Sri Balaji Educational & Charitable Public Trust, CHENNAI V. ACIT, CHENNAI

ITA 186/CHNY/2014

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 90706 (ITAT-CHENNAI)
• Duration Of Justice: 1 year(s) 6 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 24-07-2015
• Appeal Filed By: Assessee
• Bench Allotted: A
• Next Hearing Date: 26-05-2015
• Assessment Year: 2009-2010
• Appeal Filed On: 20-01-2014
• Court: TRIBUNAL
• Department Lawyers: S DASGUPTA
• Assessee Lawyers: S SRIDHAR
• Keywords: Unexplained cash credit; Charitable institution; Onus to prove
• Section: 133A; 12A; 12AA; 11

Judgement Text

, , IN THE INCOME-TAX APPELLATE TRIBUNAL A BENCH, CHE NNAI , . ! ! ! ! , ' ' ' ' #$ #$ #$ #$ BEFORE SHRI CHANDRA POOJARI, ACCOUNTANT MEMBER & SHRI V. DURGA RAO, JUDICIAL MEMBER I.T.A. NO. 186/MDS/2014 ASSESSMENT YEAR: 2009-10 SRI BALAJI EDUCATIONAL & CHARITABLE PUBLIC TRUST, 3 RD FLOOR, JAI DURGA COMPLEX, NEW NO. 60, 1 ST AVENUE, ASHOK NAGAR, CHENNAI 600 083. [PAN: AACTS1386D] VS. THE ASSISTANT COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE III(4), CHENNAI. ( %& %& %& %& /APPELLANT ) ( '(%& '(%& '(%& '(%& / RESPONDENT ) %& ) * / APPELLANT BY : SHRI S. SRIDHAR, ADVOCATE '(%& ) * / RESPONDENT BY : SHRI S. DAS GUPTA, JCIT ) + / DATE OF HEARING : 26.05.2015 ,-. ) + /DATE OF PRONOUNCEMENT : 24.07.2015 / / / / / O R D E R PER V. DURGA RAO, JUDICIAL MEMBER : THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAIN ST THE ORDER OF THE LD. COMMISSIONER OF INCOME TAX (APPEALS) (C) II , CHENNAI, DATED 15.11.2013 PASSED UNDER SECTION 271(1)(C) OF THE IN COME TAX ACT. 2. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE S RI BALAJI EDUCATIONAL AND CHARITABLE PUBLIC TRUST IS A TRUST REGISTERED UNDER SECTION 12AA OF THE INCOME TAX ACT. THE TRUST IS MA INLY ENGAGED IN I.T.A. I.T.A. I.T.A. I.T.A. NO NONO NO. .. .18 1818 186 66 6/M/1 /M/1 /M/1 /M/14 44 4 2 RUNNING EDUCATIONAL INSTITUTIONS FOR CONDUCTING VAR IOUS PROFESSIONAL COURSES SUCH AS ENGINEERING, MBBS, NURSING AND OTHE R PARAMEDICAL COURSES, ETC. THE ASSESSEE HAS FILED ITS RETURN OF INCOME FOR THE ASSESSMENT YEAR UNDER CONSIDERATION ON 30.09.2009 A DMITTING TOTAL INCOME OF . NIL. THE CASE OF THE ASSESSEE WAS SELECTED FOR SC RUTINY AND NOTICE UNDER SECTION 143(2) OF THE ACT WAS ISSU ED AND A DETAILED QUESTIONNAIRE WAS ALSO ISSUED TO THE ASSESSEE. SUBS EQUENTLY, A SURVEY UNDER SECTION 133A OF THE ACT WAS CONDUCTED ON 20.11.2009. IN THE ASSESSMENT ORDER, THE ASSESSING OFFICER HAS OBS ERVED THAT FROM THE MATERIALS IMPOUNDED DURING THE COURSE OF SURVEY FROM MAHATMA GANDHI MEDICAL COLLEGE & RESEARCH INSTITUTE, PONDIC HERRY VIDE ANNEXURE ANN/VN/B&D/IMP-5 PAGE 1-33, IT WAS FOUND T HAT THE ASSESSEE HAS RECEIVED VOLUNTARY DONATIONS BY WAY OF CASH AMOUNTING TO .12,94,74,800/- FROM AUGUST, 2008 TO MARCH, 2009. H OWEVER, THE ASSESSEE HAS ADMITTED CASH DONATIONS BY WAY OF CASH ONLY AT .4,73,20,000/- IN THE RETURN OF INCOME FOR THE FINA NCIAL YEAR 2008-09 LEAVING A BALANCE OF .8,21,54,800/- HAS NOT RECORDED IN THEIR REGULAR BOOKS OF ACCOUNTS MAINTAINED EITHER IN THEIR COLLEG E OR IN THEIR TRUST OFFICE. BASED ON THE IMPOUNDED MATERIAL AND STATEME NT OF MR. M.K. RAJAGOPALAN, CHAIRMAN, RECORDED IN THE TRUST OFFICE OF ASHOK NAGAR ON I.T.A. I.T.A. I.T.A. I.T.A. NO NONO NO. .. .18 1818 186 66 6/M/1 /M/1 /M/1 /M/14 44 4 3 THE DATE OF SURVEY I.E. 20.11.2009, WHILE ANSWERING TO QUESTION NO. 17 AND 24, THE VOLUNTARY CONTRIBUTION COLLECTED