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TMI Blog2018 (8) TMI 377X X X X Extracts X X X X X X X X Extracts X X X X ..... of the trust who has given the donation through cheque. The said donation was utilized for charitable activities. Therefore, the addition made by the AO and sustained by the ld. CIT(A) was no justified and accordingly the same is deleted. - decided in favour of assessee. - ITA No. 2497/Del/2013 - - - Dated:- 3-8-2018 - Sh. N. K. Saini, AM And Ms. Suchitra Kamble, JM Assessee by : Sh. Akhilesh Kumar, Adv Revenue by : Sh. Kaushlendra Tiwari, Sr. DR ORDER Per N. K. Saini, AM This is an appeal by the assessee against the order dated 31.10.2012 of the ld. CIT(A), Ghaziabad. 2. The Registry has pointed out that there is a delay in filing the appeal. The assessee moved an application dated 25.04.2013 for condonation of delay stating therein as under: 1. That the appellant filed an appeal in form 35 on dated 22.1.2010 against the order u/s 143(3) of the Income Tax Act, 1961 before the Commissioner of Income Tax (Appeal), Ghaziabad. 2. That the appellant submitted following correspondence address in form 35: Shree Bankey Bihari Educational Society N. H. 24, Near Masuri Canal, Ghaziabad UP 201302 3. That the appeal was heard on dated 29.1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that in view of the above factual and legal submissions, the delay in filing appeal may please be condoned. Sd/- (Ganga Saran Sharma) Chairman Shree Bankey Bihari Education Society Appellant I, Ganga Saran Sharma, Chairman of Shree Bankey Bihari Educational Society, the Appellant do hereby declare that what is stated above is true and correct to the best of my knowledge and belief. Verified, today the 25th day of April, 2013 Sd/- (Ganga Saran Sharma) Chairman Shree Bankey Bihari Education Society Appellant 3. In support of the above application, the assessee also furnished an affidavit dated 15.04.2013 of CA Pramod Kumar, Chartered Accountant, its counsel which reads as under: I, CA Pramod Kumar s/o Late Sh. J. P. Goel, age 45 years r/o SD- 373, Shastri Nagar, Ghaziabad do hereby solemnly affirm and state as under :- 1. That 1 represented the appellant Shri Bankey Bihari Educational Society before the Commissioner Of Income Tax (Appeal), Ghaziabad in income tax appeal for AY 2007-08. 2. That the appeal was heard on 29t h October, 2012 and file was kept for orders. 3. That on 30th November, 2012 , I visited the CIT ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rs 1994-95and 1996-97, against the decision of the Commissioner (Appeals) denying the deduction claimed under section 80-O of the Income-tax Act, 1962. The assessee submitted an affidavit stating that he followed the advice given by his chartered accountant not to file further appeals before the Tribunal for the assessment years 1994- 95 and 1996-97, as the issue involved was identical to the appeal filed before the Tribunal for the assessment year 1993-94, which was then pending before the Tribunal, to avoid multiplicity of litigation and that after the adjudication of appeal for the assessment year 1993-94 by the Tribunal, he could move a rectification application before the Assessing Officer to bring the assessment order in conformity with the decision of the Tribunal. In support of the averments made in the affidavit, the assessee also filed an affidavit by one of the partners of the firm of chartered accountants. The Tribunal dismissed the appeal in limine and observed that a chartered accountant could not have given an absurd advice. The affidavit filed by the firm of chartered accountants was rejected. The affidavit filed by the assessee was also rejected on the ground that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the appellant. Appellant craves leave to add, amend or delete any of the grounds of appeal. 10. From the above grounds, it is gathered that the only grievance of the assessee relates to the confirmation of addition of ₹ 15,00,000/- made by the AO by treating the same as unexplained cash credit. 11. Facts of the case in brief are that the assessee society is engaged in running of a Dental Collage and Research Centre set up at Dasna Masuri, Ghaziabad. It was granted registration u/s 12AA of the Income Tax Act, 1961 (hereinafter referred to as the Act) on 14.06.2002 and thereafter approval u/s 80G of the Act was granted vide order dated23.05.2007. The assessee filed the return of income on 17.07.2007 declaring Nil income which was processed u/s 143(1) of the Act. Later on, the case was selected for scrutiny. During the course of assessment proceedings, the AO noticed that the assessee had shown in the details of corpus funds an amount of ₹ 71,10,000/- out of which major amount was received from M/s VIC Enterprises Pvt. Ltd., Punjabi Bhawan, 10 Rouse Avenue, New Delhi, amounting to ₹ 50,00,000/- and from M/s Navjyoti Vikas Sansthan, 66, New Mohanpuri Col ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d