Top Stories ITAT deletes deduction claimed u/s 35(1)(ii) of Income Tax Act towards Donation made to ineligible Scientific Research Trust [Read Order] By Aparna. M – On March 28, 2024 3:02 pm – 2 mins read The Ahmedabad bench Income Tax Appellate Tribunal ( ITAT ) deleted the deduction claimed under Section 35(1)(ii) of the Income Tax Act, 1961 towards donation made to the ineligible scientific research trust.

The assessee C K Zipper Private Limited after filing the return of income assessee case was selected for scrutiny. Subsequently, it was further found that the claim of the assessee in respect of deduction under Section 35(1)(ii) of the Act has been allowed by the  AO though on the basis of the false documents in respect of making donation to one Arvindo Institute of Applied Scientific Research Trust, which was earlier approved under Section 35(1)(ii) of the Act, but, subsequently, the same was expired on 31.03.2006.

On perusal of records it further found that the Trust has raised substantial donations over the last six years on the basis of forged document, since obtained, wherein the appellant was found to be one of the beneficiaries, claim of deduction whereof amounting to Rs.35,00,000/- was made. Accordingly the assessee case was reopened and completed the reassessment proceedings by making disallowance towards the expenditure of Rs. 20,00,000/- under Section 69C of the  Income Tax Act.

Aggrieved by the order assesee filed an appeal before the CIT( Appeal ). The CIT(A) dismissed the appeal filed by the assessee. Thereafter the assessee filed an appeal before the tribunal. The tribunal observed that the assessee claimed a weighted average deduction of Rs.15,00,000/- under Section 35(1)(ii) of the Act for A.Y. 2016-17 towards the donation made to scientific research trust. However, the earlier the trust was approved under Section 35(1)(ii) of the Act, the same expired on 31.03.2006. Thus, the entity is not recognized for the purpose of Section 35(1)(ii) of the Act and neither eligible to raise donations for undertaking scientific research.

Therefore the bench confirmed that the “claim made by the appellant on a wrong footing, particularly, when the donation was made to the entity which is not eligible to raise donation under Section 35(1)(ii) of the Income Tax Act, the CIT(A) upheld the order of disallowance of the claim made by the appellant by the AO which, in our considered opinion is just and proper”. After analyzing the submission of both parties, the two member  bench of Ramit Kochar, ( Accountant Member ) and Madhumita Roy, ( Judicial Member ) deleted the deduction claimed under Section 35(1)(ii) of Income Tax Act towards Donation made to ineligible Scientific Research Trust. B. K. Patel, counsel appearing for the assessee and Prasad Rao Waghe Annasaheb, Counsel appeared  for revenue