The Tax Publishers2020 TaxPub(DT) 1818 (Mum-Trib)

INCOME TAX ACT, 1961

Section 35(1)(ii)

Donation to an institution of which approval was withdrawn by prescribed authority with retrospective effect would not affect the assessee who gave donation. Assessee was entitled to rely upon the certificate granted to donee institution which was valid and subsisting when donation was made to it. Therefore, AO was directed to allow deduction as claimed under section 35(1)(ii).

Business deduction under section 35(1)(ii) - Expenditure on research and development - Donation to an institution of which approval was withdrawn by prescribed authority with retrospective effect -

Assessee claimed deduction under section 35(1)(ii) amounting to Rs. 60 lakh on account of donation given to Matravaini Institute of Experimental Research Education. AO noticed that CBDT vide its Letter F.No. 203/11/2015/ITA.II, dated 24-8-2016 had ordered for withdrawal of notification issued under section 35(1)(ii), granted to Matravaini Institute of Experimental Research Education with effect from 21-8-2007 and accordingly AO disallowed deduction. Held: Donation to an institution of which approval was withdrawn by prescribed authority with retrospective effect would not affect the assessee who gave donation. Assessee was entitled to rely upon the certificate granted to donee institution which was valid and subsisting when donation was made to it. Therefore, AO was directed to allow deduction as claimed under section 35(1)(ii).

Supported by:CIT v. Chotatingrai Tea & Ors. (2003) 126 Taxman 399 (SC) : 2002 TaxPub(DT) 1674 (SC), State of Maharashtra v. Suresh Trading Company (1998) 1998 taxmann.com 1747 (SC), Ramdas Maneklal Gandhi v. Union of India & Anr. (2000) 108 Taxman 590 (Bom) : 2000 TaxPub(DT) 0940 (Bom-HC)

REFERRED :

FAVOUR : in assessee's favour

A.Y. :

INCOME TAX ACT, 1961

Section 32(1)

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