9911796707
TMI Blog2016 (4) TMI 914X X X X Extracts X X X X X X X X Extracts X X X X ..... of by way of this common order. 2. Facts in brief:- The assessee "Maharaji Educational Trust" is registered u/s 12A of the Act vide order no.DIT(E)2(213)/94-95 dt. 31.01.1995 issued by DIT (Exemptions) Madras and also u/s 80G of the Income Tax Act, 1961 (the Act). Subsequently, the assessee Trust has also been allowed exemption u/s 10(23)(C)(vi) of the Act by DG (Exemptions), New Delhi vide order dt. 27.3.2009 vide F.No.DGIT(E)/10(23)(C)(vi)/2008- 09/1766. 2.1. The registration u/s 12A of the Act continues and has not been withdrawn till date. The Trust has been claiming and was allowed the benefit of exemption u/s 11 of the Act for the A.Y. 2002-03 in an order passed u/s 143(3) of the Act on 28.3.2005. 2.2. Also for the A.Y. 2008-09 and 2009-10, the assessee's claim for exemption u/s 11 was accepted by the A.O. vide his orders of assessment u/s 143(3) of the Act dt. 21.12.2010 and 13.12.2010 respectively. 2.3. The Trust is running medical college and para-medical courses at Ghaziabad and Chennai. The list of such courses are given in pages 1 and 2 of the assessment order for the A.Y. 2004-05. For the sake of brevity, we do not repeat the same. 2.4. A survey was conducted on t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... refore the books results of the assessee cannot be accepted. Therefore I am not satisfied with the correctness and completeness of the accounts of the assessee. As per reply dated 8.12.2006 filed during assessment proceedings the number of seats in management quota is 21 in MBBS course and 20 in BDS, The only specific information available on record regarding fees received under the head Project Works available on seized annexure - 9 which shows recovery of 10 lakhs to 25 lakhs from MBBS students on account of project work which is the component of fees not supported by receipts from all students. And assessee's reply dated 26.12.06 stating that maximum fees permitted to be collected from MBBS students is 30 lakhs and from BDS students 12 lakhs. Making a conservative estimate based on the actual figures of Rs. 45 lakhs for 3 students i.e average of Rs, l5 lakh per MBBS student the unaccounted fees under the head project work from MBBS students is estimated at 21 x 15 lakhs = 3,15,00,000/- which is fees over and above that accounted by the assessee. So far as the BDS students are concerned fees on account of project work are estimated at 6 lakhs { considering pw component ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d relief. He at para 10.3. and 10.4 had held as follows. "10.3 Regarding estimation and an additions of Rs. 1.33 Crores made on account of undisclosed fee, it is seen from the assessment order and the records produced by the appellant, that the Assessing Officer has failed to invoke the provisions of section 145 (3) of the Act or pinpointed any unrecorded single entry in respect of fees received from the students and for that matter, any other entry in respect of any expenditure because the entire amount realised from the students are reflected in the account books under the head Project Work, which was transferred to Fee A/c and the same has been accepted by the Assessing Officer as correct. Therefore, there is no reason for the Assessing Officer for estimating the fee received from all the medical students of both MBBS and BDS Courses and adding the same twice to the returned version without the support of any cogent material. 10.4 In view of the above discussion and respectfully following the decisions of various appellate authorities cited supra and also taking into consideration all the relevant facts and circumstances of the case, I am of the considered opinion that the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y the A.O. is not sustainable, as it is based on guess work and extrapolation. It is not based on evidence. There was no documents found during the course of survey, which supports such an addition. There was no enquiry or investigation conducted by the A.O. from the concerned students or parents during the assessment proceedings and no evidence was collected by the A.O. to support his conclusions. 5.1. The assessee has relied upon a number of case laws for the proposition that the amount deemed to be income u/s 68 is also entitled to exemption. He further submitted that the eligibility u/s 11 and 12 cannot be denied as long as the registration u/s 12 and u/s 10(22) continues. The assessee is imparting education and the activities of the Trust are in accordance with its objectives. There is no adverse finding on this aspect by the A.O. in his orders. 5.3. We have gone through the case laws relied upon before us. These are extracted for ready reference. i. DIT(E) vs. Raunaq Education Foundation 249 ITR 76 (Del) ii. DDIT vs. Shanti Devi Progressive Education Society 340 ITR 320 (Del) iii. ITO vs. Baba Dhall Educational Society of India 27 SOT 391 (Del.) iv. CIT vs. Geetanja ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Trust are charitable and there is no allegation that the activities of the Trust are not in accordance with its objects. No violation of Sec.13 is made out. 5.8. Thus, we uphold the order of the First Appellate Authority and dismiss the appeal of the Revenue. 6. ITA 2404/Del/2008 A.Y. 2005-06:- The Revenue has filed this appeal on the following grounds. 1. On the facts and in the circumstances of the case, the Ld.CIT(A) has erred in deleting the addition of Rs. 6,46,65,262/- by allowing the benefit of s.11 and 12 of the Income Tax Act, 1961 (the Act) even when it was established on the basis of the material found during the course of survey u/s 133A of the Act on 10.8.2006 that the assessee was running educational institutions on commercial lines with profit motive. 