GAYATRI ANAND EDUCATION SOCIETY,UP V. ITO WARD EXEMPTION, GHAZIABAD

ITA 1003/DEL/2024

AI Insights

The case involves the Gayatri Anand Education Society appealing against the order of the CIT(A) which sustained the additions made by the A.O. regarding alleged bogus donations. The A.O. had reopened the assessment based on information about bogus donations and assessed a total income significantly higher than declared by the Assessee. The CIT(A) dismissed the Assessee's appeal, leading to the current appeal before the Income Tax Appellate Tribunal. The Tribunal found procedural lapses in the handling of the Assessee's evidence and directed a fresh assessment.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 775956 (ITAT-DELHI)
• Duration Of Justice: 1 year(s) 6 month(s) 6 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 10-09-2025
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: B
• Assessment Year: 2017-2018
• Appeal Filed On: 04-03-2024
• Other Referred Cases: CIT v. S Khader Khan Son [2012] 25 taxmann com 413, Andaman Timber Industries CCE [2015] 62 taxmann.com, CIT v. Orissa Corporation (P) Ltd. [1986] 1986 taxmann.com 1163 (SC), CIT v DaulatramRawatmull, 87 ITR 349 (SC)
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: RAJESH KUMAR DHANESTA
• Assessee Lawyers: MAHESH KUMAR; MEENAL
• Keywords: Opportunity of being heard; Additional evidence; Third party statement; Competent authority; Opportunity of cross examination; Bogus
• Section: 147; 148; 142(1); 11

