My client says the Explanation in s.35(1) protects him because the donee's approval was live on the day he paid. The department has the donee's own admission before the Settlement Commission that the money went back in cash. Is the statutory protection enough?
No. The Mumbai Bench held that once the Revenue demonstrates through cogent material that the payment was an accommodation entry, the onus shifts to the donor to establish the genuineness of his own transaction, and failure to discharge it disentitles him to the weighted deduction. CIT v Chotatingrai Tea was distinguished on the footing that there was no finding of fraud there, whereas here the institution had admitted before the Settlement Commission that it did no significant research and refunded the donations.
Decided by the ITAT (Shri Om Prakash Kant, Accountant Member and Shri Sandeep Singh Karhail, Judicial Member) on 2025-08-28, reported as ITA No. 3793/MUM/2024; Assessment Year 2014-15. It bears on section 35(1)(ii), section 133(6), section 12AA(3), section 250 of the Income Tax Act 1961, in Deductions & Disallowances, Evidence & Burden of Proof and Assessment & Scrutiny matters.
This is the Revenue-side authority in the s.35(1)(ii) bogus-donation line and it must be read against Ashokkumar Gokulchand Sananda, which allowed the deduction on the same donee. The difference is evidentiary, not statutory. What tipped this case were three things the assessee could not answer: the s.133(6) notice to the donee came back unserved, the donee had itself admitted the refund arrangement before the Settlement Commission, and the assessee had made no comparable donation in any earlier or later year. The Bench also took the aggressive position that coordinate Bench decisions rendered without the benefit of the Supreme Court's decision in Batanagar cannot be applied — which is how the department will meet a citation of the taxpayer line.
Binding on the AO and CIT(A) within the Tribunal's jurisdiction. Persuasive elsewhere.
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The assessee, a firm trading in dye-intermediates and pharmaceuticals, filed its return for AY 2014-15 on 1 November 2014 declaring Rs 15,53,930. During scrutiny it emerged that it had donated Rs 15,00,000 to the School of Human Genetics and Population Health and claimed a weighted deduction of Rs 26,25,000 under s.35(1)(ii). A notice under s.133(6) to the donee came back unserved, and the approval granted to the institution stood withdrawn by a Government of India notification dated 15 September 2016. The Assessing Officer disallowed the deduction. The CIT(A)/NFAC confirmed on 29 May 2024, relying on the Jaipur Bench in P.R. Rolling Mills (P.) Ltd. v. DCIT [(2018) 171 ITD 683] and the Kolkata Bench in Tarasafe International Pvt. Ltd. v. DCIT, ITA No. 261/Kol/2020 decided 7 March 2023, and recording that the assessee had made no donation in any earlier or later assessment year, and that the institution had accepted before the Settlement Commission for AYs 2012-13 to 2014-15 that it did not carry out significant research in the fields for which it was approved and that the donations received were refunded. Before the Tribunal the assessee relied on CIT v Chotatingrai Tea and on Mumbai Bench orders in ACIT v Ashitkumar Gunvantrai Shah and Ravindra Reshamwala allowing the deduction where the approval was valid on the date of donation. The appeal was filed one day late in the Registry's reckoning and was treated as within time because limitation expired on a Sunday.
The appeal was dismissed (para 7). The donation to the School of Human Genetics and Population Health was not a genuine contribution towards scientific research but part of an organised accommodation entry mechanism, and the disallowance of Rs 26,25,000 was upheld (paras 6 and 6.1). Once the Revenue demonstrates through cogent material that a donation was a mere accommodation entry, the onus shifts to the assessee to establish the genuineness of the transaction, and failure to do so disentitles it to the weighted deduction (para 5.2). Chotatingrai Tea was distinguished as a case where all statutory conditions were fulfilled and there was no finding of fraud (para 5.3).
