2008 (8) TMI 910 - HC - Income Tax

Court affirms tax assessment on society's donations, stresses donor scrutiny for genuineness

The High Court upheld the decisions of the Commissioner of Income-tax (Appeals) and the Appellate Tribunal, dismissing the appeal against the assessment ... - Issues involved: Appeal against order affirming assessment made by Income-tax Appellate Tribunal regarding donations to a society.Assessment by Assessing Authority: The Assessing Authority assessed the society, disregarding donations and deeming donors as bogus. Commissioner of Income-tax (Appeals) reversed the assessment, stating donors were not examined or cross-examined to determine their authenticity. Emphasized that if donors were found to be bogus, society's registration u/s 12AA could be canceled.Decision of Appellate Tribunal: Appellate Tribunal agreed with Commissioner's view, noting donors were not examined or cross-examined. Held that society, being registered u/s 12AA, was entitled to exemption u/s 11 of the Income-tax Act. Tribunal emphasized the necessity of examining donors to establish the genuineness of donations.High Court's Analysis: High Court scrutinized findings of Commissioner and Tribunal, concluding that donations could not be labeled as bogus without donor examination and cross-examination. Emphasized the importance of evidence in determining genuineness. Noted that society's registration was not revoked despite donor authenticity concerns, allowing it to claim exemption u/s 11. High Court upheld the decisions of Commissioner and Tribunal, dismissing the appeal.