTHORITIES. 4 . WE HAVE HEARD THE COUNSELS FOR BOTH THE PARTIES AND WE HAVE ALSO PERUSED THE MATERIAL PLACED ON RECORD , JUDGMENT CITED BY THE PARTIES AS WELL AS THE ORDERS PASSED BY REVENUE AUTHORITIES. WE FIND THAT THE IDENTICAL GROUND HAS ALREADY BEEN DEC IDED BY THE COORDINATE BENCH OF ITAT IN ITA NO.3453/MUM/18 & 1584/MU M/2019 FOR AY 2013 - 14 & 2014 - 15 IN THE CASE OF M/S MOTILAL DAHYABHAI JHAVERI VRS. ACIT . THE OPERATIVE PORTION OF THE ORDER OF ITAT PASSED IN ITA NO.3453/MUM/18 & 3 I.T.A. NO. 2040 /MUM/201 8 BORSAD TOBACCO CO. PVT. LTD. 1584/MUM/2019 IS CONTAINED IN PARA NO. 6.1 , WHICH ARE REPRODUCED BELOW: - 6.1. WE FIND THAT THE RELIANCE PLACED BY THE LD AR ON THE DECISIONS OF HONBLE SUPREME COURT IN THE CASE OF CIT VS CHOTATINGRAI TEA REPORTED IN (2003) 126 TAXMAN 399 (SC) DATED 29.10.2002 AND STATE OF MAHARASHTRA VS SURESH TRADING COMPANY REPORTED IN (1998 ) 1998 TAXMANN.COM 1747 (SC) DATED 7.2.1996 ARE VERY WELL FOUNDED AND ARE SQUARELY APPLICABLE TO THE FACTS OF THE INSTANT CASE BEFORE US. THE RATIO DECIDENDI OF THE SAID JUDGEMENTS ARE NOT REPRODUCED HEREIN FOR THE SAKE OF BREVITY. WE ALSO FIND THAT THE LD AR HAD RIGHTLY PLACED RELIANCE ON THE DECISION OF THE HONBLE JURISDICTIONAL HIGH COURT IN THE CASE OF NATIONAL LEATHER CLOTH MANUFACTURING CO. VS INDIAN COUNCIL OF AGRICULTURAL RESEARCH REPORTED IN (2000) 110 TAXMAN 511 (BOM) DATED 7.10.1999 IN THE CONTE XT OF WITHDRAWAL OF DEDUCTION U/S 35(1)(II) OF THE ACT DUE TO WITHDRAWAL OF RECOGNITION WITH RETROSPECTIVE EFFECT . IN ANY CASE, WE FIND THAT THE PROVISIONS OF SECTION 35(1)(II) OF THE ACT VIDE ITS EXPLANATION REPRODUCED HEREINABOVE CLEARLY PROVES THAT THE DONOR (I.E ASSESSEE HEREIN) CANNOT BE AFFECTED DUE TO SUBSEQUENT WITHDRAWAL OF RECOGNITION WITH RETROSPECTIVE EFFECT. RESPECTFULLY FOLLOWING THE AFORESAID DECISIONS AND THE 4 I.T.A. NO. 2040 /MUM/201 8 BORSAD TOBACCO CO. PVT. LTD. PROVISIONS OF THE ACT, WE DIRECT THE LD AO TO GRANT DEDUCTION U/S 35(1)(II) OF THE ACT IN THE SUMS OF RS 26,25,000/ - AND RS 21,00,000/ - FOR THE ASST YEARS 2013 - 14 AND 2014 - 15 RESPECTIVELY. IN VIEW OF THESE FINDINGS, THE OTHER ARGUMENTS ADVANCED BY THE LD AR ON MERITS ARE NOT ADJUDICATED HEREIN AND ARE LEFT OPEN. ACCORDINGLY, THE GROUNDS RAISED BY THE ASSESSEE FOR BOTH THE YEARS ARE ALLOWED. 5. APART FROM THAT, WE FIND THAT ANOTHER COORDINATE BENCH OF ITAT IN ITA NO. 6672 & 6673/MUM/13 FOR AY 2013 - 14 & 2014 - 15 IN THE CASE OF KITCHEN ESSENTIALS VRS. ACIT , HAS ALREADY DECIDED THE IDENTICA L GROUND RAISED IN THE PRESENT APPEAL. THE OPERATIVE PORTION OF THE ORDER OF ITAT PASSED IN ITA NO. 6672 & 6673/MUM/13 IS CONTAINED IN PARA NO. 8 TO 9 , WHICH ARE REPRODUCED BELOW: - 8. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL ON RECORD INCLUDING THE DECISIONS CITED BY THE ID. AR. THE UNDISPUTED FACTS ARE THAT THE ASSESSEE HAS MADE DONATIONS OF RS.50 TAKHS TO THE 'THE SCHOOL OF HUMAN GENETICS AND POPULATION HEALTH' AND CLAIMED DEDUCTION ULS.35(1 )(II) OF THE ACT EQUAL TO RS.87,50,000I - BEING 175% OF THE AMOUNT PAID. A SURVEY WAS CONDUCTED AT THE OFFICE PREMISES OF THE 5 I.T.A. NO. 2040 /MUM/201 8 BORSAD TOBACCO CO. PVT. LTD. SCHOOL NAMELY, 'THE SCHOOL OF HUMAN GENETICS AND POPULATION HEALTH' U/S.133A OF THE ACT ON 27.01 .20 15 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 DONATIONS WERE RECEIVED FROM DONORS AND MONEY USED TO BE R ETURNED BACK TO THE DONORS IN LIEU OF COMMISSION, EVEN WHILE THE DONOR AVAILED OF DEDUCTIONS 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 INSTITUTI ON HAS MISUSED THE EXEMPTION. HOWEVER, UNDER SIMILAR FACTS AND CIRCUMSTANCES, VARIOUS COORDINATE BENCHES HAVE TAKEN THE VIEW THAT MERE ADMISSION ON THE PART OF THE OFFICE BEARERS OF THE BODY/TRUST, THE ASSESSEE CANNOT BE PENALIZED AND THE AMOUNT OF DONATIO NS CLAIMED BY THE ASSESSEE ON ACCOUNT OF PAYMENT TO THE SAID SCHOOL CANNOT BE DENIED. IN THE CASE OF NARBHERAM VISHRAM GUA, ITA NO.42&43/KOL/2018, ORDER DATED 27.07.2018, THE KOLKATA BENCH OF THE TRIBUNAL UNDER SIMILAR CIRCUMSTANCES AND FACTS HAS HELD AS U NDER : - '13 WE HAVE GIVEN A CAREFUL CONSIDERATION TO THE RIVAL SUBMISSIONS AND PERUSED THE MATERIALS 6 I.T.A. NO. 2040 /MUM/201 8 BORSAD TOBACCO CO. PVT. LTD. AVAILABLE ON RECORD, WE NOTE THAT THE ASSESSEE HAS CHALLENGED DISALLOWANCE OF WEIGHTED DEDUCTION OF RS.4,81,25,000/ - FOR A. Y. 2013 - 14 AND DISALLOWANCE OF WEIGHTED DEDUCTION OF RS. 10,50,00,000/ - , FOR A. Y. 2014 - 15, CLAIMED BY HIM UNDER SECTION 35(0(II) OF THE ACT IN RESPECT OF THE AMOUNTS OF DONATIONS MADE TO TWO INSTITUTIONS VIZ. 'MATRIVANI INSTITUTE EXPERIMENTAL RESEARCH & EDUCATION' (HEREINAFTER REFERRE D TO AS 'MATRIVANI) AND 'THE SCHOOL OF HUMAN GENETICS AND POPULATION HEALTH' (HEREINAFTER REFERRED 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 WEIGHTED DEDUCTION OF R S.10,50,00,000 UNDER SECTION 35(I)(II) OF THE INCOME 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 WHICH WERE APPROVED BY THE CENTRAL GOVERNMENT FOR THE PURPOSES OF SECT ION 35(L)(II) OF THE ACT READ WITH RULE 5C AND SE OF THE INCOME TAX RULES, 1962. IN THE ASSESSMENT YEAR 2013 - 14, THE ASSESSEE CLAIMED WEIGHTED DEDUCTION OF RS.4,81,25,000/ - UNDER SECTION 35(1) (II) OF THE ACT, WHICH IS 175% OF THE AMOUNT OF DONATION BEING THE SUM OF RS.2,75,00,000/ - IN RESPECT OF THE DONATION GIVEN TO 'THE SCHOOL OF 7 I.T.A. NO. 2040 /MUM/201 8 BORSAD TOBACCO CO. PVT. LTD. HUMAN GENETICS AND POPULATION HEALTH'. WE NOTE THAT THE NOTIFICATIONS TO THIS EFFECT, THAT THESE TWO INSTITUTIONS