BY WAY OF CASH WHICH WAS NOT DISCLOSED TO THE DEPARTMENT IS QUANTIFIED AS UN DER: F.Y. VOLUNTARY CONTRIBUTION RECEIVED BY WAY OF CASH VOLUNTARY CONTRIBUTION RECEIVED BY WAY OF CASH DECLARED IN THE BOOKS OF ACCOUNTS DIFFERENCE 2008-09 129,474,800 47,320,000 82,154,800 3. WHILE GIVING THE ANSWER TO THE QUESTION NO. 17, MR. RAJAGOPALAN AGREED THAT SRI BALAJI EDUCATIONAL & CHARITABLE TRU ST DECLARED RECEIPT OF .7,94,12,000/- ON ACCOUNT OF VOLUNTARY CONTRIBUTION FROM THE STUDENTS WHICH INCLUDES .3,20,92,000/- RECEIVED IN DEMAND DRAFT AND THE BALANCE OF .4,73,20,000/- RECEIVED IN CASH. BUT FROM THE ABOVE TABLE IT IS APPARENT THAT THE ASSESSEE RECEIVED VOL UNTARY CONTRIBUTION BY WAY OF CASH TO THE TUNE OF .12,94,74,800/-. BASED ON THE ABOVE, THE ASSESSEE WAS ASKED TO EXPLAIN AS TO WHY THE BALANCE CASH RECEIVED IN THE FORM OF VOLUNTARY CONTRIBUTION TO THE TUNE OF .8.21,54,800/- SHOULD NOT BE TREATED AS UNDISCLOSED INCOME OF THE TRUST A ND HOW THE EXEMPTION UNDER SECTION 11 OF THE ACT BE GRANTED. 4. IT WAS SUBMITTED BEFORE THE ASSESSING OFFICER T HAT THE IMPOUNDED MATERIAL IN ANN/VN/B&D/IMP/5, THE ASSESSEE CLAIMED THAT ALL THE CASH RECEIVED AS VOLUNTARY CONTRIBUTION WAS RECORDED IN THE CASH BOOK BUT I.T.A. I.T.A. I.T.A. I.T.A. NO NONO NO. .. .18 1818 186 66 6/M/1 /M/1 /M/1 /M/14 44 4 4 WHILE PREPARING THE LEDGER OF VOLUNTARY CONTRIBUTIO N THEY BOOKED SOME CASH EXPENDITURE MADE DIRECTLY FROM THE SAID CASH R ECEIVED. THUS, THE TOTAL RECEIPT OF VOLUNTARY CONTRIBUTIONS SHOWED LES SER AMOUNT TO THE TUNE OF .3,86,48,000/- AND THE DIFFERENCE WAS NOT .8,21,54,800/- AS CLAIMED BY THE DEPARTMENT. IN SUPPORT OF THE CLAIM, THE ASSESSEE HAS PRODUCED BOOKS OF ACCOUNTS. ON VERIFICATION OF THE VOUCHERS OF VOLUNTARY CONTRIBUTION, THE ASSESSING OFFICER HAS N OTICED THAT MANY VOUCHERS DID NOT HAVE THE REQUISITE DETAILS OF THE DONORS. THE ASSESSEE WAS ASKED TO PRODUCE THE DETAILS OF THE DO NORS SO THAT THE SAME COULD BE VERIFIED. THE ASSESSEE HAS SUBMITTED BEFORE THE ASSESSING OFFICER THAT THERE ARE SOME UNVERIFIABLE DONATION WHICH COMES TO THE TUNE OF .3,86,48,000/- AND SUBMITTED THAT THEY WANT TO DISCLOSE .3,86,48,000/- UNDER SECTION 115BBC(3) OF THE ACT A S ANONYMOUS DONATION AS IT COULD NOT PRODUCE THE DETA ILS OF THE DONORS. ACCORDINGLY, ASSESSMENT WAS COMPLETED BY TREATING T HE DISPUTED AMOUNT OF .3,86,48,000/- AS ANONYMOUS DONATION AS DISCLOSED B Y THE ASSESSEE UNDER SECTION 115BBC(3) OF THE ACT. 5. THEREAFTER, THE ASSESSING OFFICER HAS INITIATED PENALTY PROCEEDINGS AND CALLED EXPLANATION FROM THE ASSESSE E AS TO WHY PENALTY PROCEEDINGS UNDER SECTION 271(1)(C) OF THE ACT SHOULD NOT I.T.A. I.T.A. I.T.A. I.T.A. NO NONO NO. .. .18 1818 186 66 6/M/1 /M/1 /M/1 /M/14 44 4 5 INITIATED. IN RESPONSE TO THE ABOVE, THE ASSESSEE V IDE LETTER DATED 02.01.2012, THE ASSESSEE HAS GIVEN A DETAILED EXPLA NATION TO THE ASSESSING OFFICER AND REQUESTED THAT THE PENALTY PR OCEEDINGS MAY BE DROPPED. IN THE PENALTY PROCEEDINGS, THE ASSESSING OFFICER, AFTER CONSIDERING THE EXPLANATION OF THE ASSESSEE, HAS OB SERVED THAT THE ASSESSEES SUBMISSION CANNOT BE ACCEPTED SINCE THE ASSESSEE HAS NOT DISCLOSED THE ABOVE SAID AMOUNT IN THE RETURN O RIGINALLY FILED. DURING THE SURVEY OPERATION, THE CHAIRMAN OF THE TR UST ACCEPTED THE FACT THAT SOME UNDISCLOSED CASH DONATION WAS RECEIV ED AND THEY DID NOT CAME UP WITH DETAILS AT THE INITIAL STAGE OF TH E ASSESSMENT PROCEEDINGS. IT WAS ONLY DURING ASSESSMENT PROCEEDI NGS, THE