given them blank signed cheques for the above purpose. Both the persons had given affidavit to this effect. The AO pointed out that the accountholders of the society stated that the society, M/s Navjyoti Vikas Sansthan had no income and no donation had been given to any society because there was no source of income of the society as the society was not doing any activity. The AO also summoned Sh. Vinod Dixit and Sh. Sandeep Garg and confronted them with the aforesaid statements and affidavits. Both of them had given a letter that the Secretary of Society approached them for taking their advices on giving entries to the parties in cheque in lieu of cash. Ultimately, both of them advised not to participate in any transaction because those activities were against law. They denied all the allegations made against them in the affidavits. The AO asked the assessee to show-cause as under: 1. As per balance sheet a donation of ₹ 15,00,000/- have been shown as received from Navjyoti Vikas Sansthan, 66, New Mohanpuri Colony, Meerut, through cheque. The necessary statement of the secretary of M/s Navjyoti Vikas Sansthan has already been taken on 2.9.2009 by the undersigned. The S ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... /s Nav Jyoti Vikas Sansthan. 3. Considering these facts/issues, when the statements of Shri Madan Giri Shri Deven Chauhan were recorded, both persons have stated that their bank account have been mis-utilized. Their society does not have any source of income to give such heavy donation and these were only book/bank entries in greed of getting commission of 10% in lieu of such entries. As the source is not explained by Shri Madan Giri, the secretary of M/s Nav Jyoti Vikas Sansthan, and the so called society is also not filing its return of income regularly, the statement of account holder of society stating that these are mere book entry in lieu of commission, the ultimate the source of deposit in the book of M/s Nav Jyoti Vikas Sansthan is cash deposits and the confirmation submitted by you from the above sodety has also been denied by the secretary of the society. 4. In view of above, you are required to explain as to why the above so called donation of ₹ 15,00,000/- may not be treated as non genuine and bogus. In view of all above facts and circumstantial evidences an opportunity is being given to cross examine the secretary of the society Shri Madan Giri and to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ind. In these circumstances and in view of the documents filed before your goodself, records containing details of donation maintained by the assessee and filed before you, we submit that the donations received is genuine and was utilized for the charitable purposes. Thus in view of these facts and submissions made earlier, it is prayed that the donation of ₹ 15,00,000/- should not be treated as anonymous and may be accepted as genuine. 14. The AO, however, did not find force in the submissions of the assessee by observing as under: a) Shri Madan Giri, Secretary of the society M/s Nav Jyoti Vikas Sansthan, has clearly stated in his statement on oath given by him on 2.9.2009 that I have totally ignorant from the society M/s Bankey Bihari Educational Society to which the donation of ₹ 15,00,000/- was shown as given. b) Shri Devendra Singh Chauhan who is also the joint account holder of the bank account of the above society, has also denied in his statement on oath taken on 2.9.2009. c) Both of them have stated that the letter pad of our society was misused by Shri Vinod Dixit Shri Sandeep Garg, who are Income Tax Advocates, for giving the entry of do ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... xit and Sh. Sandeep Garg is concerned that should also be looked into in broad prospective of their letters, First of all they have not denied the acquaintance of Sh. Madan Giri and Sh. Devendra Singh Chauhan with them. They have accepted that they are well known to each other. Secondly they have stated that Sh. Madan Giri and Sh. Devendra Singh Chauhan (the associates of the society) had approached them for giving entries in lieu of receipt of cash commission. The above issue further strengthened the facts that entry has been taken by the society in lieu of cash. It is further necessary to point out that apart from above narrated facts it would not be out of place to mention that the accounts from where M/s Nav Jyoti Vikas Sansthan has received maximum amounts, namely M/s Varun Trade Centre and M/s Sharma Associates are one of the accounts from where amounts were received by M/s D.N. Kansal Securities Pvt. Ltd. and others to the tune of more than 45 crores and the total of these two accounts transactions comes to ₹ 45 crores and more. There are other entries taken from M/s Varun Trade Centre and M/s Sharma Associates which are directly or indirectly related with Mr. Mah ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... llowing