Sakar Healthcare Ltd. Vs PCIT (ITAT Ahmedabad)
Assessee had claimed deduction u/s 80G for donations made to M/s. Aadhar Foundation – ₹14 lakhs in A.Y. 2020-21 & ₹28.50 lakhs in A.Y. 2021-22. AO, after scrutiny u/s 143(3), allowed the claims. Subsequently, PCIT invoked powers u/s 263, holding that Aadhar Foundation was found in search u/s 132 (conducted on 02.02.2021) to be engaged in a bogus donation racket, wherein donations were routed back to donors after charging commission. As AO failed to disallow such claim despite availability of adverse information, PCIT held the assessment orders to be erroneous & prejudicial to Revenue.
Assessee contended before Tribunal that it had genuinely donated funds, furnished receipts, & was unaware of any wrongdoings of the donee trust. It was argued that AO, being in possession of search findings during assessment, must be deemed to have applied his mind in allowing the deduction.
Tribunal, however, noted that AO had not made any specific enquiry regarding the donation in light of incriminating information on record. Once it stood established that Aadhar Foundation was providing accommodation entries in form of bogus donations, AO’s failure to examine deduction claim made the orders erroneous & prejudicial. The plea of “ignorance” of Assessee was rejected, as PCIT rightly observed that donation was not genuine & might have even been received back in cash. Accordingly, Tribunal upheld PCIT’s 263 orders for both years & dismissed Assessee’s appeals.