ASSESSEE HAS LEFT WITH NO OTHER CHOICE BUT TO ACCEP T THE SAME. CONSIDERING THE ABOVE FACTS, THE ASSESSING OFFICER CAME TO CONCLUSION THAT THE ASSESSEE HAS WILFULLY FAILED TO DISCHARGE ITS DUTY TO DISCLOSE ALL ITS INCOME IN THE RETURN ORIGINALLY FILED AND HELD THAT IT IS A CLEAR CASE OF CONCEALMENT OF INCOME AND THE TOTAL UNDISCLOSED AMO UNT OF .3,86,48,000/- ATTRACTS PENALTY UNDER SECTION 271(1 )(C) OF THE ACT. 6. THE ASSESSEE CARRIED THE MATTER IN APPEAL BEFOR E THE LD. CIT(A). THE LD. CIT(A), AFTER CONSIDERING THE SUBMISSIONS O F THE ASSESSEE, HAS OBSERVED THAT THE ANONYMOUS DONATION IS TAXABLE UND ER THE PROVISIONS I.T.A. I.T.A. I.T.A. I.T.A. NO NONO NO. .. .18 1818 186 66 6/M/1 /M/1 /M/1 /M/14 44 4 6 OF INCOME TAX ACT AND THE ASSESSEE WAS DUTY BOUND T O DISCLOSE THE SAME AND TO PAY THE REQUISITE TAX ON THE SAME. THE LD. CIT(A), BY FOLLOWING THE DECISION IN THE CASE OF MAK DATA (P) LTD. V. CIT [2013] TAXMANN.COM 448 (SC), CONFIRMED THE PENALTY ORDER P ASSED BY THE ASSESSING OFFICER UNDER SECTION 271(1)(C) OF THE AC T. 7. ON BEING AGGRIEVED, THE ASSESSEE CARRIED THE MA TTER IN APPEAL BEFORE THE TRIBUNAL. 8. (I) THE LD. COUNSEL FOR THE ASSESSEE HAS SUBMITT ED THAT THE ASSESSEE IS RUNNING CHARITABLE EDUCATIONAL INSTITUT ION AND THE DONATION RECEIVED BY THE ASSESSEE ARE NOT TAXABLE BECAUSE TH E ASSESSEE IS ENJOYING REGISTRATION UNDER SECTION 12AA OF THE ACT . (II) THE LD. COUNSEL FOR THE ASSESSEE HAS FURTHER SUBMITTED THAT ALL THE DONATIONS RECEIVED BY THE ASSESSEE ARE VOLUNTAR Y DONATION AND THEREFORE, THE DONATIONS RECEIVED BY THE ASSESSEE E XEMPT FROM TAXATION UNDER INCOME TAX ACT. (III) HE HAS FURTHER SUBMITTED THAT THE ASSESSING O FFICER CAME TO A CONCLUSION BASED ON THE SEIZED MATERIAL IN ANN/VN/B &D/IMP/5 PAGE 1 TO 33 THAT THE ASSESSEE HAS RECEIVED VOLUNTARY DONA TION BY WAY OF CASH AMOUNTING TO .12,94,74,800/-. WHEN IT WAS EXPLAINED BEFORE THE I.T.A. I.T.A. I.T.A. I.T.A. NO NONO NO. .. .18 1818 186 66 6/M/1 /M/1 /M/1 /M/14 44 4 7 ASSESSING OFFICER THAT THE AMOUNT SHOWN LESSER TO T HE AMOUNT RECEIVED WAS DUE TO SOME EXPENDITURE MADE DIRECTLY FROM THE SAID CASH RECEIPTS, THE AMOUNT AS FOUND BY THE ASSESSING OFFICER OF .8,21,54,800/- IS NOT CORRECT AND ACCEPTED THAT IT IS ONLY .3,86,48,000/-. IT WAS ALSO SUBMITTED BEFORE THE LD . CIT(A) THAT THE ASSESSING OFFICER HIMSELF, BASED ON THE SEIZED MATE RIALS CAME TO A CONCLUSION THAT THE AMOUNT RECEIVED BY THE ASSESSEE IS A VOLUNTARY DONATION BY WAY OF CASH. WHEN THE ASSESSEE WAS ASKE D TO PRODUCE DETAILS ABOUT THE DONATION, THE ASSESSEE WAS NOT AB LE TO GIVE FULL DETAILS OF DONORS IN RESPECT OF .3,86,48,000/- VOLUNTARY OFFERED BY THE ASSESSEE AS INCOME. THE ASSESSING OFFICER ACCEPTED THE SAME AND ASSESSMENT WAS COMPLETED. THEREAFTER, PENALTY WAS I NITIATED, WHICH IS NOT LEVIABLE. (IV) THE ASSESSEE HAS SUBMITTED A DETAILED EXPLANAT ION BEFORE THE ASSESSING OFFICER. THE EXPLANATION SUBMITTED BY THE ASSESSEE WAS NEITHER FOUND BY THE ASSESSING OFFICER FALSE NOR BO NAFIDE. HOWEVER, THE ASSESSING OFFICER HAS SIMPLY REJECTED THE EXPLA NATION AND PRAYED THAT THE PENALTY MAY BE DELETED. I.T.A. I.T.A. I.T.A. I.T.A. NO NONO NO. .. .18 1818 186 66 6/M/1 /M/1 /M/1 /M/14 44 4 8 9. ON THE OTHER HAND, THE LD. DR STRONGLY RELIED O N THE DECISION IN THE CASE OF MAK DATA (P) LTD. V. CIT [2013] TAXMANN .COM 448 (SC) AND SUPPORTED THE ORDERS PASSED BY THE AUTHORITIES BELO W. THE LD. DR FURTHER SUBMITTED THAT THE ASSESSEE KNOWS THAT THE DONATIONS RECEIVED BY THE ASSESSEE IS NOT VOLUNTARY DONATIONS AND THE ASSESSING OFFICER HAS POINTED OUT THE NATURE OF DONATION, THE ASSESSE E HAS ACCEPTED THE DONATION RECEIVED TO THE EXTENT OF .3,86,48,000/- AS ANONYMOUS DONATIONS. 