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TMI Blog2022 (4) TMI 388X X X X Extracts X X X X X X X X Extracts X X X X ..... Prashant Maharishi, AM And Shri Pavan Kumar Gadale, JM For the Assessee : None For the Revenue : Shri Hoshang B. Irani, DR ORDER PER PRASHANT MAHARISHI, AM: 01. ITAs No. 1474/Mum/2019 for AY 2009-10 1475/Mum/2019 for AY 2010-11 are pertaining to the same assessee involving common issue and therefore both these appeals are heard and disposed off by this common order. 02. For Assessment Year 2009-10 in ITA No.1474/Mum/2019, the assessee has preferred an appeal against the order passed by the learned Commissioner of Income Tax (Appeals)-17, [in short the learned CIT(A)] Mumbai dated 31.01.2019, wherein the donation given by the assessee of ₹ 15 lacs to one M/s Navjivan Trust was claimed as deduction under section 35AC of the income-tax Act, 1961 (hereinafter referred to as 'Act ) of ₹ 18,75,000/- was disallowed. At the time of hearing, the assessee has submitted a letter dated 14th March, 2022 stating that assessee has availed the benefit of Vivad Se Vishwas Act, 2020 and have been issued form No.3 on 8th February, 2021 and therefore, assessee withdraw the appeal. 03. The learned DR did not raise any objection to the same. In view of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ence of assessee. Subsequently, the order could not be passed due to some administrative reasons and further notice was issued to the assessee on 26th February, 2022 fixing the date of hearing on 14th March, 2022. This time too, none appeared on behalf of the assessee. 09. In view of this, the appeal of the assessee is decided on the merits of the case. 010. The learned Departmental Representative vehemently supported the order of the learned CIT(A). He extensively referred to the order of the learned CIT(A) and submitted that in the case of CIT vs. Batanagar Education And Research Trust [2021] 129 taxmann.com 30 (SC) has dealt with an identical issue where the registration of the Trust is cancelled. He also referred to the fact that these are bogus donation and for immediately preceding year for Assessment Year 2009-10, the assessee itself has gone in Vivad Se Vishwas Scheme-2020. He therefore, submitted that the order passed by the learned CIT(A) deserve to be upheld. He also stated that in some of the cases the deduction under section 35AC of the Act is allowed. Further, after the decision of the Supreme Court as stated above, the order of the learned CIT(A) cannot be foun ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and beneficiary companies/entities like the appellant. Let us examine the chronology of the events. The Investigation wing of the I.T. Department, Mumbai conducted a Search Seizure operation u/s 132 of the Act against the premises of M/s Navjeevan Charitable Trust on 27.10.2014. The investigation revealed that the Trust has collected non-genuine donation of ₹ 80 cores during last 5 financial years, which was transferred to around 20 parties as expenses, part of which were ultimately withdrawn in cash. Rest of the amounts were transferred to various entities, whose activities or whereabouts could not be authenticated or found. In spite of best effort of Investigation Wing, only 7 associated persons could be traced and that too without having any business and living standard. The Trust was found to be in very small locality without any documentation activities. Subsequently, along with Search and Seizure operation Survey operations were also conducted in case of various associated persons and interested parties. Shri Amish Modi was the broker, who co-ordinate this nefarious financial manipulation between the Trustees and interested parties. The statement of number of associa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... what so ever available on internet with regard to the charitable activities of the trust. The Investigation Wing of the Department had initially conducted discrete enquiry and subsequently covered all the scamster under Search Seizure operation and survey operations. In fact all the beneficiary parties admitted the fact that they have utilized accommodation entry given by the Trust. The modus operandi was explained by various individuals who have been associated with the activities, during the search and survey operation such as Mr. Amish Modi and Mr Subhash Kadam. One of them is Mr.Amish Modi, who has operated as broker between the trust and interested parties. Mr. Modi has detailed, how the cheques were collected from the parties in the guise of donation and given to the trustees. The Trust after taken nominal commission used to return the equivalent cash to all the donors. Thus, the so called donors used to claim deduction u/s.35AC of the Act and the brokers as well as the trustees use to get money in the form of commission. It was confessed by Mr.Kadam that no genuine philanthropic activity was being carried out by the trust and bogus expenditures were booked to