appeal by Revenue and cross-objection (CO) by assessee r e directed against order of CIT(A), Udaipur, dt. 28th March, 2007 pertaining to asst. yr. 2004-05. Briefly stated, facts of this case are that assessee is public educational society duly registered under Rajasthan Societies Act, 1958. It is also registered under s. 12AA of IT Act, 1961 (hereinafter referred to as Act for short) by CIT, Udaipur vide No. 919, dt. 24th Feb., 2003. It has claimed exemption under s. 11 of Act as it has been established for charitable purposes. assessee society filed its return of income on 1st Nov., 2004, showing loss of Rs. 33,65,846. During year under consideration assessee society has been running engineering college in name of "Geetanjali Institute of Technology and Science". It has shown total receipt of Rs. 1,07,37,085 from Geetanjali Institute of Technology and Science from tuition fees, hostel fees, conveyance fees, etc., and Rs. 5,60,02,537 from Geetanjali Educational Society out of donations and interest etc. Against above receipts assessee society has booked total expenditure of Rs. 4,59,47,088 which includes Rs. 4,26,58,933 being capital expenditure; thus total income of assessee comes to Rs. 1,61,89,727, which after setting off of excess of expenditure over income of asst. yr. 2003-04 of Rs. 1,98,55,573 results into net loss of Rs. 36,65,846. AO has noted that perusal of balance sheet revealed that assessee society has received corpus donations of Rs. 1,97,34,112 and other donations of Rs. 5,36,98,553. When asked to, assessee society filed list of donors, corpus and non-corpus, along with their complete addresses. PAN, mode of receipts etc. from examination of which, AO has made following observations: "1. donation received includes quantum ranging from Rs. 3,000 to Rs. 51 lakhs. Some of donations received include donation received in cash and also in form of DDs and cheques. donations include donation from various trusts also for example Krishan Devi Philanthropical Trust, Kolkata, Rs. 15 lakhs, Shri Padmanabha Charitable Trust, Mumbai, Rs. 15 lakhs, Anandi Lal Poddar Trust, Mumbai above Rs. 17 lakhs, Lachman Das Sewa Ram Charities, Mumbai above Rs. 15 lakhs. donations received include donations received from various companies such as Gold Star Jewellary Ltd., Mumbai above Rs. 25 lakhs, IPCA Lab. Ltd. Rs. 51 lakhs, Alok Industries Ltd., Rs. 20 lakhs, Diam Star Jewellary India (P) Ltd., Mumbai, Rs. 10 lakhs, Under Water Services, Mumbai, Rs. 25 lakhs. It is further seen that there are hundreds of donors from city of Raipur who are shown to have given amounts ranging from Rs. 15,000 to Rs. 50,000. It i s further seen that these donations have been paid in form of DDs/postal orders issued from single bank in single day and which are serially numbered." From above suspicion aroused in mind of AO about genuineness of these donations. AO got further inquiries conducted. I T O (Inv.), Raipur recorded statements of five of donors, when commission issued under s. 131(d) to ITO (Inv.), Raipur. From their statements (relevant parts of which are reproduced in assessment order) AO came to conclusion that donations are not genuine. AO also got information collected under s. 133(6) of Act in respect of some of donors residing in Udaipur from which AO drew inference that society is engaged in issuing bogus donation receipts and in fact it has introduced its unaccounted money in form of donations. He also opined that donors have at same time, claimed deduction under s. 80G in respect of their donation receipts from their incomes. AO finally came to conclusion that society has lost charitable purpose. For that purpose, he issued show- cause letter dt. 26th Dec., 2006 to assessee society. society filed its replies on 26th Dec., 2006 and 27th Dec., 2006, which are reproduced verbatim in assessment order. Finally, he came to conclusion that assessee society is not eligible for exemption under s. 11, therefore, he rejected claim of assessee and assessed it as AOP at maximum marginal rate as per provisions of s. 167B of Act at total income of Rs. 7,43,39,750. learned CIT(A), on contrary, accepted claim of exemption of assessee. He has observed that exemption under s. 11 of Act cannot b e denied to assessee on basis of fake donations, and it cannot be treated as income of assessee under s. 68 of Act or any other section of Act. There is no express provision in any of relevant ss. 11, 12 and 13 of Act to that effect. He has further observed that exemption under s. 11 of Act can be denied only in circumstances if (i) activities of trust are not genuine and (ii) activities are not being carried out in accordance with objects of trust. learned CIT(A) has clearly observed that AO has not given such finding. He goes on adding that till time society remains registered under s. 12AA of Act, any income received by it has to be treated as exempt under s. 11 of Act. Uncross-examined version of donors has been held to be not relevant. Resultantly, he has allowed claim of assessee society under s. 11 of Act. Revenue is aggrieved. We have heard rival submissions and have perused available materials o n record carefully. We have also perused paper book and written submission filed before us. learned CIT Departmental Representative, Shri K.R. Meghwal, has repeated facts and reasoning given by learned AO, in its