TaxTMI 
TaxTMI 
TaxTMI 
2022 (10) TMI 894
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.... in case of Podar Education Trust, Bangalore against the order of Commissioner of Income-tax (Appeals) [in short the learned CIT (A)]. All these appeals are having common facts, identical orders, and similar appellate orders. Both the parties argued them together and therefore, the same are disposed of by this common order. 03. We first take up the appeal of the ld AO in case of Podar Education and Sports Trust for AY 2012-13 , and apply our decision for other years as facts and circumstances are similar except the done trust and amount of donation. 04. The learned Assessing Officer has filed appeal against the order passed by the CIT (A)-47, Mumbai dated 11th August, 2021 for A.Y. 2012-13 in ITA No. 1876/Mum/2021, wherein the appeal filed by the assessee against the assessment order dated 29th December, 2019 passed under Section 143(3) read with section 153A of the Income-tax Act, 1961 (the Act) passed by the learned Dy. Commissioner of Income-tax, Central Circle-1(4), Mumbai (the learned Assessing Officer) was partly allowed. 05. Ld AO has raised following grounds of appeal:- 06. Brief fact of the case shows that assessee is a charitable trust registered under Section 12AA (1....
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....ces, Ahmadabad, were also recorded under Section 131 of the Act. Similar statement of Mr. Sureshbhai Thakkar was also recorded. On 11 January 2018, statement of one Mr. Shirish Shah, alleged entry operator was recorded under Section 131 of the Act, wherein information with respect to various share capital introduced in the companies was also found. Based on this, statement of Jayesh Zanani, who is manager in Podar group was also recorded, who confirmed the same. 011. Based on this, the assessee's trust was asked the details with respect to donation made as per letter dated 26 September 2019. Assessee furnished such detail. Subsequently, notice under Section 133(6) of the Act were issued to the various trust to whom donations were made by the assessee for verification of genuineness. A show cause notice dated 12th December, 2019, was issued to the assessee to show why the donation given by the assessee trust should not be treated as bogus as same was not given for the object of the trust for the relevant assessment years during the A.Ys. 2012-13 to 2018-19, assessee replied on 23 December 2019. Meanwhile, the reply to notice under Section 133(6) of the Act was also received from Do....
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....ee has total income of Rs.31,19,82,582/- out of which Rs.29,38,72,711/- are utilized for the purpose of object of the trust. The utilization included the provision for gratuity of Rs.1,76,72,365/-. Accordingly, ld AO computed application of income for educational purposes of Rs. Rs.27,62,00,346/- [ Rs 29,38,72,711- Rs 1,76,72,365] which resulted into excess of income over expenditure of Rs.3,57,82,234/-. On this sum, the learned Assessing Officer allowed the exemption under Section 10(23C) (via) of the Act and computed the total income at Rs.nil. 017. Ld AO held that a sum of Rs.1 crore donated to Ramrao Adik Education Society is bogus and denied exemption as allegedly not applied for educational purposes. 018. Accordingly, the assessment order under Section 153A read with section 143 of the Act, was passed on 29th December, 2019, at total taxable income at Rs. 1 crore and also denying deduction as application of income of provision for gratuity of Rs 1,76,73,365/-. 019. Assessee aggrieved with the assessment order preferred the appeal before the learned CIT (A). Assessee challenged the assessment order stating that i. No incriminating material found during the course of searc....
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....ho were involved in the day-to-day affairs of the assessee company. There are certain text messages also available, which are produced at page no. 15 of the assessment order. This all shows that assessee is a party from which donations are given to other trust and cash is received back by the Podar Group, which is converted into the share capital in the group companies. Merely because, these statements are retracted by those persons, the learned CIT (A) should not have been deleted the addition. It was further stated that when the donation is given to a particular trust, all the evidences of the donation remains only a paper formality, which does not have any credibility. Therefore, the addition deleted by the learned CIT (A) is on irrelevant consideration. Therefore, he submitted that ground no. 1 to 5 of the appeal of the learned Assessing Officer deserves to be allowed. On Ground no. 6, he relied on the order of the learned Assessing Officer. 023. The learned Authorized Representative referred to the Paper Book containing to 252 pages and supported the order of the learned CIT (A). It was submitted that i. Undoubtedly, originally same statements were given by some outside per....
