ADIT, Trivandrum v. M/s Manarul Huda Trust, Trivandrum

ITA 778/COCH/2008 | 2004-2005
Pronouncement Date: 30-04-2010

Appeal Details

RSA Number 77821914 RSA 2008
Assessee PAN AAATM6592K
Bench Cochin
Appeal Number ITA 778/COCH/2008
Duration Of Justice 1 year(s) 10 month(s) 4 day(s)
Appellant ADIT, Trivandrum
Respondent M/s Manarul Huda Trust, Trivandrum
Appeal Type Income Tax Appeal
Pronouncement Date 30-04-2010
Appeal Filed By Department
Bench Allotted DB
Tribunal Order Date 30-04-2010
Date Of Final Hearing 28-10-2009
Next Hearing Date 28-10-2009
Assessment Year 2004-2005
Appeal Filed On 25-06-2008
Judgment Text
IN THE INCOME TAX APPELLATE T RIBUNAL COCHIN BENCH COC HIN BEFORE S/SHRI N.VIJAYAKUMARAN JM AND SANJAY ARORA AM I.T.A. NO. 778/COCH./2008 ASSESSMENT YEAR : 2004-05 THE ASSISTANT DIRECTOR OF INCOME-TAX (EXEMPTION) RANGE- 1 TRIVANDRUM. VS. M/S. MANARUL HUDA TRUST EMKE MANZIL KALLATTUMUKKU PO MANACAUD TRIVANDRUM. [PAN: AAATM 6592K] (REVENUE-APPELLANT) (ASSESSEE-RESPONDENT) REVENUE BY SHRI T.J.VINCENT DR ASSESSEE BY SHRI T.M. SREEDHARAN ADV. O R D E R PER SANJAY ARORA AM: THIS APPEAL BY THE REVENUE IS ARISING OUT OF THE O RDER BY THE COMMISSIONER OF INCOME-TAX (APPEALS)-I TRIVANDRUM (CIT(A) FOR SH ORT) DATED 21.2.2008 AND THE ASSESSMENT YEAR (A.Y.) UNDER REFERENCE IS 2004-05. 2.1 THE PRESENT APPEAL IMPUGNS THE DELETION OF PEN ALTY U/S. 271(1) (C) OF THE INCOME- TAX ACT 1961 ('THE ACT' HEREINAFTER) IMPOSED VIDE ORDER DATED 24.1.2008 I.E. AFTER THE PART-CONFIRMATION OF THE ASSESSMENT MADE VIDE ORDE R U/S. 144 DATED 28.12.2006 BY THE FIRST APPELLATE AUTHORITY VIDE ITS ORDER DATED 18.7 .2007 AND WHICH WAS NOT APPEALED AGAINST FURTHER BY THE ASSESSEE. THE ASSESSEE IS A TRUST REGISTERED U/S. 12AA OF THE ACT RUNNING VARIOUS SCHOOLS AND HOSPITALS. A SURVEY U/S . 133A WAS CONDUCTED IN ITS CASE ON ONE SUCH HOSPITAL AL ARIF HOSPITAL AMBALATHARA T RIVANDRUM ON 12.12.2005 AND SOME BOOKS OF ACCOUNTS IMPOUNDED. THE ASSESSEE FILED IT S RETURN FOR THE YEAR ON 31.3.2006 AT A DEFICIT OF RS. 1 89 38 383/-. THE ASSESSMENT WAS CO MPLETED U/S. 144 BY MAKING ADDITIONS ON THE FOLLOWING COUNTS AFTER IMPOUNDING THE SOME OTHER BOOKS OF ACCOUNTS I.E. AS REQUISITIONED VIDE SUMMONS FOR 24/11/2006 IN VIEW OF ITS UNCOOPERATIVE ATTITUDE: A) SHORT COLLECTION AT AL ARIF HOSPITAL : AS PER THE P&L ACCOUNT FOR THE RELEVANT YEAR THE COLLECTION OF THE SAID HOSPITAL WAS SHOWN AT RS. 70 83 991/-. AGAINST THIS THE ACCOUNT ITA. NO. 778/COCH./2008 2 BOOKS IMPOUNDED