The Learned Tribunal Has Allowed The Appeal Filed By The Assessee Byfollowing Its Earlier Decision In The Case Of Dcit v. M/S.maco Corporation [India]Pvt. Ltd. In Ita/16/2017 Dated 14.3.2018. Against The Said Decision, Therevenue Had Preferred Appeal In Ita/42/2020 Which Was Dismis

O - 46 IN THE HIGH COURT AT CALCUTTASPECIAL JURISDICTION (INCOME TAX)ORIGINAL SIDE ITAT/120/2021 IA NO:GA/2/2021PRINCIPAL COMMISSIONER OF INCOME TAX - 1, KOLKATAVS. TIRUPATI MEAL PRODUCERS [P] LTD. BEFORE : THE HON’BLE JUSTICE T.S. SIVAGNANAM AndTHE HON’BLE JUSTICE HIRANMAY BHATTACHARYYADate : AUGUST 12, 2022. Appearance :Mr. Vipul Kundalia, Adv.Mr. Anurag Roy, Adv. …for appellant.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 29.11.2019passed by the learned Income Tax Appellate Tribunal, “C” Bench, Kolkata[Tribunal] in I.T.A. No. 904/Kol/2019 for the assessment year 2014-2015. Therevenue has raised the following questions of law for consideration. a)Whether in the facts and circumstances of the case the LearnedIncome Tax Appellate Tribunal erred in law by ignoring the facts thatthe Central Government vide notification no.79/2016 dated 6.9.2016withdrew the recognition given to grant approval under section35[1][ii] of the Income Tax Act, 1961 of M/s. Herbicare Bio-HerbalResearch Foundation w.e.f. 1.4.2007 ? b) Whether in the facts and circumstances of the case the LearnedIncome Tax Appellate Tribunal was justified in deleting the disallowance made by the Assessing Officer in respect of the claim ofassessee regarding deduction under section 35[1][ii] of the IncomeTax Act, 1961 ? We have heard Mr. Vipul Kundalia, learned standing Counsel for theappellant and Mr. Subash Agarwal, learned counsel for the respondent. The learned tribunal has allowed the appeal filed by the assessee byfollowing its earlier decision in the case of DCIT vs. M/s.Maco Corporation [India]Pvt. Ltd. in ITA/16/2017 dated 14.3.2018. Against the said decision, therevenue had preferred appeal in ITA/42/2020 which was dismissed by judgmentdated 12.8.2022. The operative portion of the judgment reads as follows : “In our considered view, we need not travel this far todecide the substantial question of law in the case onhand as we are considering the case falling underSection 35 of the Act. In terms of Explanation toSection 35(1)(iii) of the Act, deductions to which theassessee is entitled to in respect of any sum paid to aresearch organisation, university etc. shall not bedenied merely on the ground that subsequent to thepayment of such sum by the assessee, the approvalgranted to the research organisation or university etc.has been withdrawn. This issue was considered by theHon’ble Supreme Court in the case of Commissioner ofIncome Tax vs. Chotatingrai Tea & Ors. reported in(2002) 258 ITR 529 (SC). The operative portion of thesaid decision is as follows:“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. The society had granted a certificate to the assessee whichhad also been approved by the prescribed authority. society 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 upbefore 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 in restoring 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 thedate 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.” In the light of the above decision, the appeal filed by the revenue has to benecessarily dismissed and, accordingly, the same is dismissed and substantialquestions of law are answered against the revenue. (T.S. SIVAGNANAM, J.) (HIRANMAY BHATTACHARYYA, J.) Pkd/GH