Rimjhim Vanijya Pvt. Ltd, Kolkata v. ITO, Ward-1(1), Kolkata, Kolkata

ITA 274/KOL/2019 | 2014-2015
Pronouncement Date: 13-11-2019 | Result: Allowed

Appeal Details

RSA Number 27423514 RSA 2019
Assessee PAN AADCR2514C
Bench Kolkata
Appeal Number ITA 274/KOL/2019
Duration Of Justice 8 month(s) 28 day(s)
Appellant Rimjhim Vanijya Pvt. Ltd, Kolkata
Respondent ITO, Ward-1(1), Kolkata, Kolkata
Appeal Type Income Tax Appeal
Pronouncement Date 13-11-2019
Appeal Filed By Assessee
Order Result Allowed
Bench Allotted B
Tribunal Order Date 13-11-2019
Last Hearing Date 31-10-2019
First Hearing Date 31-10-2019
Assessment Year 2014-2015
Appeal Filed On 15-02-2019
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL B BENC H KOLKATA BEFORE SHRI S.S.GODARA JM &DR. A.L.SAINI AM ./ITA NO.274/KOL/2019 ( / ASSESSMENT YEAR: 2014-15) RIMJHIM VANIJYA PVT. LTD. 8/1 LAL BAZAR STREET KOLKATA- 700001 VS. ITO WARD-1(1) KOLKATA ./ ./PAN/GIR NO.: AADCR 2514 C (APPELLANT) .. (RESPONDENT) APPELLANT BY : SHRI ARYAN KOCHAR ADVOCATE RESPONDENT BY : SMT. RANU BISWAS ADDL. CIT / DATE OF HEARING : 31/10/2019 /DATE OF PRONOUNCEMENT : 13/11/2019 / O R D E R PER BENCH: THE CAPTIONED APPEAL FILED BY THE ASSESSEE PE RTAINING TO ASSESSMENT YEAR 2014-15 IS DIRECTED AGAINST THE ORDER PASSED BY TH E COMMISSIONER OF INCOME TAX (APPEAL)-6 KOLKATA IN APPEAL NO. CIT(A) KOLKATA-6 /10161/18-19 WHICH IN TURN ARISES OUT OF AN ASSESSMENT ORDER PASSED BY THE ASS ESSING OFFICER U/S 143(3) OF THE INCOME TAX ACT 1961 (IN SHORT THE ACT) DATED 31/12/2016. 2. IN THIS APPEAL THE ASSESSEE HAS RAISED A MULTI PLE GROUNDS OF APPEAL BUT AT THE TIME OF HEARING THE SOLITARY GRIEVANCE OF THE ASSE SSEE HAS BEEN CONFINED TO THE ISSUE THAT THE ASSESSING OFFICER AS WELL AS LD. CIT (A) DENIED THE DEDUCTION U/S M/S RIMJHIM VANIJYA PVT. LTD. . ITA NO.274/KOL/2019 ASSESSMENT YEAR:2014-15 P PP PA AA AG GG GE EE E | || | 2 22 2 35(1)(II) OF THE ACT IN RESPECT OF DONATION OF RS. 20 00 000/- MADE TO THE SPECIFIED INSTITUTION. 3. WHEN THIS APPEAL WAS CALLED OUT FOR HEARING THE LD. COUNSEL FOR THE ASSESSEE INVITED OUR ATTENTION TO THE ORDER DATED 27/07/2018 PASSED BY THE TRIBUNAL IN THE CASE OF NARBHERAM VISHRAM IN I.T.A. NOS. 42&43/KOL/ 2018 FOR ASSESSMENT YEAR 2013-14 & 2014-15 WHEREBY THE ISSUE OF DONATION U/ S 35(1)(II) HAVE BEEN DISCUSSED AND ADJUDICATED IN FAVOUR OF THE ASSESSEE . THE LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE PRESENT ISSUE IS SQUARE LY COVERED BY THE ABOVE SAID ORDER OF THE TRIBUNAL A COPY OF WHICH IS ALSO PLAC ED BEFORE THE BENCH. 4. THE LD. DR RELIED UPON THE ORDERS OF THE AUTHORI TIES BELOW. 