AT THE TIME OF SURVEY REVEALED THE TOTAL COLLECTION OF RS. 83 35 418/-. THE ASSESSEE HAD THUS SHORT ACCOUNTED FOR THE SAI D RECEIPTS FOR RS. 12 51 427/- . THE SAME STOOD ADDED IN THE ABSENCE OF ANY EXPLANATION BY THE ASSESSEE. B) CAPITAL EXPENSES : THE ASSESSEE CLAIMED DEDUCTION ON ACCOUNT OF CAP ITAL EXPENSES AT RS. 1 84 39 383/-. THE SAME STOOD ALLOWED BY THE AS SESSING OFFICER (A.O.) AT RS. 68 02 297/- I.E. AT THE AMOUNT OF ADDITION TO FIX ED ASSETS AS REVEALED BY THE SCRUTINY OF THE ASSESSEES BOOKS. 2.2 THE ASSESSEE COULD SUBMIT SOME DETAILS SUPPORT ED BY BILLS INVOICES ETC. IN FIRST APPEAL I.E. IN RESPECT OF ADDITION TO ASSETS RELA TING TO NATIONAL COLLEGE OF ENGINEERING THIRUNELVELI. THE LD. CIT(A) AFTER VERIFICATION TH EREOF ALLOWED THE SAME DIRECTING FOR THE SUSTENANCE OF THE BALANCE RS. 34.65 LAKHS . QUA THE ADDITION ON ACCOUNT OF SHORT RECEIPT (RS. 12.51 LACS) HE FOUND NO MERIT IN THE ASSESSEES PLEA OF THE SAME BEING ON ACCOUNT OF THE NON-ACCOUNTING OF THE CHARGES TOWARD FOOD AND MEDICINE BOTH THE INCOME AND EXPENDITURE IN RESPECT OF WHICH STAND EXCLUDED. 2.3 THE AO THEREAFTER TOOK UP THE PENALTY PROC EEDINGS U/S. 271(1)(C) I.E. AS ALREADY INITIATED PER NOTICE U/S. 274 ON 28.12.2006 FOR TH E LEVY OF PENALTY QUA THE SAID TWO ADDITIONS; THE INCOME HAVING BEEN FINALLY ASSESSED AT (-) RS. 4408673/- WITH THE ASSESSEE NOT PREFERRING ANY APPEAL AGAINST THE ORDER OF THE FIRST APPELLATE AUTHORITY. THE ASSESSEE SUBMITTED THAT AS ITS BOOKS OF ACCOUNTS FOR THE REL EVANT YEAR WERE IMPOUNDED BY THE REVENUE THE CORRECT FIGURES OF THE INCOME COULD NO T BE FURNISHED PER ITS RETURN OF INCOME. IN FACT IT WAS FOR THIS REASON THAT ITS AC COUNTS COULD NOT BE AUDITED AND WHICH STOOD CONVEYED PER THE RETURN. THERE WAS AS SUCH NO INTENTIONAL OMISSION ON ITS PART. THE AO FOUND THE ASSESSEES EXPLANATION AS NOT MAINTAIN ABLE. IT WAS THE ASSESSEES DUTY TO GET ITS ACCOUNTS AUDITED THE TIME FOR WHICH IN FACT HAD LAPSED MUCH BEFORE THE TIME OF SURVEY. IN ANY CASE THE ASSESSEE COULD HAVE REQUES TED FOR AND OBTAINED THE RELEVANT EXTRACT FROM ITS RECORDS IMPOUNDED IN SURVEY FOR T HE PURPOSE OF FILING OF RETURN AND WHICH IT CHOSE NOT TO. FURTHER IT HAD NOT OFFERED ANY EXPLANATION WITH REGARD TO THE DEFICIENCY IN RECEIPT AND FURTHER COULD NOT SUBST ANTIATE ITS CLAIM IN RESPECT OF CAPITAL EXPENDITURE I.E. TO THE EXTENT FINALLY DISALLOWED . HE ACCORDINGLY LEVIED PENALTY AT RS. 16 LAKHS AS AGAINST THE MINIMUM LEVIABLE PENALTY O F RS. 15.56 LAKHS FINDING