ESTATE OF VANDRAVAN P SHAH,MUMBAI vs. ASSISTANT COMISSIONER OF INCOME TAX, CIRCLE 19(3), MUMBAI

On the fac CIT(A) erred i 35AC of the material with and revert the 4. On the fac CIT(A) erred i Rs.50,00,000 the following: - The 'Navjeev notification No - The appel statement, Fo assessing offi 4. The return of consideration was fi total income of ₹2, 143(3) of the Income 12.03.2014 determin 4.1 Subsequently, Commissioner of Inc search under section of M/s Navjeevan C Trust was engaged i bogus donations elig Act. The modus oper followed by return commission. The a AAPRS9053J), was i Es ITA No. 5401, ts and circumstances of the case and in in not appreciating the fact that the disal Act was made by the Ld. AO by rel which the appellant was never confronte e allegation made against it. ts and circumstances of the case and in in approving the disallowance made by t 0/- claimed u/s 35AC of the Act without van Charitable Trust has been notified u/ o. SO 121(E) dated 12.01.2009. lant had duly submitted donation re orm 58 evidencing the trust registration ficer and appellate authority. f income for the assessmen iled by the assessee on 10.09 92,44,086/-. The assessment e-tax Act, 1961 (“the Act”) wa ning total income at ₹2,93,67,81 information was received fro come-tax, Central Circle–2(1), M n 132 of the Act had been condu Charitable Trust. The search re in providing accommodation en gible for deduction under secti randi involved receipt of donati n of cash to the donors a assessee, Shri Vandravan P identified as one of the benef state of Vandravan P Shah 3 , 5402 & 5403/MUM/2024 law, the Ld. llowance u/s lying on the ed to explain law, the Ld. the Ld. AO of appreciating /s 35AC vide eceipt, bank n before the nt year under .2011 declaring under section as completed on 0/-. om the Deputy Mumbai, that a ucted in the case evealed that the ntries by way of on 35AC of the ions by cheque, after deducting P. Shah (PAN: ficiaries, having allegedly made a do claimed deduction un 4.2 The search asse the case of M/s Nav Circle, Mumbai, wher connivance with the donors gave cheque 35AC of the Act but trust against the don of the trust to facilita 4.3 On the basis o recorded reasons to accordingly, he issue 4.4 In response to Representative of the details comprising computation of inco assessment year 20 the assessee reques return filed by the a the Act. Subsequen intimated that the assessment year 20 Es ITA No. 5401, nation of ₹50,00,000/- to the nder section 35AC. essment u/s 153C of the Act w vjeevan Charitable Trust by the reas he gave finding that donor e trust to receive back donatio payment to the trust to gave t the donors also received back nation after deducting small com ate this subterfuge transaction. f the above information, the A believe that income escaped a d notice u/s 148 of the Act on 2 the notice u/s 148 of the Act, e assessee M/s N.P. Patwa & Co of profit and loss account, ome and original return of i 11-12. The Authorized Represe ted to treat the original return assessee in response to return f ntly, vide letter dated 11.04 assessee died on 06.02.20 013-14, the assessee was repr state of Vandravan P Shah 4 , 5402 & 5403/MUM/2024 said Trust and was completed in e DCIT, Central rs were acting in on in cash. The e deduction u/s k cash from the mmission charge Assessing Officer assessment and 28.03.2018. the Authorized ompany filed the balance sheet, income for the entative (AR) of n of income as filed u/s 148 of .2018, the AR 013 and from resented in the name of M/s Estate having PAN No. AAAE 4.5 During reasses 133(6) was attempte notice was returne Accordingly, the ass establishing the truth Navjeevan Charitable the genuineness of Officer disallowed th completed reassessm on 20.12.2018 in the representative, retain Officer declined the under: “5. The case o the DCIT- Cen by the Natio dated 30.11 cancelled vide Pr. CIT(Centr case of asses after receipt accommodatio cheque paym cash to the accommodatio 133A, have a Navjeevan Ch providers wer accommodatio Es ITA No. 5401, of Vandravan P. Shah, throug E6452D. sment proceedings, verification d in respect of the donee Trus ed unserved with the remar sessee was required to discha h of claim of deduction u/s 35 e Trust but the assessee failed the donation. Consequently, he claim of deduction under sec ment under section 143(3) read w e name of the deceased assesse ning the PAN of the deceased. deduction u/s 35AC of the A of M/s Navjeevan Charitable Trust was c ntral Circle -2(1), Mumbai. The trusts reco nal Committee has been withdrawn v .2016. The assessee Trust's registra e order u/s 12AA(3) of the I.T. Act dt. 20. ral)-1, Mumbai. During assessment proc ssee trust it was noticed from the facts of donation, trust booked bogus purc on entry providers. The entry providers ment from trust, encashes the cheque an e trust/trustee after retaining comm on entries. Few entry providers who we admitted of providing accommodation as d haritable Trust for commission. The asses re completed u/s 153C and commission on transaction was taxed. Few donor state of Vandravan P Shah 5 , 5402 & 5403/MUM/2024 gh the executor n under section st; however, the rk “Trust left”. arge its onus of 5AC paid to M/s to substantiate the Assessing ction 35AC and with section 147 ee through legal . The Assessing Act observing as centralized with ognition granted ide Notification tion was also 12.2016 by the ceedings in the s gathered that chases through after receipt of nd returns back mission on the ere covered u/s donation to M/s ssment of entry n income on the rs covered u/s 133A have a back for tax concluded th activity and n commission undisclosed in 6. In view of 50,00,000/- d is disallowed Penalty proce furnishing ina 4.6 The Assessing O the Act on 20.12.201 Vandravan P. Shah deceased. 