Ita/16/2017 Dated 14.3.2018 The Previous Appeal Against This Order. Against Thesaid Order, The Revenue Preferred Appeal In Ita/42/2020 Which Was Dismissedby Jud v. Chotatingrai Tea & Ors. Reported In (2002) 258 Itr529 (Sc). The Operative Portion Of The Said Decision Is Asfollows

O - 47 IN THE HIGH COURT AT CALCUTTASPECIAL JURISDICTION (INCOME TAX)ORIGINAL SIDE ITA/35/2021 PRINCIPAL COMMISSIONER OF INCOME TAX - 4, KOLKATAVS. M/S. MACO CORPORATION INDIA PVT. LTD. BEFORE : THE HON’BLE JUSTICE T.S. SIVAGNANAM AndTHE HON’BLE JUSTICE HIRANMAY BHATTACHARYYADate : AUGUST 12, 2022. Appearance : Ms. Smita Das De, Adv. …for appellant. Mr. J. P. Khaitan, Sr. Adv.,Mr. Anil Kumar Dugar,Adv.Mr. R. Chatterjee,Adv.Mr. Subash Agarwal, Adv.……for respondent. The Court : This appeal filed by the revenue under Section 260A of theIncome Tax Act, 1961 (the Act) is directed against the order dated 13.4.2018passed by the learned Income Tax Appellate Tribunal, “B” Bench, Kolkata[Tribunal] in I.T.A. No. 378/Kol/2017 for the assessment year 2014-2015. Theappeal was admitted on 1.12.2021 to decide the following question of law: a)Whether on the facts and the circumstances of the case the LearnedIncome Tax Appellate Tribunal, “B” Bench, Kolkata erred in law bydeleting the disallowance of deduction under section 35(1) (ii) of theIncome Tax Act, 1961 of Rs.4,37,50,000/-?Income Tax Appellate Tribunal, “B” Bench, Kolkata erred in law bydeleting the disallowance of deduction under section 35(1) (ii) of theIncome Tax Act, 1961 of Rs.4,37,50,000/-?b)Whether the Learned Income Tax Appellate Tribunal, “B” Bench,Kolkata failed to appreciate the fact that the assessee company haddebited Rs.2,50,00,000/- on account of Scientific ResearchKolkata failed to appreciate the fact that the assessee company haddebited Rs.2,50,00,000/- on account of Scientific Research Organization donation made to the concern Organization i.e.Herbicure Healthcare Bio – Herbal Research Foundation and claimeddeduction u/s 35 (1) (ii) of Rs.4,37,50,000/- i.e. 175% ofRs.2,50,00,000/- which is not sustainable in the eye of law ? c) Whether the Learned Income Tax Appellate Tribunal, “B” Bench,Kolkata failed to apply its judicious consideration by completelyignoring the facts that donation was made to a bogus Organisationnot entitled to receive any donation for the purpose of being eligiblefor the eligible donations made by the assessee u/s 35 (i) (ii) of theAct. d)Whether the Learned Income Tax Appellate Tribunal, “B” Bench,Kolkata failed to appreciate that the assessee had received dividedincome and income distribution from Trust of Rs.36,00,000/- andRs.44,67,229/- respectively for the Financial Year 2013 – 2014 andclaimed the same as an exempt income when the assessee hadneither allocated any expenses u/s 14A of the Act nor bifurcated theinvestment between taxable income yielding investment and exemptincome yielding investment. e)Whether the conclusion arrived by the Learned Income Tax AppellateTribunal, “B” Bench, Kolkata in grantting relief to the Assessee isperverse and totally bad in law.Tribunal, “B” Bench, Kolkata in grantting relief to the Assessee isperverse and totally bad in law. We have heard Ms. Smita. Das De, learned standing Counsel for theappellant and Mr. J. P. Khaitan, learned senior counsel for the respondent. The learned tribunal while dismissing the revenue’s appeal in theimpugned order had followed its earlier decision in the assessee’s own case in ITA/16/2017 dated 14.3.2018 the previous appeal against this order. Against thesaid order, the revenue preferred appeal in ITA/42/2020 which was dismissedby judgment dated 12.8.2022. The operative portion of the judgment reads asfollows :- e)Whether the conclusion arrived by the Learned Income Tax AppellateTribunal, “B” Bench, Kolkata in grantting relief to the Assessee isperverse and totally bad in law.Tribunal, “B” Bench, Kolkata in grantting relief to the Assessee isperverse and totally bad in law. We have heard Ms. Smita. Das De, learned standing Counsel for theappellant and Mr. J. P. Khaitan, learned senior counsel for the respondent. The learned tribunal while dismissing the revenue’s appeal in theimpugned order had followed its earlier decision in the assessee’s own case in ITA/16/2017 dated 14.3.2018 the previous appeal against this order. Against thesaid order, the revenue preferred appeal in ITA/42/2020 which was dismissedby judgment dated 12.8.2022. The operative portion of the judgment reads asfollows :- “In our considered view, we need not travel this far todecide the substantial question of law in the case on hand aswe are considering the case falling under Section 35 of theAct. In terms of Explanation to Section 35(1)(iii) of theAct, deductions to which the assessee is entitled to inrespect of any sum paid to a research organisation,university