INTERNATIONAL RURAL EDUCATIONAL & CULTURAL ASSOCIATION, NARMADA V. ITO, WARD-1, BHARUCH

ITA 565/SRT/2019

• Counselvise Citation: [2022] 104 COUNSELVISE.COM (IT) 1759 (ITAT-SURAT)
• Duration Of Justice: 2 year(s) 8 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 17-08-2022
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: DB
• Next Hearing Date: 17-08-2022
• Assessment Year: 2011-2012
• Appeal Filed On: 10-12-2019
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Keywords: Unexplained cash credit; Charitable institution; Rule of consistency; Additional evidence; Corroborative evidences; Set aside
• Section: 68; 143(3); 80G; 12A

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, SURAT BENCH, SURAT BEFORE SHRI PAWAN SINGH, JUDICIAL MEMBER AND DR. ARJUN LAL SAINI, ACCOUNTANT MEMBER ITA No. 564 & 565/Srt/2019 (Assessment Year: 2010-11 & 2011-12) (Physical hearing) International Rural Educational & Cultural Association, Inreca Complex, Rajpipla Road, Dist. Narmada-393040. PAN No. AAATI 3801 R Vs. I.T.O., Ward-1, Bharuch. Appellant/ assessee Respondent/ revenue Appellant represented by None Respondent represented by Shri H.P. Meena (CIT-DR) Date of hearing 18/08/2022 Date of pronouncement 18/08/2022 Order under Section 254(1) of Income Tax Act PER: PAWAN SINGH, JUDICIAL MEMBER: 1. These two appeals by the assessee are directed against the separate orders of learned Commissioner of Income Tax (Appeals)-4, Vadodara (in short, the ld. CIT(A) dated 30/09/2019 and 03/09/2019 for the Assessment years (AY) 2010-11 and 2011-12 respectively. In both these appeals, the assessee has raised common grounds of appeal, except variation of addition under Section 68 of the Income Tax Act, 1961 (in short, the Act). Facts in both these years are almost similar, therefore, both these appeals were clubbed, heard together and are being decided ITA No. 564 & 565/Srt/2019 International Rural Educational & Cultural Association Vs ITO 2 by this consolidated order to avoid the conflicting decision. For appreciation of facts, the appeal for the A.Y. 2010-11 is treated as a “lead case”. In this appeal, the assessee has raised following grounds of appeal: “1. The learned ITO and CIT(Appeal-4) erred in law and on facts in passing the assessment order u/s 143(3) of IT Act, 1961 which is requested to be quashed. 2. The learned ITO and CIT(Appeal-4) erred in law by making the addition of Rs. 53,53,555/- u/s 68 of the IT Act, 1961 being unexplained cash credits. 3. Prayer: (i) To set aside the assessment order u/s 143(3) of IT Act, 1961 passed by the ITO, Ward-1, Vadodara. (ii) To drop the addition of Rs. 5353555/- u/s 68 of IT Act, 1961 being unexplained cash credits. Your honour, appellant prays for leave to add to alter and/or to amend all or any of the grounds before the final hearing of the appeal.” 2. Brief facts of the case as gathered from the orders of the lower authorities are that the assessee is a public charitable trust and having registration under Section 12A and 80G of the Income Tax Act, 1961 (in short, the Act). The assessee filed its return of income for the Assessment Year (AY) 2010-11 on 30/03/2011 declaring NIL income. The case of assessee was selected for scrutiny. During the assessment, it was noted by the Assessing Officer that Rs. 41,49,55/- was credited in cash of different ITA No. 564 & 565/Srt/2019 International Rural Educational & Cultural Association Vs ITO 3 dates in the name of Dr. V.M. Kaushik and amount of Rs. 12,04,000/- was credited in cash on different dates in the name of Mrs. Mayarani V Kaushik. The Assessing Officer also examined the books of account of assessee trust and the return of income of trustees to verify the creditworthiness of trustees who introduced the huge amount in cash. The Assessing officer found that Dr. V.M. Kaushik has filed his return of income for A.Y. 2010-11 declaring total income of Rs. 1,52,000/- after claiming deduction under Chapter VI-A of Rs. 1.00 lac and Mrs. Mayarani V Kaushik received salary of Rs. 4,54,302/- from Bal Bharati Public School, Rohini Delhi. The Assessing Officer was of the view that the trustees are not having capacity to introduce such huge amount in cash. The assessee has not furnished any explanation about the credit shown in the cash in the books of account. Accordingly, the Assessing Officer made addition under Section 68 of the Act on Rs. 53,53,555/-. 