TMI Blog2015 (8) TMI 765X X X X Extracts X X X X X X X X Extracts X X X X ..... persons who have arranged the donations. Most of the donors have already confirmed giving of donations to the assessee and none of the donors have confirmed the version of the Assessing Officer if they have given donations to the assessee through commission agent, against commission payment. Therefore, the theory of commission agent arranging the donations is not proved through any reliable or cogent evidence. No material was also found during the course of search to support the findings of the authorities below if any commission is paid actually to the commission agent for arranging the donations. The assessee is a charitable society. Therefore, there was no need to make any payment by way of commission and even if any commission is paid, this would have been allowable deduction under section 37 of the Act. Therefore, in the absence of any specific material available on record, it is difficult to believe that any commission was paid by the assessee. No enquiries have been made from any recipient of the amount. The assessee was engaged only in construction of the building in the year under consideration. Therefore, there was no other source of income from where it could be stated ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 3) of the Act in the case of the assessee. Considering the above discussion, we set aside the orders of the authorities below and delete the addition of ₹ 3,99,950 and ₹ 1.60 crores in the hands of the assessee. We also held that there is no violation of sections 11(3) and 13(3) of the Act in the case of the assessee. - Decided in favour of assessee. Cancel the registration under section 12AA - Held that:- There is no material available against the assessee-society at this stage to show that the assessee's activities are not genuine or have not been carried out in accordance with the objects of the trust. We may also note here that in the remaining assessment years 2005-06, 2006-07, 2007-08 and 2008-09, the Revenue Department did not find any adverse material against the assessee to prove that its activities are not genuine. There is no violation of sections 11, 12 and 13 of the Act. There is also no violation of conditions under section 80G of the Act. Therefore, considering the totality of the facts and circumstances, it is clear that the assessee-society has solely carried out the genuine educational activities and as such, there is no reason to cancel the registr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g name, address and permanent account number of the donor and is a capital receipt on account of corpus fund received with specific instructions of a capital fund and has already been shown as an income. 6. Ground No. 1 of the Departmental appeal is connected with grounds Nos. 3 and 4 of the assessee's appeal. The same would read as under : (i) Whether, on the facts and in the circumstances of the case the learned Commissioner of Income-tax (Appeals) is justified in law and on facts in partly deleting the addition of ₹ 1,63,54,699 made under section 68 of the Income-tax Act, 1961, on account of addition to corpus fund based on certain incomplete confirmation when the assessee failed to prove the genuineness of the donations and same were without any specific directions in violation of section 11(1)(d) ? 7. Briefly stated, the facts of the case are that in this case search under section 132(1) of the Act was conducted on M/s. Indo Global Education Foundation group of cases on July 15, 2008. In response to notice under section 153A of the Act, the assessee filed the return declaring the income at nil. The assessee claimed income exemption under sections 12A and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ation was treated as unexplained expenditure. 8. The stand of the assessee, inter alia, was that : All the transactions have been accounted for in the regular books of account. This was the first year of the society and the only activity during the year was construction of building and other infrastructure facilities. Persons were deputed for collection of donations for the cause of the society. The concerned persons collected the donations along with details of donors and submitted their details by claiming 2 per cent. as the collection charges. The society is a charitable organisation and so the said commission as claimed by the concerned persons was never paid to them. As regards the notices under section 133(6) issued to various persons on test check basis to ascertain the genuineness of the donations, it was stated that only 5 of the persons denied making the donations while 106 came back unserved. That the donations pertained to 8 years ago and the donors may have died/left country, etc. However, 90 confirmations were stated filed vide their letters dated December 23, 2010 and December 27, 2010. As regards the two companies M/s. Nishant Finvest Pvt ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... huge amount by unknown entity whose own existence is doubtful was not accepted, in respect of M/s. Nishant Finvest it is seen that the company is in default of filing of Form DIN 3/Form 32 and hence details of directors are not available. It was also noted that donation from both companies was on the same