5. WE SEE NO REASON TO TAKE ANY OTHER VIEW OF THE MATTER THEN THE VIEW SO TAKEN BY THE DIVISION BENCH OF THIS TRIBUNAL IN THE CASE OF NARBHERAM VISHRAM VIDE ORDER DATED 27/07/2018. IN THIS ORDER THE TRIBUNAL HAS I NTER ALIA OBSERVED AS UNDER: 13. WE HAVE GIVEN A CAREFUL CONSIDERATION TO THE R IVAL SUBMISSIONS AND PERUSED THE MATERIALS AVAILABLE ON RECORD WE NOTE THAT THE ASSESSEE HAS CHALLENGED DISALLOWANCE OF WEIGHTED DEDUCTION OF RS.4 81 25 00 0/- FOR A.Y. 2013-14 AND DISALLOWANCE OF WEIGHTED DEDUCTION OF RS.10 50 00 0 00/- FOR A.Y. 2014-15 CLAIMED BY HIM UNDER SECTION 35(1)(II) OF THE ACT I N RESPECT OF THE AMOUNTS OF DONATIONS MADE TO TWO INSTITUTIONS VIZ. MATRIVANI INSTITUTE EXPERIMENTALRESEARCH & EDUCATION (HEREINAFTER REFERRED TO AS MATRIVANI ) AND THE SCHOOL OF HUMANGENETICS AND POPULATION HEALTH (HEREINAFTER R EFERRED TO AS SHG). THE ASSESSEE FIRM IN A.Y. 2014-15 MADEDONATION OF RS 2 00 00 000/ TO MATRIVANI AND RS 4 00 00 000/ TO SHG AND CLAIMED WEIGHTED DED UCTION OF RS.10 50 00 000 UNDER SECTION 35(1)(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 0 0 000) DONATED TO THESE TWO INSTITUTES WHICH WERE APPROVED BYTHE CENTRAL GOVERN MENT FOR THE PURPOSES OF SECTION 35(L)(II) OF THE ACT READ WITH RULE 5C AND5 E 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 AC T WHICH IS 175% OF THE AMOUNT OF DONATION BEING THE SUM OF RS.2 75 00 000/- IN RE SPECT OF THE DONATION GIVEN TO THE SCHOOL OF HUMANGENETICS AND POPULATION HEALTH . WE NOTE THAT THE NOTIFICATIONS TO THIS EFFECT THAT THESE TWO INSTIT UTIONS VIZ: MATRIVANI AND SHG WERE APPROVED BY THE CENTRAL GOVERNMENT FOR THE PUR POSE OF SECTION 35 (1) (II) OF THE ACT WAS PUBLISHED IN THEGAZETTE OF INDIA. HOWEV ER 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 WING O F KOLKATA THAT THE SAID DONATIONS WERE BOGUS. THE REASONS STATED THEREIN I N SHORT WERE THAT STATEMENTS M/S RIMJHIM VANIJYA PVT. LTD. . ITA NO.274/KOL/2019 ASSESSMENT YEAR:2014-15 P PP PA AA AG GG GE EE E | || | 3 33 3 OF SOME KEY PERSONS OF THESE TWO DONEE INSTITUTIONS WERE RECORDED BY THE INVESTIGATION AUTHORITY IN COURSE OF SURVEY PROCEED INGS IN THEIR CASES. THE SAID KEY PERSON IN THEIR STATEMENTS ACCEPTED TO HAVE R ECEIVED DONATIONS FROM VARIOUS ENTITIES IN LIEU OF CASH RETURNED TO THEM AFTER DED UCTING COMMISSION THERE FROM. 14.WE NOTE THAT DURING THE COURSE OF HEARING BEFO RE US THE LD COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE SUMS PAID TO 'MATRIVAN I' AND 'SHG WERE GENUINE DONATIONS AND BOTH OF THE INSTITUTIONS WERE ADMITTE DLY REGISTERED UNDER SECTION 12A OF THE INCOME TAX ACT 1961. WE NOTE THAT BOTH OF THE SAID TWO INSTITUTIONS VIZ 'MATRIVANI' AND 'SHG' ARE SCTENTIFIC RESEARCH ASSOCIATION APPROVED AS SUCH BY CENTRAL GOVERNMENT UNDER SECTION 35(1)(II) OF THE INCOME TAX ACT 1961 VIDE NOTIFICATION BEARING NO. 229/2007 (F.NO.203/1 35/2007/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 GAZE TTE 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 OF 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 EXTRA CTS OF WHICH WAS PROVIDED TO THE ASSESSEE IN THE SHOW CAUSE NOTICE THE NAME OF THE ASSESSEE FIRM DOES NOT APPEAR ANYWHERE. IT IS TO BE NOTED THAT NONE OF THOSE PERS ONS IMPLICATE THE ASSESSEE TO HAVE MADE BOGUS DONATIONS AND THAT CASH WAS PAID TO THE DONORS ASSESSEE IN LIEU 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 ASSESSING OFFICER DID NOT ALLO W OPPORTUNITY OF CROSS EXAMINATION. WE NOTE THAT IN ABSENCE OF OPPORTUNITY