camoufl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s evident from the record that no such request has been made by the appellant to the A.O. during the re-assessment proceedings to cross examine the evidence obtained by him Regarding the contention of the appellant that no proof was brought on record that money was returned to the appellant in support of the AO's contention. It is a part of a scam and it has been duly acknowledged by the associates the Trust that the money has been received back in cash and surreptitiously deduction u/s.35AC of the Act has been claimed. The contention that it had provided all the necessary details to prove the genuineness of the donations and to enable the A.O. to make an independent enquiry with the A.O. and therefore, the A.O. failed to discharge his onus cast under the law while disallowing the claim made by the appellant and made an addition of ₹ 15,00,000/- to the income of the appellant on suspicion, surmises and conjectures. This contention is not correct as the appellant had failed to discharge its onus of proving the claim of deduction u/s 35AC with respect to donation of ₹ 15,00,000/- to Navjeevan Trust is genuine with supporting documentary evidences at any time eith ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e of survey his business activity was suspended, staff were in stress and due to mental pressure and fatigue, he was totally confused and given to understand that he was responsible for being negligent in the matter of not verifying the genuineness of the Trust activity. The content of the affidavit of Mr. Manish M. Shah is examined. The Director of the company has made statement based on his assertion that a statement was given in a confused state of mind on the consistent pressure of the survey party from the Investigation wing. First of all, no such complaint has been filed before the higher authorities regarding the pressure exerted upon by Income-tax officer, officials and secondly the entire affidavit has been filed on the advice of the consultant and not a single word has been referred that donation was given for charitable purpose. Rather on the advice of the consultant, Mr. Manish M. Shah was given to understand that his onus is limited to see that Trust is approved at the time of giving donation. Can a person of a normal prudence will believe such statement that a company is giving lakhs and lakhs of donation, not in one year, but continuously three years without car ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... etraction of a statement through an affidavit is an afterthought without any corroborative supporting evidence. 4.2.5 Human Probability: The facts and circumstances of the case has to be tested on the concept of surrounding circumstances and human probability. The appellant claims to have given donation to a trust which is established as bogus trust indulged in providing accommodation entry camouflaging charitable activity in order to claim the non-genuine deduction u/s.35AC of the Act. The Hon'ble Supreme Court's observation, in the case of CIT v. Durga Prasad More [1971] 82 ITR 540, to the effect that Science has not yet invented any instrument to test the reliability of the evidence placed before a court or tribunal. Therefore, the courts and Tribunals have to judge the evidence before them by applying the test of human probabilities . Similarly, in a later decision in the case of SumatiDayal v. CIT [1995] 214 ITR 801/80 Taxman 89 (SC) Hon'ble Supreme Court rejected theory that it is for alleger to prove that the apparent and not real, and observed that, This, in our opinion, is a superficial approach to the problem. The matter has to be considered i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in subjective perception on such issues, on the same set of facts, but that cannot be a reason enough for the fact finding authorities to avoid taking subjective calls on these aspects, and remain confined to the findings on the basis of irrefutable evidences. The Hon'ble Supreme Court has, in the case of Durga Prasad More (supra), observed that human minds may differ as to the reliability of a piece of evidence but in that sphere the decision of the final fact finding authority is made conclusive by law. The facts remain uncontroverted are i. M/s. Navjeevan Charitable Trust is a bogus trust only run for the purpose of accommodation entry for interested parties who want to obtain the certificate for non-genuine donation for claiming deduction u/s.35AC of the Act. ii. Neither M/s. Navjeevan Charitable Trust, nor by any of the beneficiary or broker has been able to lay down an iota of evidence to show that the trust has carried out any charitable activity during its entire existence. iii. During Search and Seizure operation u/s. 132 and Survey operation u/s. 133A covering the main player of the scam, no trace of any documents, no books of accounts has been ..... X X X X Extracts X X X X X X X X Extracts X X X X
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