day, i.e., March 6, 2003 and from the same bank. The result/findings of the response to the requisition under section 133(6) as tabulated by the Assessing Officer is reproduced below : S. No. Particulars 1. Total number of letter sent 272 2. Donations confirmed 140 3. Donations denied 5 4. No reply 11 5. Reply seeking clarification 10 6. Notices under section 133(6) received back unserved 106 In this connection, the Assessing Officer mentioned that vide letter dated December 23, 2010 and Decem ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... It is amply clear that out of 272 persons to whom notices were issued under section 133(6), only 5 persons have in fact denied making payment of donations. The Department has issued notices to these persons without mentioning the amount and period of donation. In the absence of any details only 5 persons have denied the transaction may be because the amount was less and the period to which the transaction belonged was more than 8 years old. 7. We had produced before the Assessing Officer receipts issued to those persons whereby they have mentioned their permanent account numbers and have countersigned the receipts in their own handwriting for making payment. 8. Most of the persons making the donations have claimed deductions under section 80C in their Income-tax returns. 9. As regards the nature of the donations, it was stated that the donation receipts filed before the Assessing Officer mention that such donations are for the corpus of the society. 11. The learned Commissioner of Income-tax (Appeals) considering the submissions of both parties, evidences and material on record deleted the substantial addition and allowed the appeal of the assessee partly on these groun ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uilding and other infrastructure facilities. No evidence have been found or led by the Assessing Officer as regards any unac counted donations or diversion of the funds. In other words, it is not a case where even a part of the donations credited in the balance- sheet have been found utilised by the members/promoters of the society for their own personal purpose or for activities other than charitable purpose. 5.7 The assessee also pointed out that anonymous donations were allowed up to the year 2007, but in this case the Assessing Officer sought to make further enquiries by issuance of requisitions under section 133(6). The assessee had also contended that the donations have been mainly received by cheque/draft and most of such persons have even claimed deductions under section 80G in their respective Income-tax returns. That all the receipts which were found during the search operations, bear the names, addresses, permanent account numbers and in the case of cash receipts, it contained the signatures acknowledging the payment, as made towards the corpus fund. These have not been controverted by the Assessing Officer. However, it will be in the fitness of things to examine the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... M/s. Shober (supra), the directors were not available. The address of M/s. Shober is in a residential area, viz., Munirka DDA Flats. Hence, it can be rightly and safely presumed that the assessee has not discharged the initial onus of demonstrating the identity, genuineness and credit worthiness of these two companies. Even in appeal, no documents to further substantiate the genuineness of the transaction have been provided. 5.7.2 The assessee furnished copies of bank account statements of the two companies. No doubt it is the assessee's case that these bank statements were important piece of evidence for arriving at a just decision should be considered, placing reliance in the case of CIT v. Mukta Metal Works as reported in 336 ITR 555. However, I find that these bank statements were not furnished before the learned Assessing Officer. It was not even part of the assessee's written submissions which were remanded. I also find that there was sufficient opportunity during the assessment stage for the assessee to have furnished the copies of the bank statements. Be that as it may, a bare reading of rule 46A shows that the assessee is not entitled to produce additional evide ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... permanent account number and signature of the donor. Paper book page 152 is the reply of the donor Shri Narjit Singh on the same line that no assessment year is mentioned in the notice of the Assessing Officer. Learned counsel for the assessee has mentioned many of such receipts in the paper book. Learned counsel for the assessee also referred to paper book page 26 which is a list of 23 persons where no notices have been served in respect of the amount of ₹ 3,69,000, which is supported by the donation receipts having their permanent account numbers on the receipts, signature when cash is given and in other cases, donations are given by cheques or drafts. The details are filed at pages 27 to 49 of the paper book. Paper book page 50 is the list of 5 persons who have denied donation and their replies on the donation receipts are filed at paper book pages 51 to 60. Learned counsel for the assessee also submitted that it is admitted fact that no admission was made during the assessment year under appeal to any of the educational