10. WE HAVE HEARD BOTH SIDES, PERUSED THE MATERIAL S ON RECORD AND GONE THROUGH THE ORDERS OF AUTHORITIES BELOW. THE A SSESSEE IS AN EDUCATIONAL AND CHARITABLE TRUST ENJOYING REGISTRAT ION UNDER SECTION 12AA OF THE ACT. THERE WAS A SURVEY UNDER SECTION 1 33A CONDUCTED ON 20.11.2009. THE ASSESSEE HAS ALSO FILED RETURN OF I NCOME FOR THE YEAR UNDER CONSIDERATION ON 30.09.2009 ADMITTING NIL INC OME. DURING THE COURSE OF SURVEY, CERTAIN MATERIALS WE IMPOUNDED IN RESPECT OF MAHATMA GANDHI MEDICAL COLLEGE & RESEARCH INSTITUTE VIDE ANNEXURE ANN/VN/B&D/IMP/5 PAGE 1 TO 33. FROM THE SEIZED MATE RIALS, IT WAS FOUND THAT THE ASSESSEE HAS RECEIVED VOLUNTARY DONA TION BY WAY OF CASH AMOUNTING TO .12,94,74,800/- FROM AUGUST, 2008 TO MARCH, 2009. HOWEVER, THE ASSESSEE HAS ADMITTED A CASH DONATION BY WAY OF CASH I.T.A. I.T.A. I.T.A. I.T.A. NO NONO NO. .. .18 1818 186 66 6/M/1 /M/1 /M/1 /M/14 44 4 9 ONLY AT .4,73,20,000/- IN THE RETURN OF INCOME FOR THE ASSE SSMENT YEAR UNDER CONSIDERATION. ACCORDING TO THE ASSESSING OFF ICER, THE BALANCE OF .8,21,54,800/- HAS NOT RECORDED IN THEIR REGULAR BO OKS OF ACCOUNTS MAINTAINED EITHER IN THEIR COLLEGE OR IN THEIR TRUS T OFFICE. WHEN THE CHAIRMAN WAS ASKED TO EXPLAIN IN RESPECT OF QUESTIO N NO. 17, SHRI RAJAGOPALAN AGREED THAT SRI BALAJI EDUCATIONAL & CH ARITABLE PUBLIC TRUST DECLARED RECEIPT OF .7,94,12,000/- ON ACCOUNT OF VOLUNTARY CONTRIBUTION FROM THE STUDENTS WHICH INCLUDES .3,20,92,000/- RECEIVED IN DEMAND DRAFT AND THE BALANCE OF .4,73,20,000/- RECEIVED IN CASH. BUT, ACCORDING TO THE ASSESSING OFFICER, THE AMOUNT RECEIVED BY THE ASSESSEE IS .12,94,74,800/-. THE ASSESSEE WAS ASKED O EXPLAIN I N THE CONTEXT OF SEIZED MATERIAL I.E. ANN/VN/B&D/IMP/ 5. IT WAS SUBMITTED BY THE ASSESSEE THAT ALL THE CASH RECEIVE D ARE VOLUNTARY CONTRIBUTION AND WAS RECORDED IN THE CASH BOOK. BUT WHILE PREPARING LEDGER OF THE VOLUNTARY CONTRIBUTION, THEY BOOKED S OME CASH EXPENDITURE MADE FROM THE CASH RECEIVED. THUS, THE TOTAL RECEIPT OF VOLUNTARY CONTRIBUTIONS SHOWED LESSER AMOUNT TO THE TUNE OF .3,86,48,000/- AND THE DIFFERENCE WAS NOT .8,21,54,800/- AS CLAIMED BY THE DEPARTMENT. IN SUPPORT OF ITS CLAIM, THE ASS ESSEE PRODUCED BOOKS OF ACCOUNT. ON VERIFICATION OF THE VOUCHERS O F VOLUNTARY I.T.A. I.T.A. I.T.A. I.T.A. NO NONO NO. .. .18 1818 186 66 6/M/1 /M/1 /M/1 /M/14 44 4 10 CONTRIBUTION, IT WAS NOTICED THAT MANY VOUCHERS DID NOT HAVE THE REQUISITE DETAILS OF THE DONORS. THE ASSESSEE WAS A SKED TO PRODUCE THE DETAILS OF THE DONORS SO THAT THE SAME COULD BE VER IFIED. THE ASSESSEE HAS SUBMITTED BEFORE THE ASSESSING OFFICER THAT THE RE ARE SOME UNVERIFIABLE DONATION WHICH COMES TO THE TUNE OF .3,86,48,000/- AND THEY WANTED TO DISCLOSE .3,86,48,000/- UNDER SECTION 115BBC(3) OF THE ACT AS ANONYMOUS DONATION AS IT COULD NOT PRODU CE THE DETAILS OF THE DONORS. IN SO FAR AS DIFFERENCE POINTED OUT BY THE ASSESSING OFFICER BASED ON THE SEIZED MATERIALS, IT WAS EXPLAINED BEF ORE THE ASSESSING OFFICER BY PRODUCING BOOKS OF ACCOUNTS THAT THE VOL UNTARY DONATIONS RECEIVED BY THE ASSESSEE IS ONLY .7,94,12,000/-. THE ABOVE EXPLANATION GIVEN BY THE ASSESSEE WAS ACCEPTED BY T HE ASSESSING OFFICER. 