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TMI Blog2021 (1) TMI 172X X X X Extracts X X X X X X X X Extracts X X X X ..... spectively. 3. The factual background leading to the filing of the present appeals is summarized as follows: A. ITA No. 164/2020 [AY 2006-07] 4. The Appellant is an educational trust, duly registered under the provisions of Section 12AA of the Act and is enjoying exemption under Section 80G thereof. The Appellant filed its return of income on 14th September, 2006 declaring nil income. The case was selected for scrutiny, and pursuant thereto, an Assessment Order under section 143(3) was passed on 15th December 2008. The Assessee preferred an appeal before Commissioner of Income Tax Appeals [hereinafter referred to as 'CIT(A)'] who confirmed the same vide order dated 29th July 2009. The Assessee then preferred further appeal before the ITAT, whereupon, vide order dated 29th January, 2010 the assessment order was set aside and the Assessing Officer [hereinafter referred to as 'AO'] was directed to decide the case afresh, after taking into account all the documentary evidence and affording the Appellant an opportunity of hearing. In accordance with the direction of the Tribunal, statutory notices were served upon the Appellant and a fresh assessment order dated 9th June, 2011 under ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s under Section 68 of the Act. As regards addition of Rs. 35 lacs on account of unexplained receipts, the Appeal was allowed and addition was deleted on the ground that the aforesaid amount received from Sh. Mahesh Garg, during the Financial Year 2006-07 was assessable in AY 2007-08 and therefore, the addition cannot be made in AY 2006-07. It was further noticed that the appeal of the Assessee for AY 2007-08 had been disposed of enhancing the taxable income by Rs. 35 lacs. The Assessee then preferred an appeal before the ITAT impugning the order of CIT(A). B. ITA No. 154/2020 [AY 2007-08] 7. For AY 2007-08, the Appellant filed its return of income on 24th August 2008 declaring nil income. Assessment was completed u/s 143(3) on 29th December, 2009 and total income was assessed as NIL. Subsequently, on 23rd March, 2014, the Additional Commissioner (Appeals) issued a notice under Section 148 for reopening the assessment. This action also originated from the information received from the Joint Director of Income Tax vide letter dated 21st January, 2013, which, in turn was based on the above noted CBI report. 8. Re-assessment was completed on 20th March 2015, under Section 147 r/w 14 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... roper identification and creditworthiness of the donor. In support of his submission, Mr. Chandani submitted that the Tribunal in its earlier order dated 29th January, 2010 had correctly observed that the donations received by the Appellant from the donors were true, proper and in conformity with law. The Appellant had successfully proved the source of donations, furnishing the donation confirmation as well as the Income Tax returns, bank accounts and cash flow statement of some of the donors. It was further argued that the Tribunal has erred in not considering the judgment rendered on the same set of facts of its coordinate bench for AY 2006-07 in the Appellant's own case wherein the Tribunal had categorically observed that the Appellant had furnished evidences that the donations were not bogus. The CBI report had no nexus or connectivity with the case of the Appellant and the AO has thoughtlessly followed the CBI report which was baseless and devoid of any merit. It was also argued that the Tribunal, as a last fact-finding authority, was required under law to verify the authenticity of the CBI report, based on which the entire purported action of reopening an assessment, and cons ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ubt, the reasons were recorded on 28/03/2013, i.e. after the expiry of 4 years from the (relevant) assessment year. However, the reasons recorded clearly shows that that information was received from the Deputy Director of Income Tax on 21/1/2013 about the assessee that a huge amount of cash was deposited in the bank accounts of the society by Sri SK Sharma and other entities. This information was based on the investigation by the central bureau of investigation (CBI) which clearly shows that a huge amount of Rs. 2,97,00,000 were received by it till 31/7/2006 and assessee received the same through 38 credit entries ranging from INR 500,000 to Rs. 25,00,000 from various persons. Such persons were repaid after borrowing by the assessee. Further, the amount of INR 3,500,000 received from accommodation entry provider Shri Mahesh Garg was also noted. Further, all the 22 witnesses examined by the central bureau of investigation have clearly stated that they have not given any donation to the Appellant. Further, the chartered accountant of Sri SK Sharma clearly confessed before the CBI that all these 22 persons obtained permanent account number through him and these evidences were used fo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... me Tax Act which has been confirmed by the learned CIT-A. No further evidences were produced before us. ... if the donation is not credited to the income and expenditure account on provisions of Section 68 are rightly applied by the lower authorities. 21. In view of the above facts, we confirm the actions of lower authorities in taxing the sum of INR 4,000,000 as unexplained income being bogus donation credited to the general fund in the balance sheet. In the result ground number 2 of the appeal is dismissed. xx ... xx ... xx 33. We have carefully considered the rival contentions and perused the orders of the lower authorities. During the year, the assessee has received a donation from 122 persons amounting to INR 9,500,000. The assessee has given the name, address, permanent account number of those persons as per 7 pages list placed on the paper book at page number 12 - 18. This year also the assessee has credited the same amount to general fund. The opening balance of general fund at the beginning of the year on 01 /04/2006 was Rs. 40,00,000 and at the end of the year on 31/03/2007 is INR 13,500,000. The above donation of INR 9,500,000 also was not credite ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by the Joint Director of Income Tax (Investigation) informing that a Regular Case (RC) was registered against one Shri Manoj Kumar Aggarwal. This case disclosed the nexus between the suspect and the Appellant and brought to light the startling facts that contradicted the earlier findings arrived at in the scrutiny assessment. The credibility of witnesses was brought into the open during the CBI investigation. One of the witness, Sh. Mahesh Garg, stated that the money was paid in cash for arranging donation in favour of the Appellant. The other witnesses stated that they had not given any donation to the Appellant. This revelation controverted the factual foundation set up by the Appellant, and falsified the information disclosed by the Appellant during the course of the prior assessment. The AO thus had specific information about cash deposits, supported by statement of witnesses which confirmed that the donors were bogus. These facts disclose a vital link and nexus between the information received by the AO and the reason to believe for reopening the assessment, which fulfilled the threshold required for assuming jurisdiction by the AO in order to reopen the assessment. There was, ..... X X X X Extracts X X X X X X X X Extracts X X X X
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