Case Law Details
DCIT Vs Podar Education Trusts (ITAT Mumbai)
ITAT Mumbai held that denial of exemption under section 10(23C) of the Income Tax Act on allegation of bogus donation unsustainable in absence of evidence that donation made by assessee to those trust are bogus.
Facts- The assessee is a charitable trust registered u/s. 12AA (1)(b)(i) of the Income-tax Act, 1961. During the course of search, the income tax department found that there are three trust belonging to Podar Group i.e. (i) Anandilal and Ganesh Podar society (ii) Podar Education Trust & (iii) Podar Education & Sports Trust. These trusts gave allegedly bogus donation to other trusts, the other trusts returned back cash to Podar Group, and the cash was introduced into various companies with the help of entry providers.
AO further noted that assessee is claiming exemption under Section 10(23C) (vi) of the Act and as per the third proviso, the assessee is required to apply the income wholly and exclusively for the objects for which it is formed. AO noted that assessee’s trust has not applied the same in accordance with the provisions of the law.
Conclusion- Held that CIT(A) allowed exemption to the assessee with respect to the alleged bogus donation holding that there is no evidence available with the AO that the donation made by the assessee to those trust are bogus and further the exemption is allowable.
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