entirety. According to him claim of assessee society is not allowable. On other hand, learned Authorised Representative, Shri Sanjay Jhawar, has relied on order of learned CIT(A) in this regard. He has further submitted that AO has neither doubted genuineness of activities carried out by assessee society nor has alleged that society has not carried out its activities as per its objectives. It is case of learned Authorised Representative that donations received by it were wholly for charitable purposes and have been utilized for charitable purposes. Having cogitated entire evidences available on record vis-a-vis oral submissions, we are of opinion that nowhere learned AO has noted or found that assessee society did not carry out its activities as per its objectives. He has also not doubled genuineness of activities of assessee society. In such circumstances, when institution is engaged in charitable activities, receives donation or contribution in respect of which particulars or identity of donors has not been established, IT law, as it stood before 1st April, 2007, does not deny exemption of such income if same has been applied for charitable purposes. From 1st April, 2007 onwards anonymous donations or contributions may result in denial of exemption under s. 11 of Act by virtue of sub-s. (7) inserted in s. 13 of Act and s. 115BBC by Finance Act, 2006. This amendment also clarifies that hitherto such anonymous donations/contributions did not lead to rejection of claim of assessee. Hon ble Rajasthan High Court in case of Dy. CIT vs. Cosmopolitan Education Society (1999) 157 CTR (Raj) 209: (2000) 244 ITR 494 (Raj) has held, by dismissing appeal of Revenue and by affirming findings of Tribunal and that of learned CIT(A), that in case of any misutilisation of funds of society or mismanagement of activities of society, action can be taken against members of society as per provisions of various statutes governing society but, this cannot be made basis for rejection of claim of exemption made by assessee society. Special Leave Petition against this judgement was also dismissed by Hon ble Supreme Court and decision is reported in (2000) 241 ITR (St) 132. Jodhpur Bench of Tribunal has taken similar view while deciding case of ITO vs. Sankripa Sanathan Sansthan in ITA No. 578/Jd/2006 wherein it has been held that s. 11(1)(d) of Act does not demand that assessee trust should establish creditworthiness and financial capacity of donors and explanations about their sources and genuineness of their contributions. strict proof as required under s. 68 of Act is not applicable in such cases. Once identity of donor is shown donation has to be held as genuine. So long as assessee society enjoys registration under s. 12AA of Act and applies its income for charitable purposes it cannot be denied exemption under s. 11 of Act. In another case Jodhpur Bench while deciding ITO vs. Udaipur Udyog Ltd. Provident Fund Trust in ITA No. 575/Jd/2006 has held that so long as provident fund continued to remain recognized, any income received by trustees has to be treated as exempt. It was also held that on going through language of Sch. IVth it becomes apparent that power to grant or withdraw recognition lies with Chief CIT and AO has absolutely no jurisdiction to consider this aspect of matter. So long as assessee remains recognized, its income cannot be held to be taxable. This was admitted case by both parties that recognition under s. 12AA of Act remains in operation and AO has not disputed application of income for charitable purposes. We are in agreement with observations of learned CIT(A) when he says that exemption under s. 11 cannot be denied to assessee on basis of fake donations. impugned claim of exemption can only be denied if (i) activities of trust are not genuine and (ii) its activities are not being carried out in accordance with objects of trust. Admittedly, no finding has been given by learned AO in this regard. He has not touched these ingredients, which are sine qua non for grant of impugned exemption. It is also fact that registration granted under s. 12AA of Act has not been withdrawn by CIT. None of allegations contained in assessment order for asst. yr. 2004-05 under consideration relates to activities carried on by society. Rather, activities of society are being carried out as per rules, stand confirmed from following evidences: Approval by AICTE and affiliation from Mohan Lal Sukhadia University, Udaipur (PB 1-11) State Government letter for approval of society as educational institute and other permission letters (PB 12-25) Campus placement details (26) Details of students in institutions run by society (PB 27) Newspaper clippings and newsletters and brochures (PB 28-97) copy of concession of society has also been included at pp. 50-72. Hon ble Delhi Bench of Tribunal, in case of Manav Shiksha Samiti vs. Dy. CIT in ITA No. 1343/Del/2006 has held that if assessee satisfies condition that it is existing solely for education purposes about which no dispute was raised by AO then all its income from whatever source, is to be granted exemption under law. It has been further held that educational society where total income is exempt is unlikely to have any undisclosed income. Similar where total income is exempt is unlikely to have any undisclosed income. Similar view Has been expressed