The Bench proceeded from three admitted facts: the approval stood withdrawn by the notification of 15 September 2016; the institution had itself admitted before the Settlement Commission that it was engaged in accommodation entries and refunded donations in cash after retaining commission; and the transaction was therefore part of an organised fraud rather than a payment for scientific research (para 5.1). It adopted the shifting-onus rule from P.R. Rolling Mills and the analysis in Tarasafe International, which had read CIT (Exemption) v Batanagar Education and Research Trust [129 taxmann.com 30] as the Supreme Court's endorsement of the department's findings arising out of the survey on the same institution (para 5.2). It held Chotatingrai Tea distinguishable because the question there was only whether a subsequent withdrawal of approval could retrospectively affect a genuine donation, whereas here the investigation material, the Settlement Commission admissions and Batanagar established that the donations were a device (para 5.3). Contrary coordinate Bench orders were held inapplicable as rendered either without the benefit of Batanagar or on different facts, and the Bench added that the unserved s.133(6) notice, once put to the assessee, shifted the onus, particularly as the donee had itself admitted returning cash to donors (para 5.4).
we hold that the donation made by the assessee to SHG&PH was not a genuine contribution towards scientific research but part of an organised accommodation entry mechanism
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Handle my notice → Ask a CA on WhatsAppNo. The Mumbai Bench held that once the Revenue demonstrates through cogent material that the payment was an accommodation entry, the onus shifts to the donor to establish the genuineness of his own transaction, and failure to discharge it disentitles him to the weighted deduction. CIT v Chotatingrai Tea was distinguished on the footing that there was no finding of fraud there, whereas here the institution had admitted before the Settlement Commission that it did no significant research and refunded the donations. This was decided by the ITAT (Shri Om Prakash Kant, Accountant Member and Shri Sandeep Singh Karhail, Judicial Member) and bears on section 35(1)(ii), section 133(6), section 12AA(3), section 250 of the Income Tax Act 1961. It is reported as ITA No. 3793/MUM/2024; Assessment Year 2014-15. This is the Revenue-side authority in the s.35(1)(ii) bogus-donation line and it must be read against Ashokkumar Gokulchand Sananda, which allowed the deduction on the same donee. The difference is evidentiary, not statutory. What tipped this case were three things the assessee could not answer: the s.133(6) notice to the donee came back unserved, the donee had itself admitted the refund arrangement before the Settlement Commission, and the assessee had made no comparable donation in any earlier or later year. The Bench also took the aggressive position that coordinate Bench decisions rendered without the benefit of the Supreme Court's decision in Batanagar cannot be applied — which is how the department will meet a citation of the taxpayer line. If it applies to you, the first step is this: Anticipate the shifting onus: assemble contemporaneous material showing why this donee was chosen — board resolution, correspondence, site visit, the research being funded — not merely the receipt and the bank statement.
The assessee, a firm trading in dye-intermediates and pharmaceuticals, filed its return for AY 2014-15 on 1 November 2014 declaring Rs 15,53,930. During scrutiny it emerged that it had donated Rs 15,00,000 to the School of Human Genetics and Population Health and claimed a weighted deduction of Rs 26,25,000 under s.35(1)(ii). A notice under s.133(6) to the donee came back unserved, and the approval granted to the institution stood withdrawn by a Government of India notification dated 15 September 2016. The Assessing Officer disallowed the deduction. The CIT(A)/NFAC confirmed on 29 May 2024, relying on the Jaipur Bench in P.R. Rolling Mills (P.) Ltd. v. DCIT [(2018) 171 ITD 683] and the Kolkata Bench in Tarasafe International Pvt. Ltd. v. DCIT, ITA No. 261/Kol/2020 decided 7 March 2023, and recording that the assessee had made no donation in any earlier or later assessment year, and that the institution had accepted before the Settlement Commission for AYs 2012-13 to 2014-15 that it did not carry out significant research in the fields for which it was approved and that the donations received were refunded. Before the Tribunal the assessee relied on CIT v Chotatingrai Tea and on Mumbai Bench orders in ACIT v Ashitkumar Gunvantrai Shah and Ravindra Reshamwala allowing the deduction where the approval was valid on the date of donation. The appeal was filed one day late in the Registry's reckoning and was treated as within time because limitation expired on a Sunday. The matter was decided on 2025-08-28 by the ITAT (Shri Om Prakash Kant, Accountant Member and Shri Sandeep Singh Karhail, Judicial Member). On those facts the ITAT held as follows. The appeal was dismissed (para 7). The donation to the School of Human Genetics and Population Health was not a genuine contribution towards scientific research but part of an organised accommodation entry mechanism, and the disallowance of Rs 26,25,000 was upheld (paras 6 and 6.1). Once the Revenue demonstrates through cogent material that a donation was a mere accommodation entry, the onus shifts to the assessee to establish the genuineness of the transaction, and failure to do so disentitles it to the weighted deduction (para 5.2). Chotatingrai Tea was distinguished as a case where all statutory conditions were fulfilled and there was no finding of fraud (para 5.3).