etc. shall not be denied merely on the ground thatsubsequent to the payment of such sum by the assessee, theapproval granted to the research organisation or universityetc. has been withdrawn. This issue was considered by theHon’ble Supreme Court in the case of Commissioner of IncomeTax vs. Chotatingrai Tea & Ors. reported in (2002) 258 ITR529 (SC). The operative portion of the said decision is asfollows: “It is not in dispute that the assessees had madedonations to the Society for Integral Development,Calcutta, which had as its object the undertaking tocarry out approved programmes of rural development. Thesociety had granted a certificate to the assessee whichhad also been approved by the prescribed authority. According to the Revenue authorities theassessees were not entitled to deduction as claimeddespite the aforesaid because subsequently the approvalgranted by the prescribed authority was withdrawn withretrospective effect. It was also alleged that theassessees had received back the donation which had beenmade by them to the society. When the matter came up before the Tribunal at the instance of the assessees, theTribunal found, as a matter of fact that the assessee hadfulfilled all the conditions under section 35CCA of theAct for grant of deduction thereunder. The Tribunal alsofound that the assessees’ position could not be affectedby any subsequent withdrawal of the certificate grantedby the prescribed authority under section 35CCA but foundthat there was no evidence in support of the Revenue’scase that the assessees had received back the amountdonated by them to the society. However, the matter wasremanded back to the Assessing Officer for fresh disposalfor the purpose of determining whether the money had infact been utilised for an approved programme. Pursuant tothe directions of the High Court the following questionswere referred under section 256(2) of the Act (page 645): (1) Whether, on the facts and in the circumstancesof the case, the Tribunal having held that the assesseehave fulfilled all the conditions laid down in section35CCA of the Income-tax Act, 1961, read with rule 6AAA ofthe Income-tax Rules for deduction of the amount donatedto the approved society, which had not come back to theassessee soon after or later on in some form or theother, that the Tribunal was justified in law inrestoring the matter to the Assessing Officer on thereasons and grounds given in the order passed on appeal?(2) Whether, on the facts and in the circumstancesof the case, and in view of the findings of factsrecorded by the Tribunal on questions of facts arisingfor decision, the Tribunal was justified in law inholding that the entitlement of the assessee for claimingdeduction of the amount donated to the approved societywould depend upon the utilisation of such fund by theapproved society in the approved programme before the date specified in the section and on this basis onlyrestoring the matter to the Assessing Officer?” The High Court followed the reasoning of theCalcutta High Court in CIT v. Bhartia Culter Hammer Co.[1998] 232 ITR 785, and came to the conclusion that onceit was found that the assessees had fulfilled all theconditions which had been laid down under section 35CCAof the Act for claiming deduction of the amount donatedby it, there was no obligation on the part of theassessee to see that the amount was utilised for thepurpose for which it was donated. Furthermore, thededuction was allowed on the certificate furnished and itwas not for the assessee to show whether the institutionto which the money had been donated was carrying on therural development work, as envisaged under section 35CCAof the Act. In our view, the reasoning of the High Courtwhile answering the question referred to it in favour ofthe assessee is sound and calls for no interference.In the light of the above decision, we find the reasoninggiven by the tribunal to be just and proper and cannot beheld to be perverse. In the result, the appeal filed by therevenue (ITA/42/2020) is dismissed and the substantialquestion of law is answered against the revenue.” Thus, following the above decision substantial questions of law nos. 1, 2and 3 are answered against the revenue. So far as question of law no.4 is concerned, we find from the order of thelearned tribunal that the issue was remanded back to the assessing officer. Thus,we find there is no substantial question of law on the said issue. Accordingly, theappeal filed by the revenue is dismissed and the substantial question of law nos. 1 to 3 are answered against the revenue. The fourth substantial question of lawframed for consideration cannot be construed as a substantial question of law asthe matter has been remanded by the tribunal to the assessing officer for freshdecision. (T.S. SIVAGNANAM, J.) (HIRANMAY BHATTACHARYYA, J.) Pkd/GH