THE EXPLANATION 1 (B) TO THE SECTION TO BE ATTRACTED IN THE PRESENT CASE . IN APPEAL THE SAME ITA. NO. 778/COCH./2008 3 STOOD DELETED BY THE LD. CIT(A) BEFORE WHOM IT WAS EXPLAINED THAT THE WANT OF PROOF IN RESPECT OF THE INVESTMENT IN FIXED ASSETS WAS DUE T O THE FACT THAT CERTAIN FILES CONTAINING THE BILLS RELATING TO CONSTRUCTION AND PURCHASES WE RE LOST OR MISPLACED AND WERE NOT TRACEABLE. A PERUSAL OF HIS ORDER REVEALS THAT THE LD. CIT(A) RELIED ON THE DECISION IN THE CASE OF CIT VS. N.A. MOHAMMED HNAEEF 83 ITR 215 (SC) AND CIT VS. SHIVLAL DESAI & SONS 114 ITR 377 (BOM.) FOR THE PROPOSITION THAT THE PE NALTY COULD NOT BE IMPOSED IF THERE IS NO INTENTIONAL DEFAULT ON THE PART OF THE ASSESSEE WITH A VIEW TO AVOID THE PAYMENT OF TAX. FURTHER NO PENALTY COULD BE LEVIED IN THE ABSENCE OF A POSITIVE INCOME AS CONFIRMED IN THE CASE OF CIT VS. PRITHIPAL SINGH & CO. 166 CTR (SC) 167 AND CIT VS. A. HARIRAMAN 204 CTR (MAD.) 101. AGGRIEVED THE REVENUE IS IN A PPEAL. 3. BEFORE US LIKE CONTENTIONS STOOD RAISED BY EITH ER SIDE WITH THE LD. AR EMPHASIZING THE STATUS OF THE ASSESSEE UNDER THE AC T I.E. AS A CHARITABLE TRUST. 4. WE HAVE HEARD THE PARTIES AND PERUSED THE MATERIAL ON RECORD. 4.1 WE WOULD TO BEGIN WITH VISIT THE LAW IN TH E MATTER; THE LD. CIT(A) HAVING ALLOWED THE ASSESSEES APPEAL ON LEGAL GROUNDS. AFORTIORI NO PENALTY CAN BE LEVIED IN THE CASE OF MERE INADVERTENCE OR AN INNOCENT MISTAKE. AT THE SA ME TIME THE BURDEN OF PROOF TO EXPLAIN THE DIFFERENCE BETWEEN THE ASSESSED AND THE RETURNED INCOME AS BEING DUE TO SOME COGENT OR PLAUSIBLE REASON AND DID NOT ARISE FROM ANY FRAUD OR ANY GROSS OR WILFUL NEGLECT ON ITS PART IS ON THE ASSESSEE IN THE ABSENCE OF WHICH IT WOULD BE DEEMED GUILTY OF CONCEALMENT OR FURNISHING INACCURATE PARTICULARS OF INCOME (SECTION R/W EXPLANATION 1 THERETO). THIS IS THE TRITE LAW WHICH STANDS SETTL ED BY THE HONBLE SUPREME COURT OVER A NUMBER OF CASES AND IT WOULD NOT MATTER OR BE OF A NY CONSEQUENCE THAT THE ASSESSEE IS A CHARITABLE ENTITY. RATHER THE VERY FACT IT IS SO IS ONLY INDICATIVE OF THE FACT THAT IT IS OBLIGED TO MAINTAIN ITS ACCOUNTS IN A PROPER MANNER HAVING BEEN EXTENDED A CONCESSION UNDER THE LAW AND OF WHICH IT IS ONLY HAVING GOT ITSELF REGISTERED AS A CHARITABLE ENTITY UNDER THE ACT CONSCIOUS OF. IT IS ONLY WHERE THE I NCOME IS SHOWN TO HAVE BEEN APPLIED FOR CHARITABLE PURPOSES IN TERMS OF SECTION 11 R/W S. 13 OF THE ACT THAT WOULD QUALIFY ITS CLAIM FOR EXEMPTION UNDER THE ACT. QUA