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2016 (7) TMI 839

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..... g Officer examined the Secretary and Treasurer of the Trust, an opportunity shall be given to the assessee to cross examine them to find out whether actually the Trust received the money or not. It is also necessary to find out who actually opened the bank account in Axis Bank at Kolkata and operated the same. If the trustees of the so called three Trusts opened the bank account in the name of some other persons with connivance of the officials of Axis Bank, the Assessing Officer has to find out what kind of action was taken against the Axis Bank officials and the trustees who are responsible for opening the bank account. Since these details are not available on record, this Tribunal is of the considered opinion that the matter needs to be reconsidered by the Assessing Officer. Coming to the penalty levied by the Assessing Officer u/s 271(1)(c) of the Act, as observed earlier, the assessee was not given any opportunity to cross examine the Secretary and Treasurer of the Trust. Admittedly, as observed earlier, the Secretary and the Treasurer of the Trust were examined and the copies of the statement was not furnished to the assessee and what was available on record is only enquir .....

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..... olding that the donations made by the assessee to three different Trusts are not genuine. The matter was carried by way of appeal before the CIT(A). During the pendency of appeal before the CIT(A), the assessee-company was in the process of winding up, therefore, the company wanted to settle the issue peacefully with the Department. Accordingly, the donations made to the extent of ₹ 2,25,00,000/- was not pressed before the CIT(A). The CIT(A) dismissed the issue as not pressed. 3. Subsequently, the Assessing Officer just 11 days before the expiry of limitation for initiating proceedings u/s 271(1)(c) of the Act issued show cause notice for initiating penalty proceedings against the assessee. The assessee explained before the Assessing Officer that the antecedents of the recipient donees were verified through the website and it was also disclosed in the website the approval of the National Committee. The ld. Counsel further submitted that all the three Trusts are genuine trusts and in fact, approved by the National Committee u/s 35AC of the Act. Referring to the penalty order, the ld. Counsel submitted that the Assessing Officer has not reappreciated the material available o .....

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..... ssessee without giving any opportunity for cross examination. Therefore, the ld. Counsel submitted that an opportunity may be provided to the assessee for cross examination of the so called Secretary who was examined by the Assessing Officer. 6. On the contrary, Shri B. Koteswara Rao, ld. Departmental Representative submitted that the Assessing Officer made a thorough investigation with regard to the transaction of the so called donations said to be given by the assessee. The Assessing Officer conducted enquiry with Aadivasi Mahila Vikas Samidhi, one of the Trust to which the assessee claimed to have donated a sum of ₹ 1 crore on three occasions. The Secretary of Aadivasi Mahila Vikas Samidhi was examined. She clarified that she was working as Secretary since 1993 to July 2010. The Secretary clarified that the Trust had not received any big amount at any time in the past. Referring to the signature contained in Form 58A, the Secretary of the Trust clarified that the signature appearing in Form 58A is not of her. The Treasurer of the Trust was also examined. He could not confirm the receipt of donation by the Trust. The other person who was handling the affairs of the Trust .....

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..... nnot be entertained by the Income Tax Department. Therefore, the Assessing Officer has rightly levied penalty u/s 271(1)(c) of the Act which was confirmed by the CIT(A). 8. In the quantum appeal in I.T.A.No.1439/Mds/2014, the assessee has not pressed the issue of donation of ₹ 2,25,00,000/-, therefore, the CIT(A) has no occasion to consider the same on merit. The CIT(A) has simply rejected the appeal of the assessee on the ground that the issue was not pressed before him. This Tribunal is of the considered opinion that when the so called donation was routed through fictitious bank account, the CIT(A) ought to have examined the issue on merit. The assessee had not pressed the appeal before the CIT(A) with an intention to avoid further legal proceedings. The power of the CIT(A) is coterminous with that of the Assessing Officer. Therefore, in order to find out the real culprits who opened the bank account in the name of the recipient trust, the CIT(A) ought to have examined the matter on merit and dispose of the same on merit. This Tribunal is of the considered opinion that the power to enhance the assessment by assessing the income which was omitted by the Assessing Officer, .....

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..... 61 and files its return of income with The Dy. CIT, Circle -1, Jamshedpur. 2. The charitable activities undertaken by this Samiti are on very small scale and in the area of Formation of Self Help Groups, Manufacturing of Candle, preparing Tashar thread, etc. 3. Summons were issued to the President of the Samiti, Shri Diku Hansda to produce the books of account and bank statements of Samiti for F.Ys 07-08 08-09 and Smt. Sukul Hansda, the then Secretary of the Samiti and her statement was recorded. 4. Verification of Receipt payment Account of the Samiti for F.Yr 07-08 shows that it has not received any donation from M/s Mangal Tech Park Pvt. Ltd. Neither, the bank statements of the Samiti shows to have received such heavy smounts from donation. 5. Smt. Sukul Hansda, the then Secretray of M/s Adivasi Mahila Vikas Samiti denied to have received any amount as donation from M/s Mangal Tech Park Pvt. Ltd. She also denied her signature on the Receipts of money (Form No.58A) which have been sent to this office by you. 6. Conclusion: Advasi Mahila Vikas Samiti, Phuldungri, P.O Ghatsila, Dist. Singhbhum, Jharkhand has not received the donations of ₹ 1 .....

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..... ney or not. It is also necessary to find out who actually opened the bank account in Axis Bank at Kolkata and operated the same. If the trustees of the so called three Trusts opened the bank account in the name of some other persons with connivance of the officials of Axis Bank, the Assessing Officer has to find out what kind of action was taken against the Axis Bank officials and the trustees who are responsible for opening the bank account. Since these details are not available on record, this Tribunal is of the considered opinion that the matter needs to be reconsidered by the Assessing Officer. 11. Now coming to the penalty levied by the Assessing Officer u/s 271(1)(c) of the Act, as observed earlier, the assessee was not given any opportunity to cross examine the Secretary and Treasurer of the Trust. Admittedly, as observed earlier, the Secretary and the Treasurer of the Trust were examined and the copies of the statement was not furnished to the assessee and what was available on record is only enquiry report and the letter said to be received by the Dy. Commissioner of Income Tax, Chennai, from Dy. Director of Income Tax (Investigation), Jamshedpur. In those circumstances .....

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