by Hon ble Allahabad High Court while deciding case of CIT vs. Kamla Town Trust (2006) 201 CTR (All) 281: (2005) 279 ITR 89 (All). It is also clear from record that no opportunity to cross-examine donors, whose statements were relied on by AO for denying exemption under s. 11 of Act, was given to assessee society. Therefore, these statements cannot be made basis for rejecting claim of assessee society in view of decision of case of State of Kerala vs. K.T. Suaduli Grocery Dealer, etc. 1977 CTR (SC) 260 and also by Hon ble Delhi High Court in case of CIT vs. SMC Share Brokers Ltd. (2007) 210 CTR (Del) 353: (2007) 288 ITR 345 (Del). assessee society has produced names and addresses, PAN confirmations, etc., during assessment proceedings of all donors for year under consideration. Entire details have also been filed before us at pp. 130-151 of PB. AO has conducted small enquiries which were also not subjected to cross-check by assessee and has further, observed in his order that it was neither practical nor feasible to verify each and every donation. It was duty of AO to make such verification from individual donors and without making such verification, he could not come to conclusion that donations are bogus. Most of donations having been received by drafts/cheques through banking channels, in normal course, from existing assessees, confirmations having been filed no enquiry having been conducted in correct perspective, action in holding such donations as bogus is also in violation of principles of natural justice. onus of proving that apparent was not real lies on party who claimed it to be so. It is long cherished ruling of Hon ble Supreme Court which was given in judgement of CIT vs. Daulatram Rawatmull 1972 CTR (SC) 411: (1973) 87 ITR 349 (SC). Still further, Hon ble Delhi High Court has held, while deciding case of Director of IT (Exemption) vs. Keshav Social & Charitable Foundation (2005) 278 ITR 152 (Del), that when assessee has not only disclosed its donations, but has also submitted list of donors, fact that complete list of donors was not filed or that donors were not produced, does not necessarily lead to inference that assessee was trying to introduce unaccounted money by way of donation receipts. learned Authorised Representative has further placed reliance on various other decisions of Hon ble Patna, Gujarat and other High Courts to support claim of assessee. It is fact that no verification was made from donors whose confirmations were filed and who remitted by cheques/drafts. Some of donors to whom AO called for information under s. 133(6), namely, Shri Ashok Choudhary and Shri Chater Singh Babel and others admitted donation (PB 161-164). AO has failed to bring these facts on record although all these evidences were filed on record. AO ignored statements filed by society in which there was nothing incriminating and order was passed on basis of statements recorded by him and were against society. It is clear case that the, AO did not make any enquiry in respect of donations received from trusts, companies and celebrities and other donors, which were received by account payee cheques/drafts. These donors are existing assessees and have claimed deduction under s. 80G of Act for donation made to assessee. Merely by recording statements of few persons on back of assessee, without producing them for cross-examination, entire donations cannot be treated as bogus and as unexplained money of society. IT authorities cannot be allowed to take advantage of their own inaction to prejudice of assessee, in respect of allegation that assessee society has received donations from various trusts, well known companies and certain celebrities. society has been working for purpose of attaining its objects by carrying out various activities in field of education. Therefore, there is nothing wrong to make donations to assessee society keeping in mind charitable activity by it. In totality of foregoing discussions, we are of considered opinion that there is no infirmity in finding of learned CIT(A) insofar as appeal of Revenue is concerned. issue in question is squarely covered by abovementioned decisions of this Bench of Tribunal and is also covered by other decisions mentioned as above. Therefore, we confirm impugned finding and dismiss ground raised by Revenue. As result, appeal of Revenue is dismissed. C.O. No. 48/Jd/2007 assessee has raised only one ground in its cross-objection which reads as under: "Under facts and in circumstances of case, learned CIT(A) has erred in stating that not providing opportunity of cross-examination to assessee society is technical lapse/lacunae instead of holding that without providing same statements of donors do not become admissible evidence against assessee society." As we have already observed while deciding appeal of Revenue that not providing opportunity of cross-examination is serious lacuna and n o t technical lapse unscrutinised statement is not statement at all and cannot be used against person who was not given opportunity to cross- examine deponent in this case no such opportunity was given. Therefore, we amend observations so made by learned CIT(A) and allow this ground of cross-objection. In result, appeal of Revenue is dismissed and cross- objection is allowed. *** ASSISTANT COMMISSIONER OF INCOME TAX v. GEETANJALI EDUCATION SOCIETY