courses because construction of the building was going on and it is also admitted fact that more than 85 per cent. of the receipts have been spent on con ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd managed affairs of the assessee and, therefore, the Assessing Officer was justified in disallowing the entire donations. The learned Departmental representative for the Revenue also referred to paragraph 12 of the order of the Assessing Officer in support of his contention. The learned Departmental representative for the Revenue also submitted that merely because no admission was taken in the academic year during the assessment year under appeal to any educational course is no ground to delete the addition. He relied upon the decision of the hon'ble Punjab and Haryana High Court in the case Blowell Auto P. Ltd. v. Asst. CIT [2008] 219 CTR (P H) 185. The learned Departmental representative for the Revenue also submitted that the additional evidence was rightly rejected by the learned Commissioner of Income-tax (Appeals) in respect of the two companies who have given donations to the assessee. 14. We have considered the rival submissions. The facts noted above are not in dispute and the learned Commissioner of Income-tax (Appeals) has reproduced the chart above to show the response of the parties to the requisition issued under section 133(6) of the Act. It is not in disput ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rjeet Singh. It will, therefore, clearly show that the donors were also misled by vague notice issued by the Assessing Officer, otherwise, they would have been in a better position to make proper replies before the Assessing Officer, had the complete information provided in the notice by the Assessing Officer under section 133(6) of the Act. Paper book page 26 is the list of corpus donations from 23 persons where notices under section 133(6) of the Act were received back as unserved in a sum of ₹ 3,69,000. This list is supported by the donation receipts on paper book pages 27 to 49 and in all the receipts wherever donation is given in cash, permanent account numbers and signature of the donors are mentioned, in other receipts, the donations are given by cheques or/bank drafts have the permanent account number of the donor also. Paper book page 50 is the list of five persons who have denied to have given any donation to the assessee but their receipts are having permanent account numbers of the donors and their signature. The Assessing Officer except issuing notice under section 133(6) of the Act, has not made any enquiry from the donors. Since during the course of search the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... instance of the respondent, did not pursue the matter further. The Revenue did not examine the source of income of the said alleged creditors to find out whether they were creditworthy. There was no effort made to pursue the so-called alleged creditors. In those circumstances the respondent could not do anything further. In the premises, if the Tribunal came to the conclusion that the respondent had discharged the burden that lay on it, then it could not be said that such a conclusion was unreasonable or perverse or based on no evidence. If the conclusion was based on some evidence on which a conclusion could be arrived at, no question of law as such arose. The High Court was right in refusing to state a case. 15. The hon'ble Supreme Court in the case CIT v. Bharat Engineering and Construction Co. [1972] 83 ITR 187 (SC) held as under (headnote) : Held, that the inference drawn from the facts proved was a ques ion of fact and the Tribunal's finding on that question was final. A construction company took time to earn profits and it could not have earned a huge profit within a few days after the commencement of its business. Hence, it was reasonable to assume that the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erefore, liable to be set aside even for making part addition against the assessee. 18. As far as additions of ₹ 20 lakhs in respect of two companies are concerned, the assessee filed complete details of the directors and shareholdings pattern of both companies. The board of resolutions in the cases of both companies are filed that these companies are authorised to make donation to the assessee. Both companies have admittedly made donations to the assessee through cheques and both donations' cheques were cleared through banking channel. The authorities below merely because no bank account is filed in the cases of both companies, held that the assessee has not been able to prove the creditworthiness of the donor companies. The assessee, however, filed copies of their bank accounts before the authorities below and written submission was filed at paper book page 130 enclosing copies of their bank statements to show that the donations have been made through banking channel. It was also explained that these statements were not available to the assessee and no cash have been deposited in their accounts for making donations. It was held that the donors did not exist at given ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e donations to the assessee. Therefore, the assessee is able to prove the identity of the donor companies as well as their creditworthiness. On the basis of evidences and material on record, it is clear that the assessee has been able to prove the genuineness of the donations. Therefore, the addition is wholly unjustified in a sum of ₹ 20 lakhs. 