SURINDERSINGH J.NARULA,AHMEDABAD V. THE ITO, WARD-1(1)(3), AHMEDABAD

ITSSA 129/AHD/2025

AI Insights

The case involves Surindersingh J. Narula, an individual engaged in the business of software and support service, who appealed against the order of the Commissioner of Income Tax (Appeals)-12, Ahmedabad. The appeal was related to the disallowance of a deduction claim of Rs. 17,50,000 under section 35(1)(ii) of the Income Tax Act for a donation made to the School of Human Genetics & Population Health, Kolkata. The primary legal contention was whether the disallowance was valid given that the proceedings under section 153C, which were initiated based on seized documents, did not pertain to this issue. The Tribunal referenced a similar case, M/s Gujarat Agrochem. Pvt. Ltd., where relief was granted under similar circumstances.

• Counselvise Citation: [2026] 140 COUNSELVISE.COM (IT) 829843 (ITAT-AHMEDABAD)
• Duration Of Justice: 2 month(s) 17 day(s)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 15-01-2026
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: Ahmedabad
• Assessment Year: misc
• Appeal Filed On: 28-10-2025
• Other Referred Cases: M/s Gujarat Agrochem. Pvt. Ltd. (ITA No. 2224/Mum/2018 dated 11.06.2019)
• Laws Referred To: Income Tax Act
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RIGNESH DAS
• Assessee Lawyers: S N DIVETIA; SAMIR VORA; ARS
• Keywords: Retrospective amendment; Principle of natural justice; Opportunity of cross examination
• Section: 143(3)

