Case Law Details
Haresh Acids and Chemicals Pvt Ltd Vs ITO (ITAT Ahmedabad)
Introduction: In a significant ruling, the Income Tax Appellate Tribunal (ITAT) in Ahmedabad addressed the contentious issue of bogus donation bills submitted for tax deduction claims under Section 35(1)(ii) of the Income Tax Act. The case, Haresh Acids and Chemicals Pvt Ltd vs. ITO, scrutinized the authenticity of donations claimed by the assessee for the Assessment Years 2013-14 & 2014-15. This article provides an in-depth analysis of the ITAT’s decision, its legal framework, and the broader implications for taxpayers and charitable institutions.
Detailed Analysis: The core dispute arose from the assessee’s claim of deductions amounting to Rs.8,75,000 for a donation of Rs.5,00,000 to the School of Human Genetics and Population Health (SHG&PH), a claim that the Income Tax Department challenged as bogus. The department’s scrutiny was prompted by a survey on SHG&PH, revealing that the institution engaged in providing bogus bills in the guise of donations, with funds allegedly routed back to donors through various means.
Key Points from the ITAT’s Decision:
1. Reassessment Proceedings: The ITAT examined the legality of the reassessment proceedings initiated under Section 147 of the Income Tax Act, concluding that the objections raised by the assessee were considered, and there was no violation of the principles of law governing such proceedings.
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