2. On the facts and in the circumstances of the case, the Ld.CIT(A) has erred in allowing the benefit of s.11 and 12 of the Income Tax Act, 1961 (the Act) overlooking the fact that it was only because of discrepancies detected during the course of survey on 10.8.2006 that the assessee has subsequently revised the original return filed on 31.10.2005 by filing a revised return on 31.3.2007 and enhanced the surplus ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Act to the assessee for the A.Y. 2004-05 as well as for the A.Y. 2008-09 and A.Y. 2009-10. Hence even on the principle of consistency the order of the First Appellate Authority has to be upheld. 6.7. As regards the ground referring to the filing of a revised return, it is explained that the revised return was filed merely to transfer the project work account to donation account. Such filing of a revised return of income cannot be a reason to reject claim of exemption u/s 11 of the Act. In any event as the returned income has been accepted by the A.O. and no additions have been made. 6.8. Hence we uphold the order of the First Appellate Authority and dismiss this appeal of the Revenue. 7. ITA 896/Del/09 A.Y. 2006-07:- This appeal of the Revenue is filed on the following grounds. 1. On the facts and in the circumstances of the case, the Ld.CIT(A) has erred in deleting the addition of Rs. 6,46,65,262/- by allowing the benefit of s.11 and 12 of the Income Tax Act, 1961 (the Act) even when it was established on the basis of the material found during the course of survey u/s 133A of the Act on 10.8.2006 that the assessee was running educational institutions on commercial lines with ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e assessee and under such circumstances no addition can be made in the hands of the assessee based on this seized material. The A.O. on the other hand concluded as follows. "3.3. Conclusion: Now the issue is to draw inference on the notings available in the said Annexure. It is humanly impossible to have an accurate idea of the nature of entries in the absence of clear cut description. The onus to furnish and prove the nature of transactions was upon the assessee as the said annexure was impounded from the premises of the assessee as has been claimed as well as admitted during the course of survey proceedings by Dr.P.Mahalingam, Chairman of assessee trust that the same is maintained by one of its employee. It is a matter of record that the assessee trust is found to have been involved in commercial activities by way of receipt of donations and other receipts over and above the stipulated fee structure. It is pertinent to mention here that a view cannot be drawn in respect of each page of the annexure. Therefore, in the absence of detailed clarification coming from the assessee, it can only be possible to draw a reasonable view. While doing so explanations given by the Counsel of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of Rs. 3 crores to my capital account on payment of taxes and use the amount accordingly. " 5.3 Thus, it is seen that Dr P Mahalingam has declared this income regarding the unrecorded transaction in his own hands and also paid the taxes thereon. The individual assessment of Dr P Mahalingam has been completed u/s 143(3) on 31112/2009 for the Assessment Year 2007-08 on a returned income of Rs. 3,03,82,035/-. The appellant has stated that the amount of Rs. 3 Crores disclosed as his individual income under, the head "income from other sources" was on account of disclosure made as a result of the survey. 5.4 Thus it is seen that Dr P Mahalingam has already offered this amount for taxation in his return of income which has been duly accepted by the Income Tax Department, hence, the question of taxing the same amount in the hands of the assessee shall amount to double taxation. It has been held of the case of Hira Singb And Co. Vs CIT (SC) 287 ITR 209 that additions made on the basis of admission by assessee is justified. 5.5. Once the Department has accepted the statement of Dr P Mahalingam which was recorded as a result of survey. The Assessing Officer without any evidence can ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to be granted when income is brought to tax u/s 68 of the Act. 8.11. Out of the additions u/s 68 and 69C totalling to Rs. 4,22,48,338/-, no amount can be brought to tax, as the deemed application u/s 11(1) would be Rs. 5,44,75,960/- and the application of income in respect of capital expenditure would be Rs. 12,69,84,028/- totalling to Rs. 18,14,59,988/-. This results in a net deficit of Rs. 3,07,03,982/-. Thus looking at the issue from another angle, we have to uphold the order of the First Appellate Authority and dismiss this appeal of the Revenue. 9. ITA 311/Del/08 : This is an appeal filed by the assessee directed against the order of the DIT(E) dt. 24.9.2007, wherein he refused to recognise the Trust u/s 80G of the Act. This was rejected on the ground that the conditions laid down u/s 11 to 13 were violated. The Ld.DG(Exemptions) also records that the claim u/s 11 and 12 made by the assessee were rejected. 10. After hearing rival contentions, as we have upheld the order of the Ld.CIT(A) for all the 4 A.Ys granting exemption u/s 11 and 12 of the Act to the assessee, consequently the DG(E) is directed to grant recognition to the assessee u/s 80G(v) of the Act. 11. In the re ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