19. Considering the above discussion, when the donors have given their permanent account numbers and their receipts would prove that the assessee has been able to prove the identity of the donors as well as proved that the donors have given donations towards corpus of the assessee-society and the donations have been utilised for the purpose of construction of the educational building. Therefore, the authorities below should not have made addition against the assessee. Therefore, we set aside the orders of the authorities below and delete the entire addition. 20. In the result, grounds Nos. 3 and 4 of the appeal of the assessee are allowed and ground No. 1 of the Departmental appeal is dismissed. 21. On ground No. 5, of the appeal of the assessee, the assessee challenged the addition of ₹ 65,980 out of total addition of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ave considered the rival submissions and material available on record The Assessing Officer has relied upon the seized documents in which at some page commission word is mentioned but no details have been found during the course of search. If the assessee has made any actual payment on account of commission to any person, the commission is stated to be given to some persons who have arranged the donations. Most of the donors have already confirmed giving of donations to the assessee and none of the donors have confirmed the version of the Assessing Officer if they have given donations to the assessee through commission agent, against commission payment. Therefore, the theory of commission agent arranging the donations is not proved through any reliable or cogent evidence. No material was also found during the course of search to support the findings of the authorities below if any commission is paid actually to the commission agent for arranging the donations. The assessee is a charitable society. Therefore, there was no need to make any payment by way of commission and even if any commission is paid, this would have been allowable deduction under section 37 of the Act. Therefore, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r of corpus fund, commission payment and disallowance under section 11(3). The Assessing Officer has also mentioned about certain receipts of capitation fees and undisclosed cash found from Shri Sukhdev Singla, chairman and has used that observation to conclude that the activities of the assessee- society are in violation of sections 11(3) and 13(3) of the Act. This matter pertains to the assessment year 2009-10 and, therefore, not applicable to the assessment year under consideration. The assessee submitted before the learned Commissioner of Income-tax (Appeals) that the assessments for the assessment years 2005-06, 2006-07, 2007-08 and 2008-09 have also been framed by the Assessing Officer on December 31, 2010, under section 153A/143(3) wherein the returned income was accepted and no additions have been made in these years despite the details of donations. The learned Commissioner of Income-tax (Appeals) considering the facts and circumstances was inclined to hold that there has been no finding as to any violation of the aims and objects of the society during the year. The Assessing Officer has also not disputed the application of the donated funds. It was the year of establishin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s and is dismissed as such and ground No. 3 of the Departmental appeal is dismissed. 31. In the result, the appeal in I. T. A. No. 226/Chd/2013 is partly allowed and the Departmental appeal in I. T. A. No. 214/Chd/2013 is dismissed. I. T. A. No. 215/Chd/2013 (assessment year 2004-05) (Revenue's appeal) : 32. This appeal filed by the Revenue is directed against the order of the learned Commissioner of Income-tax (Appeals) (Central), Gurgaon, dated December 17, 2012, for the assessment year 2004-05 on the following grounds : (i) Whether, on the facts and in the circumstances of the case the learned Commissioner of Income-tax (Appeals) is justified in law and on facts in partly deleting the addition of ₹ 2,84,70,952 made under section 68 of the Income-tax Act, 1961, on account of addition to corpus fund based on certain incomplete confirmation when the assessee failed to prove the genuineness of the donations and same were without any specific directions in violation of section 11(1)(d) ? (ii) Whether, on the facts and in the circumstances of the case the learned Commissioner of Income-tax (Appeals) is justified in law and on facts in partly deleting the ad ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ore, following my finding for the assessment year 2003-04, wherein I have dealt in detail the basis of additions as given in the order by the Assessing Officer, I am inclined to hold that no addition can be sustained on account of the addition of corpus fund made to the tune of ₹ 2,84,70,952 and commission of 2 per cent. thereupon in this year. Aside, in the assessment year 2003-04, I have treated donations to a certain extent as unexplained as well as the donations by the two corporate entities. Consequently other than the aforesaid, the findings in the assessment year 2003-04 will hold good for the assessment year 2004-05 too. 8. In the result the appeal of the assessee is allowed. 