4.7 The appeal was Ld. CIT(A) in presc appellant was, how Premchand Shah ha 5. Before the learn the merits of the add specifically contendin change of opinion. D also made submis juri iction on the g been initiated in the n Es ITA No. 5401, admitted and offered the amount of don xation or have revised the return of i at the assessee Campatrust was indu not as per its objectives for which trust w income on the donation amount w ncome and treating the trust as AOP. f the above facts, it was seen that an debited to assessee's profit and loss acco d and added back to the total income of eedings are initiated u/s 271(1)(c) of th accurate particulars of income.” Officer passed the order u/s 143 18 under the name as the legal h, having PAN No. AARPSS s filed against the assessment o cribed form No. 35 where th wever, mentioned as Estate aving PAN No. AAAE6452D. ned CIT(A), the assessee raised g dition and on the validity of the ng that the reopening was ba During the appellate proceeding ssion challenging the very ground that the reassessment p name of a deceased person. state of Vandravan P Shah 6 , 5402 & 5403/MUM/2024 nation received income. It was ulged in bogus was formed and was taxed as amount of Rs. ounts u/s 35AC f the assessee. he I. T. Act for 3(3) r.w.s. 147 of heir of late sh S9053J of the order before the e name of the of Vandravan grounds both on e reassessment, ased on a mere gs, the assessee assumption of proceedings had 5.1 It was submitte and 142(1) of the A Vandravan P. Shah, ultimately framed in Shah . It was conten assessee had been Vandravan P. Sha AAAAE6454D) and t been validly complete not in the name of th 5.2 The assessee fu deceased, executors discharge the liabiliti taxes due to the Gov been granted by the dated 30.10.2013, wh credits of the deceas one of the executors it was contended tha the Act in the name a 5.3 According to the person are void ab founded on such not Officer was aware of Es ITA No. 5401, d that the notices issued under Act were addressed to the PA , who had expired, and the a the name of the legal heir of Sh nded that, since Assessment Yea represented by the “Estate ah”, having a separate PA therefore the assessment, if at ed only in the name and PAN o he deceased individual. further submitted that under s were appointed to adminis ies of the deceased, realise recei vernment. It was pointed out th e Hon’ble Juri ictional High C hereby the administration of the sed was entrusted to Shri Dilip named in the will. In this factu at the issuance of notice under and PAN of the deceased was leg e assessee, proceedings initiated initio, and no valid reassess ice. It was specifically urged tha f the death of the assessee, y state of Vandravan P Shah 7 , 5402 & 5403/MUM/2024 r sections 143(2) AN of late Shri assessment was hri Vandravan P. ar 2013–14, the e of Late Shri AN, (PAN No. all, could have of the estate and the will of the ter the estate, ivables, and pay hat probate had Court vide order e properties and Dhirajlal Shah, ual background, r section 148 of gally untenable. d against a dead sment could be at the Assessing et proceeded to issue notice under se legal heir. Reliance contend that a noti person is invalid in proceedings. 5.4 The assessee als the reassessment wa the end of the releva on the part of the as facts necessary for reasons recorded by such failure, which reopening beyond fou the ground of non-ap 5.5 The learned CI However, while upho rejected the objection proceedings under reassessment as well 6. Before us, the a of Vandravan P. Sha has also been filed be Es ITA No. 5401, ection 148 in the name of the de was placed on various judicia ice issued under section 148 n law and vitiates the entire so challenged the reopening on as initiated after the expiry of ant assessment year, and there ssessee to disclose fully and tr the assessment. It was cont y the Assessing Officer did no is a mandatory juri ictional p ur years. The reasons were furt pplication of mind. T(A) condoned the delay in fil lding the addition on merits, th ns raised against the initiation o section 148 of the Act and l as the addition made therein. appeal has been filed in the nam h having PAN No. AAAAE6454D efore us. state of Vandravan P Shah 8 , 5402 & 5403/MUM/2024 eceased through al precedents to to a deceased e reassessment the ground that four years from e was no failure ruly all material ended that the ot establish any precondition for ther assailed on ling the appeal. e learned CIT(A) of reassessment sustained the me of the Estate D. A Paper Book

In the ground N the reassessment or on the ground that t was addressed to the the reassessment pr name and PAN of th had left a will exec assessee had, in law, estate of the deceased AAAAE6454D. 7.1 The assessee h validity of the reasses no failure on its par necessary for the ass conditions stipulated not satisfied. The ass in Ground No. 3 and 8. At the outset, appeal and contend completed in the n retaining the PAN of issue that arises for proceedings initiated Es ITA No. 5401,

