TaxTMI 
TaxTMI 
2007 (11) TMI 348
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....i Institute of Technology and Science". It has shown a total receipt of Rs. 1,07,37,085 from Geetanjali Institute of Technology and Science from tuition fees, hostel fees, conveyance fees, etc., and Rs. 5,60,02,537 from Geetanjali Educational Society but of donations and interest etc. Against the above receipts the assessee society has booked total expenditure of Rs. 4,59,47,088 which includes Rs. 4,26,58,933 being capital expenditure; thus the total income of the assessee comes to Rs. 1,61,89,727, which after setting off of excess of expenditure over income of asst. yr. 2003-04 of Rs. 1,98,55,573 results into a net loss of Rs. 36,65,846. The AO has noted that the perusal of the balance sheet revealed that the assessee society has received corpus donations of Rs. 1,97,34,112 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 ca....
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....me of Rs. 7,43,39,750. 3. The learned CIT(A), on the contrary, accepted the claim of exemption of the assessee. He has observed that an exemption under s. 11 of the Act cannot be denied to the assessee on the basis of fake donations, and it cannot be treated as the income of the assessee under s. 68 of the Act or any other section of the Act. There is no express provision in any of the relevant ss. 11, 12 and 13 of the Act to that effect. He has further observed that the exemption under s. 11 of the Act can be denied only in the circumstances if (i) the activities of the trust are not genuine and (ii) the activities are not being carried out in accordance with the objects of the trust. The learned CIT(A) has clearly observed that the AO has not given such a finding. 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 availabl....
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....nnot be made a basis for the rejection of the claim of exemption made by the assessee society. The Special Leave Petition against this judgement was also dismissed by the Hon'ble Supreme Court and the decision is reported in (2000) 241 ITR (St) 132. The Jodhpur Bench of the Tribunal has taken a similar view while deciding the case of ITO vs. Sankripa Sanathan Sans than in ITA No. 578/Jd/2006 wherein it has been held that s. 11 (1)(d) of the Act does not demand that the assessee trust should establish creditworthiness and financial capacity of donors and explanations about their sources and genuineness of their contributions. The strict proof as required under s. 68 of the Act is not applicable in such cases. Once the identity of the donor is shown the donation 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 ....
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....lar view Has been expressed by the Hon'ble Allahabad High Court while deciding the case of CIT vs. Kamla Town Trust (2006) 201 CTR (All) 281 : (2005) 279 ITR 89 (All). It is also clear from the record that no opportunity to cross-examine the donors, whose statements were relied on by the AO for denying exemption under s. 11 of the Act, was given to the assessee society. Therefore, these statements cannot be made basis for rejecting the claim of the assessee society in view of the decision of the case of State of Kerala vs. K.T. Suaduli Grocery Dealer, etc. 1977 CTR (SC) 260 and also by t the Hon'ble Delhi High Court in the case of CIT vs. SMC Share Brokers Ltd. (2007) 210 CTR (Del) 353 : (2007) 288 ITR 345 (Del). The assessee society has produced names 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 A....