THE STATEMENT OF LAW POSITED EARLIER WE REFER TO SOME CASE LAW BY THE APEX COURT AS: CIT VS. MUSSADILAL RAM BHAROSE 165 ITR 14 (SC); CIT VS. K.R. SADAYAPPAN 185 ITR 49 (SC); CIT (ADDL.) VS. JEEVAN LAL SAH 205 ITA. NO. 778/COCH./2008 4 ITR 244 (SC); B.A. BALASUBRAMANIAM AND BROS. CO. VS. CIT 236 ITR 977; K.P. MADHUSUDHANAN V. CIT 251 ITR 99 (SC) (APPROVING THE DECISION BY THE JU RISDICTIONAL HIGH COURT REPORTED AS 246 ITR 218); UNION OF INDIA V. DHARMENDRA TEXTILE PROCESSORS 295 ITR 244 (SC). IN OTHER WORDS THE RULE OF EVI DENCE PER THE EXPLANATION 1 TO THE PROVISION RAISES A REBUTTABLE PRESUMPTION AGAINST THE ASSESSE E WHICH CAN BE REBUTTED ONLY BY COGENT AND RELIABLE MATERIAL. THE MATTER IS THUS ESSENTIALLY ONE OF FACT I.E. WHETHER THE ASSESSEE HAS BEEN ABLE TO SUBSTANTIATE HIS EXPLANAT ION OF THE DIFFERENCE AND THUS REBUT THE PRESUMPTION OF CONCEALMENT OF OR FURNISHING IN ACCURATE PARTICULARS OF INCOME BY A SATISFACTORY EXPLANATION I.E. INDEPENDENT AND IRR ESPECTIVE OF THE FINALITY TO THE ADDITIONS IN THE ASSESSMENT. WHILE NO GUIDE IN THE MATTER OF EVIDENCE COULD BE LAID DOWN THE COURTS HAVE GENERALLY HELD THAT THE PROOF NECESSARY UNDER THE EXPLANATION IS AS REQUIRED IN A CIVIL SUIT VIZ. PRE-PONDERANCE OF PROBABILITY AND REFERENCE FOR WHICH INTER ALIA MAY BE MADE TO THE DECISIONS IN THE CASE OF CIT VS. ABDUL BAKSHI 160 ITR 95 (AP)(FB); CIT VS. INDIA 218 ITR 629 (KER.)(FB). THE MATERIALS THEREFORE SHOULD BE SUCH AS WOULD CONVINCE A REASONABLY MINDED AS TO THE VALIDITY OF THE EXPLANATION. 4.2 THE SECOND ASPECT OF LAW ON WHICH THE PE NALTY APPEAL IN THE INSTANT CASE STANDS ADJUDICATED BY THE FIRST APPELLATE AUTHORITY IS PER TAIN TO THE ABSENCE OF A POSITIVE INCOME. THE SAME IS AGAIN NO LONGER RELEVANT IN VIEW OF THE DECISION BY THE HONBLE APEX COURT IN THE CASE OF CIT V . GOLD COIN HEALTH FOOD (P.) LTD. 304 ITR 308 (SC). HERE IT WOULD ALSO BE RELEVANT TO MENTION THAT THE ASSESSEE HAS P OSITIVE INCOME AND IT IS ONLY ON ACCOUNT OF APPLICATION THEREOF FOR CHARITABLE PURPO SES THE ONUS FOR WHICH IS ON THE ASSESSEE RESULTING IN EXEMPTION U/S. 11 THAT THE SAME RESULTS IN NIL OR NEGATIVE INCOME DENOTING AN OVER-APPLICATION OF INCOME. THE SAME T HUS AS IN THE CASE OF LOSS WOULD NOT PRECLUDE THE LEVY OF PENALTY; THE LEGAL FICTION OF EXPLANATION 4(A) TO THE SECTION PROVIDING FOR THE MECHANISM FOR THE MEASUREMENT OF PENALTY IN SUCH CASES WITH THE FIGURE OF LOSS (OR DEFICIENCY) BEING CONSIDERED AS AN ABSOLUTE FIG URE IN ITSELF FOR THE PURPOSE OF COMPUTING THE PENALTY. THIS IS ONLY THE RATIONAL AS THE LOSS OR NEGATIVE INCOME IS AS MUCH INCOME (REFER: CIT V. HARPRASAD & CO. (P.) LTD . 