The Bench proceeded from three admitted facts: the approval stood withdrawn by the notification of 15 September 2016; the institution had itself admitted before the Settlement Commission that it was engaged in accommodation entries and refunded donations in cash after retaining commission; and the transaction was therefore part of an organised fraud rather than a payment for scientific research (para 5.1). It adopted the shifting-onus rule from P.R. Rolling Mills and the analysis in Tarasafe International, which had read CIT (Exemption) v Batanagar Education and Research Trust [129 taxmann.com 30] as the Supreme Court's endorsement of the department's findings arising out of the survey on the same institution (para 5.2). It held Chotatingrai Tea distinguishable because the question there was only whether a subsequent withdrawal of approval could retrospectively affect a genuine donation, whereas here the investigation material, the Settlement Commission admissions and Batanagar established that the donations were a device (para 5.3). Contrary coordinate Bench orders were held inapplicable as rendered either without the benefit of Batanagar or on different facts, and the Bench added that the unserved s.133(6) notice, once put to the assessee, shifted the onus, particularly as the donee had itself admitted returning cash to donors (para 5.4). In the words reproduced by the source cited on this page: "we hold that the donation made by the assessee to SHG&PH was not a genuine contribution towards scientific research but part of an organised accommodation entry mechanism" The decision followed or applied P.R. Rolling Mills (P.) Ltd. v. DCIT [(2018) 171 ITD 683 (Jaipur)] — followed; Tarasafe International Pvt. Ltd. v. DCIT, ITA No. 261/Kol/2020, decided 7 March 2023 — followed; CIT (Exemption) v. Batanagar Education and Research Trust [129 taxmann.com 30 (SC)] — relied on; CIT v. Chotatingrai Tea [(2002) 258 ITR 529 (SC)] — distinguished.
It was decided by the ITAT on 2025-08-28 and is reported as ITA No. 3793/MUM/2024; Assessment Year 2014-15. Binding on the AO and CIT(A) within the Tribunal's jurisdiction. Persuasive elsewhere. A Tribunal decision binds the assessing officer and the Commissioner (Appeals) within that Tribunal's jurisdiction, and is persuasive before other benches. It is not binding on a High Court, and a contrary co-ordinate bench decision will be argued against you, so check whether the point has been taken the other way before you build a reply around it. On section 35(1)(ii), section 133(6), section 12AA(3), section 250, the practical question is whether the facts of your own notice match the facts of this case closely enough for the same rule to apply.
It helps the department, and it appears in this library for that reason — you need to know what the Assessing Officer will cite against you. The appeal was dismissed (para 7). The donation to the School of Human Genetics and Population Health was not a genuine contribution towards scientific research but part of an organised accommodation entry mechanism, and the disallowance of Rs 26,25,000 was upheld (paras 6 and 6.1). Once the Revenue demonstrates through cogent material that a donation was a mere accommodation entry, the onus shifts to the assessee to establish the genuineness of the transaction, and failure to do so disentitles it to the weighted deduction (para 5.2). Chotatingrai Tea was distinguished as a case where all statutory conditions were fulfilled and there was no finding of fraud (para 5.3). It arises in Deductions & Disallowances, Evidence & Burden of Proof and Assessment & Scrutiny matters, on section 35(1)(ii), section 133(6), section 12AA(3), section 250 of the Income Tax Act 1961, and was decided by Shri Om Prakash Kant, Accountant Member and Shri Sandeep Singh Karhail, Judicial Member. Before relying on it, read the source linked on this page and check whether it has since been distinguished, overruled or overtaken by an amendment to the Income Tax Act. In practice the steps that follow from it are these. Show a pattern: the absence of any donation in the preceding or succeeding year was expressly held against this assessee. Check whether the donee went before the Settlement Commission and what it admitted; that admission is what converts a general investigation report into case-specific material. If the Assessing Officer's s.133(6) enquiry to the donee came back unserved and was put to you, answer it on the record — the Bench treated the failure to respond as the moment the onus shifted. Where the facts are against you on genuineness, shift the argument to procedure: the denial of cross-examination under Andaman Timber Industries and the non-supply of the investigation report were the grounds that won in the Nagpur case.