VIZ; 'MATRIVANI' AND 'SHG', WERE APPROVED BY THE CENTRAL GOVERN MENT FOR THE PURPOSE OF SECTION 35(1)(II) OF THE ACT, WAS PUBLISHED IN THE GAZETTE OF INDIA. HOWEVER, THE DEDUCTION CLAIMED BY THE ASSESSEE WAS DENIED BY THE ASSESSING OFFICER ON THE BASIS OF THE ALLEGATIONS CONTAINED IN THE REPORT OF THE INVESTIGATION WIN G OF KOLKATA THAT THE SAID DONATIONS WERE BOGUS. THE REASONS STATED THEREIN, IN SHORT, WERE THAT STATEMENTS OF SOME KEY PERSONS OF THESE TWO DONEE INSTITUTIONS WERE RECORDED BY THE INVESTIGATION AUTHORITY IN COURSE OF SURVEY PROCEEDINGS IN THEIR CASES. THE SAID KEY PERSON, IN THEIR STATEMENTS, ACCEPTED TO HAVE RECEIVED DONATIONS FROM VARIOUS ENTITIES IN LIEU OF CASH RETURNED TO THEM AFTER DEDUCTING COMMISSION THERE FROM. 14. WE NOTE THAT, DURING THE COURSE OF HEARING, BEFORE US, THE ID COUNSEL FOR THE ASSES SEE SUBMITTED THAT, THE SUMS PAID TO 'MATRIVANIL 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 'SH G', ARE SCIENTIFIC RESEARCH 8 I.T.A. NO. 2040 /MUM/201 8 BORSAD TOBACCO CO. PVT. LTD. ASSOCIATION APPROVED AS SUCH BY CENTRAL GOVERNMENT UNDER SECTION 35(L)(II) OF THE INCOME TAX ACT, 1961 VIDE NOTIFICATION, BEARING NO. 229/2007 (F.NO.203/135/2007/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 OFFICIAL GAZETTE OF INDIA. THE ASSESSEE CATEGORICALLY DENIED THAT IT EVER RECEIVED BACK THE AMOUNTS OF DONATIONS IN CASH OR IN KIND FROM THE SAID INSTITUTIONS AND FROM ANY PERSON WHATSOEVER IN LIEU O F THE VARIOUS AMOUNTS DONATED TO THESE TWO INSTITUTIONS, WE NOTE THAT IN THE STATEMENTS, OF KEY PERSONS AND ALLEGED BROKERS RECORDED BY THE INVESTIGATION WING IN COURSE OF SURVEY PROCEEDINGS, IN THEIR CASES AND THE EXTRACTS OF WHICH WAS PROVIDED TO THE ASS ESSEE 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 BOGUS DONATIONS AND THAT CASH WAS PAID TO THE DONORS ASSESSEE IN LIEU OF THE ALLEGED BO GUS 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 ASSESSING OFFICER DID NOT ALLOW OPPORTUNITY OF CROSS EXAMINATION. WE NOTE THAT IN ABSENCE OF OPPORTUNITY OF CROSS - 9 I.T.A. NO. 2040 /MUM/201 8 BORSAD TOBACCO CO. PVT. LTD. EXAMINATION NO RELIANCE COULD BE MADE ON SUCH STATEMENTS TO DRAW ANY ADVERSE INFERENCE AGAINST THE ASSESSEE FIRM. THE ASSESSEE FIRM DENIED ITS KNOWLEDGE OF THE STATEMENTS MADE BY THESE INSTITUTES WHICH WERE RELIED ON BY THE INVESTIGAT ION WING AND THE ASSESSING OFFICER. WE NOTE THAT NOT PROVIDING THE OPPORTUNITY OF CROSS - EXAMINATION IS AGAINST THE PRINCIPLE OF NATURAL JUSTICE AND FOR THAT WE RELY OF - THE JUDGMENT OF HON BLE DELHI HIGH COURT IN THE CASE OF CIT VS. DHARAM PAL PRERN CHAND L TD. [2007] 295 ITR 105, 108 (DEL). WE NOTE THAT ON IDENTICAL FACTS, THE SIMILAR PROPOSITION WAS UPHELD BY THE COORDINATE BENCH OF KOLKATA IN THE CASE