3 On perusal of t 159 of the Income-ta reassessment and re deceased person up legal fiction whereby the deceased for the sub-sections (2) and been taken against against the legal rep Es ITA No. 5401, or the purpose of levying any sum in th n accordance with the provisions of sub-se any proceeding taken against the deceas shall be deemed to have been taken aga sentative and may be continued representative from the stage at which it the death of the deceased; any proceeding which could have been deceased if he had survived, may be tak representative; and all the provisions of this Act shall apply ac resentative of the deceased shall, for the an assessee. representative shall be personally liable apacity as legal representative if, while harged, he creates a charge on or dispo f the estate of the deceased, which are i but such liability shall be limited to the v ed of or parted with. ns of sub-section (2) of section 161, sect far as may be and to the extent to h the provisions of this section, apply i of a legal representative under this section ub-section (4) and sub-section (5), be lim e is capable of meeting the liability.” the provisions above, we find t ax Act provides a complete code ecovery of tax in respect of inco to the date of his death. The s the legal representative steps in limited purpose of tax proceedin (3), any proceeding taken or wh the deceased may be continu presentative, who is deemed to state of Vandravan P Shah 12 , 5402 & 5403/MUM/2024 he hands of the legal ection (1),- sed before his death ainst the legal repre- against the legal stood on the date of n taken against the ken against the legal ccordingly. purposes of this Act, for any tax payable e his liability for tax oses of or parts with n, or may come into, value of the asset so ion 162, and section which they are not in relation to a legal n shall, subject to the mited to the extent to that the Section for assessment, ome earned by a ection creates a nto the shoes of ngs. By virtue of hich could have ued or initiated be an assessee for such purposes. T remains confined to is capable of meetin makes it clear that provides the machine the deceased would taxable income con assessed and recover 9.4 In the case, t corresponding to as consideration before 2012-13, which are Vandravan P. Shah 159 of the Act, his l sum which the decea died, in the like man Thus, as far as perio representatives subs as if such proceeding 9.5 The term "Legal of the Act read with 1908. It encompasses deceased person and the estate of the dec Es ITA No. 5401, he liability of the legal represen the extent to which the estate ng such liability. The scheme it does not create a new ch ery for assessment and collecti have been liable to pay had h ntinues to be that of the de red through the legal representa he assessee died on 06.02.2 sessment year 2013-14. The e us are for assessment year e prior to the death of the and therefore, under the provi legal representative(s) is/are lia ased would have been liable to p nner and to the same extent t od before the death of the dec titute him for all purposes of gs are continued against the dec l Representative" is defined und h Section 2(11) of the Code of C s a person who in law represent d includes any person who inte ceased. Thus, whether the repr state of Vandravan P Shah 13 , 5402 & 5403/MUM/2024 ntative, however, of the deceased of section 159 harge. It merely ion of tax which he not died. The ceased, though ative. 013 i.e. period assessments in s 2010-11 and assessee Shri sions of section able to pay any pay if he had not o the deceased. eased, the legal tax proceedings ceased. der Section 2(29) Civil Procedure, ts the estate of a ermeddles with esentative is an heir or an executor, capacity of a legal executor under Sectio 9.6 Thus in s period before the dea name of the deceased legal heir or executo before us, the asses should have been c deceased person hav of deceased person c person, therefore, it of person. 9.7 The assessmen the section 168 of the represented by one e then as if the execu relevant provision of “Executors. 92 168. (1) Subject a person shall be char (a) if there is o (b) if there ar association Es ITA No. 5401, for the period prior to death, representative under Section on 168 of the Act. sum and substance, the asse ath of the deceased has to be c d through legal representative w or of the estate of the deceas ssee has raised an question th completed in the name of the ving a different PAN. In our opi came into existence only upon can’t represent for the period b t of estate of deceased person e Act. The estate of the decease executor or if there are more tha utors were an association of th section 168 of the Act is reprodu as hereinafter provided, the income of the rgeable to tax in the hands of the executor nly one executor, then, as if the executor re more executors than one, then, as n of persons; state of Vandravan P Shah 14 , 5402 & 5403/MUM/2024 they act in the 159, not as an essment for the completed in the who may be even sed person. But hat assessment e estate of the inion, the estate n the death of a before the death is governed by d person can be an one executor he persons. The uced as under: estate of a deceased r,- 93 were an individual; or if the executors were an and for the purpose non-resident accord during the previous y (2) The assessment from any assessmen (3) Separate assessm each completed prev date of the death to estate according to t (4) In computing the income of the estate of, any specific lega but the income so ex year of such specific Explanation.