TMI Blog2007 (11) TMI 348X X X X Extracts X X X X X X X X Extracts X X X X ..... o the activities carried on by the society. Rather, the activities of the society are being carried out as per rules, stand confirmed from the evidences. It is a clear case that the AO did not make any enquiry in respect of the donations received from the trusts, companies and celebrities and other donors, which were received by account payee cheques/drafts. These donors are existing asses sees and have claimed deduction u/s 80G of the Act for the donation made to the assessee. Merely by recording statements of few persons on the back of the assessee, without producing them for cross-examination, the entire donations cannot be treated as bogus and as unexplained money of the society. The IT authorities cannot be allowed to take advantage of their own inaction to the prejudice of the assessee, in respect of the allegation that the assessee society has received donations from various trusts, well known companies and certain celebrities. The society has been working for the purpose of attaining its objects by carrying out various activities in the field of education. Therefore, there is nothing wrong to make donations to assessee society keeping in mind the charitable activity by i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 7,34,112 and other donations of Rs. 5,36,98,553. When asked to, the assessee society filed the list of donors, corpus and non-corpus, along with their complete addresses. PAN, mode of receipts etc. from the examination of which, the AO has made the following observations: "1. The donation received includes quantum ranging from Rs. 3,000 to Rs. 51 lakhs. 2. Some of the donations received include donation received in cash and also in the form of DDs and cheques. 3. The donations include donation from various trusts also for example Krishan Devi Philanthropical Trust, Kolkata, Rs. 15 lakhs, Shri Padmanabha Charitable Trust, Mumbai, Rs. 15 lakhs, Anandi Lal Poddar Trust, Mumbai above Rs. 17 lakhs, Lachman Das Sewa Ram Charities, Mumbai above Rs. 15 lakhs. 4. The donations received include donations received from various companies such as Gold Star Jewellary Ltd., Mumbai above Rs. 25 lakhs, IPCA Lab. Ltd. Rs. 51 lakhs, Alok Industries Ltd., Rs. 20 lakhs, Diam Star Jewellary India (P) Ltd., Mumbai, Rs. 10 lakhs, Under Water Services, Mumbai, Rs. 25 lakhs. 5. It is further seen that there are hundreds of donors from the city of Raipur who are shown to have given amounts ranging ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... inding. He goes on adding that till the time the society remains registered under s. 12AA of the Act, any income received by it has to be treated as exempt under s. 11 of the Act. Uncross-examined version bf the donors has been held to be not relevant. Resultantly, he has allowed the claim of the assessee society under s. 11 of the Act. The Revenue is aggrieved. 4. We have heard rival submissions and have perused the available materials on record carefully. We have also perused the paper book and the written submission filed before us. 5. The learned CIT -Departmental Representative, Shri K.R. Meghwal, has repeated the facts and the reasoning given by learned AO, in its entirety. According to him the claim of the assessee society is not allowable. On the other hand, learned Authorised Representative, Shri Sanjay Jhawar, has relied on the order of the learned CIT(A) in this regard. He has further submitted that the AO has neither doubted the genuineness of the activities carried out by the assessee society nor has alleged that the society has not carried out its activities as per its objectives. It is the case of learned Authorised Representative that the donations received by i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion has to be held as genuine. So long as the assessee society enjoys the registration under s. 12AA of the Act and applies its income for charitable purposes it cannot be denied exemption under s. 11 of the Act. In another case the Jodhpur Bench while deciding the ITO vs. Udaipur Udyog Ltd. Provident Fund Trust in ITA No. 575/Jd/2006 has held that so long as the provident fund continued to remain recognized, any income received by the trustees has to be treated as exempt. It was also held that on going through the language of Sch. IVth it becomes apparent that the power to grant or withdraw recognition lies with the Chief CIT and the AO has absolutely no jurisdiction to consider this aspect of the matter. So long as the assessee remains recognized, its income cannot be held to be taxable. This was the admitted case by both the parties that the recognition under s. 12AA of the Act remains in operation and the AO has not disputed the application of the income for charitable purposes. 7. We are in agreement With the observations of learned CIT(A) when he says that exemption under s. 11 cannot be denied to the assessee on the basis of fake donations. The impugned claim of exemption ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es and addresses, PAN confirmations, etc., during the assessment proceedings of all the donors for the year under consideration. Entire details have also been filed before us at pp. 130-151 of the PB. The AO has conducted small enquiries which were also not subjected to cross-check by the assessee and has further, observed in his order that it was neither practical nor feasible to verify each and every donation. It was the duty of the AO to make such verification from the individual donors and without making such verification, he could not come to the conclusion that donations are bogus. Most of the donations having been received by drafts/cheques through banking channels, in the normal course, from existing assessees, confirmations having been filed no enquiry having been conducted in the correct perspective, the action in holding such donations as bogus is also in the violation of principles of natural justice. The onus of proving that the apparent was not the real lies on the party who claimed it to be so. It is a long cherished ruling of the Hon'ble Supreme Court which was given in the judgement of CIT vs. Daulatram Rawatmull 1972 CTR (SC) 411 : (1973) 87 ITR 349 (SC). Still fu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on that there is no, infirmity in the finding of the learned CIT(A) insofar as the appeal of the Revenue is concerned. The issue in question is squarely covered by the abovementioned decisions of this Bench of the Tribunal and is also covered by the other decisions mentioned as above. Therefore, we confirm the impugned finding and dismiss the ground raised by the Revenue. As a result, the appeal of the Revenue is dismissed. C.O. No. 48/Jd/2007 8. The assessee has raised only one ground in its cross-objection which reads as under: "Under the facts and in the circumstances of the case, the learned CIT(A) has erred in stating that not providing the opportunity of cross-examination to the assessee society is technical lapse/lacunae instead of holding that without providing the same the statements of the donors do not become admissible evidence against the assessee society." 9. As we have already observed while deciding the appeal of the Revenue that not providing the opportunity of cross-examination is a serious lacuna and not technical lapse an un scrutinised statement is not a statement at all and cannot be used against a person who was not given an opportunity to cross-exami ..... X X X X Extracts X X X X X X X X Extracts X X X X
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