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?
The Ahmedabad Bench restored the matter to the Assessing Officer with a direction to examine the alternative claim under s.35(1)(ii) and to grant it if the assessee is found eligible. The Bench proceeded on the footing, recorded from the intimation, that s.80GGA is not available where the assessee has business income, and held that the authorities should assist an assessee in claiming eligible deductions rather than punish him for a bona fide mistake.
Decided by the ITAT (Shri Sanjay Garg, Judicial Member (SMC Bench)) on 2026-01-09, reported as ITA No. 1112/Ahd/2025; Assessment Year 2021-22. It bears on section 80GGA, section 35(1)(ii), section 35, section 143(1), section 154, section 250 of the Income Tax Act 1961, in Deductions & Disallowances, Assessment & Scrutiny and Appeals matters.
The trap here is the one that catches most s.80GGA claims: the deduction is for donations to scientific research and rural development institutions, but it is not available to an assessee whose gross total income includes profits and gains of business or profession — such an assessee must claim under s.35 instead. The saving grace is that the same payment to the same institution can qualify under s.35(1)(ii), and this order shows the Tribunal willing to route the claim there even though it was raised only by way of a s.154 application and an alternative plea. It also shows that a CPC disallowance of a Chapter VI-A deduction at the s.143(1) stage is not the end of the matter.
Binding on the AO and CIT(A) within the Tribunal's jurisdiction. Persuasive elsewhere.
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The assessee made a donation of Rs 2,15,000 to The Gujarat Cancer Society and claimed the deduction under s.80GGA for AY 2021-22. The Assessing Officer disallowed the deduction in an intimation under s.143(1), on the ground that the assessee had business income and so could not obtain the deduction under s.80GGA as per the conditions laid down in that provision. The assessee then made an alternative claim, in an application under s.154, that the deduction be allowed under s.35(1)(ii) on the footing that The Gujarat Cancer Society is involved in scientific research and has been duly notified in that behalf. The alternative claim was rejected by the Assessing Officer and by the CIT(A)/NFAC, whose order under s.250 is dated 27 February 2025. The grounds before the Tribunal were that the CIT(A) had erred in rejecting the claim made in the s.154 application, had misconstrued s.154, and that the assessee was entitled to the deduction of Rs 2,15,000 under s.35.
The appeal was treated as allowed for statistical purposes (para 4). The matter was restored to the Assessing Officer with a direction to examine the assessee's claim to deduction of the amount paid to The Gujarat Cancer Society under s.35(1)(ii) and, if the assessee is found eligible, to grant the deduction accordingly (para 4).
The Bench did not disturb the finding that s.80GGA was unavailable because the assessee had business income. It reasoned instead from the duty of the authorities: it has been held time and again that income-tax authorities should charge legitimate taxes from citizens, the CBDT has issued instructions that Assessing Officers should assist assessees in claiming eligible deductions while assessing their income, and authorities should not punish assessees for bona fide mistakes but should assist them in making eligible claims of exemption or deduction. On that footing it declined to shut out the alternative claim on the ground that it had come by way of a s.154 application, and remitted it for examination on its merits (para 4).
The income-tax authorities should not punish the assessees for their bonafide mistakes, rather should assist the assessees in claiming the eligible claims of exemption/deductions, etc.
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Handle my notice → Ask a CA on WhatsAppThe Ahmedabad Bench restored the matter to the Assessing Officer with a direction to examine the alternative claim under s.35(1)(ii) and to grant it if the assessee is found eligible. The Bench proceeded on the footing, recorded from the intimation, that s.80GGA is not available where the assessee has business income, and held that the authorities should assist an assessee in claiming eligible deductions rather than punish him for a bona fide mistake. This was decided by the ITAT (Shri Sanjay Garg, Judicial Member (SMC Bench)) and bears on section 80GGA, section 35(1)(ii), section 35, section 143(1), section 154, section 250 of the Income Tax Act 1961. It is reported as ITA No. 1112/Ahd/2025; Assessment Year 2021-22. The trap here is the one that catches most s.80GGA claims: the deduction is for donations to scientific research and rural development institutions, but it is not available to an assessee whose gross total income includes profits and gains of business or profession — such an assessee must claim under s.35 instead. The saving grace is that the same payment to the same institution can qualify under s.35(1)(ii), and this order shows the Tribunal willing to route the claim there even though it was raised only by way of a s.154 application and an alternative plea. It also shows that a CPC disallowance of a Chapter VI-A deduction at the s.143(1) stage is not the end of the matter. If it applies to you, the first step is this: Before claiming s.80GGA, check whether the gross total income includes business or professional income; if it does, claim the same payment under s.35(1)(ii) instead.