-In this administering the es 9.8 The Section 168 estate of a deceased distribution to benef clear distinction: (i) Income earned deceased throu legal representa deceased. (ii) Income earned estate under sec legal heir as ‘r estate of deceas 9.9 The mere fact th does not mandate t Es ITA No. 5401, es of this Act, the executor shall be deem ing as the deceased person was a resi year in which his death took place. of an executor under this section shall nt that may be made on him in respect of ments shall be made under this section o vious year or part thereof as is included in o the date of complete distribution to the heir several interests 93. e total income of any previous year und of that previous year distributed to, or a tee of the estate during that previous yea xcluded shall be included in the total inc c legatee. section, “executor” includes an administ state of a deceased person 94.” 8 of the Act, governs taxation o d person arising after the da ficiaries. Thus, the statutory s d prior to death: assessable in gh legal representative under s ative is ‘deemed assessee’ and t d after death: assessable in th ction 168 through executor or a representative assessee’. The ta sed. hat an estate comes into existe that income earned prior to state of Vandravan P Shah 15 , 5402 & 5403/MUM/2024 med to be resident or ident or non-resident be made separately his own income. on the total income of n the period from the e beneficiaries of the der this section, any applied to the benefit ar shall be excluded; come of the previous trator or other person of income of the ate of death till scheme draws a the name of the section 159.The taxable entity is he hands of the administrator or axable entity is ence upon death death must be assessed under sect the clear legislative d

10 The Hon'ble Bo [1976] 105 ITR 76 between income asse date of death serves income of a legal rep income, the income cannot be assessed overlapping of juri i 9.11 In the present exclusively to income assessee. Conseque Assessing Officer wa reassessment in the legal representative, contention that the a name of the “estate to the statutory schem 9.12 Accordingly, we the years under co completed in accorda Es ITA No. 5401, ion 168. Such an interpretatio demarcation between the two pro ombay High Court in Arvind B 64, held that there is a cle essable under Section 159 and S s as the dividing line. Just a resentative cannot be clubbed w e assessable under Section 1 under Section 168 (post-deat iction. t case, the reassessment pro e pertaining to periods prior to t ently, section 159 alone is as, therefore, legally justified e name of the deceased assess while retaining the PAN of the assessment ought to have been of the deceased” is misconceive me. e hold that the reassessment onsideration have been validly ance with section 159 of the Ac state of Vandravan P Shah 16 , 5402 & 5403/MUM/2024 on would defeat ovisions. Bhogilal v. CIT ar demarcation Section 168. The as the personal with the estate's 159 (pre-death) h). There is no oceedings relate the death of the attracted. The in framing the see through his e deceased. The n framed in the ed and contrary proceedings for y initiated and ct. The objection raised by the assesse on this ground is, the 10. Now, the questi the name of the ‘esta have been validly assessment year 201 specifically raised to assessee on this issu 10.1 The ld counsel was no legal heir in apply. Alternatively also deemed to be section 160 of the Ac provided that in resp Administrator -Gene manager ( including fact manages proper any order of a court , the benefit of any General, official trus contested that admin death of the assessee of deceased Vandrava Es ITA No. 5401, ee challenging the validity of th erefore, rejected. ion arise whether the appeals fi ate of deceased person’ having P filed for assessment years 12-13 and maintainable ? Thi the assessee and hearing was f ue. for the assessee, firstly, subm the case so provisions of sectio it was submitted that legal re as representative assessee as ct. He submitted that section 16 pect of income of which the cou ral , the official trustee or a any person , whatever, his des rty on behalf of another) appoin receives or is entitled to receive person, such court of wards, tee , receiver or manager. Acco nistrator was managing the pr e, so appeal has been validly file an P shah as representative ass state of Vandravan P Shah 17 , 5402 & 5403/MUM/2024 he reassessment iled before us in PAN of the estate 2011-12 and is question was fixed to hear the mitted that there on 159 does not epresentative is s defined under 60(iii) specifically urt of wards, the any receiver or ignation, who in nted by or under e on behalf or for Administrator– ordingly, it was roperty after the ed by the estate essee.