11. IN THE COURSE OF PENALTY PROCEEDINGS, THE ASSE SSEE HAS SUBMITTED DETAILED EXPLANATION BEFORE THE ASSESSING OFFICER BY STATING THAT DURING THE COURSE OF EXAMINATION OF THE DONATI ONS RECEIVED IN THE CASE BY THE TRUST, IT WAS FOUND THAT CERTAIN DONATI ONS RECEIVED DID NOT HAVE COMPLETE DETAILS OF THE DONORS AS CONTEMPLATED UNDER SECTION 115BBC(3) OF THE ACT. THE TRUST AUTHORITIES, THEREF ORE, EXAMINED ALL THE DONATION RECEIPTS ON ITS OWN AND THEREAFTER IT WAS FOUND THAT DONATION I.T.A. I.T.A. I.T.A. I.T.A. NO NONO NO. .. .18 1818 186 66 6/M/1 /M/1 /M/1 /M/14 44 4 11 RECEIPTS TO THE EXTENT OF .3,86,48,000/- DO NOT CONTAIN COMPLETE DETAILS OF THE DONORS. THE ASSESSEE HIMSELF HAS OFFERED THE ABOVE AMOUNT FOR TAXATION DURING ASSESSMENT PROCEEDINGS. IN THE PENA LTY ORDER, THE ASSESSING OFFICER, AFTER CONSIDERING THE EXPLANATIO N OF THE ASSESSEE, CAME TO A CONCLUSION THAT THE ASSESSEE HAS TO OFFER THE ABOVE AMOUNT IN THE RETURN ORIGINALLY FILED AND NOT AT THE STAGE OF ASSESSMENT PROCEEDINGS. THEREFORE, THE EXPLANATION OF THE ASSE SSEE WAS NOT ACCEPTED. WE FIND THAT THE ASSESSING OFFICER HAS FA ILED TO UNDERSTAND THAT THE ASSESSEE HAS FILED NIL RETURN OF INCOME FO R THE REASON THAT THE INCOME RECEIVED BY THE ASSESSEE IS NOT LIABLE TO BE TAXED FOR THAT THE ASSESSEE BEING A CHARITABLE INSTITUTION AND NOT LIA BLE TO PAY ANY TAX. THEREFORE, THE ASSESSEE FILED A NIL RETURN OF INCOM E. WE FIND THAT THE ASSESSING OFFICER HAS NOT CONSIDERED THE EXPLANATIO N OF THE ASSESSEE AT ALL. HE SIMPLY REJECTED BY SAYING THAT HE OUGHT TO HAVE BEEN OFFERED THE ABOVE AMOUNT IN THE ORIGINAL RETURN FILED. IT I S NOT THE CASE OF THE ASSESSING OFFICER THAT THE EXPLANATION GIVEN BY THE ASSESSEE WAS FOUND EITHER FALSE OR NOT BONAFIDE. THE LD. CIT(A), WITHOUT EXAMINING THESE FUNDAMENTAL FACTS, SIMPLY CAME TO A CONCLUSIO N THAT THE ANONYMOUS DONATION RECEIVED BY THE ASSESSEE IS TAXA BLE UNDER THE INCOME TAX ACT AND CONFIRMED THE ORDER OF THE ASSES SING OFFICER. WE I.T.A. I.T.A. I.T.A. I.T.A. NO NONO NO. .. .18 1818 186 66 6/M/1 /M/1 /M/1 /M/14 44 4 12 FIND THAT THE ASSESSEE HAS RECEIVED VOLUNTARY DONAT ION AND THE ASSESSEE BEING AN EDUCATIONAL AND CHARITABLE INSTIT UTION NOT LIABLE FOR TAXATION. DURING THE SURVEY, SOME MATERIALS WAS SEI ZED AND THE ASSESSING OFFICER HAS ASKED THE ASSESSEE TO EXPLAIN THE DETAILS OF THE DONORS AND THE ASSESSEE HAS NOT ABLE TO EXPLAIN TO THE EXTENT OF 3,86,48,000/- CALCULATED BY THE ASSESSEE HIMSELF AN D ACCEPTED THAT THIS AMOUNT MAY BE CONSIDERED FOR TAXATION. IT IS N OT THE CASE OF THE ASSESSING OFFICER THAT BASED ON THE SEIZED MATERIAL S, THE ASSESSING OFFICER CAME TO A CONCLUSION THAT THE AMOUNT OFFERE D BY THE ASSESSEE IS ANONYMOUS DONATION. IN FACT, IN THE ASSESSMENT O RDER, THE ASSESSING OFFICER CAME TO A CONCLUSION BASED ON THE SEIZED MATERIALS IN ANN/VN/B&D/IMP-5 THE ASSESSEE HAS RECEIVED VOLUN TARY DONATION BY WAY OF CASH AMOUNT TO .12,94,74,800/- AND THE MANAGING TRUSTEE HAS SUBMITTED THAT THE AMOUNT IS ONLY .7,94,12,000/-. WHEN THE ASSESSEE GAVE AN EXPLANATION BY STATING THAT ALL TH E DONATIONS RECEIVED BY THE ASSESSEE ARE VOLUNTARY DONATIONS, H OWEVER, HE HAS SUBMITTED THAT IN RESPECT OF CERTAIN DONATIONS, DET AILS OF THE DONORS ARE NOT AVAILABLE AND RELEVANT AMOUNT WAS OFFERED FOR T AXATION. UNDER THESE FACTS AND CIRCUMSTANCES, THE ASSESSING OFFICE R, WITHOUT MAKING ENQUIRY/INVESTIGATION CANNOT PRESUME THAT THE DONAT IONS RECEIVED BY I.T.A. I.T.A. I.T.A. I.T.A. NO NONO NO. .. .18 1818 186 66 6/M/1 /M/1 /M/1 /M/14 