The assessee made a donation of Rs 2,15,000 to The Gujarat Cancer Society and claimed the deduction under s.80GGA for AY 2021-22. The Assessing Officer disallowed the deduction in an intimation under s.143(1), on the ground that the assessee had business income and so could not obtain the deduction under s.80GGA as per the conditions laid down in that provision. The assessee then made an alternative claim, in an application under s.154, that the deduction be allowed under s.35(1)(ii) on the footing that The Gujarat Cancer Society is involved in scientific research and has been duly notified in that behalf. The alternative claim was rejected by the Assessing Officer and by the CIT(A)/NFAC, whose order under s.250 is dated 27 February 2025. The grounds before the Tribunal were that the CIT(A) had erred in rejecting the claim made in the s.154 application, had misconstrued s.154, and that the assessee was entitled to the deduction of Rs 2,15,000 under s.35. The matter was decided on 2026-01-09 by the ITAT (Shri Sanjay Garg, Judicial Member (SMC Bench)). On those facts the ITAT held as follows. The appeal was treated as allowed for statistical purposes (para 4). The matter was restored to the Assessing Officer with a direction to examine the assessee's claim to deduction of the amount paid to The Gujarat Cancer Society under s.35(1)(ii) and, if the assessee is found eligible, to grant the deduction accordingly (para 4).
The Bench did not disturb the finding that s.80GGA was unavailable because the assessee had business income. It reasoned instead from the duty of the authorities: it has been held time and again that income-tax authorities should charge legitimate taxes from citizens, the CBDT has issued instructions that Assessing Officers should assist assessees in claiming eligible deductions while assessing their income, and authorities should not punish assessees for bona fide mistakes but should assist them in making eligible claims of exemption or deduction. On that footing it declined to shut out the alternative claim on the ground that it had come by way of a s.154 application, and remitted it for examination on its merits (para 4). In the words reproduced by the source cited on this page: "The income-tax authorities should not punish the assessees for their bonafide mistakes, rather should assist the assessees in claiming the eligible claims of exemption/deductions, etc."
It was decided by the ITAT on 2026-01-09 and is reported as ITA No. 1112/Ahd/2025; Assessment Year 2021-22. 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 80GGA, section 35(1)(ii), section 35, section 143(1), section 154, 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 taxpayer. The appeal was treated as allowed for statistical purposes (para 4). The matter was restored to the Assessing Officer with a direction to examine the assessee's claim to deduction of the amount paid to The Gujarat Cancer Society under s.35(1)(ii) and, if the assessee is found eligible, to grant the deduction accordingly (para 4). It arises in Deductions & Disallowances, Assessment & Scrutiny and Appeals matters, on section 80GGA, section 35(1)(ii), section 35, section 143(1), section 154, section 250 of the Income Tax Act 1961, and was decided by Shri Sanjay Garg, Judicial Member (SMC Bench). 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. Confirm that the donee holds a notification under s.35(1)(ii) as well as whatever certificate it gave you — that is what made the alternative claim arguable here. If the CPC has already disallowed under s.143(1), raise the alternative claim by a s.154 application and carry it in appeal; do not treat the intimation as final. Rely on the Tribunal's own formulation that authorities should assist assessees in claiming eligible deductions and should not punish bona fide mistakes. Remember the anti-double-claim rule: a payment allowed under one head cannot also be claimed under another provision for the same or any other year.
Validity check could not be completed. Decided 9 January 2026; no appeal and no later decision considering it were traced on this pass. The disposal is a remand, so the entitlement under s.35(1)(ii) was not decided; the order establishes only that the alternative claim must be examined. 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; 4 numbered paragraphs. The reasoning, the direction to the Assessing Officer and the disposal are all inside para 4, and the closing sentence 'With the above observations, the appeal of the assessee is treated as allowed for statistical purposes' carries no paragraph number of its own. There is no para 5. The order is very short and does not itself reproduce or cite the sub-section of s.80GGA that bars the deduction where there is business income; at para 3 it records only that the Assessing Officer disallowed 'as per the conditions laid down in the aforesaid provisions'. The current text of s.80GGA could not be verified from a live departmental page on this pass — incometaxindia.gov.in/w/section-80gga carries a 'Year: 2000' stamp and is archived — so nothing is stated here beyond what the order records. The order does not state whether the Gujarat Cancer Society in fact holds a notification under s.35(1)(ii); that is precisely what the Assessing Officer was directed to examine. The grounds of appeal reproduced at para 2 refer to the claim as one 'u/s 35 of the act' while the body of the order refers to s.35(1)(ii). The order was pronounced the day after the hearing. 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 treated as allowed for statistical purposes (para 4). The matter was restored to the Assessing Officer with a direction to examine the assessee's claim to deduction of the amount paid to The Gujarat Cancer Society under s.35(1)(ii) and, if the assessee is found eligible, to grant the deduction accordingly (para 4).
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