2 In our opinion, years was correctly legal representative, i ought to have been fi deceased person thro 10.3 The estate of a upon death and is a post-death income. T period before the de prior to the death as of the deceased throu estate of deceased, th name of the deceased present appeals pert estate had no locus t 10.4 Even though an appeal was required assessee through su and not in the st Consequently, the a assessment years pri and 2012-13, are no on this ground alone Es ITA No. 5401, having held that reassessment framed in the name of the de it necessarily follows that any a iled in the same capacity i.e. in ough the PAN of the deceased. a deceased person comes into ssessable under section 168 on The estate did not come into e eath of assessee and therefore sessment could be completed o ugh legal representative and not herefore, the appeal was also to d person through legal represent tain to assessment years prio o maintain the appeals. n executor may be a legal rep d to be filed in the name o uch legal representative and PA tatus of the estate with a appeals filed in the name of ior to death i.e. the assessment ot maintainable and are liable . We order accordingly. state of Vandravan P Shah 18 , 5402 & 5403/MUM/2024 for the relevant eceased through appeal therefrom the name of the o existence only nly in respect of xistence for the , for the period nly in the name t in the status of o be filed in the tative. Since the r to death, the presentative, the of the deceased AN of deceased, separate PAN., f the estate for t years 2011-12 to be dismissed

Since we have year 2011-12 as no required to be dispos the validity of the rea 12. The ground No reassessment procee on ‘borrowed satisfac the Assessing Officer of the assessee obser Grounds 02 objected the a for reopening 143(3) based third party a best be cons concrete evid assessment appellant has and found tha u/s 147 of th from the Pr. C the course of notice u/s 14 through speed the same, app original retur u/s 142(1) on The Attention the investigat be true that w real transacti transactions a It was furthe DDIT is a independently Es ITA No. 5401, already dismissed the appeals on-maintainable the ground on sed, yet for completeness, the gro assessment and merit are also a o. 1 of the appeal of the asses dings on the ground that reope ction’ and total lack of ‘applicat r. The ld CIT(A) has dismissed t rving as under: & 03: In this ground of appeal the assumption the original assessment which was comp on the findings of the search party in th and such action of the assessing officer sider as difference of opinion and there dence of escapement of income for reo under section 143(3). The contentio s been considered. I have gone through at the proceedings against appellant we he Income Tax Act, 1961 after obtaining Commissioner of Income Tax - 19, Mumb f proceedings, the Assessing Officer is 48 on 28.03.2018 and duly served upon d post and Email to the appellant. In re pellant has filed the return of Income as rn. However, the Assessing Officer issu n various dates. n is drawn to highlight the importance of ting agencies and that would point out th when transactions are through cheques it ions but the authority is entitled to look b and ascertain the motive behind the tra er argued by the appellant that the rep third-party information which has y subjected to further verification by the state of Vandravan P Shah 19 , 5402 & 5403/MUM/2024 for assessment n merit are not ounds raised on adjudicated. ssee assails the ening was based tion of mind’ by these objections appellant pleted u/s he case of r is at the e was no opening of n of the h the facts re opened g approval bai. During ssued the appellant esponse to treated in ued notice f reports of hat it may t looks like behind the nsactions. port of the not been assessing officer, where the initial bu various docum In view of t Assessing Off the supporti furnished par have carefull perusal of as based on cog Assessing Off notices u/s intervene at initiation of a Assessing Off case of the ap AO is justifie Hence, the Gr 12.1 We have heard the relevant materia reproduce the reason available on Paper Bo “Reasons for IT Act. 1. Brief deta The assessee consideration 3,54,43,851/ on 2.01.2013 passed on 3,54,92,280/ 2. Brief deta In this case, i Mumbai vide dated 11.03. received from Es ITA No. 5401, eas the appellant had in the said case d urden of substantiating the purchases ments is in violation of principle of natura the discussion, it is pertinent to note fficer has granted ample opportunities fo ing documents. However, the appel rtially reply to the notices as discussed ly considered appellant submission. Aft ssessment order, it is seen that the reo gent evidence and clear facts brought