Dr Subhash Pethaljibhai Chavda, JUNAGADH V. The Income Tax Officer, Ward 1(1), JUNAGADH

ITA 91/RJT/2018

• Counselvise Citation: [2024] 100 COUNSELVISE.COM (IT) 3912 (ITAT-RAJKOT)
• Duration Of Justice: 5 year(s) 11 month(s) 2 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-02-2024
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 29-11-2023
• Assessment Year: 2011-2012
• Appeal Filed On: 06-03-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ASHISH KUMAR PANDEY
• Keywords: Charitable institution
• Section: 11; 142(1); 143(2); 22

Judgement Text

ITA No.91/RJT/2018 Assessment Year: 2011-12 1 IN THE INCOME TAX APPELLATE TRIBUNAL RAJKOT BENCH, RAJKOT (Conducted through E-Court at Ahmedabad) BEFORE SMT. ANNAPURNA GUPTA, ACCOUNTANT MEMBER AND Ms. SUCHITRA KAMBLE, JUDICIAL MEMBER ITA No.91/RJT/2018 Assessment Year: 2011-12 Dr. Subhash Pethaljibhai Chavda Ahir Kelvani Mandal, C/o. D.R. Adhia, “Om Shri Padmalaya” Beside Trikamraiji Haweli, Opp. Hotel Imperial Palace, 16, Jagnath Plot,Dr. Yagnik Road, Rajkot. [PAN – AAATD 1612 K] Vs. The Income Tax Officer, Ward – 1(1), Junagadh. (Appellant) (Respondent) Assessee by Shri Vimal Desai, AR Revenue by Shri Ashish Kumar Pandey, Sr. DR Da te o f He a r in g 30.11.2023 Da te o f P ro n o u n ce m e n t 09.02.2024 O R D E R PER SUCHITRA KAMBLE, JUDICIAL MEMBER : This appeal is filed by the Assessee against the order dated 01.02.2018 passed by the CIT(A)-3, Rajkot for the Assessment Year 2011-12. 2. The Assessee has raised the following grounds of appeal:- “1.1 The Ld. CIT(A) has erred in law and facts in confirming addition of Rs.21,84,000/- in respect of donation received by the appellant. The same needs deletion. 1.2 The Ld. CIT(A) has erred in law and facts in confirming addition of Rs.21,84,000/- in respect of donation received by the appellant without properly considering that the Ld. AO has erred in not examining/ verifying evidences furnished before him in respect of 25 persons. The same needs deletion. 1.3 The Ld. CIT(A) has erred in law and facts in confirming addition of Rs.21,84,000/- in respect of donation received by the appellant without ITA No.91/RJT/2018 Assessment Year: 2011-12 2 considering that the Ld. AO has erred in not calling/remaining persons other than 25 persons. The same needs deletion. 1.4 The Ld. CIT(A) has erred in law and facts in confirming addition of Rs.21,84,000/- in respect of donation received by the appellant without considering that the addition made by the Ld. AO is totally based on presumption surmises statement made before him in positive manner. The same needs deletion. 1.5 The Ld. CIT(A) has erred in law and facts in confirming addition of Rs.21,84,000/- in respect of donation received by the appellant totally based on presumption and surmises. The same needs deletion. 1.6 Taking into consideration the legal, statutory, factual, accounting and administrative aspects no addition of Rs.21,84,000/- ought to have been confirmed. The same needs deletion. 2. Taking into consideration the legal, statutory, factual, accounting and administrative aspects no disallowance of Rs.21,84,000/- ought to have been confirmed. The same needs deletion. 3. Without prejudice, the assessment made is bad in law and ought to have been annulled. 4. Without prejudice, the assessment made is bad ain law and ought to have been annulled being passed having no jurisdiction. 5. Without prejudice, no adequate, sufficient and reasonable opportunity has been provided at the time of assessment stage, the assessment needs annulment. 6. Without prejudice, no adequate, sufficient and reasonable opportunity has been provided at the time of appellate stage. The assessment needs annulment. 7. The appellant craves leave to add/alter/amend and/or substitute any or all ground of appeal before the actual hearing takes place” 3. The assessee is registered as Trust with the Charity Commissioner and engaged in carrying out educational and allied activities. The source of income of the Trust is from fees received from educational and allied institutions, voluntary donations, corpus and interest received from Bank. The return of income in Form No.ITR-7 was filed on 30.09.2011 alongwith the audit report declaring total income at Rs.Nil after claiming exemption under Section 11 on total receipts of Rs.49,92,187/-. The case was selected for scrutiny and notice under Section 143(2) of the Income Tax Act, 1961 was issued on 26.09.2012 which was duly served upon the assessee. The Ld. AR/(Advocate) attended the proceeding and furnished the details in ITA No.91/RJT/2018 Assessment Year: 2011-12 3 response to notice under Section 142(1) dated 29.08.2013. The Assessing Officer observed that the assessee has shown Rs.21,84,000/- as addition to the corpus fund during the relevant assessment year. The show cause letter dated 10.03.2014 was issued. The Advocate filed letters from 25 donors alongwith Driving Licence/ Aadhaar Card/Voter Id. Card. But the same was not accepted by the Assessing Officer and observed that the receipts of corpus donations amounting to Rs.21,84,000/- claimed as exempt should be treated as anonymous donations within the meaning of Section 115BBC of the Income Tax Act, 1961 and made the addition. 4. Being aggrieved by the Assessment Order, the assessee filed appeal before the CIT(A). The CIT(A) dismissed the appeal of the assessee. 