OF CROSS-EXAMINATION NO RELIANCE COULD BE MADE ON SUCH STATEMENTS TO DRAW A NY ADVERSE INFERENCE AGAINST THE ASSESSEE FIRM. THE ASSESSEE FIRM DENIED ITS KNO WLEDGE OF THE STATEMENTS MADE BY THESE INSTITUTES WHICH WERE RELIED ON BY THE INV ESTIGATION WING AND THE 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 HONBLE DELHI HIGH COURT IN THE CASE OF CIT VS. DHARAM PAL PREM CHAND LTD. [2007] 295 ITR 105 108 (DEL).WE NOTE TH AT ON IDENTICAL FACTS THE SIMILAR PROPOSITION WASUPHELD BY THE COORDINATE BEN CH OF KOLKATA IN THE CASE OF RAJDA POLYMERS 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 CIRCUM STANCES THAT THE AO GOT SWAYED AWAY WITH THE STATEMENT RECORDED ON OATH OF MR. SWAPAN RANJAN DASGUPTA DURING SURVEY CONDUCTED AT THE PREMISES OF M/S. HERBICURE. WE HAVE REPRODUCED QUESTION NO. 22 AND 23 AND ANSWERS GIVEN BY SHRI SWAPAN RANJAN DASGUPTA WHEREIN HE ADMITS TO PROVIDE ACCOMMODATIO N ENTRIES IN LIEU OF CASH. THIS INFORMATION WE SHOULD SAY CAN BE THE TOOL TO S TART AN INVESTIGATION WHEN THE ASSESSEE MADE THE CLAIM FOR WEIGHTED DEDUCTION. THE GENERAL STATEMENT OF SHRI SWAPAN RANJAN DASGUPTA AGAINST DONATION MADE THE CL AIM OF ASSESSEE FOR DEDUCTION SUSPICIOUS. HOWEVER WHEN THE AO INVESTIG ATED SHRI SWAPAN RANJAN DASGUPTA HAS CONFIRMED THAT M/S. HERBICURE WAS IN R ECEIPT OF THE DONATION AND IT HAS NOT GIVEN ANY REFUND IN CASH THEN THE SOLE BAS IS 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 DASGUPTA FORTIFIES THE CLAIM OF THE ASSESSEE FOR WE IGHTED DEDUCTION U/S. 35(1)(II) OF THE ACT. THE SOLE BASIS OF THE ADDITION/DISALLOW ANCE BASED ON STATEMENT RECORDED ON OATH DURING SURVEY CANNOT BE ALLOWED AS HELD BY HON'BLE SUPREME M/S RIMJHIM VANIJYA PVT. LTD. . ITA NO.274/KOL/2019 ASSESSMENT YEAR:2014-15 P PP PA AA AG GG GE EE E | || | 4 44 4 COURT IN KADER KHAN & SONS (SUPRA). MOREOVER WE NO TE THAT IF THE AO WAS HELL BENT DETERMINED TO DISALLOW THE CLAIM OF THE ASSESS EE 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 (SUPRA). 11. IN THE LIGHT OF THE AFORESAID FACTS AN D CIRCUMSTANCES WE CANNOT SUSTAIN THE ORDER OF THE AUTHORITIES BELOW. THEREFO RE WE SET ASIDE THE IMPUGNED ORDER AND DIRECT THE AO TO ALLOW THE DEDUCTION OF R S.26 28 500/- U/S. 35(1)(II) OF THE ACT. 15. NOW WE DEAL WITH THE ARGUMENTS OF LD DR FOR TH E REVENUE. WE NOTE THAT THE SOLITARY GRIEVANCE OF THE LD DR FOR THE REVENUE IS THAT SINCE THE REGISTRATION HAD BEEN CANCELLED BY THE CBDT WITH RETROSPECTIVE EFFEC T THAT IS WITH EFFECT FROM 1ST APRIL 2007 BY ISSUING NOTIFICATION DATED 06.09.201 6 FOR BOTH THE INSTITUTIONS VIZ: MATRIVANI AND THE SCHOOL OF HUMANGENETICS AND PO PULATION HEALTH THEREFORE THESE INSTITUTIONS ARE NOT ENTITLED TO CL AIM BENEFIT UNDER SECTION 35 (1) (II) OF THE ACT. WE NOTE THAT THE WITHDRAWAL OF REC OGNITION U/S 35(1)(II) OF THE ACT IN THE HANDS OF THE PAYEE ORGANIZATIONS WOULD NOT A FFECT THE RIGHTS AND INTERESTS OF THE ASSESSEEHEREIN FOR CLAIM OF WEIGHTED DEDUCTION U/S 35(1)(II) OF THE ACT FOR THAT WE RELY ON THE JUDGMENTOF THE COORDINATE BENCH KOL KATA