OF RAJDA POLYMERS, ITA NO.333/K6112017,FOR ASSESSMENT YEAR 2013 - 14 WHEREIN IT WAS HELD AS FOLLOWS: '10. .. .. THUS WE NOTE FROM THE ENTIRE FACTS AND CIRCUMSTANCES, THAT THE AO GOT SWAYED AWAY WITH THE STATEMENT RECORDED ON OATH OF MR. SWAPAN RANJAN DASGUPTA DURING SURVEY CONDUCTED AT THE PREMISES OF MIS. HERBICURE. WE HAVE REPRODUCED QUESTION NO. 22 AND 23 AND ANSWERS GIVEN BY SHRI SWAPAN RANJAN DASGUPTA, WHEREIN HE ADMITS TO PROVIDE ACCOMMODATION ENTRIES IN LIEU OF CASH. THIS INFORMATION WE SHOULD SAY CAN BE THE TOOL TO START AN INVESTIGATION WHEN THE ASSESSEE MADE THE CLAIM FOR WEIGHTED 10 I.T.A. NO. 2040 /MUM/201 8 BORSAD TOBACCO CO. PVT. LTD. DEDUCTION. THE GENERAL STATEMENT OF SHRI SWAPAN RANJAN DASGUPTA AGAINST DONATION MADE THE CLAIM OF ASSESSEE FOR DEDUCTION SUSPICIOUS. HOWEVER, WHEN THE AO INVESTIGATED, SHRI SWAPARI RANJAN DASGUPTA HAS CONFIRMED THAT M/S. HERBICURE WAS IN RECEIPT OF THE DONATION AND IT HAS NOT G IVEN ANY REFUND IN CASH, THEN THE SOLE BASIS OF DISALLOWANCE OF CLAIM AS A MATTER OF FACT DISAPPEARED. IT SHOULD BE REMEMBERED SUSPICION HOWSOEVER STRONG CANNOT TAKE THE PLACE OF EVIDENCE. THE CONFIRMATION FROM SHRI SWAPAN RANJAN DASGUP!A FORTIFIES THE CLA IM OF THE ASSESSEE FOR WEIGHTED DEDUCTION U/S. 35(1)(II) OF THE ACT. THE SOLE BASIS OF THE ADDITION/DISALLOWANCE BASED ON STATEMENT RECORDED ON OATH DURING SURVEY CANNOT BE A//OWED AS HELD BY HON'BLE SUPREME COURT IN KADER KHAN & SONS (SUPRA). MOREOVER, WE NOTE THAT IF THE AO WAS HELL BENT DETERMINED 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 SUPREME COURT IN ANDAMAN TIMBER (SU PRA). 11. IN THE LIGHT OF THE AFORESAID FACTS AND CIRCUMSTANCES, WE CANNOT SUSTAIN THE ORDER OF THE AUTHORITIES BELOW. THEREFORE, WE SET ASIDE THE 11 I.T.A. NO. 2040 /MUM/201 8 BORSAD TOBACCO CO. PVT. LTD. IMPUGNED ORDER AND DIRECT THE AO TO ALLOW THE DEDUCTION OFRS.26,28,5001 - U/S. 35(I) (II) OF THE ACT. 15. NOW, WE DEAL WITH THE ARGUMENTS OF ID DR FOR THE REVENUE. WE NOTE THAT THE SOLITARY GRIEVANCE OF THE ID DR FOR THE REVENUE IS THAT SINCE THE REGISTRATION HAD BEEN CANCELLED BY THE CBDT, WITH RETROSPECTIVE EFFECT THAT IS, WITH EFFECT FROM ISLAPRIL 2007, BY ISSU ING NOTIFICATION DATED 06.09.2016, FOR BOTH THE INSTITUTIONS VIZ: 'MATRIVANI' AND 'THE SCHOOL OF HUMAN GENETICS AND POPULATION HEALTH, THEREFORE THESE INSTITUTIONS ARE NOT ENTITLED TO CLAIM BENEFIT UNDER SECTION 35(1) (II) OF THE ACT. WE NOTE THAT THE WITH DRAWAL OF RECOGNITION U/S 35(L) (II) OF THE ACT IN THE HANDS OF THE PAYEE ORGANIZATIONS WOULD NOT AFFECT THE RIGHTS AND INTERESTS OF THE ASSESSEE HEREIN FOR CLAIM OF WEIGHTED DEDUCTION U/S 35(1 )(II) OF THE ACT, FOR THAT WE RELY ON THE JUDGMENT OF THE COOR DINATE BENCH, KOLKATA, IN THE CASE OF M/S MACO CORPORATION