o fficer while recording satisfaction for is 148. Accordingly, I do not see any this juncture as I don't see any an assessment proceedings u/s 148 initiate fficer which is based on specific informat appellant. Therefore, in my considered op ed in rejecting the objections of the A round is noted as dismissed.” rival submission of the partie al on record. In this regard, i ns recorded by the Assessing O ook page 3: r re-opening of the assessment u/s 14 ails of the Assessee: e has filed return of income for the ye n on 25.08.2012 declaring the total inco -. The same was processed u/s 143(1) 3. Order u/s 143(3) r.w.s. 147 has a 20.02.2015 assessing total income -. ails of information received by the A.O information was received from DDIT (Inv.) e letter No. DDIT(Inv.) Unit-7(4)/35(1)(ii) 2019 wherein it is stated that informa m the Directorate of Investigation (Kolkata state of Vandravan P Shah 20 , 5402 & 5403/MUM/2024 discharged s through l justice. that the for proving llant has d supra. I ter careful opening is out by the suance of reason to nomaly in ed by the tion in the pinion, the Appellant. s and persused t is relevant to Officer which is 47 of the ear under me at Rs. of the Act also been e of Rs. O. ) Unit-7(4), )/2018-19 ation was a) that the following inst bogus donatio School of H after referred PAN – AABAS Registered O 700004 A Survey ac (hereafter, ref registered / a found that t brokers and a dubious sche profited from scientific rese research in genuine. 3. Analysis o On perusal o 2012-13 (AY has also mad of Human G deduction u/s 2012-13 as p Sl. No. Name of A 1 Vandravan 4. Findings o In view of the Shah (PAN A 60,00,000/- u 2012-13 on Genetics and claimed u/s Vandravan P Es ITA No. 5401, titution vide a network of brokers is enga on u/s 35(1)(ii) of the Income Tax Act, 196 Human Genetics and Population Hea as SHGPH) S4570M Office: 7, Nilamber Mukherjee Street, ction u/s 133A of the Income Tax A ferred as Act) was carried out on 27.01.20 administrative offices of the above institut the above institute in connivance with accommodation entry providers has indu me of tax evasion, defrauding revenue an the government intention to increase & e earch or research in social science or the country. The institutes' activities of information received: of list of beneficiaries, it is seen that d 2011-12), Vandravan P Shah (PAN AAR de bogus donation of Rs. 60,00,000/- to M Genetics and Population Health and s 35(1)(ii) of the Income Tax Act, 1961 d er following details: Assessee Name of Trust PAN n P Shah School of Human Genetics and Population Health AARPS9053J of the A.O. e above, it is abundantly clear that Van AARPS9053J) has claimed bogus donati u/s 35(1)(ii) of the Income Tax Act, 1961 the donation made to M/s School o d Population Health. Therefore, the 35(1)(ii) has to be added to the total Shah of AY 2012-13. state of Vandravan P Shah 21 , 5402 & 5403/MUM/2024 aged in the 61: lth, (Here Kolkata- Act, 1961 015 at the te and it is h donors, ulged in a nd has ill- encourage statistical s are not during AY RPS9053J) M/s School d claimed during AY Amount of Bogus Donation 60,00,000 ndravan P ion of Rs. during AY of Human deduction income of 5. Basis of escapement On the basis undersigned, escaped the chargeable to 12.2 Upon a careful that the Assessing Of material originating f and findings from th Charitable Trust, , w Officer of the assess reasons were recorde our view, legally u material may stem findings regarding th was that of the Asses the Assessing Office other juri ictions; ra his mind to such ma has escaped assess provisions of Section was no statutory m conduct a prelimina assessee prior to the only required to exam a reasonable belief. Es ITA No. 5401, f forming reason to believe and d of income: s of the aforesaid information available I have reason to believe that the asse income of Rs. 60,00,000/- or any oth tax...” perusal of the reasons record fficer was in possession of speci from the Investigation Wing of he assessment proceedings of which was duly forwarded to see. The contention of the as ed on the basis of "borrowed sa unsustainable. While the info from an external source (in he Trust), the belief formed upon ssing Officer himself. The law d er from relying on information ather, it requires that he indepe aterial to form a prima facie be sment. Furthermore, under th n 148 as they stood at the relev mandate requiring the Asses ary enquiry or seek an explan e issuance of notice. The Assess mine the material available on r We find that the Assessing O state of Vandravan P Shah 22 , 5402 & 5403/MUM/2024 details of e with the essee has er income ded, we observe ific and tangible the Department M/s. Navjeevan o the Assessing sessee that the atisfaction" is, in rmation or the this case, the n such material oes not prohibit n received from endently applies lief that income he un-amended vant time, there sing Officer to nation from the sing Officer was record and form Officer has duly appreciated the mat information received the plea that the act rejected. 