5. The Ld. AR submitted that the assessee Trust received corpus donation of Rs.21,84,000/- from 2000 persons and claimed exemption thereto under Section 11(1)(d) of the Act. List of all 200 donors, confirmatory letters from 25 persons on sample basis alongwith their proof of identity and address was submitted before the Assessing Officer. The Ld. AR submitted that under Section 115BBC donation can be termed as anonymous only to the extent Trust has not maintained the details of identity indicating name and address of the donors. This fact is clear from the sub- Section (3) of Section 115BBC. In the present case, the assessee submitted the particulars of name and address of 25 donors on sample basis as desired by the Assessing officer. The confirmation letters from the donors were same since the donors were villagers and the assessee had given them the proforma explaining the requirement of the same by the Assessing Officer for availability of exemption under Section 11(1)(d) of the Act. Hence, there was no necessity for the Assessing Officer to draw any kind of adverse inference on this count. The Ld. AR relied upon the following decisions :- “a) Delhi ITAT in case of Shree Shiv Venkteshwar Educational & Social Welfare Trust – 106 taxmann.com 249. b) Visakhapatnam ITAT in case of Siddhartha Academy of General & Technical Education – 141 taxmann.com 287 c) Lucknow ITAT in case of Narain Educational & Welfare Trust – 69 taxmann.com 63 d) Lucknow ITAT in case of Saraswati Educational Charitable Trust – 69 taxmann.com 64.” ITA No.91/RJT/2018 Assessment Year: 2011-12 4 6. The Ld. AR further submitted that it is neither the case of the Assessing Officer nor has the Assessing Officer been able to prove that any of the donors had not actually given any donation to the assessee Trust. Hence, in the absence of any contradicting evidence, there was no reason to disbelieve the factum of donation received by the assessee from these persons. Without prejudice to the earlier contention, the Ld. AR further submitted that the Assessing Officer, if he had dissatisfaction in respect of claim of corpus donation by the assessee, might have taxed the above impugned donations as regular donations eligible for application of income in normal course. However, under no circumstances, the donations could have been treated as anonymous donation when the requirement of Section 115BBC of maintaining identity of the donors indicating name and address were fulfilled by the assessee in the course of assessment proceedings and the Assessing Officer has not been able to disprove or contradict the same. 7. The Ld. DR submitted that for Assessment Year 2009-10 the assessee’s appeal was dismissed as ex-parte by the Tribunal in ITA No.378/RJT/2014. The Ld. DR further submitted that identity was not properly maintained by the assessee and only indicated name and address to prove the case of the assessee. In fact, the confirmations are also mechanical and Section 115BBC of the Act is categorically introduced for not allowing false evidence. As in the present case, the assessee does not establish the identity of the respective donors. The Ld. DR tried to distinguish the case laws relied upon by the assessee as in those case laws the factual aspect was totally different from assessee’s case. In fact, in the present case, the assessee has not submitted any bank details. The assessee has not shown/proved the genuineness of the donations. The Ld. DR relied upon the decision of Tribunal in case of Shri Giriraj Educational and Welfare Society Vs. ITO (2012) 27 taxmann.com 89 (Agra). 8. The Ld. AR in the rejoinder submitted that assessee has provided identity of the donors and the decisions relied by the assessee are very much relevant in the present assessee’s case. Once the onus of identity and the purpose of donation has been explained, the burden of onus has been discharged by the assessee. As regards earlier year’s order, the same was not related to Section 115BBC and the present Assessment Year is the first time assessment. ITA No.91/RJT/2018 Assessment Year: 2011-12 5 9. We have heard both the parties and perused all the relevant material available on record. It is pertinent to note that the assessee has given details of 200 persons and also given the sample of 22 persons related to their voter’s identity and their confirmations. The assessee has annexed documents which were produced before the Assessing Officer as well as before the CIT(A) alongwith assessee Trust’s computation of income. The assessee has established the onus of identity and at no point of time the Assessing Officer has doubted these donors and their identity at any juncture. The assessee is merely saying that the identity cards were not given and the identity was not proved but from the records, it appears that the documents as well as the receipt of the donors was very much there on record before both the authorities. Even in the case of Giriraj Educational & Welfare Society (supra), it was observed that the CIT(A) therein has granted relief on the donations which were verified. In the present case the Assessing Officer and CIT(A) has not verified the donations which was actually received from those who are included in the list and whose identity was proved by assessee before the Assessing Officer. Thus, the case law relied by Ld. DR will not be applicable in the present case. Subsequently, numerous ITAT decisions that providing list of doners before Assessing Officer held that the same is sufficient evidence to Section 115BBC will be applicable. The decisions relied by the Ld. AR are very much applicable in the present case and the records of identity of donors indicating their names and addresses have been maintained and the same was produced during the assessment proceedings and, therefore, Section 115BBC of the Act cannot be applied in the present assessee’s case as well. Thus, appeal of the assessee is allowed. 10. In the result, appeal filed by the assessee is allowed. Order pronounced in the open Court on this 09 th February, 2024. . Sd/- Sd/- (ANNAPURNA GUPTA) (SUCHITRA KAMBLE) Accountant Member Judicial Member Ahmedabad, the 09 th day of February, 2024 PBN/* ITA No.91/RJT/2018 Assessment Year: 2011-12 6 Copies to: (1) The appellant (2) The respondent (3) CIT (4) CIT(A) (5) Departmental Representative (6) Guard File By order UE COPY Assistant Registrar Income Tax Appellate Tribunal Rajkot Bench, Rajkot