Searched for later treatment; none was found. That is not the same as a source affirming it. Decided 28 August 2025; no appeal against it has been traced, and no decision applying, following or affirming it was found. It stands against the Nagpur Bench in Ashokkumar Gokulchand Sananda v. ACIT, ITA No. 427/NAG/2024, decided 6 April 2026, and against the Calcutta High Court in PCIT v. Maco Corporation India Pvt. Ltd., ITA/35/2021, decided 12 August 2022, which allowed the deduction on donations to the same institution. This Bench's answer to the High Court decision, at its paragraph 3.2 quoting Tarasafe, is that the Calcutta High Court decided without the Supreme Court's decision in Batanagar having been cited. That reasoning has not been tested by any High Court that could be located. The disagreement with the Nagpur Bench is between Tribunal benches, so this is not a case of High Courts differing; but a reader must be shown both orders. No source could be cited for that finding. Checking whether an authority still stands matters as much as knowing what it held: a decision may be overruled on one point and survive on another, or the provision it interprets may have been amended since. Read the source and the editor's note on this page before relying on it in a reply to an Assessing Officer or in an appeal.
Read in full from the plain /doc/ URL. The retrieved text is badly OCR-degraded, with doubled and broken words throughout ('stablish/establish', 'Rs.15,00,000/ 15,00,000/-', 'retrospec tively'); the single quotation used here was taken from a clean passage and checked word by word. The order has 7 numbered paragraphs, with sub-paragraphs 3.1, 3.2, 5.1 to 5.4 and 6.1, and the disposal at para 7. Paragraph 3.2 reproduces the CIT(A)'s order, which in turn reproduces paragraphs 39 to 44 of the Kolkata Bench decision in Tarasafe International Pvt. Ltd.; those numbers belong to Tarasafe and not to this order. The header describes the Bench as 'J (SMC)' yet names two Members, which is internally inconsistent for a single-member bench; the point is recorded because it was not resolvable from the report. The extract at para 3.2 spells Maco Corporation as 'Mackaw Corporation'. This library shows the verification state of every entry openly. This entry has not yet been read in full by a chartered accountant. The summary reflects the sources listed on this page. Read the source before you rely on it in a reply to an Assessing Officer or in an appeal before the Commissioner (Appeals) or the Income Tax Appellate Tribunal.
The appeal was dismissed (para 7). The donation to the School of Human Genetics and Population Health was not a genuine contribution towards scientific research but part of an organised accommodation entry mechanism, and the disallowance of Rs 26,25,000 was upheld (paras 6 and 6.1). Once the Revenue demonstrates through cogent material that a donation was a mere accommodation entry, the onus shifts to the assessee to establish the genuineness of the transaction, and failure to do so disentitles it to the weighted deduction (para 5.2). Chotatingrai Tea was distinguished as a case where all statutory conditions were fulfilled and there was no finding of fraud (para 5.3).
TaxSphere, “Chromex v DCIT-17(1), Mumbai”, https://taxnotice.vittsphere.com/caselaw/case/chromex-35-1-ii-onus-shifts-batanagar-accommodation-entry/ (validity last checked 2026-09-16)
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The CBDT cancelled my donee's s.35(1)(ii) approval with retrospective effect two years after I donated, and the reassessment has taken away my 175 per cent weighted deduction and added a notional commission. Does the deduction survive?
The CPC disallowed my s.80GGA deduction in the s.143(1) intimation because I have business income. Can I still get relief for the same donation under s.35(1)(ii), and can I raise it in a s.154 application?
Our trust was formed weeks ago and has done nothing yet. Can registration be refused for that?
The Commissioner has cancelled my trust's registration because some corpus donations are said to be bogus — can he do that when the money was actually spent on the trust's objects?