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....e is no enquiry made by the learned Assessing Officer with respect to the Donee trust that whether any cash is returned back to any of these persons stated by the learned Assessing Officer. Therefore, there is no evidence against the assessee that assessee has contravened any of the provisions of Section 10(23C) of the Act. x. The learned Authorized Representative vehemently referred to the order of the learned CIT (A) in case of Anandilal and Ganesh Podar society for A.Y. 2011-12. It is submitted that all these reasoning given by the learned CIT (A) in that particular case squarely applies in case of the assessee. xi. It is for the learned Assessing Officer to show that donations given by it have come back to the assessee. There is no such evidence available with the learned Assessing Officer or collected in any independent inquiry. xii. financial statement of the assessee's trust shows that it has given a donation of Rs.1,25,00,000/- towards education purposes as submitted in administrative expenses schedule 7 of the annual accounts. Assessee trust has shown fees income of Rs.30.81 crores and has excess of Rs.5,20,00,000/- for this year and none of the examination by the le....
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....tional activities which are entitled to exemption under Section 10(23C) of the Act. 027. On 9 January 2018, there was a search on Podar Group and statements of several persons were recorded under Section 131 of the Act. In substance, all of them stated that funds have been diverted from the trust by further donation to other trust. Other trust in turn return cash to the Podar Group and then, such cash are converted into share capital or loan etc. in the group companies. Therefore, based on this, the learned Assessing Officer took a view that assessee has donated a sum of Rs.1 crores to Ramrao Adik Education Society by cheque no. 188152 dated 28th June, 2011 of IDBI bank is a bogus donation. Therefore, on this sum, the learned Assessing Officer denied the exemption under Section 10(23C) of the Act. Specific show cause notice was issued which was replied by the assessee. In reply, the assessee categorically submitted that the reliance placed by the learned Assessing Officer on the statement of Mr. Kiritkumar Suba, Mr. Navin Nishar and Mr. N.K. Sodhani under Section 131 of the Act and Mr. Jayesh Zanani under Section 132(4) of the Act is unwarranted. Assessee submitted that these are ....
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....go either against the assessee or in favour of the assessee. However, the arguments and findings of the learned CIT (A) have been relied upon by the learned CIT (A) in this year to delete the addition. To state the fact that for A.Y. 2011-12, has also given donation of Rs.50 lacs to Ramrao Adik Education Society. The finding of the learned CIT (A) in A.Y. 2011-12 has been extensively reproduced by the learned CIT (A) in this year. In A.Y. 2011-12, the learned CIT (A) relied on the plethora of judicial precedents along with the facts to delete the addition. In A.Y. 2011-12, the learned CIT (A) in assessee's own case followed the decision of learned CIT (A) in case of another trust Anandilal and Ganesh Podar society for A.Y. 2011-12 vide Para 12 of his order. The fact clearly shows that only evidence available with the learned Assessing Officer are statements of several persons recorded under Section 131 of the Act which were subsequently retracted and in cross examination such retraction was confirmed. 028. We examine those statements. i. Statement of Mr. Kiritkumar suba, CA, was recorded on 11 January 2018, which has been reproduced on page no. 6 of assessment order. Mr. Kiritku....
