M/s. Navjyoti Vikas Sansthan, Ghaziabad V. Addl. CIT, Ghaziabad

ITA 4185/DEL/2016

• Counselvise Citation: [2019] 116 COUNSELVISE.COM (IT) 9093 (ITAT-DELHI)
• Duration Of Justice: 2 year(s) 11 month(s) 12 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 10-07-2019
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: E
• Assessment Year: 2007-2008
• Appeal Filed On: 29-07-2016
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Keywords: Charitable institution
• Section: 12AA; 148; 11

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCHES E: DELHI BEFORE SHRI BHAVNESH SAINI, JUDICIAL MEMBER AND DR. B.R.R. KUMAR, ACCOUNTANT MEMBER ITA.NO.4184 & 4185/0DEL./2016 ASSESSMENT YEARS 2006-2007 & 2007-2008 NAVIJYOTI VIKAS SANSTHAN HIG, J-3A, SANJAY NAGAR, GHAZIABAD. PAN AAAAN4050A VS., THE ADDL. CIT, RANGE-1, GHAZIABAD. (APPELLANT) (RESPONDENT) FOR ASSESSEE : - NONE - FOR REVENUE : MS. RINKU SINGH, SR. D.R. DATE OF HEARING : 09 .0 7 .2019 DATE OF PRONOUNCEMENT : 10 .0 7 .2019 ORDER PER BHAVNESH SAINI, J.M. BOTH THE APPEALS BY THE ASSESSEE ARE DIRECTED AGAINST THE DIFFERENT ORDERS OF THE LD. CIT(A), GHAZIABAD, DATED 11.02.2016, FOR THE A.YS. 2006-2007 AND 2007-2008, CHALLENGING THE ADDITION OF RS.1,66,05,000/-AND RS.15 LAKHS ON ACCOUNT OF UNEXPLAINED BANK DEPOSITS. 2 ITA.NOS.4184 & 4185/DEL./2016 NAVIJYOTI VIKAS SANSTHAN, GHAZIABAD. 2. THE ASSESSEE HAS BEEN NOTIFIED THE DATE OF HEARING TWICE THROUGH REGISTERED POST. HOWEVER, NONE APPEARED ON BEHALF OF THE ASSESSEE. THE ASSESSEE IS, THEREFORE, PROCEEDED EX-PARTE. 3. WE HAVE HEARD THE LD. D.R. AND PERUSED THE FINDINGS OF THE AUTHORITIES BELOW. THE LD. D.R. STATED THAT FACTS ARE SAME IN BOTH THE APPEALS. 4. THE A.O. NOTED IN THE ASSESSMENT ORDER FOR A.Y. 2006-2007 THAT ASSESSEE IS REGISTERED WITH THE REGISTRAR OF SOCIETIES AND LATER ON NAME WAS CHANGED. MEMORANDUM OF THE SOCIETY SHOWS ITS MAIN OBJECTS ARE FOR EDUCATIONAL PURPOSES. THE ASSESSEE DID NOT FILE RETURN OF INCOME. NOTICE UNDER SECTION 148 OF THE I.T. ACT WAS ISSUED AND SERVED UPON THE SECRETARY OF THE ASSESSEE SOCIETY. INFORMATION REGARDING ADVANCEMENT OF DONATION FROM THE ASSESSEE WAS RECEIVED BY THE A.O. ON THE BASIS OF WHICH ASSESSMENT WAS REOPENED. IT IS NOTED THAT WHILE COMPLETING THE ASSESSMENT PROCEEDINGS OF M/S. BANKEY BIHARI EDUCATIONAL SOCIETY, IT WAS NOTICED THAT ASSESSEE SOCIETY HAD ADVANCED DONATIONS. THE VERIFICATIONS OF THE BANK ACCOUNTS OF THE SOCIETY REVEAL 3 ITA.NOS.4184 & 4185/DEL./2016 NAVIJYOTI VIKAS SANSTHAN, GHAZIABAD. THAT HUGE CASH DEPOSITS AND OTHER TRANSACTIONS WERE REFLECTED IN ITS BANK ACCOUNT MAINTAINED WITH NAINITAL BANK, GHAZIABAD. FURTHER ENQUIRIES IN THE CASE REVEALED THAT THE INTRODUCER SHRI VINEET KUMAR WAS NOT IN EXISTENCE AND FURTHER TRANSFER ENTRIES FROM M/S VARUN TRADE CENTRE, M/S SHARMA ASSOCIATES AND M/S SUNIL ASSOCIATES TO ASSESSEE SOCIETY WERE REVEALED. THE ADDRESSES