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TMI Blog2014 (1) TMI 979X X X X Extracts X X X X X X X X Extracts X X X X ..... - ITA No. 3494/Del. /2013 - - - Dated:- 15-1-2014 - Shri Joginder Singh And Shri B. C. Meena,JJ. For the Petitioner : Shri Ranjan Chopra, CA For the Respondent : Shri S. N. Bhatia, DR ORDER Per B. C. Meena, Accountant Member : This appeal filed by the assessee emanates from the order of CIT (Appeals)-XII, New Delhi dated 18.02.2013. 2. The assessee is running educational institutions. The assessee society was formed in 2002. The assessee society also got registered u/s 12AA of the Income-tax Act, 1961 vide Order No.2001-02/L-396/487 dated 02.07.2002. On the basis of the information received from Director of Income-tax (Investigation), New Delhi vide its letter dated 02.03.2006, the notice u/s 148 was issued. The information was that assessee has received accommodation entries in its bank account with Oriental Bank of Commerce, Faridabad and the following amounts were claimed to have been received :- Date Amount/Cheque No. Name of Entry Provider Bank of entry provider 27.09.2003 3,50,000/- 216018 Rudhra Tea P. Ltd. IndusInd., Preet Vihar 13.12.2004 5,00,000/- 735515 Shree Packers - do - The assessee has shown corpus donation received during the year of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rcumstances of the case, the learned CIT (A) has erred both on facts and in law in disallowing the exemption under Section 11 despite the assessee fulfilling all conditions and being eligible for the same. (iii) On the facts and circumstances of the case, the learned CIT (A) has erred both on facts and in law in making the abovesaid disallowance ignoring the fact that the exemption under Section 11 is available to an eligible assessee with respect to the application of income and not on the source of income. (iv) On the facts and circumstances of the case, learned CIT (A) has erred both on facts and in law in not computing the income of the assessee trust in accordance with the provisions of the section 11 (1A) of the Act whereby income to the extent it is applied towards charitable purposes is exempt. 4.(i) That learned CIT(A) have erred in law and on facts in treating the entire amount of Rs.1,31,13,000/-, received on account of corpus donation, as income from undisclosed sources u/s 68 of the Act more so when necessary ingredients of that section are missing. (ii) Without prejudice to the above and in the alternative learned CIT (A) has erred both on the facts and in law ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eport submitted by the Assessing Officer, the Assessing Officer has confirmed that certain donors were produced before him and their statements were also recorded. Many of the donors have also filed reply to the Assessing Officer. Therefore, making the addition of whole of the amount of the donations received by assessee was completely unjustified. The CIT (A) confirmed the addition without giving any specific findings with regard to these donations and without consideration the documents submitted. He also relied on the following decisions of various courts :- (i) ACIT vs. Surat City Gymkhana 300 ITR 214 (SC) : For the proposition that section 12A of the Income-tax Act, 1961 is relevant to charitable and religious trust where registration u/s 12A is a fait accompli to hold the Assessing Officer back from further probe into the objects of the trust. (ii) Hiralal Bhagwati vs. CIT 246 ITR 188 (Guj.) : For the proposition that once registration u/s 12A was granted, benefit to assessee under section 80G could not be denied. (iii) Director of Income Tax vs. Raunaq Education Foundation 294 ITR 76 (Delhi) : For the proposition that where the assessee is entitled to exemp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ertion of section 115BBC as well as section 13(7) of the Act which is applicable from Assessment Year 2007-08 while the assessee s case pertains to Assessment Year 2004-05. 7. On the other hand, ld. DR relied on the orders of the authorities below and submitted that the Assessing Officer issued letters u/s 133(6) of the Income-tax Act, 1961 to verify the genuineness of transactions but some of them returned back unserved by postal authorities with the remarks incomplete address . This fact was confronted with the assessee and asked to produce the donors along with their identities creditworthiness and genuineness of the transactions but assessee failed to prove genuineness of transactions, identity and credit worthiness of the donors. He relied on the orders of the authorities below. 8. We have heard both the sides on the issue. The Assessing Officer received information from Director of Income-tax (Investigation) with regard to two amounts received as accommodation entries by cheque, i.e., Rs.3,50,000/- from Rudhra Tea P. Ltd. vide cheque no.216018 dated 27.09.2003 and Rs.5 lacs from Shree Packers vide cheque no.735515 dated 13.12.2004. The Assessing Officer issued notice u ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1961. There is no allegation against the assessee that the assessee is not conducting its business as per the aims and objects of the society. Further, we do not find any merits in the observation of the authorities below that donations were not for corpus donation. The account for the assessee Trust shows that there was sufficient capital expenditure during the year which is much above the corpus donation received by the assessee. In view of these factual matrix, we find no justification in denying the benefit of section 11 to the assessee. We also got support from various decisions relied upon by the assessee wherein such issues have been considered and decided :- (i) ACIT Vs Surat City Gymkhana [200SJ 300 ITR 214 (SC) It was held in this case by the Apex Court that the registration of a trust under section 12A of the Income-Tax Act, 1961, once done is a fait accompili and the AO can not, thereafter, make further probe into the objects of the trust. (ii) Ahmedabad Urban Development Authority Vs Dy.DIT (E) [2011] 335 ITR 575 (Guj) It was held in this case that the granting of registration under section 12AA of the Act, denotes, as per the Legislative scheme, that the condi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... x. (ii) S.H. Gowda Charitable Trust [2006] 285 ITR 327 (Karn) The issue before the Hon. High Court in this case was grant of registration to a charitable trust, under section 12AA of the Act. It was, inter alia, held in this case that the authorities are required to satisfy themselves about the genuineness of the activities of the trust and how income derived from trust property is applied to charitable or religious purpose and not the nature of the activity by which the income was derived by the trust. (iii) DIT(E) Vs Keshav Social and Charitable Foundation [2005] 278 ITR 152 (Del) In this case, the assessee had furnished the list of donors. The AO disallowed the claim of exemption under section 11, stating that the assessee could not furnish details regarding the donors and that it was just a way of introducing unaccounted money into the books of the assessee trust and thus, treated the amount as cash credit under section 68 of the Act. The Tribunal held that because more than 75% of the donations received by the assessee was spent for charitable purposes, the addition was not justified. On appeal before the High Court, dismissing the appeal of the Department, it was he ..... X X X X Extracts X X X X X X X X Extracts X X X X
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