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....t. Ultimately, reply was received from trust along with the evidence. 031. Further, it was contended before the learned Assessing Officer that all these persons Mr. Kiritkumar suba, Mr. Navin Nishar, Mr. N.K. Sodhani all are outside chartered accountants and them explaining the modus operandi of Podar group. Further, Mr. Jayesh Zanani, who was manager accounts in some group company, stated that he has come to know this modus operandi from Mr. Kiritkumar suba. It is to be noted that Mr. Kiritkumar suba retracted his statement on 3 April 2018. Mr. Navin Nishar retracted his statement on 4 June 2018 and Mr. Sodhani retracted his statement on 30 August 2018, Mr. Jayesh Zanani also retracted his statement on 2 April 2018. It is to be noted that at the time of issuance of notice under Section 153A of the Act i.e. of 16 August 2018 all those persons who originally gave statement were mostly retracted. Subsequently, during the course of assessment proceedings, these persons were cross-examined, who confirmed the retraction of the statement. Therefore, now these statements do not have any evidentiary value. 032. Even otherwise, in none of the statement recorded by the learned Assessing Of....
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....ustees of Ramrao Adik Education Society to explain whether they have returned the donation amount in cash. There is no such effort made by the learned Assessing Officer. 039. Further, there is no enquiry in the activity of Ramrao Adik Education Society that in fact whether they are engaged in such activities or not. There is no evidence that Ramrao Adik Education Society is not carrying on educational activities but accepting the donation and returning the cash to the Donors. 040. The learned Departmental Representative did not show us any evidence that society which is allegedly returning the cash back to the assessee has at all been examined with respect to such activities. 041. Further, the statement of Angadia relied upon by the learned Assessing Officer also did not show any money collected from above done trust and given to assessee. In view of this, we held that there is no evidence available with the learned Assessing Officer to hold that donation made by the assessee to Ramrao Adik Education Society is not for educational purpose. 042. According to the provision of Section 10(23C)(vi) of the Act, any University or any Educational Institutions solely existing for educat....
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....nal institute and makes provision for gratuity and leave encashment of the staff on actuarial basis, which is ascertained liability, and not merely a provision. Merely because it is stated to be a provision, it is not disallowable. Even otherwise, the issue is squarely covered in favour of the assessee by the decision of co-ordinate Bench in assessee's own case for A.Y. 2014-15. In the result, ground no. 6 of the appeal of the learned Assessing Officer is dismissed. 045. In the result, the appeal of the learned Assessing Officer for AY 2012-13 is dismissed. 046. For following Assessment years donations are given to following entities :- Ay 2014-15 Sr No Name of The Trust PAN Donation [ In Rs] 1 Dr D Y patil International Academy AATD9542N 50,00,000 2 Shantidevi Charitable Trust AAGTS2305G 3,50,00,000/- Ay 2015-16 SR No Name of The Trust PAN Donation [ In Rs] 1 Varunarjun Trust AABTV5968K 1,00,00,000 2 Ujjain Charitable Trust Hospital & Research Centre AAATU0192K 1,50,00,000 3 Nathiya Charitable Trust AABTN8918A 25,00,000 For AY 2016-17 Sr No Name of The Trust PAN Donation in Rs 1 Khsetropasana Trust AAATK5385L 15,00,000 2 Prabodh Foundatio....
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....herein we followed the decision of the coordinate bench and allowed the deduction of leave encashment and gratuity, therefore, for identical reasons we also dismiss ground number 6 of the appeal of the learned AO for assessment year 2014 - 15 to 2018-19. 051. In view of above all the 6 appeals filed by the learned assessing officer in case of Podar Education Trust for assessment year 2012 - 13, 2014 - 15 to 2018-19 are dismissed. PODAR EDUCATION AND SPORTS TRUST 052. These are 5 appeals with respect to the above trust filed by the Deputy Commissioner of income tax, central circle - 1 (4), Mumbai (the learned assessing officer/AO) for assessment year 2014 - 15 to 2018 - 19. 053. First we take up, assessment year 2014 - 15 wherein the learned assessing officer has raised following grounds of appeal:- i. on the facts and in the circumstances of the case and in law, the learned CIT (A) order in deleting the disallowance of bogus donation of Rs. 5 crores u/s 10 (23C) of the income tax act, 1961 which was made in the course of assessment u/s 143 (3) read with Section 153A as the assessee trust contravened the provisions of Section 11 and 12 and thereby rendering itself as in eligib....