OF THE ACCOUNT HOLDERS OF THESE CONCERNS WERE ALSO FOUND BOGUS. THE STATEMENT ON OATH WERE RECORDED OF SHRI DEVENDRA SINGH CHAUHAN AND SHRI MADAN GIRI, THE JOINT ACCOUNT HOLDERS OF THE BANK ACCOUNT OF THE SOCIETY, IT WAS STATED THAT THE INCOME TAX PRACTITIONER SHRI SANDEEP GARG AND ADVOCATE SHRI VINOD DIXIT HAD PROMISED TO PAY 10% COMMISSION ON THE ENTIRE TRANSACTIONS FOR PROVIDING ENTRY THROUGH THE BANK ACCOUNT OF THE ASSESSEE SOCIETY AND FOR THIS PURPOSE BLANKED SIGNED CHEQUES WERE GIVEN BY THE ASSESSEE SOCIETY. IT WAS FURTHER STATED THAT THE ASSESSEE SOCIETY HAS NO INCOME AND NO DONATION HAVE BEEN GIVEN TO ANY SOCIETY BECAUSE THERE IS NO SOURCE OF INCOME AND NO ACTIVITY IS BEING DONE BY THE ASSESSEE SOCIETY. THE STATEMENTS OF SHRI VINOD DIXIT AND 4 ITA.NOS.4184 & 4185/DEL./2016 NAVIJYOTI VIKAS SANSTHAN, GHAZIABAD. SHRI SANDEEP GARG WERE ALSO RECORDED. THEY DENIED ALLEGATIONS AGAINST THEM. THE A.O. NOTED THAT NO DOCUMENTS HAVE BEEN PRODUCED BEFORE HIM. SHRI MADAN GIRI, SECRETARY OF THE ASSESSEE SOCIETY APPEARED BEFORE A.O. AND FILED AN AFFIDAVIT THAT THEIR COUNSEL SHRI SANJEEV/SANDEEP GARG, CA WHO WERE LOOKING AFTER THE AFFAIRS OF THE SOCIETY HAD ALL THE DOCUMENTS LIKE COPY OF BANK ACCOUNT, BANK PASSBOOK, PAN CARD AND BANK STATEMENT ETC. ARE IN THEIR POSSESSION AND THAT THEY REFUSED TO GIVE BACK THE REQUIRED DOCUMENTS, THEREFORE, ASSESSEE SOCIETY IS UNABLE TO FILE THE RETURN OF INCOME. THE A.O. IN SUCH CIRCUMSTANCES, PROCEED TO FRAME EX-PARTE ASSESSMENT. THE A.O. NOTED THAT IN THE ACCOUNT OF THE SOCIETY, THERE ARE DEPOSITS OF RS.1,66,05,000/- WHICH WERE DEPOSITED THROUGH THE CLEARING ENTRIES OF DELHI STATE COOPERATIVE BANK AND MAHAMEDHA URBAN COOPERATIVE BANK. ONE OF THE ACCOUNT OF THE INVESTOR WERE ALSO INTRODUCED BY SHRI VINOD KUMAR GUPTA, PROPRIETOR OF M/S. VARUN TRADE CENTRE, GHAZIABAD. OUT OF THIS AMOUNT, VARIOUS CHEQUES HAVE BEEN ISSUED IN THE NAMES OF FATEH CHAND CHARITABLE TRUST TOTALING TO RS.1,57,00,000/-. BOTH 5 ITA.NOS.4184 & 4185/DEL./2016 NAVIJYOTI VIKAS SANSTHAN, GHAZIABAD. THE SIGNATORY TO THE BANK ACCOUNT OF THE ASSESSEE SOCIETY DENIED TO HAVE ANY KNOWLEDGE OF ISSUE OF CHEQUES TO FATEH CHAND CHARITABLE TRUST. THE A.O. ALSO NOTED THAT CONFIRMATION FILED IN THIS REGARD IS STATED TO BE FORGED. THE A.O, THEREFORE, NOTED THAT AMOUNT OF RS.1,57,00,000/- HAS BEEN WITHDRAWN FROM THE BANK ACCOUNT OF THE ASSESSEE SOCIETY FOR WHICH NO UTILIZATION HAVE BEEN EXPLAINED, THEREFORE, SAME WAS ADDED ON ACCOUNT OF EXPENSES DISALLOWED IN A SUM OF RS.1,57,00,000/-. THE ADDITION WAS CHALLENGED BEFORE THE LD. CIT(A). THE SUBMISSIONS OF THE ASSESSEE ARE REPRODUCED IN THE APPELLATE ORDER. THE LD. CIT(A), HOWEVER, DID NOT ACCEPT THE CONTENTION OF THE ASSESSEE AND NOTED THAT ASSESSEE HAS NOT BEEN GRANTED REGISTRATION UNDER SECTION 12AA OF THE I.T. ACT, THEREFORE, IT IS NOT ELIGIBLE FOR ANY DEDUCTION UNDER SECTION 11 TO 13 OF