34. We have heard the learned representatives of both parties and perused the material available on record. The learned representatives of both parties stated that all the issues are same on three grounds of appeal as have been considered in preceding assessment year 2003-04. On consideration of these facts and material on record, we find that all the three grounds raised in the Departmental appeal are same as have been decided in preceding assessment year 2003-04. Therefore, following the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... addition of ₹ 1.60 crores being cash found in the residential premises of the chairman of the society which has been added on substantive basis in the hands of the assessee-society. Consequently, the assessee society was held to have violated the provisions of sections 11(3) and 13(3) of the Act. The assessee was aggrieved by taxing of the amount of ₹ 1,63,99,950 in the hands of the assessee-society, whereas the income was exempt under section 10(23C)(iv) of the Act. The assessee challenged the addition before the learned Commissioner of Income-tax (Appeals) and the learned Commissioner of Income-tax (Appeals) discussed the facts of the case and submissions of the assessee in the impugned order as under : 5.1 Capitation fees issue : It is seen from the impugned order at paragraph 10, that during the course of search and seizure at the residence of Sh. Sukhdev Kumar Singla, chairman of the society, a cash bundle was found along with hand-written slips with receipts tied which was marked as annexure D-20. The notings on the slips, mentioning the names of students and amount paid by them were found not matching with the receipts issued to the concerned student(s). On ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing evidences managed by the assessee. Therefore, the capitation fee of ₹ 3,99,950 was added in the hands of the assessee- society under section 69. 5.2 Consequently in paragraph C of the impugned order, the Assessing Officer held that by accepting the capitation fee, it has violated the aims and objects of the society and the huge cash found from the resident of Sh. Sukhdev Singla also proved that there has been violation of section 13(3) of the Income-tax Act, 1961. Accordingly, the assessment was framed at an income of ₹ 1,63,99,950. 39. The assessee submitted before the learned Commissioner of Income-tax (Appeals) as under : i. Regular books of account are maintained and all the entries have been accounted for in the books of account. ii. Statement of staff members recorded during search operations and all had denied any donations from the students. iii. Affidavits from students whose slips were found during search were filed with the Assessing Officer whereby they have confirmed payment of fee and denied any payment of donation to the college. iv. During the assessment proceedings a chart depicting total sanc tioned seats, seats filled in counsel ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... operated on November 28, 2007, i.e., before the assessment year 2009-10. 39. The learned Commissioner of Income-tax (Appeals) considering the submissions of the assessee and material on record dismissed the appeal of the assessee. His findings in paragraphs 7 to 9 of the appellate order are reproduced as under : 7. I have considered the arguments advanced by the assessee. Ihave also gone through the findings given by the Assessing Officer about violation of sections 11, 12, 13 and section 10(23C). 7.1 Issue of capitation fee of ₹ 3,99,950 : The cash as per the bundles found, to iterate, was stated to be cash collected from the students for which receipts were issued and cash collected during that period from the sale of scrap items by the employees of Indo Global Education Foundation. Each of the slip (names of 5 students with stream) and its notings was explained in the assessment proceedings and now before me. For sake of brevity, one such explanation is reproduced below : '(a) Page 17 of annexure D-20 is a handwritten slip written by employee of Indo Global Education Foundation mentioning the name of Sh. Digvijay Singh Thakur and D-(90). The slip is a memo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Counsel for Technical Education to the society was 460 seats. Out of 460 seats, 420 seats were for Engineering streams and 40 seats for B. Architecture 67 per cent. seats are filled through counselling and 33 per cent. seats are filled through management quota. All the seats are filled on the basis of common entrance test (CET) and tenth, plus two basis. Seats left unfilled by the Punjab Technical University (PTU) through counselling are also transferred to the management quota. During the year under reference only 148 seats were filled through counselling by PTU against the quota of 307 seats. The society through its own efforts was able to fill only 272 seats. 