12.3 The assessee ha on the ground that t material facts fully a first proviso to Sectio concept of "full and of the transaction dis Officer has explicitly assessee obtained ac under Section 35AC paid amounts by ch M/s. Navjeevan Cha which is essentially disclosure within the asserted by the asses are found to be false the proviso is no l condition regarding t truly stands satisfied of the reassessment the appeal is dismiss Es ITA No. 5401, terial and established a live lin and the formation of his belief tion was taken without applica as further challenged the validi there was no failure on its par and truly, thereby invoking the on 147. This argument is devo true disclosure" presupposes t sclosed. In the reasons recorded y set out the modus operand commodation entries in the guis C. The specific allegation is tha heque and received cash back f aritable Trust. A disclosure of sham or bogus cannot be term e meaning of the Act. When th ssee, namely, the genuineness e based on credible material, th longer available. Therefore, th the failure to disclose material d. The objections of the assessee are accordingly rejected. The g sed. state of Vandravan P Shah 23 , 5402 & 5403/MUM/2024 nk between the f. Consequently, ation of mind is ity of the notice rt to disclose all e bar under the id of merit. The the genuineness d, the Assessing di whereby the se of deductions at the assessee from the donee, f a transaction med as a "true" he primary facts of the donation, he protection of he juri ictional l facts fully and e against validity ground no. 1 of 13. The ground Nos the addition. The ld on merit observing as “15. During th the case, Ass are perused. the Assessing Ground 01: In addition mad the A.Y. 201 considered. I instant case i Mumbai ment the premise o seen that Shr an amounting Trust and th commission c also claim ded However, it is was centraliz trusts recogni withdrawn v Trust's registr of the I.T' Act Income Tax proceedings i the facts gath bogus purcha entry provide encashes the after retaining entry provide providing ac Charitable T providers wer the accommod u/s i-33A ha received back was conclud activity and n Es ITA No. 5401, s. 3 and 4 of the appeal relate CIT(A) rejected the contention s under: he appeal proceedings, Grounds of appea sessment order, submission filed by the There is merit in the assessment order p g Officer in view of the following as under n this ground of appeal the appellant obj de by the Assessing Officer is Rs. 50,00 1-12. The contention of the appellant have gone through the facts and found t information received from DCIT Central C tioning that a search u/s 132 was carr of M/s Navjeevan Charitable Trust where ri Vandravan P Shah has given donation g to Rs. 50,00,000/- to M/s Navjeevan C he received back in cash after deduct harge by the trust to facilitate this subter duction u/s 35AC against the donation. s also noted that M/s Navjeevan Charita zed with the DCIT Central Circle -2(L), Mu ition granted by the National Committee ide Notification dated 30.11.2016. The ration was also cancelled vide order u/ t dt. 20.12.2016 by the Principal Commi x (Central)-1, Mumbai. During as in the case of assessee trust it was no hered that after receipt of donation, tru ases through accommodation entry provi ers after receipt of cheque payment fr cheque and returns back cash to the tru g commission on the accommodation en ers who were covered u/s 133A, have ad ccommodation as donation to M/s N Trust for commission. The assessment re completed u/s 153C and commission dation transaction was taxed. Few donor ave admitted and offered the amount of k taxation or have revised the return of ded that the assessee was indulged not as per its objectives for which trust w state of Vandravan P Shah 24 , 5402 & 5403/MUM/2024 e to the merit of of the assessee al, Facts of appellant passed by r:- bjected the 0,000/- for has been that in the Circle 2(1), ried out at ein it was u/s 35AC Charitable tion small rfuge, and able Trust umbai. The has been assessee s 12AA(3) issioner of ssessment ticed from ust booked iders. The rom trust, ust/trustee tries. Few dmitted of Navjeevan of entry income on rs covered f donation income. It in bogus was formed and commiss undisclosed in In view of the 50,00,000/-, on 14.08.201 u/s 35AC is DCIT Central of the incom Navjeevan c 50,00,000/-. left". Further, donation give unverified in a The contentio unsubstantiat ground is note 13.1 During the cou furnished