99 ITR 118 (SC)). BESIDES AN EXCESS APPLICATION OR A FINDING TO THAT EFFECT ONLY IMPL IES THAT THE ASSESSEE WOULD BE REQUIRED TO APPLY ITS INCOME LESSER TO THAT EXTENT TOWARD CHARI TABLE PURPOSES IN FUTURE. IT NEEDS TO BE ITA. NO. 778/COCH./2008 5 APPRECIATED THAT THERE CAN BE NO OVER-APPLICATION O F INCOME OVER TIME INASMUCH AS IT IS ONLY THE INCOME THAT CAN BE SO APPLIED OR IS THE O NLY RELEVANT APPLICATION (I.E. WHICH FORMS THE BASIS FOR THE GRANT OF EXEMPTION) SO THA T AT BEST ONLY THE WHOLE (100%) OF ITS CAN BE ULTIMATELY APPLIED. THE UNDERSTATEMENT OF IN COME OR INFLATION OF EXPENSES WOULD PER SE THEREFORE CONSTITUTE VALID GROUNDS FOR INITIATIO N OR IMPOSITION OF PENALTY. ALSO IT HAS TO BE BORNE IN MIND THAT PENALTY IS LEVIABLE N OT ONLY IN RESPECT OF CONCEALMENT OF PARTICULARS OF INCOME BUT ALSO FURNISHING INACCURA TE PARTICULARS THEREOF. IN FACT THAT IS THE CHARGE IN THE INSTANT CASE. 4.3 WE NEXT EXAMINE THE EXPLANATION OF THE ASSESSEE FOR EACH OF THE TWO ADJUSTMENTS MADE TO ITS RETURNED INCOME. IN RESPECT OF FIRST I.E. FOR RS. 12 51 427/- THE ONLY EXPLANATION FURNISHED BY THE ASSESSEE WE FIND ON A PERUSAL OF THE ORDERS ON QUANTUM AND IN THE PENALTY PROCEEDINGS IS THAT THE SAME REPRES ENTED CHARGES FOR FOOD AND MEDICINE ITEMS WHICH STAND EXCLUDED AS A MATTER OF (ACCOUNT ING) PRACTICE EXCLUDING THE RELATED EXPENSES AS WELL. THERE IS NO GAIN SAYING THAT THE SAME IS RENDERED WITHOUT ANY REFERENCE TO OR DE HORS ANY MATERIAL EITHER FOR THE PRECEDING CURRENT OR EVEN SUCCEEDING YEARS ALL OF WHICH ARE AVAILABLE AND WHICH COULD SHOW THE TR UTH OF THE STATEMENT. SECONDLY THE ENTIRE RECEIPTS HAVING BEEN ADMITTEDLY ACCOUNTED IN ITS CASH BOOK WHEREFROM WOULD THE RELATED EXPENSES BE INCURRED ONE MAY ASK LEADING TO THE QUESTION AS TO THE SOURCE OF INCURRING THE RELATED EXPENSES. CLEARLY THE SAME C AN ONLY BE IN BOOKS OF ACCOUNTS AND THUS THERE IS NO BASIS FOR STATING THAT THE SAME S TANDS EXCLUDED. WITHOUT DOUBT THE ASSESSEES EXPLANATION IS WITHOUT ANY MERIT. THE PL EA OF THE BOOKS BEING UN-AUDITED IS IRRELEVANT. THIS IS AS THE CLAIM IS ONLY WITH REFER ENCE TO THE BOOKS WHICH HAVE NOT BEEN PLACED BEFORE THE AUDITORS FOR THE EXPRESSION OF TH EIR OPINION THEREON AND WOULD NOT DISTURB THE PRIMARY ACCOUNTING FACTS. IN FACT IT R UNS COUNTER TO THE ASSESSEES EXPLANATION. 