INDIA (P) LTD, ITA NO.161KOI1201 7, FOR ASSESSMENT YEAR 2013 - 14, WHEREIN 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 SECTION 21 OF THE 12 I.T.A. NO. 2040 /MUM/201 8 BORSAD TOBACCO CO. PVT. LTD. GENERAL 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 POWER OF CANCELLATION OF REGISTRATION FILL 01.1 0.2004; AND LASTLY. SECTION 21 OF THE GENERAL CLAUSES ACT HAS NO APPLICATION TO THE ORDER PASSED BY THE CIT UNDER SECTION 12A BECAUSE THE ORDER IS QUASI JUDICIAL IN NATURE AND IT IS FOR ALL THESE REASONS THE CIT HAD NO JURISDICTION TO CANCEL THE REGISTRATI ON 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 JUDGEMENT OF THE HON'BLE APEX COURT WOULD SQUARELY B E APPLICABLE TO THE FACTS OF THE INSTANT CASE. IN FACT THE ASSESSEE'S CASE HEREIN FALLS ON A MUCH BETTER FOOTING THAN THE FACTS BEFORE THE HON'BLE APEX COURT. IN THE CASE BEFORE HON'BLE APEX COURT, THE POWER OF CANCELLATION OF REGISTRATION US 12A OF THE AC T 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 REGISTRATION COULD HAPPEN. BUT IN THE INSTANT CASE, THERE IS ABSOLUTELY NO PROVISION FOR WITHDRAWAL OF RECOGNITION U/S 3 5 (I) (II) OF THE ACT. HENCE WE HOLD THAT THE WITHDRAWAL 13 I.T.A. NO. 2040 /MUM/201 8 BORSAD TOBACCO CO. PVT. LTD. OF RECOGNITION U/S 35(L) (II) OF THE ACT IN THE HANDS OF THE PAYEE ORGANIZATIONS WOULD NOT AFFECT THE RIGHTS AND INTERESTS OF THE ASSESSEE HEREIN FOR CLAIM OF WEIGHTED DEDUCTION U/S 35(1 )(H) OF THE ACT.' 16. IN VIEW OF THE AFORESAID FINDINGS IN THE FACTS AND CIRCUMSTANCES OF THE CASE AND RESPECTFULLY FOLLOWING THE VARIOUS JUDICIAL PRECEDENTS RELIED UPON HEREINABOVE, WE DIRECT THE ID AO TO GRANT DEDUCTION U/S 35(L) (II) OF THE ACT, IN THE SUM OF RS. 4 ,81,25,000/ - FOR A. Y, 2013 - 14 AND IN THE SUM OF RS. 10,50,00,0001 - , FOR A. Y. 2014 - 15, AS CLAIMED BY HIM UNDER SECTION 35(L) (II) OF THE ACT IN RESPECT OF THE AMOUNTS OF DONATIONS MADE TO TWO INSTITUTIONS VIZ. 'MATRIVANI INSTITUTE EXPERIMENTAL RESEARCH & EDUCATION' AND THE SCHOOL OF HUMAN GENETICS AND POPULATION HEALTH' ACCORDINGLY, THE GROUNDS 1 T 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 DECISION S 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 BY THE CBDT WITH RETROSPECTIVE EFFECT BY ISSUING NOTIFICATION AND, THEREFORE, THE ASSESS EE IS NOT ENTITLED TO BENEFIT 14 I.T.A. NO. 2040 /MUM/201 8 BORSAD TOBACCO CO. PVT. LTD. ULS.35(1 )(II) OF THE ACT. THE FACTS BEFORE US BEING MATERIALLY SAME INVOLVING THE SAME SCHOOL, NAMELY, 'THE SCHOOL OF HUMAN GENETICS AND POPULATION HEALTH', WE, THEREFORE, RESPECTFULLY FOLLOWING THE DECISIONS OF THE COORDINAT E BENCHES OF THE TRIBUNAL, HOLD THAT THE DEDUCTION 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 THE ASSESSEE FOR THE ASSESSMENT YEAR 2013 - 2014 (ITA NO.6672/ MUM/201 7) IS HEREBY ALLOWED. 