3. On appeal before the ld. CIT(A), the assessee filed additional evidence which consists of cash book of various projects and copies of bank statement, copy of correspondence with government agencies regarding approval of fund, copy of extract of 7/12 of agricultural land and prayed to admit the additional evidence. On the additional evidence, the remand report of Assessing officer was called. The Assessing Officer furnished his remand report dated 17/01/2019. In the remand report, the Assessing ITA No. 564 & 565/Srt/2019 International Rural Educational & Cultural Association Vs ITO 4 officer objected in admission of additional evidence and submit that during the assessment, the assessee was given ample opportunity to produce supporting evidence in respect of deposited accepted by Dr. V.M. Kaushik and Mrs. Mayarani V Kaushik. In absence of any explanation, the addition was made under Section 68 of the Act. The Assessing Officer further stated that Dr. V.M. Kaushik has declared income in his return of income of Rs. 1,52,000/- and Mrs. Mayarani V Kaushik declared total income of Rs. 3,43,810/-. From these facts, the creditworthiness of the trustees are not proved. The Assessing officer contended to uphold the addition under Section 68 of Rs. 53,53,555/-. Copy of remand report was furnished to the assessee. The assessee filed its rejoinder as recorded in para 4.2 of order of ld. CIT(A). In the rejoinder, the assessee stated that the assessee received the said amount in the form of advance from trustee and part of the amount was repaid during the year and out of advance of the loan, identity proof of friend from whom loan was received was furnished. On the basis of such rejoinder/explanation, the assessee tried to substantiate the genuineness of cash credit. The assessee also furnished a certificate of Tehsildar showing agricultural income of Rs. 4.00 lacs. The explanation of assessee was not accepted by ld. CIT(A) by holding that the assessee has miserably failed to prove the source of agricultural income and other ITA No. 564 & 565/Srt/2019 International Rural Educational & Cultural Association Vs ITO 5 sources of fund/creditworthiness and dismissed the appeal. Further aggrieved, the assessee has filed the present appeal before this Tribunal. 4. None has appeared on behalf of assessee despite service of notice. Perusal of record shows that authority letter of Khandar & Associates was filed, is on record, who have sought adjournment on 16/2/2022 and 26/4/2022 and thereafter not attended the hearing on 07/7/2022 and again on 18/8/2022 (today), therefore, we find that the assessee has no regard with this judicial forum, thus, we left no option except to decide the appeal on the basis of material available on record and after hearing the submission of ld. CIT-DR for the revenue. The ld. CIT-DR for the revenue submits that the assessee has failed to prove the creditworthiness of the trustees who have introduced cash in the books of assessee. The trustees have very meagre income as recorded by Assessing Officer and appreciated by ld. CIT(A). The assessee has not filed even a single document to prove the creditworthiness of the creditors and genuineness of transactions. Since all the ingredients of Section 68 is not substantiated by assessee, therefore, the appeal of assessee was dismissed by the ld. CIT(A). Before the ld. Tribunal, the assessee has not filed even a single document to substantiate the grounds of appeal. The assessee is not entitled for any relief whatsoever claimed in the grounds of appeal. ITA No. 564 & 565/Srt/2019 International Rural Educational & Cultural Association Vs ITO 6 5. We have considered the submission of ld. CIT-DR for the revenue and perused the orders of lower authorities carefully. We find that during the assessment, the assessee was asked to explain the creditworthiness of trustee of the assessee and genuineness of transactions. The assessee failed to file any documentary evidence and to substantiate the creditworthiness of the trustees who introduced the cash in the books of assessee. The Assessing officer in absence of any evidence made addition under Section 68 of the Act. The ld. CIT(A) confirmed the addition by taking a view that the assessee has not proved the agricultural income or source of credit. Before us, the assessee has neither filed any document nor any written submission to substantiate various grounds of appeal, therefore, in absence of any evidence, we do not find any merit in the grounds of appeal raised by the assessee. Accordingly, we uphold the order of the ld. CIT(A). 6. In the result, this appeal of assessee is dismissed. 7. Now we take appeal for the A.Y. 2011-12 being ITA No. 565/Srt/2019 wherein the assessee has raised similar grounds of appeal as raised in appeal for AY 2010- 11, except variation of addition. In this appeal, the grounds, facts and submission of the ld. CIT-DR are identical to the grounds, facts and submission made in ITA No. 564/Srt/2019 for the A.Y. 2010-11. Considering the fact that we have dismissed the appeal of assessee in A.Y. 2010-11 by upholding the order of ld. ITA No. 564 & 565/Srt/2019 International Rural Educational & Cultural Association Vs ITO 7 CIT(A), therefore, considering the principle of consistency, the grounds of appeal of ITA No. 564/Srt/2019 for the A.Y. 2010-11 are also dismissed with similar directions. 8. In the result, both these appeals of the assessee are dismissed. Order pronounced in the open court on 18 th August, 2022 in open court at the time of hearing and result was also placed on notice board. Sd/- Sd/- (Dr. ARJUN LAL SAINI) (PAWAN SINGH) ACCOUNTANT MEMBER JUDICIAL MEMBER Surat, Dated: 18/08/2022 *Ranjan Copy to: 1. Assessee 2. Revenue 3. CIT(A) 4. CIT 5. DR 6. Guard File By order Sr.Private Secretary, ITAT, Surat