44 4 13 THE ASSESSEE ARE NOT VOLUNTARY DONATIONS, PARTICULA RLY, WHEN THE ASSESSEE IS ENJOYING REGISTRATION UNDER SECTION 12A (A) OF THE ACT. 12. THE ASSESSEE, BY EXPLAINING ALL THE FACTS, SUB MITTED A DETAILED EXPLANATION BEFORE THE ASSESSING OFFICER. THEREAFTE R, IT IS THE DUTY OF THE ASSESSING OFFICER TO ESTABLISH THAT THE ASSESSE E HAS EITHER CONCEALED THE INCOME OR FILED INACCURATE PARTICULAR S. IN THE PRESENT CASE, THE ASSESSING OFFICER HAS ACCEPTED THE AMOUNT OFFERED BY THE ASSESSEE FOR TAXATION AND LEVIED PENALTY WITHOUT DO ING ANY ENQUIRY OR INVESTIGATION TO DISPROVE THAT THE EXPLANATION GIVE N BY THE ASSESSEE EITHER FALSE OR NOT BONAFIDE, PENALTY CANNOT BE LEV IED. THE ABOVE VIEW HAS BEEN ENDORSED BY THE HONBLE ANDHRA PRADESH HIG H COURT IN THE CASE OF CIT V. CHENNUPATI TYRE & RUBBER PRODUCTS [2 014] 90 CCH 0181 APHC. 13. WE FIND THAT THE ASSESSEE HAS FAILED TO HANDLE THE DONATIONS RECEIVED BY THEM IN APPROPRIATE MANNER. THEREFORE, THE ASSESSEE OFFERED THE VERY SAME AMOUNT FOR TAXATION. UNDER TH ESE FACTS AND CIRCUMSTANCES OF THE CASE, WE ARE OF THE OPINION TH AT THE ASSESSEE HAS NEITHER CONCEALED THE INCOME NOR FURNISHED INACCURA TE PARTICULARS. IN SO FAR AS CASE LAW RELIED ON BY THE LD. DR IS CONCE RNED, IN THE CASE OF I.T.A. I.T.A. I.T.A. I.T.A. NO NONO NO. .. .18 1818 186 66 6/M/1 /M/1 /M/1 /M/14 44 4 14 MAK DATA (P) LTD. V. CIT (SUPRA), IN THAT CASE, THE ASSESSEE HAS NOT GIVEN ANY EXPLANATION BEFORE THE ASSESSING OFFICER. IN THE PRESENT CASE, THE ASSESSEE HAS GIVEN A DETAILED EXPLANATION AND THE EXPLANATION GIVEN BY THE ASSESSEE WAS ACCEPTED TO C ERTAIN EXTENT AND ONLY IN RESPECT OF DONATIONS RECEIVED AND DETAILS O F THE DONORS NOT FILED, THE ASSESSING OFFICER HAS CONSIDERED THOSE DONATION S ARE ANONYMOUS DONATIONS. IT IS NOT THE CASE OF THE ASSESSING OFFI CER THAT THE EXPLANATION GIVEN BY THE ASSESSEE WAS FOUND EITHER FALSE OR NOT BONAFIDE. THEREFORE, THE CASE LAW RELIED BY THE LD. DR HAS NO APPLICATION. 14. THE HONBLE JURISDICTIONAL HIGH COURT IN THE C ASE OF CIT V. M/S. GEM GRANITES (KARNATAKA) IN T.C.(A) NO. 504 OF 2009 VIDE ORDER DATED 12.11.2013 HAS CONSIDERED THE JUDGEMENT OF THE HON BLE SUPREME COURT IN THE CASE OF MAK DATA P. LTD. V. CIT (SUPRA ) AND OBSERVED AS UNDER: 11. IN A RECENT DECISION OF THE HON'BLE SUPREME C OURT IN CIVIL APPEAL NO.9772 OF 2013, DATED 30.10.2013 (MAK DATA P. LTD., VS. COMMISSIONER OF INCOME TAX-II), THE HON'BLE SUPREME COURT WHILE CONSIDERING THE EXPLANATION TO SECTION 271(1), HELD THAT THE QUESTION WOULD BE WHETHER THE ASSESSEE HAD OFFERED AN EXPLAN ATION FOR CONCEALMENT OF PARTICULARS OF INCOME OR FURNISHING INACCURATE PARTICULARS OF INCOME AND THE EXPLANATION TO SECTIO N 271(1) RAISES A PRESUMPTION OF CONCEALMENT, WHEN A DIFFERENCE IS NO TICED BY THE ASSESSING OFFICER BETWEEN THE REPORTED AND ASSESSED INCOME. THE I.T.A. I.T.A. I.T.A. I.T.A. NO NONO NO. .. .18 1818 186 66 6/M/1 /M/1 /M/1 /M/14 44 4 15 BURDEN IS THEN ON THE ASSESSEE TO SHOW OTHERWISE, B Y COGENT AND RELIABLE EVIDENCE AND WHEN THE INITIAL ONUS PLACED BY THE EX PLANATION, HAS BEEN DISCHARGED BY THE ASSESSEE, THE ONUS SHIFTS ON THE REVENUE TO SHOW THAT THE AMOUNT IN QUESTION CONSTITUTED THEIR INCOME AND NOT OTHERWISE. FACTUALLY, WE FIND THAT THE ONUS CAST UPON THE ASSE SSEE HAS BEEN DISCHARGED BY GIVING A COGENT AND RELIABLE EXPLANAT ION. THEREFORE, IF THE DEPARTMENT DID NOT AGREE WITH THE EXPLANATION, THEN THE ONUS WAS ON THE DEPARTMENT TO PROVE THAT THERE WAS CONCEALMENT OF P ARTICULARS OF INCOME OR FURNISHING INACCURATE PARTICULARS OF INCOME. IN THE INSTANT CASE, SUCH ONUS WHICH SHIFTED ON THE DEPARTMENT HAS NOT BEEN D ISCHARGED. IN THE CIRCUMSTANCES, WE DO NOT FIND THAT THERE IS ANY GRO UND FOR THIS COURT TO SUBSTITUTE OUR INTERFERE WITH THE FINDING OF THE TR IBUNAL ON THE ASPECT OF THE BONAFIDES OF THE CONDUCT OF THE ASSESSEE. 