additional submissions as regard donation received from Nav Jyoti Vikas Sansthan: That at the outset we wish to submit that the donation of ₹ 15,00,000/- received from M/s Nav Jyoti Vikas Sansthan is genuine and was received from them. The assessee maintained complete record of the identity indicating the name and address of the donors making such contributions during the year under consideration and such details and other relevant documents of all the donations received during the year were produced before your goodself. Sh. Madan Giri, secretary of M/s Nav Jyoti Vikas Sansthan was cross examined and his statement was recorded on dt. 16.12.2009. Sh. Madan Giri confirmed in his statement that his signatures are genuine and he has not received any cash against the donation given. Mr. Madan Giri is a highly educated and professionally qualified person and has very long experience as lawyer for more than 30 years. He has now concocted a story that he was influenced by others and they misused the account of the society. The allegation made by him are totally false and we deny the same. Independent enquiries from Mr. Vinod Dixit and Mr. Sandip Garg were also made ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Reliance is place on the appeal order passed by the Ld. Commissioner of Income Tax (Appeal) Ghaziabad in appeal no. 161/2007-08 dt. 21.10.2010 in the appeal of Sai Chhaya Educational Welfare Society vs. Addl. Commissioner of Income Tax, Range 2, Ghaziabad. It was held that even if some discrepancies were noted by the AO; these were relevant to be examined in the hands of the doners only; such discrepancies were not fit enough to warrant additions in the hands of the appellant (para 7.4). 33. Without prejudice, it is submitted that even if the donation is treated as unexplained/bogus, the benefit of application of provisions of section 11 and 12 of the Income Tax Act cannot be denied. As the amount donation of ₹ 15,00,000/- was fully utilized for the charitable purpose during the year under consideration, the taxable income and tax payable would be Nil . The AO has not cited any of the provisions of the income Tax Act, 1961 to deny the benefit of application of section 11 and 12 of the IT Act, therefore, the taxable income should be held Nil . 17. The ld. CIT(A) after considering the submissions of the assessee confirmed the addition made by the AO by observing in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... urther submitted that the donation of ₹ 15,00,000/- received from M/s Nav Jyoti Vikas Sansthan, 66, New Mohanpuri Colony, Meerut through cheque was utilized by the assessee for charitable purpose. It was further submitted that the copy of donation letter dated 25.07.2006 on letter head of M/s Nav Jyoti Vikas Sansthan issued for making donation to the assessee alongwith cheque No. 084387of ₹ 15,00,000/- drawn on the Nainital Bank Ltd., Ghaziabad was furnished to the AO. It was also stated that the donation letters as well as cheque and confirmation letters were signed by Sh. Madan Giri under the seal of Secretary of the Sansthan. The said donation was made towards corpus fund of the assessee for charitable activities being carried out by the assessee. Therefore, the addition made by the AO and sustained by the ld. CIT(A) was not justified. The reliance was placed on the following case laws: CIT, Gzb Vs Uttranchal Welfare Society (2014) 364 ITR 398 (All.) DIT Vs Keshav Social Charitable Foundation 278 ITR 152 (Del.) Sunder Deep Ed. Society in ITA No. 2428/Del/2011 order dated 6.12.2013 DIT Vs Sri Belimatha Mahasamsthana Socio Cultural and Educational ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eshav Social Charitable Foundation (2005) 278 ITR 152 (supra) held as under: The assessee had not only disclosed its donations, but had also submitted a list of donors. The fact that the complete list of donors was not filed or that the donors were not produced, does not necessarily lead to the inference that the assessee was trying to introduce unaccounted money by way of donation receipts. This is more particularly so in the facts of the case where admittedly more than 75 per cent of the donations were applied for charitable purposes. The SLP filed by the department against the aforesaid order of the Hon ble Delhi High Court was dismissed by the Hon ble Supreme Court in Civil Appeal No. 3358/2006 vide order dated 22.02.2017. 23. In the present case also, the assessee not only disclosed its donation but also produced confirmation from the Secretary of the trust who has given the donation through cheque. The said donation was utilized for charitable activities. Therefore, the addition made by the AO and sustained by the ld. CIT(A) was no justified and accordingly the same is deleted. 24. In the result, the appeal of the assessee is allowed. ( Order Pronounced i ..... X X X X Extracts X X X X X X X X Extracts X X X X
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