40 seats were left vacant for this academic year. It is pertinent to mention here that if the seats through PTU counselling are even left vacant why a student will give any amount above the normal fee during management counselling. A chart of total sanctioned seats, seats filled in counselling, total seats filled and total seats left blank in respect of last six years furnished is reproduced below, which is stated to indicate the seats left vacant in spite of all the efforts by the management. Thus, in this scenario it was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... made 2004-05 2,84,70,952 Addition made 2005-06 48,34,800 Accepted by the Assessing Officer 2006-07 37,57,300 -do- 2007-08 4,20,000 -do- 2008-09 20,000 -do- 2009-10 - 3,99,950 Addition made Total 5,38,58,019 3,99,950 0.75 per cent. The assessee has also relied upon the copy of seized cash book wherein the detail of scrap sold entries have been recorded along with copies of the receipts of scrap before the Assessing Officer. It has also been argued that in some of the years, i.e., from the assessment years 2005-06 to 2008-09, certain corpus funds were received and no adverse view had been taken by the Assessing Officer and also most of the cash was found from the residential portion of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... khdev Singla and the balance surrendered amount of ₹ 80 lakhs has been accepted as it is. The sources stood explained under section 132(4). Thus, on one hand, the Assessing Officer has accepted the source of ₹ 80 lakhs as given by Sh. Sukhdev Singla in his statement under section 132(4) while the source of ₹ 1.60 crores has not been accepted. 8. There are some undisputed facts, besides the documents and bundles of cash found. Firstly that the seats were all not filled up ; returns of the assessee for the assessment years 2005-06, 2006-07 and 2008-09 have been accepted without any disallowances ; and cash of ₹ 2.40 crores for the assessment year 2009-10 and ₹ 10 lakhs for the assessment year 2008-09 was surrendered at the time of search on which taxes have been paid as the same stood declared in the returns filed by Shri Sukhdev Singla, the chairman of the society. However it is also fact that Shri Sukhdev Singla could not explain the discrepancies between the cash as per the bundle and as per the receipt issued in the name of the student with the branch of study, especially when the slips tied to the bundles were found in his briefcase. This was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s and conjectures. However, where the evidence is quite explicit especially in the back drop of the nature of the trade/profession, ore cannot ignore the same. Fee slips were found which mentions the name of the student and the stream of study, with also the amounts tallying with the ledger copy of each of the said students. The particulars were thus very precise. However it belies-logic that cash proceeds of sale of scraps should be attached to these fee receipts in the form of handwritten slips and put in bundles. These proceeds from sale of scraps are in lump sum figures and nothing very convincing arguments have been put forth that the proceeds are actually from scrap sales. As regards the explanation that the cash found emanated from the property dealings seems farfetched too. If that be so as made out by the assessee than there was nothing to hold back the assessee from producing documentary evidences of his real estate dealings be it in the line of consultancy or in sale and purchase. It is not in debate that assessee must have been with the construction company 'Ashiana' but what is germane to the issue is whether the cash found can be said to be from his property d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e- society is therefore held to have violated the provisions of sections 11, 12 and 13 of the Income-tax Act. The taxing of the income of the assessee at ₹ 1,63,99,950 is therefore confirmed. Consequently, the assessee fails on these grounds of appeal. 9. In the result the appeal of the assessee is dismissed. 40. We have heard the learned representatives of both parties and perused the material on record. 41. Learned counsel for the assessee reiterated the submissions made before the authorities below and referred to paper book page 1, which is inventory of cash found and seized from Shri Sukhdev Kumar Singla and submitted that no cash was found and seized from the assessee. Paper book page 61 is the statement of Shri Sukhdev Kumar Singla recorded on July 16, 2008, in which the Assessing Officer asked for the explanation of Shri Sukhdev Kumar Singla regarding cash found from his premises and lockers and Shri Sukhdev Kumar Singla explained that sum of ₹ 20,90,305 was received from the office of the assessee-society and the same belonged to the assessee- society as per the books of account maintained and the remaining amount of ₹ 1.60 crores recovered from ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re found, there is sale of scrap from July 10, 2008, to July 14, 2008 and the same of scrap has been noted in the cash book. The students or their parents have not been examined and even the accountant has not been examined by the Assessing Officer for verification. Paper book pages 80-86 are various statements of administrative officers/ teaching staff of the assessee-society who were examined by the Assessing Officer and none of them have supported the charge of any capitation fees or donation from the students. Paper book page 91 is the bank certificate in the case of Shri