6 . AFTER HAVING GONE THROUGH THE FACTS OF THE PRESENT CASE AS WELL AS CONSIDERING THE ORDERS PASSED BY REVENUE AUTHORITIES AND ORDER S OF THE COORDINATE BENCHES OF ITAT AS MENTIONED ABOVE , WE FIND THAT AS PER THE FACTS OF THE PRESENT CASE, ADMITTEDLY, THE ASSESSEE HAD GIVEN DONATION TO SHGPH, WHICH WAS AFTER THE DATE OF RECOGNITION OF SHGPH U/S 35(1)(II) OF THE ACT, BUT BEFORE THE DATE OF WITHDRAWAL OF SAID APPROVAL BY CBDT IN THE CASE OF SHGPH. NOW, TH E SHORT POINT FOR CONSIDERATION BEFORE US IS AS TO WHETHER THE ASSESSEE /DONAR COULD BE DENIED WEIGHTED DEDUCTION U/S 35(1)(II) OF THE ACT DUE TO THE SUBSEQUENT WITHDRAWAL OF RECOGNITION BY CBDT WITH RETROSPECTIVE EFFECT. WE FIND THAT THE ISSUE UNDER CONS IDERATION HAS ALREADY BEEN ADDRESSED /CONSIDERED 15 I.T.A. NO. 2040 /MUM/201 8 BORSAD TOBACCO CO. PVT. LTD. BY THE COORDINATE BENCH OF KOLKATA TRIBUNAL IN THE CASE OF DCIT VRS. MACO CORPORATION (I) PVT. LTD. IN ITA NO. 16/KOL/2017 DATED 14.03.18 FOR AY 2013 - 14 . 7. APART FROM THIS, LD. AR HAD ALSO PLACED ON THE DE CISIONS OF HONBLE SUPREME COURT IN THE CASE OF CIT VS CHOTATINGRAI TEA REPORTED IN (2003) 126 TAXMAN 399 (SC) DATED 29.10.2002 AND STATE OF MAHARASHTRA VS SURESH TRADING COMPANY REPORTED IN (1998) 1998 TAXMANN.COM 1747 (SC) DATED 7.2.1996 WHICH ARE SQUARE LY APPLICABLE TO THE FACTS OF THE INSTANT CASE BEFORE US. THE RATIO DECIDENDI OF THE SAID JUDGEMENTS ARE NOT BEING REPRODUCED HEREIN FOR THE SAKE OF BREVITY. IN ANY CASE, WE FIND THAT THE PROVISIONS OF SECTION 35(1)(II) OF THE ACT VIDE ITS EXPLANATION REPR ODUCED HEREINABOVE CLEARLY PROVES THAT THE DONOR (I.E ASSESSEE HEREIN) CANNOT BE AFFECTED DUE TO SUBSEQUENT WITHDRAWAL OF RECOGNITION WITH RETROSPECTIVE EFFECT. T HEREFORE , RESPECTFULLY FOLLOWING THE PROVISIONS OF THE ACT AND THE DECISION S OF THE COORDINATE BENCH ES OF ITAT AS MENTIONED ABOVE A ND IN ORDER TO MAINTAIN JUDICIAL CONSISTENCY AND JUDICIAL DISCIPLINE , WE APPLY THE SAME FINDINGS WHICH ARE APPLICABLE MUTATIS MUTANDIS IN THE PRESENT CASE. THEREFORE, WE DIRECT THE AO 16 I.T.A. NO. 2040 /MUM/201 8 BORSAD TOBACCO CO. PVT. LTD. TO GRANT DEDUCTION U/S 35(1)(II) OF THE ACT TO THE ASSESSEE AS CLAIMED BY HIM FOR THE YEAR UNDER CONSIDERATION. 7 . IN THE NET RESULT, THE APPEAL FILED BY THE ASSESSEE STA NDS ALLOWED WITH NO ORDER AS TO COST. ORDER PRONOUNCED IN THE OPEN COURT ON 17 TH JUNE , 2019. SD/ - SD/ - (RAJESH KUMAR ) (SANDEEP GOSAIN) ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI ; DATED : 17 . 0 6 .201 9 SR.PS. DHANANJAY / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT 3. ( ) / THE CIT(A) 4. / CIT - CONCERNED 5. , , / DR, ITAT, MUMBAI 6. / GUARD FILE / BY ORDER, . / (DY./ASSTT.REGISTRAR) , / ITAT, MUMBAI