Judgement Text

"1 ITA No. 1003/Del/2024 Gayatri Anand Education Society Vs. ITO IN THE INCOME TAX APPELLATE TRIBUNAL DELHI DELHI BENCH : “B” NEW DELHI] BEFORE SHRI YOGESH KUMAR U.S., JUDICIAL MEMBER AND SHRI MANISH AGARWAL, ACCOUNTANT MEMBER I.T.A. No. 1003/DEL/2024 (A.Y 2017-8) Gayatri Anand Education Society A-10, Sector-59, Gautam Budh Nagar, Uttar Pradesh, 201301 Vs ITO Ward Exemption Ghaziabad Appellant Respondent PAN:AAAAG7303H Assessee by Sh. Mahesh Kumar, CA and Ms.Meenal Goyal, CA Revenue by Sh. Rajesh Kumar Dhanesta, Sr. DR Date of Hearing 29/07/2025 Date of Pronouncement 10/09/2025 ORDER PER YOGESH KUMAR, U.S. JM: The present appeal is filed by the Assessee against the order of Ld. Commissioner of Income Tax (Appeals/ National Faceless Appeal Centre (‘Ld. CIT(A)/NFAC’ for short), New Delhi dated 10/01/2024 for the Assessment Year 2017-18. 2. The Grounds of Appeal are as under:- “1. For that the Learned Commissioner of Income Tax (A) (\"Ld. CIT(A)\") by passing order dated 10.01.2024 u/s. 250 of the Income Tax Act, 1961 (\"Act\") (hereinafter referred to as \"impugned order 1\") has erred in law and facts by sustaining the addition made by the Ld. Assessing officer (\"AO\") in assessment order dated 31.03.2022 passed u/s. 147 read with section 144B of the Act (hereinafter referred to as \"impugned order 2\"). 2. For that the addition made by the AO in impugned order are bad and untenable in the facts of the case and also in the eyes of the law. Printed from counselvise.com 2 ITA No. 1003/Del/2024 Gayatri Anand Education Society Vs. ITO 3. For that the assessment order dated 31.03.2022 is legally unsustainable since notice under section 148 of the Act was issued without obtaining approval from the competent authority as is required under the provise to Section 151 (1) of the Act. It is submitted that non-compliance of statutory requirement has vitiated the proceedings initiated by the AO, which fact Ld. AIT (A) has failed to consider. 4. For that the A O. has erred in making and subsequently the Ld. TA) has erred in sustaining the impugned addition of Rs. 1,50,00,000/-alleging that the same is a bogus donation received from Ms Anandilal & Ganesh Podar Society by placing reliance only on the uncorroborated third party statement of Mr Kirit kumar Dharsi bhaiS uba us 131 of the Act dated 11.01.2018 that was recorded behind the back of the Appellant, during the course of a third party survey conducted in the case of Podar Group, and an opportunity to cross examine was not provided to the Appellant despite request. 5. For that the AO has erred in making and subsequently the Ld. UITLA has erred in sustaining addition as the department has neought nothing on record to show that cash was exchanged between the Appellant and the donor The action was motivated by mere allegations in a statement recorded us 131 of the Act which itself has no evidentiary value vide CIT v. S Khader Khan Son [2012] 25 taxmann com 413. 6. For that in the facts and circumstances of the case, the Ld. CIT(A) erred in sustaining the addition solely on the basis of a statement recorded without giving an opportunity to the Appellant to cross-examine the person whose statement has been relied upon vide Andaman Timber Industries CCE [2015] 62 taxmann.com it is submitted that even a copy of said statement was not provided to the Appellant to rebut. 7. For that, the A.O. has erred in making and the Ld CIT (A) has erred in sustaining the impugned addition of Rs 1,50,00,000/- on mere pretext that the same is a bogus donation. It is submitted that the AO and Ld. CIT (A) failed to consider that the donation was received through banking channels and donor has confirmed such donation by issuing confirmation note 8. For that there is no cogent evidence before the A.O. except the alleged third party statement of Mr. Kuritkumar Dharsibhai Suba who alleged that cash was returned back against the said donation. It is submitted that the A.O. and Ed. CJ.T Alhas failed to consider that the opportunity to cross examination of Printed from counselvise.com 3 ITA No. 1003/Del/2024 Gayatri Anand Education Society Vs. ITO said Mr. KiritkumarDharsibhatSuba was not provided to the Appellant despite request and, therefore, in absence of the same the alleged statement of said witness should not have been relied at all. 9. For that the A.O. has not conducted any independent inquiry before making addition in Appellant's income. A.O has also failed to bring on record any evidence to prove establish that the donation received by the Appellant was subsequently returned back in cash except mere allegations of a witness Reliance in this regard is placed upon the ruling laid down by the Hon'ble Jurisdictional Delhi High Court in C11 A and A Bakery P. Lid 302 ITR 51. 10. For that the A.O. erred in making and subsequently Ld. CIT(A) grossly erred in confirming the addition of Rs. 4,40.25,000/-(\"corpus donation\") as revenue receipt by disregarding the fact that the Appellant has discharged its onus by placing on record the documentary evidence pertaining to donation during the course of assessment and also during appellate proceedings. Reliance is being placed upon the ruling passed by the Hon'ble Supreme Court in CIT v. Orissa Corporation (P) Ltd.. [1986] 1986 taxmann.com 1163 (SC). 11. For that without prejudice to the above, the A.O. has failed to verify about the individual donors and without making such verification/bringing any cogent material on record. the A.O. should not have come to the conclusion that the donation be treated as revenue receipt. Reliance is being placed upon the ruling laid down by the Hon'ble Supreme Court in CIT v DaulatramRawatmull, 87 ITR 349 (SC) wherein it is held that the onus hes upon the party who claimed it to be so. 12. That the appellant craves leaves to add, to delete, or amend any of the above grounds of appeal at the time of hearing.” 