4.4 THE NEXT EXPLANATION OF THE ASSESSEE IS WITH RE GARD TO THE SECOND ADDITION FOR RS. 34 64 970/- I.E. AS FINALLY SUSTAINED. IN THIS REG ARD WE FIND THAT THE ASSESSEES ONLY EXPLANATION STANDS FURNISHED BEFORE THE FIRST APPEL LATE AUTHORITY IN THE PENALTY PROCEEDINGS. EXPLANATIONS ARE ESSENTIALLY ON THE FA CTUAL ASPECT OF THE MATTER SO THAT THEIR APPRAISAL IS ALSO DETERMINED BY THE TIMING OF THEIR ISSUE I.E. BESIDES THE MATERIAL ADDUCED IN SUBSTANTIATION THEREOF. BEING A MATTER OF FACT AND ONE WHICH IS ONLY IN THE KNOWLEDGE ITA. NO. 778/COCH./2008 6 OF THE ASSESSEE THERE IS NO REASON THAT IT SHOULD NOT DISCLOSE IT IN THE FIRST INSTANCE WHILE HERE WE OBSERVE TO HAVE NOT BEEN ISSUED EVEN IN THE PENALTY PROCEEDINGS BUT ONLY IN THE APPELLATE PROCEEDINGS UNDERMINING ITS CREDITABILIT Y. IT IS IN THIS CONTEXT THAT IT STOOD HELD BY THE HONBLE HIGH COURT IN THE CASE OF CIT V. BHOTICA TEXTILES 159 ITR 355 (CAL.) THAT THE FURNISHING OF EVIDENCES IN THE PENALTY PROCEEDI NGS BEFORE THE FIRST APPELLATE AUTHORITY WITHOUT SHOWING REASON(S) FOR THEIR NON-SUBMISSION EARLIER SERIOUSLY DETRACTS FROM THEIR EVIDENTIARY VALUE AND THAT THE VALIDITY OF THE IMP OSITION SHOULD BE DETERMINED WITH REFERENCE TO THE MATERIALS AT THE TIME OF ITS IMPOS ITION (REFER: CIT V. BHOTICA TEXTILES 159 ITR 355 (CAL.). FURTHER EVEN SO WE FIND THE SAME AS TOTALLY UNSUBSTANTIATED. THE ASSESSEES ACCOUNTS REVEAL AN ADDITION IN FIXED ASS ETS FOR RS. 68.02 LACS I.E. AS AGAINST THE CLAIMED DEDUCTION OF RS. 184.39 LACS. AS SUCH THE ASSEESSEE WOULD ONLY HAVE SOME MATERIAL ON THE BASIS OF WHICH IT CLAIMS AT SUCH SU M AND OUGHT TO HAVE ONLY ADDUCED IT IN FACT EVEN IN THE QUANTUM PROCEEDINGS. SECONDLY IT STOOD ALLOWED SUBSTANTIAL RELIEF BY THE LD. CIT(A) IN APPEAL ONLY ON THE BASIS OF IT LEADIN G EVIDENCE TO THE ACQUISITION OF SUCH ASSETS VIZ. BILLS INVOICES PAYMENT DETAILS ETC. IT IS ONLY FOR THE UNEXPLAINED PORTION THAT THE ADDITION STANDS SUSTAINED BY HIM AND THE PENAL TY LEVIED. IT IS NOT UNDERSTOOD AS TO WHY SIMILAR EVIDENCES COULD NOT BE ADDUCED TOWARD E VIDENCING THE SAME. EVEN IF THE BILLS INVOICES ETC. ARE MISSING DUPLICATE ONES COULD BE PROCURED FROM THE PARTIES AND THE CLAIM PRESSED ON THAT BASIS WHICH IS NOT THE C ASE; THE ASSESSEE NOT RAISING ANY SUCH PLEA BEFORE THE FIRST APPELLATE AUTHORITY ACCEPTIN G ITS ORDER ON QUANTUM. FURTHER THE PAYMENT DETAILS WOULD ONLY BE THERE IN THE LEDGER A CCOUNTS WHICH COULD PROVIDE A REASONABLE BASIS FOR ITS EXPLANATION AT LEAST IN T HE PENALTY