F.No. 225/351/2018-ITA (II)
Government of India
Ministry of Finance
Department of Revenue
Central Board of Direct Taxes
Room N0. 245A, North Block
New Delhi, the 14th December, 2018
All Principal Chief Commissioners of Income Tax
All Director Generals of Income Tax (Investigation)
Kindly refer to the subject mentioned above.
2. In this connection, I am directed to state that Section 35(1)(ii) of the Income-tax Act,1961 (‘Act’) prescribes a weighted deduction @ 150% (175% before 01.04.2018) to a donor for any sum paid to an approved ‘research association having as its sole object the undertaking of scientific research or to a ‘university, college or other institution’ for carrying out scientific research. Very recently, Board has received several references from the field authorities for clarifying whether a Trust namely M/s Shri Arvindo Institute of Applied Scientific Research Trust (PAN:AAFTS7349D) (Hereinafter ‘the Trust’) having offices at Mumbai & Puducherry is an entity specified by the Central Government through a Notification for purposes of section 35(l)(ii} of the Act or not. Presently, the trust is assessed with CIT(Exemption), Mumbai.
3. In this regard, upon perusal of records,it emerges that the above Trust was earlier approved under section 35(1}(ii} of the Act which expired on 31.03.2006. Thereafter ,this entity, being not recognized for purpose of section 35(1)(ii) of the Act, is not eligible to raise donations for undertaking scientific research however, the Trust has raised substantial donations over the last six years on the basis of a forged certificate while the donors have irregularly claimed weighted deduction u/s. 35(1)(ii) of the Act on donations made to the Trust.
4. In view of above, I am directed to state that the pending scrutiny assessment cases of donors who have claimed irregular weighted deduction u/s 35(1)(ii) should be handled in light of above facts. In case of donors whose cases are presently not under scrutiny,the Board desires that a list of donors who had provided funds to the Trust u/s 35(1}(ii) of the Act should be drawn by CIT (Exemption}, Mumbai for the period from A.Y 2012-13 to 2018-19 and circulated to the concerned field authorities expeditiously.
5. I am further directed to state that while handling investigations/ enquiries in these cases, the concerned Assessing Officer should examine the specific transactions related to the sum donated and cash trail should be clearly identified. Also, various provisions pertaining to enquiry and investigation under the Act should be effectively used and assessment orders should be passed under the monitoring of supervisory authorities.
6. This issues with approval of Member (IT&C), CBDT.
Yours faithfully ,
Under Secretary (ITA.II)