TaxTMI 
TaxTMI 
2024 (7) TMI 1710
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....d in law in allowing the donation paid to India Vision Foundation as application when the assessee is an educational institute and the donation was given for non-educational activities. iii. That the appellant craves to leave, add or amend any grounds of appeal on or before the appeal is heard or disposed of. 2. Appeal on Ground No. 1 is against the allowance of benefit u/s 11 of the Income Tax Act, 1961 (in short 'the Act') by the ld. CIT (A) without appreciating that there is a clear violation of Section 13 of the Act since the Assessee had given undue benefit to specified person u/s 13(3) during the A.Y. 2014-15. 3. The brief facts, as enumerated in CIT(A)'s order, on this issue are as under: - "7.1 Brief facts of the case are that the assessee trust is registered u/s 12AA of the Income Tax Act, 1961 with the Commissioner of Income Tax, Chandigarh-II, vide order dated 31.07.2006. Assessing Officer, on perusal of balance sheet of the assessee noticed that the assessee had shown an amount of Rs. 11,32,302/- to Sh. Anshu Kataria (Chairman of assessee trust) as imprest. During the assessment proceeding nature of this account and purpose of t....
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.... the chairman of the society. So assessee's claim of exemption was denied u/s 13(l)(c) and u/s 13(l)(d) of I.T. Act, 1961 & surplus was taxed by treating AOP." 4. The ld. CIT (A) in his order has given findings on this issue as under: - "6.3 The submissions of the assessee have been considered. Imprest on the basis of which exemption has been denied in the case during the year, is derived from the Balance Sheet. It is clear that the said imprest is a carry-over from the balance sheet of previous year. At this juncture, it is pertinent to mention that during the previous year, exemption has been denied to the assessee on account of the same balance in Imprest account. That year another significant matter of bogus / anonymous donations was unearthed by the AO that led subsequently to withdrawal of exemption and consequent taxing of the entire surplus during that year It is relevant to mention that AO's mandate is to examine whether income claimed as exempt from tax does get covered by the definitions of income u/s 11 & 12 of the Act and whether utilization of such income has been done to the extent of 85% or not every year separately. In short this is an annual ex....
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..... It represent last year balance. Respectfully; we wish to submit that Sh. Anshu Kataria has given a loan of Rs. 50 Lacs to the Society. In addition to this loan other bank loans were also raised by the society for building colleges. The banks have made a stipulation in the loan documents that during the tenure of their loans, No repayment of the unsecured loan to the number of the society shall be undertaken. The society was during the year looking for availment of more loans from the bank. The society could not afford to debunk the old loan conditions while asking for new loans. So they could not repay the loans taken from Sh. Anshu Kataria. So indirectly, when Sh. Anshu Kataria needed the funds out of the loan given by him, instead he was asked to keep the college funds available in his account against the previous balance of Rs. 50 lakhs. So it was actually his own funds which were kept by him in the imprest accounts. As per above facts your Honour will realize that the amount of Rs. 11.33 was not imprest but adjustment of account against his interest free credit balance of Rs. 50 lakhs. No interest was paid or charged on the two balances. ....
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....on to India Vision Foundation. The facts brought on record by the Assessing Officer on this issue is as under: - "8.1 Brief facts of the case are that during the assessment proceedings, AO noticed that the assessee had claimed Rs. 1,50,000/- in its income and expenditure account as expenses under 'donation'. During the proceedings nature of the same and details of the donee were called from the assessee. In response, the assessee stated that Rs. 1,50,000/- were donated to India Vision Foundation, a trust registered u/s 12AA and 80G of the Act. This trust was related to Smt. Kiran Bedi, Governor, Puducherry. In response, the AO stated that the foundation to which the amount was donated was not dealing in educational activities & the donation was not allowable, as assessee had spent it on noneducational activity and other than the purpose of the assessee society. AO further mentioned that the payments looked like an agreement between the assessee and Vision India Foundation, because assessee had mentioned in its reply that Smt. Kiran Bedi had visited assessee's institutions two times and assessee had paid the donation to her trust against the same^-On t....