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Commissioner of Income Tax-III, Pune Versus Sinhgad Technical Education Society

2015 (4) TMI 190 - BOMBAY HIGH COURT

Legality and validity of the notice under section 153C - revenue's assertion that the AO is empowered under the statute to assess or reassess the total income of six assessment years immediately preceding the assessment year relevant to the previous year in which such search is conducted and therefore the satisfaction which is recorded in the satisfaction note is enough, is erroneous as held by Tribunal - Held that:- The satisfaction note was very closely examined and the reasons assigned by the .....

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sed to acquire jewellery that was belonging to him and his family. With regard to cash and stated to be recovered from the students for granting admissions, we do not find that any inquiries were made. There is absolutely nothing to indicate as to in which educational courses, the education is imparted and institutionwise. Whether the admissions are granted to the technical courses merit-wise or on the basis of marks obtained in XIIth standard HSC exam. If any fee structure is approved and cash .....

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Mr N N Singh & Ms Padma Divakar For the Respondents : Mr J D Mistri, Sr. Counsel & Mr Nitin S Dhumal ORDER P.C. 1. These appeals by the Revenue challenge the orders passed by the Income Tax Appellate Tribunal, Pune Bench. The tribunal had before it Income Tax Appeal Nos.114 to 117 of 2010 pertaining to the assessment years 2000-01 to 2003-04. 2. The assessee was in appeal. The assessee raised common grounds in all appeals and it was aggrieved by the orders of the Commissioner of Income T .....

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ses substantial question of law. We are unable to agree with him and for the following reasons: The assessee before the tribunal is an Educational Institution registered under the Bombay Public Trust Act, 1950 and Societies Registration Act, 1860. It was also registered under section 12A(a) of the Income Tax Act, 1961 since the assessment year 1994-95. One Mr.M.N. Navale is the President of the assessee Educational Society. The search and seizure operation was carried out on 20.7.2005 and certai .....

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of the trust are not genuine and those are not being carried out in accordance with the object of the trust. It is common ground that the Commissioner of Income Tax cancelled the registration under section 12AA (3) of the Income Tax and this order of the Commissioner was set aside by the tribunal. In the present case we are not concerned with the above proceedings but the question of issuance of notice under section 153C of the Income Tax Act. The assessee may have responded to the notice and t .....

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made by the Special Auditor. 5. Aggrieved by this order, the assessee filed an appeal before the Commissioner of Income Tax (Appeals), who partly allowed it. However, the assessee was not satisfied with the order of the Commissioner and challenged it in further appeal to the tribunal. 6. The tribunal allowed parties to raise an additional ground and reply to it, namely, about validity of notice under section 153C of the Act. After referring to the language of notice under section 153C as it stoo .....

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sdiction. The tribunal has found that incriminating material seized and stated to be pertaining to all six assessment years did not establish any co-relation documentwise with the assessment year in question. In other words, the tribunal concluded that the present matter indicates that the issue of notice could be on the basis that there is specific incriminating information in possession of the Assessing Officer. It is in these circumstances that the tribunal found and as indicated in paragraph .....

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o be found in paragraph 9 and 10 of the impugned order. If certain items pertain to assessment year 2004-05 or thereafter then it cannot be assumed, that the documents seized or incriminating material giving information are specific and to all assessment years. The tribunal has found that they were concluded assessments. They could not have been disturbed. The documents in question are neither incriminating ones nor unaccounted transactions of the assessee. They also did not relate to the four a .....

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ecific incriminating information or unaccounted or undisclosed hidden information was discovered or seized by the revenue from the assessee. In the circumstances, the general satisfaction and as recorded in the note is not enough. The tribunal has found that with regard to cash and jewellery, the explanation of the assessee was that he had agricultural properties and derived agricultural income. That income was utilised to acquire jewellery that was belonging to him and his family. With regard t .....

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which ought to have been gone into and there cannot be a general or vague satisfaction as is relied upon. 7. It is in these circumstances that though Mr.Singh strenuously wanted to rely on the satisfaction note and particularly paragraph 4 thereof, we do not find that reading thereof can carry the case of the revenue any further. Rather it would contradict completely, the stand taken by the authorities. Mr.Navale HUF and Mr.Navale individually as the President of the assessee institute cannot be .....

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of law. 8. Reliance on the judgment of the Division Bench of the High Court of Delhi reported in case of SSP Aviation Ltd. Vs. Deputy Commissioner of Income Tax (2012) 346 ITR 177 is misplaced. There, search was carried out in the case of "P" group of companies. It was found that the assessee before the Hon'ble Delhi High court had acquired certain development rights from "P" group of companies. Based thereon, the satisfaction was recorded by the Assessing Officer and he .....

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