Judgement Text

"IN THE INCOME TAX APPELLATE TRIBUNAL “C” BENCH, AHMEDABAD BEFORE MS. SUCHITRA RAGHUNATH KAMBLE, JUDICIAL MEMBER AND SHRI NARENDRA PRASAD SINHA, ACCOUNTANT MEMBER ITA No. 129/AHD/2025 Assessment Year:2013-14 Surindersingh J. Narula, 801, Shapath-2, Opp. Rajpath Club, S G Road, Bodakdev, Ahmedabad – 380015 [PAN – AALPN3552B] Vs. Income Tax Officer, Ward – (1) 3, Ahmedabad - 380015 (Appellant) (Respondent) Assessee by Shri S N Divetia, & Sri Samir Vora, ARs Revenue by Shri, Rignesh Das, CIT-DR Date of Hearing 07.01.2026 Date of Pronouncement 15 .01.2026 O R D E R PER NARENDRA PRASAD SINHA, ACCOUNTANT MEMBER: This appeal is filed by the assessee against the order of Commissioner of Income Tax (Appeals)-12, Ahmedabad [hereinafter referred to as ‘CIT(A)’] dated 30.09.2025 for the Assessment Year (A.Y.) 2013-14 in the proceeding u/s 143(3) r.w.s. 153C of the Income Tax Act. 2. The brief facts of the case are that the assessee is an individual and engaged in the business of software and support service. The return of income for A.Y. 2013-14 was filed on 04.06.2014 declaring income of Rs. 8,83,747/-. A proceedings u/s 153C was initiated in the case of assessee vide notice dated 30.10.2018 on the basis of information received from DCIT, Central Circle – 1(4), Ahmedabad that the seized Printed from counselvise.com ITA No. 129/Ahd/2025 Surindersingh J. Narula vs.ITO, A.Y 2013-14 2 documents in the case of H N Safal Group had a bearing on the income of the assessee. It transpired that the assessee had paid certain on- money to M/s. GSS Reality LLP for purchase of Unit No. 1002 in the commercial project of the group named ‘Solitaire Scheme’. The assessment u/s 143(3) r.w.s. 153C of the Act was completed on 27.12.2018 at total income of Rs. 26,33,750/- wherein addition of Rs.17,50,000/- was made on account of disallowance of claim of deduction u/s 35(1) of the Act. 3. Aggrieved with the order of the A.O, the assessee had filed an appeal before the first Appellate Authority, which was decided by Ld. CIT(A) vide the impugned order and the appeal of the assessee was dismissed. 4. Now the assessee is second appeal before us. The assessee has raised the following grounds of appeal: 1.1 The order passed by U/s.250 passed on 30.09.2025 for A.Y. 2013-14 by CIT(A)-12, Ahmedabad [for short CIT(A)\" upholding the disallowance of deduction u/s 35(1)(ii) of Rs. 17,50,000/- in respect of donation given to School of Human Genetics & Population Health, Kolkata (SHGPH) is wholly illegal, unlawful and against the principles of natural justice. 2.1 The Id. CIT(A), has grievously erred in law and or on facts in not appreciating fully and properly the explanation furnished and evidence produced by the appellant with regard to the validity of proceedings u/s 153C and disallowance of impugned donation. 2.2 There was gross violation of the principles of natural justice in as much as the appellant was not furnished the complete material, statements and other records relating to the impugned donation as well as the opportunity of cross examination of the Printed from counselvise.com ITA No. 129/Ahd/2025 Surindersingh J. Narula vs.ITO, A.Y 2013-14 3 concerned parties, so that the impugned assessment is liable to be quashed. 3.1 The Id.CIT(A) has grievously erred in law and or on facts in upholding the disallowance of deduction u/s 35(1)(ii) of Rs 17,50,000/ in respect of donation given to School of Human Genetics & Population Health. Kolkata (SHGPH). 3.2 That the in the facts and circumstances of the Id. CIT(A), ought not to have upheld the disallowance of deduction u/s 35(1)(ii) of Rs. 17,50,000/ in respect of donation given to School of Human Genetics & Population Health, Kolkata (SHGPH). 4.1 The Id. CIT(A) has grievously erred in law and or on facts in upholding that the proceedings initiated u/s 153C were not illegal and without jurisdiction, though the condition precedent were not satisfied 4.2 That the in the facts and circumstances of the Id. CIT(A), ought not to have upheld that the proceedings initiated u/s 153C were not illegal and without jurisdiction, though the condition precedent were not satisfied 5. Shri. S N Divetia, Ld. A.R of the assessee submitted that the proceeding u/s 153C of the Act was initiated in the case of the assessee to examine the on-money payment of Rs.17,50,000/- by the assessee in respect of purchase of Unit No. 1002 in ‘Solitaire Scheme’. He explained that no addition was made by the A.O. in this regard while completing the assessment u/s 153C of the Act. Rather the A.O had disallowed the claim for deduction u/s 35(1)(ii) of the Act, which was not a subject matter of satisfaction recorded u/s 153C of the Act. According the Ld. Counsel, when no addition was made on the issue for which the proceeding u/s 153C was initiated in the case of the assessee, it was not open for the A.O. to make any other addition on the basis of other information. On merits also, the