Sukhdev Kumar Singla to show that the locker No. 332 was lastly operated on November 28, 2007, and thereafter it was searched by the Income-tax Department on July 15, 2008 and as such whatever was found in this locker belonged to Shri Sukhdev Kumar Singla and did not pertained to the assessment year under appeal, i.e., 2009-10 and no addition has been made in the assessment year 2008-09 either against the assessee or against Shri Sukhdev Kumar Singla. Learned counsel for the assessee submitted that there were no basis to make addition of capitation fees charged from any students. Shri Sukhdev Kumar Singla has ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r and above the fees prescribed by the committee would amount to collection of capitation fee and the assessee is not eligible for exemption under section 11 of the Act. The learned Departmental representative for the Revenue also referred to the statements of Smt. Neelam Singla and Shri Manav Singla to show that they were not involved in the educational activities with the assessee. 43. We have considered the rival submissions and material available on record. Paper book page 1 is inventory of the cash found and seized from Shri Sukhdev Kumar Singla from his residence and lockers. Out of the total cash of ₹ 1,80,90,305, ₹ 1.60 crores were seized and balance cash was released. The other cash of ₹ 20,90,305 was also released. The statement of Shri Sukhdev Kumar Singla was recorded on July 15, 2008, i.e., the date of search, copy of which is filed by the learned Departmental representative for the Revenue on record that on the last page it is signed by Shri Sukhdev Kumar Singla and the search party on July 16, 2008. The learned Departmental representative for the Revenue heavily relied upon the statement of Shri Sukhdev Kumar Singla to show that the receipts seiz ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... written by Shri Manav Singla under the supervision of his father Shri Sukhdev Kumar Singla was recovered (paper book pages 103-104), which contained market survey of the plots in different areas as in financial year 2008-09, that Shri Sukhdev Kumar Singla has a lot of knowledge in the real estate area, Chandigarh. The background of Shri Sukhdev Kumar Singla would prove that he was involved in the liaison between the owners of land and bulk buyers of the land. He has confirmed to have earned undisclosed income on that account. Some other documents were also filed to show that Shri Sukhdev Kumar Singla was dealing in the properties. The Assessing Officer instead of examining this issue in the light of the documents brought on record has merely disbelieved the statement of Shri Sukhdev Kumar Singla and made substantive addition in the case of the assessee society without any basis. Section 110 of the Indian Evidence Act provides when the question is whether any person is owner of anything of which he is shown to be in possession, the burden of proving that he is not the owner is on the person who affirms that he is not the owner . In this case, it is admitted fact that the cash was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r in his return of income, how the Assessing Officer could bifurcate the amount of ₹ 1.60 crores out of total surrender of ₹ 2.40 crores for making addition in the hands of the assessee. Further locker No. 332 belonged to Shri Sukhdev Kumar Singla was admittedly operated by him lastly on November 28, 2007, would mean that the cash lying in this locker pertained to the assessment year 2008-09 because after this operation on November 28, 2007, this locker was opened by the Income-tax Department on July 15, 2008 only. It is admitted fact that no addition have been made in the assessment year 2008-09. Therefore, the addition of ₹ 37,12,000 is cash found from this locker could not be added in the hands of the assessee- society in the assessment year under appeal, i.e., 2009-10. The Revenue Department also heavily relied upon the slips found in the cases of some of the students, copies of the same are filed at pages 65 to 69 of the paper book. However, in these slips it is nowhere mentioned if any capitation fees have been paid by the students to the assessee-society. These receipts contained only the figure as D-90 and the same is repeated in other slips. The Assessi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pages 82 to 86 and none of these staff members of the assessee-society have confirmed the payment of any capitation fee/donation to the assessee-society. Rather they have denied the receipt of any capitation fee/donation by the assessee- society from any student. Since the seized receipts do not contain any detail, therefore, it was the presumption of the Assessing Officer only that some capitation fees have been received from the students but such facts have not been corroborated through any evidence or material. Rather the Assessing Officer has failed to make any enquiry from these students in respect of whom these receipts were pertained. The employees who have allegedly maintained these rough receipts have also not been examined by the Assessing Officer. The assessee disputed these slips because they were containing details of fees received from the students as well as the amount received by way of sale of scrap. It may also be noted