THE I.T. ACT. IT WAS ALSO FOUND THAT ASSESSEE FAILED TO PROVE SATISFACTORILY THE AMOUNT OF RS.1,66,05,000/- DEPOSITED IN THE ACCOUNT OF THE SOCIETY THROUGH EXPLAINED SOURCES. THE LD. CIT(A), THEREFORE, HELD THAT ASSESSEE FAILED TO EXPLAIN THE SOURCE OF THE AMOUNT DEPOSITED IN THEIR BANK ACCOUNT. THE 6 ITA.NOS.4184 & 4185/DEL./2016 NAVIJYOTI VIKAS SANSTHAN, GHAZIABAD. LD. CIT(A) ALSO RECORDED THAT IN THE SUBMISSION OF THE ASSESSEE, ASSESSEE CONTENDED THAT DONEES WERE THE REAL PROVIDERS OF THE ENTRIES. THE LD. CIT(A) ISSUED ENHANCEMENT NOTICE TO THE ASSESSEE AS TO WHY THE ADDITION SHOULD NOT BE ENHANCED TO THE FULL AMOUNT DEPOSITED IN THE BANK ACCOUNT OF THE ASSESSEE. THE LD. CIT(A), ACCORDINGLY, ENHANCED THE ADDITION TO RS.1,66,05,000/- WHICH IS THE AMOUNT OF UNEXPLAINED DEPOSITED IN THE BANK ACCOUNT OF THE ASSESSEE. THE APPEAL FOR THE A.Y. 2006-2007 WAS ACCORDINGLY DISMISSED. 5. THE FACTS ARE SAME IN A.Y. 2007-2008 IN WHICH THE A.O. MADE THE ADDITION OF RS.24 LAKHS. THE LD. CIT(A) HOWEVER FOUND THAT SINCE ADDITION IS ENHANCED IN A.Y. 2006- 2007 TO RS.1,66,05,000/-, THEREFORE, OPENING BALANCE COULD NOT HAVE BEEN ADDED. THE ADDITION WAS, THEREFORE, RESTRICTED TO RS.15 LAKHS. THE APPEAL OF ASSESSEE WAS PARTLY ALLOWED. 6. AFTER CONSIDERING THE SUBMISSIONS OF THE LD. D.R. WE DO NOT FIND ANY MERIT IN BOTH THE APPEALS OF THE ASSESSEE. IT IS A FACT THAT ASSESSEE HAS NOT BEEN GRANTED REGISTRATION UNDER SECTION 12AA OF THE I.T. ACT, THEREFORE, ASSESSEE WOULD 7 ITA.NOS.4184 & 4185/DEL./2016 NAVIJYOTI VIKAS SANSTHAN, GHAZIABAD. NOT GET ANY EXEMPTION UNDER SECTION 11 OF THE I.T. ACT. THE AUTHORITIES BELOW FOUND THAT THERE ARE UNEXPLAINED DEPOSITS IN THE BANK ACCOUNTS OF THE ASSESSEE FOR BOTH THE YEARS FOR WHICH NO SOURCE HAVE BEEN EXPLAINED. FURTHER, IT WAS FOUND THAT THE BANK ACCOUNTS WERE MANAGED BY THE PROFESSIONALS WHO ALLURED OFFICE BEARERS OF THE ASSESSEE SOCIETY TO TAKE UNEXPLAINED DEPOSITS IN THE ACCOUNT OF THE ASSESSEE AND TRANSFERRED THE SAME TO ANOTHER SOCIETY FOR COMMISSION OF 10%. THESE FACTS CLEARLY SHOW THAT ASSESSEE SOCIETY WAS HAVING NO INCOME AND NO ACTIVITIES HAVE BEEN DONE PURSUANT TO ITS OBJECTS. IT IS A CASE OF MONEY LAUNDERING THROUGH SYSTEMATIC ARRANGEMENT. THE ASSESSEE, THEREFORE, FAILED TO EXPLAIN SOURCE OF THE SAME AND TRANSFER OF MONEY TO OTHER SOCIETIES AS PER LAW. NO INTERFERENCE IS CALLED FOR IN THE MATTER. WE, ACCORDINGLY, DISMISS BOTH THE APPEALS. 7. IN THE RESULT, BOTH THE APPEALS OF THE ASSESSEE ARE DISMISSED. 8 ITA.NOS.4184 & 4185/DEL./2016 NAVIJYOTI VIKAS SANSTHAN, GHAZIABAD. ORDER PRONOUNCED IN THE OPEN COURT. SD/- SD/- (DR. B.R.R. KUMAR) (BHAVNESH SAINI) ACCOUNTANT MEMBER JUDICIAL MEMBER DELHI, DATED 10 TH JULY, 2019 VBP/- COPY TO 1. THE APPELLANT 2. THE RESPONDENT 3. CIT(A) CONCERNED 4. CIT CONCERNED 5. D.R. ITAT E BENCH 6. GUARD FILE //BY ORDER// ASST. REGISTRAR : ITAT : DELHI BENCHES : DELHI.