The Tribunal observed that the assessee has furnished all the relevant documents and details in support of its claim of deduction u/s 35(1)(iii) and 35AC of the Act, for contributions made in trusts/institutions, which were not controverted or found to be false by the AO. However, the AO had heavily relied on the report on statements recorded of third persons by the Investigation Wing, a copy of which was not provided to the assessee to rebut. The AO also did not provide an opportunity to the assessee to cross-examine such third parties. There was no independent application of mind by the AO. Therefore, it was held that the AO had violated the principles of natural justice and also did not fulfil its obligations under S. 142(3) of the Act. Reliance placed on CIT vs Andaman Timber Industries Ltd. [2015] 62 taxmann.com 3 (SC). (AY 2015-16)
Gajraj Tradecom Pvt. Ltd. v. DCIT (2023) 102 ITR 80 (SN)/200 ITD 74 (Kol)(Trib)
S. 35 : Expenditure on scientific research-Weighted deduction-Contribution towards research in social science or statistical research & Eligible projects-no opportunity to the assessee to rebut the reports of Investigation Wing on statements recorded of third party or to cross examine such third party-held, violation of principles of natural justice-Deduction allowed. [S. 35(1)(iii), 35AC]