15. IN THE PRESENT CASE, THE ASSESSEE HAS EXPLAINE D BEFORE THE ASSESSING OFFICER THAT THE AMOUNTS RECEIVED BY IT A RE VOLUNTARY DONATION AND CERTAIN DETAILS ARE NOT AVAILABLE. THE REFORE, THE EXTENT OF DETAILS NOT AVAILABLE ARE WORKED OUT BY THE ASSESSE E AND OFFERED FOR TAXATION. WE FIND THAT BY EXPLAINING ALL THE REASON S, THE ASSESSEE HAS DISCHARGED BURDEN CAST UPON IT. THEREAFTER, IT IS T HE DUTY OF THE ASSESSING OFFICER TO DISPROVE THAT THE EXPLANATION GIVEN BY THE ASSESSEE IS NEITHER CORRECT NOR BONAFIDE. THEREFORE , THE LD. CIT(A) IS NOT CORRECT IN UPHOLDING THE PENALTY ORDER PASSED B Y THE ASSESSING OFFICER BY FOLLOWING THE ABOVE DECISION OF THE HON BLE SUPREME COURT WITHOUT CONSIDERING THE EXPLANATION GIVEN BY THE AS SESSEE. 16. THE HONBLE GUJARAT HIGH COURT IN THE CASE OF NATIONAL TEXTILES V. CIT 249 ITR 125 HAS HELD THAT THE EXPLANATION 1 TO SECTION 271(1)(C) IS I.T.A. I.T.A. I.T.A. I.T.A. NO NONO NO. .. .18 1818 186 66 6/M/1 /M/1 /M/1 /M/14 44 4 16 TO THE EFFECT THAT WHERE IN RESPECT OF ANY FACT OR MATERIAL FOR PURPOSES OF HIS ASSESSMENT, AN ASSESSEE OFFERS AN EXPLANATIO N WHICH IS FOUND BY THE AO OR THE DY. CIT(A) TO BE FALSE OR WHERE TH E ASSESSEE IS UNABLE TO SUBSTANTIATE HIS EXPLANATION, THEN THE AM OUNT ADDED TO HIS INCOME SHALL BE DEEMED TO REPRESENT HIS CONCEALED I NCOME. THE NEWLY INTRODUCED EXPLANATION 1 CONSIDERABLY REDUCES, BUT DOES NOT ALTOGETHER REMOVE THE DEPARTMENTS ONUS TO PROVE CONCEALMENT I N ASSESSMENT BASED ON UNEXPLAINED CASH CREDIT OR UNEXPLAINED INV ESTMENT AND LIKE. THERE HAS NOT BEEN ANY SIGNIFICANT DIFFERENCE BY TH E INTRODUCTION OF NEW EXPLANATION 1 IN PLACE OF ORIGINAL EXPLANATION 1 W.E.F. 1 ST APRIL, 1976. THE PREVIOUS EXPLANATION USED THE EXPRESSION 'DEEMED TO HAVE CONCEALED THE PARTICULARS OF HIS INCOME OR FURNISH INACCURATE PARTICULARS OF SUCH INCOME FOR THE PURPOSE OF CLAUSE (C) OF THI S SUB-SECTION'. WHILE THE PRESENT EXPLANATION 1 READS: SUCH INCOME SHALL BE DEEMED TO REPRESENT THE INCOME IN RESPECT OF WHICH PARTICULAR S HAVE BEEN CONCEALED. IN EFFECT, THIS MAKES EXPLICIT WHAT WAS IMPLICIT IN THE PREVIOUS EXPLANATION AND THE HONBLE GUJARAT HIGH C OURT HAS CONCLUDED THAT IN ORDER TO JUSTIFY LEVY OF PENALTY FOR ADDITION OF CASH CREDITS, THERE MUST BE SOME MATERIAL OR CIRCUMSTANC ES LEADING TO REASONABLE CONCLUSION THAT THE AMOUNT DOES REPRESEN T ASSESSEES I.T.A. I.T.A. I.T.A. I.T.A. NO NONO NO. .. .18 1818 186 66 6/M/1 /M/1 /M/1 /M/14 44 4 17 INCOME AND THE CIRCUMSTANCES MUST SHOW THAT THERE W AS CONSCIOUS CONCEALMENT OR ACT OR FURNISHING OF INACCURATE PART ICULARS; EXPLANATION 1 DOES NOT MAKE THE ASSESSMENT ORDER CONCLUSIVE EVI DENCE THAT THE AMOUNT ASSESSED WAS IN FACT THE INCOME OF THE ASSES SEE. 17. IN THE CASE OF CIT V. BALRAJ SAHANI 119 ITR 36 , THE HONBLE BOMBAY HIGH COURT HAS OBSERVED AS UNDER: THE PROCEEDINGS FOR PENALTY AGAINST THE ASSESSEE W ERE TAKEN UNDER S. 271 (L)(C). UNDER THAT PROVISION, BEFORE THE ITO CA N EXERCISE HIS JURISDICTION TO MAKE AN ORDER BY WAY OF PENALTY, HE HAS TO BE SATISFIED THAT THE ASSESSEE HAS CONCEALED THE