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Income Tax Appellate Tribunal, ‘B’ BENCH, CHENNAI
Before: SHRI N.R.S. GANESAN & SHRI INTURI RAMA RAO
आदेश /O R D E R PER N.R.S. GANESAN, JUDICIAL MEMBER:
The appeal of the assessee is directed against the order passed by the Commissioner of Income Tax (Appeals)–18, Chennai for the assessment year 2010-11 confirming the penalty levied by the Assessing Officer U/s.271(1)(c) of the Income Tax Act, 1961 (in short ‘the Act’).
Shri G. Baskar, the Ld. Counsel for the assessee submitted that the Assessing Officer levied penalty U/s.271(1)(c) of the Act. During the year under consideration, the assessee deposited Rs.3,29,10,765/- in Indian Bank, Valasaravakkam & Thousand Light Branches. The assessee explained before the Assessing Officer that these amounts were from and out of the tuition fees, out-patient deposit collection from medical college run by the trust. The assessee also explained that the out-patient deposit and pharmacy collections from the hospital run by the trust were deposited in the bank account. The Assessing Officer claims that it is anonymous donations. However, the assessee claims that it is the tuition fees collected from the students and the deposit collected from the out- patients from the medical college run by the trust. According to the Ld.AR, only the classification or the source for the deposit is in dispute. The fact that the assessee has disclosed the entire receipts before the Assessing Officer is not in dispute. Since the amount was collected from the out patients and the same was deposited in the bank account and the assessee claims the same as exempted U/s.11 of the Act, it is neither the case of concealment of income nor furnishing any inaccurate particulars. Merely because the assessee could not explain the receipt of money to the satisfaction of the Assessing Officer, it does not mean that the assessee furnished any inaccurate particulars or concealed any part of the income. Therefore the CIT(A) is not justified in confirming the penalty levied by the Assessing Officer.
2.1 The Ld.AR further submitted that the search was conducted in the premises of the assessee on 15.12.2010. Therefore if at all any penalty to be levied, it has to be levied only U/s.271AAA of the Act and not U/s.271(1)(c) of the Act. Referring to Section 271AAA of the Act, the Ld.AR submitted that in respect of search initiated on or after 01.04.2007 but before 01.07.2012, the penalty shall be levied U/s.271AAA of the Act and no penalty can be levied U/s.271(1)(c) of the Act. In this case, admittedly the search was conducted on 15.12.2010. Therefore, the assessment year under consideration falls within the specified previous year within the meaning of Section 271AAA(4) of the Act. Hence, the penalty if at all to be levied only U/s.271AAA of the Act and definitely not U/s.271(1)(c) of the Act.
On the contrary, Shri A. Sundararajan, the Ld. Departmental Representative submitted that during the course of search proceedings, several incriminating materials were found. On verification there was a huge cash deposit to the extent of Rs.36.36 Crores to various branches / accounts of Indian Bank. The assessee has not maintained any proper books of account. Even after conclusion of search on 10.02.2011, the assessee could not produce any books of account to establish the so called collection of deposit from out-patients. The Assessing Officer found that the cash deposited in various bank accounts are anonymous donations and brought the same for taxation for about Rs.3,29,10,765/-. Since, the assessee could not explain the source of cash deposit to the extent of Rs. 3,29,10,765/-, the Assessing Officer found that the assessee has concealed its income. Therefore, penalty was levied U/s.271(1)(c) of the Act.
3.1 Referring to the claim of the assessee, that no penalty U/s.271(1)(c) of the Act, if at all can be levied U/s.271AAA of the Act, the Ld.DR submitted that the Assessing Officer discussed the claim of the assessee at Para 5 of the impugned order. Section 271AAA of the Act could be applied only in case there was a search in the premises of the assessee’s trust. In this case, there was no search in the premises of the assessee’s trust. The search was admittedly in the case of Shri A.N. Radhakrishnan, who is the Managing Trustee of the assessee. Since the assessee trust is a person other than the searched person, the assessment has to be made U/s.153C of the Act. Therefore the provisions of Section 271AAA of the Act cannot be made applicable to a person other than the searched person.
We have considered the rival submissions on either side and perused the material available on record. Admittedly there was cash deposit in the bank account. The Assessing Officer at Page No.3 of the assessment order reproduced the statement of Mr.A.N. Radhakrishnan which indicates the cash deposit to the extent of Rs.36,36,57,478/-. The assessee has not maintained any proper books of account. Even though the Assessing Officer found that the cash deposit was Rs.36.36 crores, he found that income sought to be evaded was Rs.3,29,10,765/-. Accordingly he levied penalty.
4.1 The fact that the entire amount was deposited in the bank account was not in dispute. The assessee claims that the cash deposited was from students and out-patients. However the Assessing Officer claims that it is from anonymous donations. An identical issue was considered by this Tribunal in the case of M/s. Balaji Educational & Charitable Public Trust Vs. ACIT in ITA186/Mds/2014 dated 24.07.2015, this Tribunal found that the assessee explained before the Assessing Officer that the amounts were received but the details were not available. On such circumstances, this Tribunal after referring to the judgment of the Hon’ble Apex Court in the case of M/s.MAK Data (P) Ltd., Vs. CIT, found that the explanation given by the assessee was neither false nor bonafide. Accordingly after referring to the judgment of the Hon’ble Gujarat High Court in the case of M/s. National Textiles Vs. CIT, 249 ITR 125, found that the assessee has neither concealed any part of the income nor filed any inaccurate particulars.
4.2 In this case also, the assessee has disclosed the entire receipt of donations. However the Assessing Officer found that it is not a voluntary donation but anonymous donation. The fact that the assessee has disclosed the entire donation and claimed exemption U/s.11 of the Act is not in dispute. When the assessee has disclosed the entire receipt and the expenditure and claimed the same as exempted U/s.11 of the Act, merely because the assessee could not furnish the details of the persons from whom the donations was received, cannot be a reason for concluding that the assessee concealed any part of income or furnished inaccurate particulars. Making a statutory claim U/s.11 of the Act cannot be construed as furnishing inaccurate particulars.
4.3 We also carefully gone through the judgment of the Apex Court in the case of CIT Vs. M/s. Reliance Petro Products Pvt. Ltd., 322 ITR 158. In the case before the Apex Court, the assessee claimed certain amount as expenditure, however the Assessing Officer disallowed the claim of the assessee and also levied penalty. The Apex Court found that when the assessee claims certain amount as expenditure, merely because the assessee could not furnish the entire details, it cannot be said that there was concealment of income or furnishing inaccurate particulars. In view of the judgment of the Apex Court in the case of Reliance Petro Products Pvt. Ltd., mere
U/s.11 of the Act, in respect of the so called donations received by the assessee cannot be a reason for levy of penalty U/s.271(1)(c) of the Act. In view of the above discussions, we are unable to uphold the orders of the lower authorities. Accordingly the same is set aside and the penalty levied U/s.271(1)(c) of the Act, is deleted.
In the result, the appeal filed by the stands allowed.
Order pronounced in the court on 2nd January, 2020 at Chennai.