3. Brief facts of the case are that, the Assessee being an AOP (Association of Persons) and filed its return of income for the year under consideration declaring nil income after claiming exemption U/s 11 of the Income Tax Act, 1961 (‘Act for short’). On the basis of information shared by the Central Circle-1(4), Mumbai regarding receipt of bogus donation from Podar group of trusts, namely M/s Anandilala & Ganesh Podar Society to the tune of Rs 1,50,00,000/- and non-declaration of the said Printed from counselvise.com 4 ITA No. 1003/Del/2024 Gayatri Anand Education Society Vs. ITO amount in the return of income filed for the AY 2017-18, the case was reopened U/s 147 and notice U/s 148 of theAct was issued after obtaining prior approval of the competent authority as per the Act.In response, the assesse filed its return of income declaring nil income after claiming exemption U/s 11 of the Act. Subsequently notice U/s 142(1) of the Act was issued. The submissions of the assesse was considered by the A.O. As per the A.O. genuineness and creditworthiness of donors remained unsubstantiated, accordingly, completed the assessment u/s 147 r.w.s 144B of the Act by assessing the total Income Rs. 5,90,25,000/-thereby raising the tax demand is Rs. 3,46,81,270/ vide Assessment Order dated 31/03/2022. 4. Aggrieved by the assessment order dated 31/03/2022, the Assessee preferred an Appeal before the Ld. CIT(A). During the First Appellate Proceedings, Assessee filed an application under Rule 46A of Income Tax Appellate Tribunal Rules, 1962 for production of additional evidence. The Ld. CIT(A) after obtaining the Remand Report, rejected the application filed by the Assessee and ultimately dismissed the Appeal of the Assessee. Aggrieved by the order of the Ld. CIT(A) dated 10/01/2024, the Assessee preferred the present Appeal on the grounds mentioned above. 5. The Ld. Counsel for the Assessee vehemently submitted that the issue of donation received from M/s Anandilala & Ganesh Podar Society is covered by the order of the Co-ordinate Bench of the Tribunal of Mumbai Bench in ITA No. 713/Mum/2020 for Assessment Year 2011-12 and other connected Printed from counselvise.com 5 ITA No. 1003/Del/2024 Gayatri Anand Education Society Vs. ITO matters, wherein the M/s Anandilala & Ganesh Podar Society has been held to be genuine. The Ld. Counsel further submitted that the Ld. CIT(A) committed error in rejecting the additional evidence wherein the Assessee has produced confirmations of donor parties, thus sought for allowing the Appeal. 6. Per contra, the Ld. Departmental Representative submitted that the Assessee has not produced any document before the A.O. to prove the genuineness of the donor parties even after providing ample opportunities, however, field certain documents before the Ld. CIT(A) under Rule 46A of Income Tax Rules, 1962, which are found to be written return by same personwith same handwriting and those receipts have been prepared by the Assessee. Therefore, submitted that the Ld. CIT(A) rightly rejected Application filed under Rule 46A of the Rules and dismissed the First Appeal filed by the Assessee.Thus, sought for dismissal of the Appeal. 7. We have heard both the parties and perused the material available on record. In the preset case, in order to prove the genuineity of the donor parties, the Assessee has not filed any confirmations issued by the donor parties or any of the documents during the assessment proceedings. It is the case of the Assessee that at the fag-end of the assessment proceedings A.O. issued show cause notice, therefore, the Assessee could not produce the requisite documents to prove its case. During the first appellate proceedings,Assessee produced certain documents i.e.confirmation of donorparties totally to 47 in number as the additional evidence, wherein Printed from counselvise.com 6 ITA No. 1003/Del/2024 Gayatri Anand Education Society Vs. ITO donor parties have confirmed that donations were made towards corpus fund of the Assessee society. The Ld. CIT(A) observed that, all the confirmation of donor parties were written by the same person and in same handwriting and observed that it seems that the Assessee has prepared those receipts. However, it is found that before rejecting the additional evidence either the A.O. or Ld. CIT(A) have not made any independent enquiry to examine the veracity of those documents or taken statement from the donor parties. 8. Considering the above facts and circumstances, we deem it fit to restore the issue involved in the present Appeal to the file of the A.O. with a direction to the Assessee to produce all the documents to substantiate its claim and the A.O. is directed to make proper independent enquiry with the donor parties in accordance with law and frame the assessment afresh after providing opportunity of being heard to the Assessee. Ordered accordingly. 9. In the result, the appeal of the Assessee is partly allowed for statistical purpose. Order pronounced in the open court on 10th September, 2025 Sd/- Sd/- (MANISH AGARWAL) (YOGESH KUMAR U.S.) ACCOUNTANT MEMBER JUDICIAL MEMBER Date:- 10 .09.2025 R.N, Sr.P.S* Copy forwarded to: 1. Appellant 2. Respondent 3. CIT 4. CIT(Appeals) 5. DR: ITAT Printed from counselvise.com 7 ITA No. 1003/Del/2024 Gayatri Anand Education Society Vs. ITO ASSISTANT REGISTR ITAT, NEW DELHI Printed from counselvise.com "