Parag Dave Vs DCIT (ITAT Ahmedabad)
Tax Deduction Denied to Assessee for Donation to Unapproved Research Body
Ahmedabad: The Income Tax Appellate Tribunal (ITAT), Ahmedabad bench, has upheld the disallowance of a tax deduction claimed by an individual, Parag Dave, for a donation made to Shri Arvindo Institute of Applied Scientific Research Trust. The tribunal ruled that the trust’s approval under Section 35(1)(ii) of the Income Tax Act, 1961, had expired well before the donation was made, rendering the contribution ineligible for the weighted deduction.
Parag Dave, engaged in the business of soil testing, building material testing, and land survey, had filed his income tax return for the Assessment Year 2017-18, declaring a total income of Rs. 56,55,070. During the scrutiny assessment, the Assessing Officer (AO) noted a claim for deduction of Rs. 54,25,000 under Section 35(1)(ii) of the Act. This claim represented 175% of a Rs. 31,00,000 donation made to Shri Arvindo Institute of Applied Scientific Research Trust.
Section 35(1)(ii) of the Income Tax Act allows for a weighted deduction for sums paid to an approved scientific research association, university, college, or other institution to be used for scientific research. The 1 approval for such institutions is granted by the prescribed authority, which historically has involved the Department of Scientific and Industrial Research (DSIR) in concurrence with the Director General of Income Tax (Exemptions). This approval is typically granted for a specified period.