documents section 35AC of the the donee trust. In o Assessing Officer issu M/s Navjeevan Char unserved with the rem 13.2 In these circum assessee to substant verification and by es No such effort was greater significance i the investigation, ind cash against the che Es ITA No. 5401, ion income on the donation amount was ncome and treating the trust as AOP. e above facts, it was seen that an amo donation given to M/s Navjeevan Charita 0, debited to profit and loss accounts of bogus on the basis of information rece Circle 2(1), Mumbai. Thereafter, Notice u me Tax Act issued by Assessing Office charitable Trust for verifying donatio That notice was returned back with rem , the contention of the appellant with en to M/s Navjeevan charitable Trust absence of documentary evidence. on of the appellant remained unjust ted. Hence, the Assessment Order is u ed as dismissed. urse of assessment proceeding s in support of its claim for d Act, including a receipt purpor rder to verify the genuineness o ued a notice under section 133 itable Trust. However, the notic mark “party left”. mstances, the onus squarely tiate its claim by producing the stablishing the genuineness of made by the assessee. This f in view of the adverse material dicating that the donee had all eques received towards donation state of Vandravan P Shah 25 , 5402 & 5403/MUM/2024 s taxed as unt of Rs. able Trust f assessee eived from u/s 133(6) er to M/s n of Rs. mark "Trust regard to t remains tified and upheld the gs, the assessee deduction under rtedly issued by of the claim, the 3(6) of the Act to ce was returned shifted to the e said donee for the transaction. failure assumes l noticed during legedly returned n. In the face of such serious allegatio the assessee to rebut 13.3 Mere production in favour of the trust 58, or evidence of re discharge the burde such documents onl ordinary course of a course of verification affirmatively establis producing the concer 13.4 In the absence having failed to dis infirmity in the ac disallowance of claim Accordingly, the claim and 4 raised by the a 14. Now, we take u The grounds raised i grounds raised in AY 15. Insofar as the concerned, the asse Es ITA No. 5401, ons, a higher degree of proof wa t the findings of the Assessing O n of documents such as the no t, donation receipts, bank statem egistration of the trust, cannot, en cast upon the assessee, pa ly constitute a paper trail ma affairs. When adverse facts em n, it becomes incumbent upon sh the genuineness of the rned party for examination. of any such corroboration, an scharge the onus cast upon ction of the ld CIT(A) in m of deduction under section 3 m of deduction is rejected and assessee are dismissed. up the appeal for AY 2012-13 f in assessment year 2012-13 be Y 2011-12, same are decided mu e appeal for Assessment Ye essee, by Ground No. 1, has state of Vandravan P Shah 26 , 5402 & 5403/MUM/2024 as required from Officer. tification issued ments, Form No. by themselves, articularly when aintained in the erge during the the assessee to transaction by nd the assessee it, we find no confirming the 35AC of the Act. Ground Nos. 3 for adjudication. eing identical to utatis mutandis. ar 2017–18 is contended that adequate opportunit learned Commissione 15.1 We have heard t material available o appellate order, it is many as five notices record further shows occasions and filed remaining notices. T detailing the dates reproduced as under “6. Decisio Following Not Sr. No. 1. No 2. No 3. No 4. No 5. No 15.2 In these circum reasonable and suffic to present its case. T endless opportunitie and the assessee partially, no infirmit Es ITA No. 5401, ty of being heard was not a er of Income Tax (Appeals). the rival submissions and carefu on record. On examination of evident that the learned CIT(A s of hearing under section 250 that the assessee sought adjou d partial submissions in re The relevant portion of the im of hearing and the nature of : on on Grounds of appeal; tices u/s 250 of the IT Act was issued to t Hearing Notice R tice dated 06.01.2021 Adjournm tice dated 13.12.2021 Adjournm tice dated 24.03.2022 Partially S tice dated 28.09.2022 Partially S tice dated 12.08.2024 Partially S mstances, we are of the consid cient opportunity was afforded The principles of natural justice s, and where adequate notice has participated in the proc ty can be found in the appella state of Vandravan P Shah 27 , 5402 & 5403/MUM/2024 afforded by the ully perused the f the impugned A) had issued as of the Act. The urnments on two sponse to the mpugned order, f compliance, is the appellant. Remarks ment ment Submission filed Submission filed Submission filed dered view that to the assessee do not mandate has been given ceedings, albeit ate proceedings.