PROCEEDINGS. IN FACT AS OBSERVED EARLIER ON THE STRENGTH OF SOME CORROBORA TIVE EVIDENCES AS THE STATEMENT OF ACCOUNTS OF THE PARTIES CONFIRMATIONS THEREFROM B ANK ACCOUNTS ETC. THE CLAIM COULD BE ADVANCED ON ITS BASIS. THE EXPLANATION THAT CERTAIN FILES ARE MISSING IS OF NO RELEVANCE CONSIDERING THAT THE BOOKS OF ACCOUNT ON THE BASIS OF WHICH THE RETURN STANDS PREPARED ARE AVAILABLE. FURTHER STILL THE EXPLANATION IS DE HORS ANY DETAILS OF THE MISSING FILES. THE SAME WOULD ONLY BE FOR A PARTICULAR UNIT(S) OR FOR A PARTICULAR PERIOD THE BASIS OF FILING BEING SOME SUCH CLASSIFICATION. IN THE PRESENT CASE THERE IS NO INFORMATION AS TO THE NATURE OF THE ASSETS PURCHASED THE DATES OF ACQUIS ITION AND PAYMENT THERE-AGAINST THE UNIT(S) FOR WHICH THESE WERE ET. AL. RESULTANTLY WE HOLD THE ASSESSEES EXPLANATION AS SANS ANY MERIT. ITA. NO. 778/COCH./2008 7 4.5 THE ASSESSEES CASE IS TOTALLY UNSUBSTANTIA TED AND IT NEITHER IT HAS BEEN ABLE TO PROVE ITS BONA FIDES EVEN AS OBSERVED BY THE ASSESSING AUTHORITY; IT F ILING ITS RETURN WHICH CARRIES A VERIFICATION WITHOUT ADMITTEDLY CA LLING FOR THE BOOKS IN THE CUSTODY OF THE REVENUE OR STATING THEREIN THE BASIS THEREOF; ITS ASSESSMENT BEING FRAMED U/S. 144 DUE TO IT FAILING TO EXTEND THE NECESSARY COOPERATION IN A SSESSMENT AND WHICH STOOD NOT CHALLENGED; IT NOT DISCLOSING THE RELEVANT FACTS IN THE ASSESSMENT PROCEEDINGS OR EVEN THE APPELLATE PROCEEDINGS; AND FINALLY BEING UNABLE T O SUBSTANTIATE ITS EXPLANATION TO ANY EXTENT. BEING A PUBLIC ORGANIZATION AND FURTHER O NE TO WHICH THE LAW EXTENDS BENEFITS AND ONLY ON THAT ACCOUNT IT IS INCUMBENT ON IT TO EXHIBIT A MUCH GREATER SENSE OF RESPONSIBILITY AND ACCOUNTABILITY BESIDES GOOD CIT IZENRY THAN WHAT TRANSPIRES IN THE PRESENT CASE. WE THEREFORE HAVE NO HESITATION IN SETTING ASIDE THE IMPUGNED ORDER AND CONFIRM THE PENALTY AS LEVIED BEING ONLY MARGINALL Y OVER THE MINIMUM AMOUNT LEVIABLE. WE DECIDE ACCORDINGLY. 5. IN THE RESULT THE REVENUES APPEAL IS ALLO WED. SD/- SD/- (N.VIJAYAKUMARAN) (SANJAY ARORA) JUDICIAL MEMBER ACCOUNTANT MEMBER PLACE: ERNAKULAM DATED: 30TH APRIL 2010 GJ COPY TO: 1. M/S. MANARUL HUDA TRUST EMKE MANZIL KALLATTUMU KKU P.O. MANACAUD TRIVANDRUM. 2. THE ASSISTANT DIRECTOR OF INCOME-TAX (EXEMPTION ) RANGE-1 TRIVANDRUM. 3. THE COMMISSIONER OF INCOME-TAX (APPEALS)-1 TRIV ANDRUM. 4. THE COMMISSIONER OF INCOME-TAX TRIVANDRUM. 5. D.R./I.T.A.T. COCHIN BENCH COCHIN. 6. GUARD FILE. BY ORDER (ASSISTANT REGISTRAR) ITA. NO. 778/COCH./2008 8