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TMI Blog2023 (7) TMI 123X X X X Extracts X X X X X X X X Extracts X X X X ..... of Rs.1 crore towards corpus donation, which is reflected in the bank statement of donor. These are established facts on record, which cannot be ignored. It is also a fact that donor itself is registered as a charitable trust/society under section 12AA of the Act. Therefore, there cannot be any doubt regarding the genuineness of the donor. Thus, the allegation of learned CIT that AO has not made proper inquiry with regard to the receipt of corpus donation is found to be contrary to facts and materials on record. Contention of DR that the corpus donation was received in subsequent financial year, we must observe that though, the cheque was received by assessee in the financial year relevant to the assessment year under dispute, however, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cts, it has been granted registration under Section 12AA of the Act by Commissioner of Income Tax (CIT), Ghaziabad. As stated, the assessee runs two educational institutions in the name and style of M/s. Reliable Institute of Law and M/s Reliable Institute of Management Technology. For the assessment year under dispute, the assessee filed its return of income on 24.09.2015, declaring nil income after claiming exemption under section 11 of the Act. The return of income filed by the assessee was selected for scrutiny and assessment in case of the assessee was completed under section 143(3) of the Act, accepting the income returned. Subsequently, in exercise of power conferred under section 263 of the Act, learned CIT called for and examined ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d loan of Rs. 1 crore on 02.04.2014, which was repaid on 31.03.2015. However, there was no corpus donation as claimed by the assessee. He observed, though, in the reconciliation statement furnished during the course of assessment proceeding, the repayment of loan as well as receipt of corpus donation was mentioned, however, such transactions were not reflected, either in the balance sheet of the trust or the balance sheet of M/s. Suran Protsahan. Referring to Explanation 2 to section 263 of the Act, learned CIT observed that the Assessing Officer has neither made proper inquiry, nor applied his mind, which made the assessment order erroneous and prejudicial to the interest of Revenue. Accordingly, he set aside the assessment order with a di ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... during the year under consideration. He submitted, assuming that the corpus donation is in the nature of ordinary donation, since the assessee has applied more than 85% of its fund/income towards charitable purpose, the assessee would still be entitled for exemption under section 11 of the Act. Hence, it will be tax neutral. Therefore, no prejudice is caused to the Revenue. Thus, he submitted, the assessment order cannot be treated as erroneous and prejudicial to the interest of Revenue. 5. Learned Departmental Representative strongly relied upon the observation of learned CIT and submitted that the assessee has failed to reconcile the receipt of corpus donation of Rs. 1 crore with proper evidences. Drawing our attention to the bank stat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eries raised in the questionnaire, the assessee furnished all the details relating to the corpus donation along with supporting evidence as called for by the Assessing Officer. The assessee also furnished the return of income and bank statements of the donor. Still unsatisfied with the reply of the assessee, the Assessing Officer issued a second notice to the assessee on 02.08.2017 requiring further details, including details of corpus donations. In response to the said notice, the assessee furnished its reply on 30.08.2017 with details as called for. Thus, from the aforesaid facts on record, it is quite clear that not only the Assessing Officer made detailed inquiry with regard to corpus donation received during the year, but the assessee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fact that donor itself is registered as a charitable trust/society under section 12AA of the Act. Therefore, there cannot be any doubt regarding the genuineness of the donor. Thus, the allegation of learned CIT that the Assessing Officer has not made proper inquiry with regard to the receipt of corpus donation is found to be contrary to facts and materials on record. 8. As regards the contention of learned Departmental Representative that the corpus donation was received in subsequent financial year, we must observe that though, the cheque was received by assessee in the financial year relevant to the assessment year under dispute, however, the money was realized on 04.04.2015, as reflected in the bank statement of M/s. Suran Protsahan. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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