PARTICULARS OF HIS INCOME OR FURNISHED INACCURATE PARTICULARS OF SUCH INCOME. TH E GRAVAMEN OF THE CHARGE AGAINST THE ASSESSEE WAS THAT HE HAD CONCEAL ED THE RECEIPT WHICH HE HAD RECEIVED FROM THE PRODUCER IN CONNECTI ON WITH THE A PARTICULAR PICTURE. IT IS NO DOUBT TRUE THAT IN THE QUANTUM APPEAL THE TRIBUNAL HAD COME TO A CONCLUSION THAT THE ASSESSEE HAD RECEIVED A SUM WHICH WAS PAID TO HIM BY THE PRODUCER. THE FIND ING IN THOSE PROCEEDINGS, HOWEVER, IS NOT BINDING IN THE PROCEED INGS RELATING TO PENALTY. IT IS, THEREFORE, PERFECTLY OPEN TO THE TR IBUNAL WHEN THE MATTER WAS TAKEN TO IT IN AN APPEAL FROM THE ORDER OF IAC LEVYING THE PENALTY, TO GO INTO THE QUESTION AS TO WHETHER THE ASSESSEE HAD IN FACT RECEIVED THE SAID SUM FROM THE PRODUCER. WHILE DEALING WITH THAT QUESTION THE TRIBUNAL HAS EXHAUSTIVELY DEALT WITH THE EVIDENCE A ND HAS FOUND THAT THE PRODUCER WAS AN UNRELIABLE WITNESS. THE TRIBUNA L HAS ALSO TAKEN INTO CONSIDERATION THE FACT THAT NO FINDING AGAINST THE ASSESSEE COULD BE REACHED ON THE BASIS OF ACCOUNT BOOKS WHICH THE ASS ESSEE DID NOT HAVE ANY OPPORTUNITY TO SEE OR STUDY AND IN RESPECT OF W HICH THE ASSESSEE DID NOT HAVE ANY OPPORTUNITY OF CROSS-EXAMINING THE PRO DUCER. THE PRODUCER HAS BEEN FOUND TO BE AN UNREALIABLE WITNES S, WHOSE RELATIONS WITH THE ASSESSEE WERE STRAINED. THE ORIGINAL CASH BOOK OR ACCOUNT BOOKS WERE NOT ANYWHERE TO BE SEEN. NOT ONLY DID TH EY REMAIN UNPROVED, BUT THEY WERE, IN FACT, NOT PRODUCED AT A LL. IF THIS WAS THE ONLY MATERIAL TO SHOW THAT THE ASSESSEE HAD RECEIVE D THE SAID AMOUNT AND THE MATERIAL WAS FOUND TO BE WHOLLY UNRELIABLE, NO BURDEN SHIFTED TO THE ASSESSEE WHICH HE WAS CALLED UPON TO DISCHAR GE. THERE WAS, I.T.A. I.T.A. I.T.A. I.T.A. NO NONO NO. .. .18 1818 186 66 6/M/1 /M/1 /M/1 /M/14 44 4 18 THEREFORE, NO QUESTION OF DRAWING ANY ADVERSE INFER ENCE BECAUSE HIS CASE THROUGHOUT HAD BEEN THAT HE HAD NOT RECEIVED T HE SAID AMOUNT. THE ASSESSEE COULD NOT REALLY BE ASKED TO PROVE THE NEGATIVE. THE TRIBUNAL HAS FOUND AS A FACT THAT THE ASSESSEE DID NOT RECEIVE THE SAID AMOUNT AT ALL. ON THAT FINDING, NO CHARGE OF CONCEA LMENT COULD POSSIBLY ARISE. THE TRIBUNAL WAS, THEREFORE, JUSTIFIED IN SE TTING ASIDE THE ORDER OF PENALTY. 18. THE HONBLE BOMBAY HIGH COURT IN THE ABOVE CAS E HAS CONCLUDED THAT THE FINDINGS IN QUANTUM PROCEEDINGS ARE NOT BINDING IN PENALTY PROCEEDINGS AND THE TRIBUNAL, OR CONSIDERAT ION OF UNRELIABLE STATE OF EVIDENCE REGARDING CONCEALMENT, WAS JUSTIF IED IN DELETING PENALTY. 19. IN VIEW OF THE ABOVE, AFTER CONSIDERING THE EN TIRE FACTS AND CIRCUMSTANCES OF THE CASE AND ALSO BY FOLLOWING THE JUDICIAL PRECEDENTS, WE HOLD THAT THE ASSESSEE HAS NEITHER C ONCEALED THE INCOME NOR FILED INACCURATE PARTICULARS. THEREFORE, THE LD. CIT(A) WAS NOT JUSTIFIED IN CONFIRMING THE PENALTY ORDER PASSE D BY THE ASSESSING OFFICER. THUS, THE ORDER PASSED BY THE LD. CIT(A) I S REVERSED AND THE PENALTY LEVIED BY THE ASSESSING OFFICER UNDER SECTI ON 271(1)(C) OF THE ACT IS DELETED. I.T.A. I.T.A. I.T.A. I.T.A. NO NONO NO. .. .18 1818 186 66 6/M/1 /M/1 /M/1 /M/14 44 4 19 20. IN THE RESULT, THE APPEAL FILED BY THE ASSESSE E IS ALLOWED. ORDER PRONOUNCED ON FRIDAY, THE 24 TH OF JULY, 2015 AT CHENNAI. SD/- SD/- (CHANDRA POOJARI) ACCOUNTANT MEMBER (V. DURGA RAO) JUDICIAL MEMBER CHENNAI, DATED, THE 24.07.2015 VM/- / ) ''+01 21.+ /COPY TO: 1. %& / APPELLANT, 2. '(%& / RESPONDENT, 3. 3 ( ) /CIT(A), 4. 3 /CIT, 5. 14 ''+' /DR & 6. 5! 6 /GF.