IN THE CASE OF M/S MACO CORPORATION INDIA (P) LTD ITA NO.16/KOL/2017 FOR ASSESSMENT YEAR 2013- 14 WHEREIN IT WAS HELD AS FOLLOWS: 29. ALL THE T HREE HIGH COURTS AFTER EXAMINING THE ISSUE IN THE LIGHT OF THE OBJECT OF SECTION 12A OF THE ACT AND SECTION 21 OF THE GENERAL CLAUSES ACT HELD THAT THE ORDER O F 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 REGIS TRATION TILL 01.10.2004; AND LASTLY SECTION 21OF THE GENERAL CLAUSES ACT HAS NO APPLICATION TO THE ORDER PASSED BY THE CIT UNDER SECTION 12A BECAUSE THE ORD ER IS QUASI JUDICIAL IN NATURE AND IT IS FOR ALL THESE REASONS THE CIT HAD NO JURI SDICTION TO CANCEL THE REGISTRATION CERTIFICATE ONCE GRANTED BY HIM UNDER SECTION 12A TILL THE POWER WAS EXPRESSLY CONFERRED ON THE CIT BY SECTION 12AA(3) O F 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 HEREIN FALLS ON A MUCH BETTER FOOTI NG 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 ACT WAS CONFERRED BY THE ACT ON THE LD CIT W.E.F. 1.10.2004 AND THE HON'BLE APEX COURT HEL D THAT PRIOR TO THAT DATE NO CANCELLATION OF REGISTRATION COULD HAPPEN. BUT IN T HE INSTANT CASE THERE IS ABSOLUTELY NO PROVISION FOR WITHDRAWAL OF RECOGNITI ON U/S 35(1)(II) OF THE ACT . HENCE WE HOLD THAT THE WITHDRAWAL OF RECOGNITION U/ S 35(1)(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 WEIGHTED DEDUCTION U/S 35(1)(II) OF THE ACT. 16.IN VIEW OF THE AFORESAID FINDINGS IN THE FACTS AND CIRCUMSTANCES OF THE CASE AND RESPECTFULLY FOLLOWING THE VARIOUS JUDICIAL PRE CEDENTS RELIED UPON HEREINABOVE WE DIRECT THE LD AO TO GRANT DEDUCTION U/S 35(1)(II) OF THE ACT IN THE SUM OF RS. 4 81 25 000/- FOR A.Y. 2013-14 AND IN TH E SUM OF RS.10 50 00 000/- FOR A.Y. 2014-15 AS CLAIMED BY HIM UNDER SECTION 35(1)( II) OF THE ACT IN RESPECT OFTHE AMOUNTS OF DONATIONS MADE TO TWO INSTITUTIONS VIZ. MATRIVANI INSTITUTE EXPERIMENTALRESEARCH & EDUCATION AND THE SCHOOL O F HUMANGENETICS 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 A SSESSEE FOR A.Y. 2014-15 ARE ALLOWED. M/S RIMJHIM VANIJYA PVT. LTD. . ITA NO.274/KOL/2019 ASSESSMENT YEAR:2014-15 P PP PA AA AG GG GE EE E | || | 5 55 5 6. AS THE ISSUE IS SQUARELY COVERED IN FAVOUR OF TH E ASSESSEE BY THE DECISION OF CO- ORDINATE BENCH IN THE CASE OF NARBHERAM VISHRAM (SU PRA) IN I.T.A. NOS. 42&43/KOL/2018 FOR A.Y. 2013-14 & 2014-15 AND THE RE IS NO CHANGE IN FACTS AND LAW AND THE REVENUE IS UNABLE TO PRODUCE ANY MATERI AL TO CONTROVERT THE ABOVE SAID FINDINGS OF THE CO-ORDINATE BENCH. THEREFORE RESPE CTFULLY FOLLOWING THE DECISION OF CO-ORDINATE BENCH WE ALLOW GROUND OF APPEAL RAIS ED BY THE ASSESSEE. 7. IN THE RESULT THE APPEAL OF THE ASSESSEE IS ALL OWED. ORDER PRONOUNCED IN THE COURT ON 13.1 1.2019 SD/- ( S.S.GODARA ) SD/- (A.L.SAINI) / JUDICIAL MEMBER / ACCOUNTANT MEMBER /KOLKATA; / DATE: 13/11/2019 ( SB SR.PS ) COPY OF THE ORDER FORWARDED TO: 1. RIMJHIM VANIJYA PVT. LTD. 2. ITO WARD-1(1) KOLKATA 3. C.I.T(A)- 4. C.I.T.- KOLKATA. 5. CIT(DR) KOLKATA BENCHES KOLKATA. 6. GUARD FILE. TRUE COPY BY ORDER ASSIST ANT REGISTRAR ITAT KOLKA TA BENCHES