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TMI Blog2016 (8) TMI 1134X X X X Extracts X X X X X X X X Extracts X X X X ..... ous account opened in the Axis Bank by way of donation was, in fact, transferred to real account maintained by the Society itself in State Bank of India. Therefore, it is obvious that the so-called Society for Welfare of Handicapped Persons, Durgapur, West Bengal is also a party to the fraudulent transaction for receiving donation. On identical set of facts, this Tribunal remitted back the matter to the file of the Assessing Officer to examine the matter further and to find out the action taken against the officials of the Axis Bank for opening such fraudulent account at Kolkata. The Assessing Officer was also directed to give an opportunity to the assessee to cross-examine the persons who are In-charge of Society at the relevant point ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... /- from M/s Megatrends Inc in which the assessee s husband was a partner and donated the same to M/s Society for Welfare of Handicapped Persons, Durgapur, West Bengal. According to the Ld. counsel, M/s Society for Welfare of Handicapped Persons, Durgapur, West Bengal was notified as a society eligible for deduction under Section 35(1)(iii) of the Incometax Act, 1961 (in short 'the Act'). The Assessing Officer, however, disallowed the claim of the assessee on the basis of the so-called communication said to be received from the Society informing that the Axis Bank opened an account with the help of some miscreants, including bank officials, in Prince Anwar Shah Road Branch, Kolkata. The Assessing Officer further found that the accoun ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ording to the Ld. counsel, the recipient-institution utilised the funds for which the approval was granted. The Ld. counsel placed her reliance on the judgment of Calcutta High Court in CIT v. M/s Bhartia Cutler Hammer Ltd. (1998) 232 ITR 785 and also judgment of Gauhati High Court in Chotatingrai Tea Estate Pvt. Ltd. v. CIT (1999) 236 ITR 644. According to the Ld. counsel, the Gauhati High Court in Chotatingrai (supra) followed the judgment of Calcutta High Court in Bhartia Cutler Hammer Ltd. (supra). The Ld.counsel further submitted that the judgment of Gauhati High Court was confirmed by the Apex Court in CIT v. Chotatingrai Tea Others (2002) 258 ITR 529. 4. On the contrary, Sh. P. Radhakrishnan, the Ld. Departmental Representative, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of them engaged in said activities for the purpose for which the institute was granted approval. Of course, the utilization of funds by the recipient-society may not be within the control of the assessee, but, it is the duty of the assessee to donate funds to an approved institution. In this case, even though the institution, to which the funds were donated, was approved one, the fact remains that the amount was credited in an account opened by fictitious persons in the name of the Society, therefore, according to the Ld. D.R., the real beneficiary is not the society approved under Section 35 of the Act. 6. The Ld. Departmental Representative further submitted that the Assessing Officer made an investigation in exercise of his power unde ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ies, there is no prohibition in the Income-tax Act to make donation to the societies approved under Section 35 of the Act. But, similar transactions were made by several persons in Chennai to the institution at Kolkata through Axis Bank and claimed deduction under Section 35 of the Act. The Axis Bank at Kolkata opened a fictitious account to give credit to this kind of transactions and subsequently the same was transferred to various other institutions and persons. In one such transaction, a Division Bench of this Tribunal found one credit in the fictitious account opened in the Axis Bank by way of donation was, in fact, transferred to real account maintained by the Society itself in State Bank of India. Therefore, it is obvious that the so ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e file of the Assessing Officer after observing as follows:- This Tribunal is of the considered opinion that when the society claims that they have no account in Axis Bank, how the funds were transferred from that account to State Bank of India account needs to be examined. Moreover, when the Assessing Officer received a letter dated 24.03.2014 from the society, the copy of the same shall be furnished to the assessee. Since the copy of the letter was not furnished, this Tribunal is of the considered opinion that there was violation of principles of natural justice. When the Assessing Officer received a letter from the recipient society claiming that they have no bank account in Axis Bank and the only one bank account is maintained with ..... X X X X Extracts X X X X X X X X Extracts X X X X
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