here that in assessment years 2005-06, 2006-07, 2007-08 and 2008-09, the incomes declared by the assessee-society have been accepted and no adverse inference have been drawn against the assessee. The Assessing Officer has relied upon the slips fou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t 6, 2002, with the Registrar of Societies, Punjab. The assessee-society was registered under section 12AA vide order of the Commissioner of Income-tax-II, dated January 17, 2003, effective retrospectively from June 12, 2002. Registration under section 80G was also granted to this society vide order dated April 20, 2005. The assessee-society has the managing body. The details of same are noted in the impugned order along with aims and objects which are mainly and solely on account of educational activities. The learned Commissioner of Income-tax also noted various educational institutions run by the assessee-society in the impugned order and also noted that at the time of admission, in case some seats remain vacant after counselling process, the seats are converted into management quota seats. The fees structure of various colleges run by the assessee-society are also mentioned along with fees fixed by the Government. It is also noted that the search was conducted in the case of the assessee-society on July 15, 2008 and various incriminating documents were found as have been discussed and considered in the appeals of the assessee-society in the assessment years 2003-04, 2004-05 and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the students outside the books of account. Therefore, the books of account do not reflect true affairs of the society. The assessee-society has introduced unaccounted income in the garb of corpus funds by paying commission for obtaining accommodation entry. The assessee-society has paid cash to the members in lieu of land donated by them and the cash paid is not recorded in the books of account. The funds of the assessee-society have been misused by its members for personal use, like purchase of cars and other household articles, etc. 48. The learned Commissioner of Income-tax was, therefore, satisfied that the activities of the assessee-trust/society are not genuine and have not been carried out in accordance with the objects of the trust. Therefore, registration granted under section 12AA of the Act vide order dated January 17, 2003, was cancelled. Further recognition under section 80G was also withdrawn accordingly. 49. The assessee is in appeal challenging the order of the learned Commissioner of Income-tax in cancelling/withdrawing the registration under sections 12AA and 80G of the Act in this order. 50. Both parties stated that the registration was cancelled under ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... section 12AA or approval under section 80G of the Act. The crux of the findings of the learned Commissioner of Income-tax in the impugned order would show that the learned Commissioner of Income-tax had taken up all the issues which were taken up by the Assessing Officer in the assessment orders for the assessment years 2003-04, 2004-05 and 2009-10 for the purpose of cancelling the registration under section 12AA and approval under section 80G of the Act. However, the appeals have been finally decided by the Tribunal and all such additions have been deleted. Therefore, there is no material available against the assessee-society at this stage to show that the assessee's activities are not genuine or have not been carried out in accordance with the objects of the trust. We may also note here that in the remaining assessment years 2005-06, 2006-07, 2007-08 and 2008-09, the Revenue Department did not find any adverse material against the assessee to prove that its activities are not genuine. There is no violation of sections 11, 12 and 13 of the Act. There is also no violation of conditions under section 80G of the Act. Therefore, considering the totality of the facts and circumst ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ground No. 2, challenging the order of the learned Commissioner of Income-tax (Appeals) in confirming the addition of ₹ 1.60 crores as deemed income under section 69B of the Act in the hands of Indo Global Education Foundation, whereas the said income was earned by Shri Sukhdev Kumar Singla from real estate business. 58. This appeal pertains to Shri Sukhdev Kumar Singla. In this case, the facts are same as have been considered in the case of the assessee-society, namely Indo Global Education Foundation in I. T. A. No. 227/Chd/2013 for the assessment year 2009-10. The Assessing Officer added ₹ 1.60 crores on substantive basis in the hands of the assessee-society and made protective assessment of the same amount in the hands of Shri Sukhdev Kumar Singla on the basis of the same reasons as have been given in the case of the assessee-society. The assessee made similar submissions before the learned Commissioner of Income-tax and it was explained that the assessee had declared ₹ 2.40 crores in his return of income. Therefore, such addition should not be made on substantive basis in the case the assessee-society. The learned Commissioner of Income-tax, however, did ..... X X X X Extracts X X X X X X X X Extracts X X X X
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