Ld. A.R submitted that no disallowance Printed from counselvise.com ITA No. 129/Ahd/2025 Surindersingh J. Narula vs.ITO, A.Y 2013-14 4 of donation u/s 35(1)(ii) was called for. He explained that the assessee had given donation of Rs. 10,00,000/- to School of Human Genetics and Population Health, Kolkata, in respect of which weighted deduction of Rs.17,50,000/- was claimed u/s 35(1)(ii) of the Act. He submitted that the approval accorded to school of Human Genetics and Population Health, Kolkata was withdrawn by the Central Government vide notification dated 15.09.2016 with effect from 01.04.2007, on the basis of which the A.O. had disallowed the claim. The Ld. A.R submitted that the identical facts were involved in the case of M/s Gujarat Agrochem. Pvt. Ltd., (ITA No. 2224/Mum/2018 dated 11.06.2019), wherein the Co- ordinate bench of Mumbai Tribunal had allowed relief. 6. Per contra, Shri. Rignesh Das, Ld CIT D.R, supported the order of the lower authorities. 7. We have considered the submissions of the assessee and the facts of the case. In the present case proceeding u/s 153C of the Act was initiated to examine the on-money payment of Rs.17,50,000/- made by the assessee on 01.07.2011 to M/S GSS Reality LLP in respect of purchase of Unit No. 1002 in the project ‘Solitaire Scheme’. It is found that no addition was made in respect of on-money payment in the assessment completed u/s 153C of the Act. The only addition made by the A.O in the order is in respect of disallowance of claim of Rs.17,50,000/- u/s 35(1) of the Act in respect of donation made to School of Human Genetics and Population Health, Kolkata. Thus, the addition made in assessment order was on an altogether different issue, in respect of which no reference is appearing in the satisfaction recorded Printed from counselvise.com ITA No. 129/Ahd/2025 Surindersingh J. Narula vs.ITO, A.Y 2013-14 5 u/s 153C of the Act. It is settled position of law that addition in respect of “other information” can be made in the proceeding u/s 153A/153C of the Act, only if certain addition is made on the basis of seized material. The Hon’ble Supreme Court in the case of Abhisar Buildwell (149 taxmann.com 399 (SC)) has held that no addition can be made in respect of completed assessments in the absence of any incriminating material. Further that in the absence of any incriminating material unearthed during the search, the AO would not have the jurisdiction to proceed in the unabated/completed year(s), only on the basis of other material. However, the completed/unabated assessments can be re- opened by the AO in exercise of powers under sections 147/148 of the Act, subject to fulfilment of the conditions as envisaged/mentioned under sections 147/148 of the Act, for considering the other material. 8. In the present case no addition was made in respect of the seized material based on which proceeding u/s 153C was initiated. In the absence of any addition on the basis of seized material, the A.O. was not empowered to consider any “other information” available with him to make the addition in the proceeding u/s 153C of the Act. Further, on merits also the addition of Rs.17,50,000/-, as made by the A.O u/s 35(1) of the Act, cannot be sustained. The Co-ordinate bench of Mumbai Tribunal in the case of M/s. Gujarat Agro Chem Pvt Ltd. (supra), wherein donation was made to school of Human Genetics and Population and Health Kolkata, had held that the claim of the assessee for deduction u/s 35(1)(ii) of the Act, cannot be affected due to subsequent withdrawal of recognition with retrospective effect. Following the decision of the co- Printed from counselvise.com ITA No. 129/Ahd/2025 Surindersingh J. Narula vs.ITO, A.Y 2013-14 6 ordinate bench, the addition made by the A.O also cannot be sustained on merits as well. 9. In view of the above facts and the legal position, the addition of Rs.17,50,000/- made on account of disallowance of claim u/s 35(1) of the Act, is deleted. The grounds taken by the assessee are allowed. 10. In the result, the appeal of the assessee is allowed. Order pronounced in the Court on 15/01/2026 at Ahmedabad. Sd/- Sd/- (SUCHITRA KAMBLE) (NARENDRA PRASAD SINHA) Judicial Member True Copy Accountant Member Dated - 15th January, 2026 Neelesh आदेश आदेश आदेश आदेश क\u0002 क\u0002 क\u0002 क\u0002 \u0003ितिलिप \u0003ितिलिप \u0003ितिलिप \u0003ितिलिप अ ेिषत अ ेिषत अ ेिषत अ ेिषत/Copy of the Order forwarded to : 1. अपीलाथ\u0007 / The Appellant 2. \b यथ\u0007 / The Respondent. 3. संबंिधत आयकर आयु / Concerned CIT 4. आयकर आयु (अपील) / The CIT(A) 5. िवभागीय \bितिनिध, आयकर अपीलीय अिधकरण / DR, ITAT, 6. गाड\u0014 फाईल /Guard file. आदेशानुसार आदेशानुसार आदेशानुसार आदेशानुसार/BY ORDER, उप उप उप उप/सहायक सहायक सहायक सहायक पंजीकार पंजीकार पंजीकार पंजीकार (Dy./Asstt.Registrar) आयकर आयकर आयकर आयकर अपीलीय अपीलीय अपीलीय अपीलीय अिधकरण अिधकरण अिधकरण अिधकरण, अहमदाबाद अहमदाबाद अहमदाबाद अहमदाबाद / ITAT, Ahmedabad Printed from counselvise.com "