TMI Blog2021 (10) TMI 739X X X X Extracts X X X X X X X X Extracts X X X X ..... easons recorded by the learned assessing officer and resultant amount of escapement of income. The facts in this case are similar to the facts decided by the honourable Delhi High Court in case of Sinfonia Tradelinks private limited [ 2021 (3) TMI 1177 - DELHI HIGH COURT] where the honourable Delhi High Court quashed reassessment wherein even the assessment was earlier not made u/s 143 (3) of the act for not correlating the information available in the original return filed by the assessee. In the present case the assessment was already made u/s 143 (3) of the act, therefore, the case of the assessee is on much stronger footing against the facts of the case decided by the honourable Delhi High Court. We do not have any hesitation in holding that the learned assessing officer has not applied his mind at the time of recording of the reason u/s 148 of the act and therefore the reopening is quashed. Exemption u/s 11 - In respect to the allowing the exemption u/s 11 of the income tax act we find that the assessee is registered u/s 12 A of the act as well as u/s 10 (23C) (IV) of the act also. This registration certificate is still valid and not withdrawn. Assessee is also held t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f ₹ 10,80,98,671/- by allowing the exemption u/s 11 of the Act. 3. On the facts and circumstances of the case, the CIT (A) has erred in holding that the assessee was entitled to exemption u/s 11 in view of the face that the assessee was charging capitation fees from the students seeking admission in MBBS/PG courses thereby indulging in commercializing the education and thus violated the objects for which it was created. 4. On the facts and circumstances of the case, the CIT (A) has erred in deleting the addition of ₹ 10,16,64,790/- of unaccounted receipts. 5. On the facts and circumstances of the case, the CIT (A) has erred in relying on the order of ITSC, when the order of ITSC itself is being contested on account of perversity of facts. 6. On the fact and circumstances of the case, the CIT (A) has erred in holding that the impounded documents don not pertain to trust and hence the trustee Mr. Mahalingam was justified in declaring additional income on that basis. 7. On the fact and circumstances of the case, the CIT (A) has erred in holding that Mr. Mahalingam has declared income on the basis of these documents, when he has not been able to est ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fter , Search under Section 132 of the Act was carried out in Santosh group of cases on 27.06.2013. The case of the assessee was also covered under the search. During the course of search, it was found that group was charging capitation fee for admission in these courses and such fee was not reflected in the returns of income filed. Thereafter reasons were recorded by the ld. Assessing Officer on 7.11.2013 and notice under Section 148 of the Act was issued on 27.11.2013. The approval of the Commissioner of Income Tax was also obtained under Section 151 of the Act. Vide letter dated 26.12.2014 assessee submitted that the return filed originally on 31st October, 2007 may be treated as return of income filed in response to notice under Section 148 of the Act. Consequently, notice under Section 143(2) of the Act was issued on 10.10.2014. The assessee raised objection vide letter dated 24.11.2014. On 02nd February 2015, the objections of the assessee were communicated and disposed of as rejected. Thus assessment proceedings continued. 7. During the course of assessment proceedings, learned Assessing Officer noted that assessee is a trust established on 6.01.1993, Dr. P. Mahalingam ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... financial year 2005 06 is ₹ 1 70,85,000 instead of ₹ 10 2,85,000 d. the assessee further objected on the basis of the register where only there is an agreement for payment of the fees but same was not paid 9. The learned Assessing Officer noted that the sum of ₹ 117,85,000 is for assessment year 2005 06 and further a sum of ₹ 74,651,210/ is already included by the assessee in the income and expenditure account as fees , thus , net unaccounted income of fees not declared in the income and expenditure account works out to ₹ 103,830,790/ . Other contention of the assessee were not accepted and learned AO held that amount of fees not declared in the return of income works out to ₹ 10,38,30,790/-. The ld. Assessing Officer thereafter made an addition of ₹ 10,38,30,790/- to the total income of the assessee i.e. excess of expenditure over expenditure of ₹ 10,80,98,671/-. The learned assessing officer further held that exemption u/s 11 of the income tax act to assessee is also not allowable and the income of the assessee was assessed in the status of Association Of Persons. Learned AO assessed assessee at a total income of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . It was stated that the impugned re-assessment is invalid and without jurisdiction as the same is completed without complying with legal provisions of requirement of provisions of Section 147 and 148 of the Act and, therefore, it is liable to be quashed. It further challenged that the re-assessment is also required to be quashed as the satisfaction recorded by the CIT, C-1, New Delhi, is mechanical and without application of mind. It further states that the re-assessment further suffers from jurisdictional error, as it does not meet the requirement of first proviso to Section 147 of the Act. 14. The ld. DR vehemently objected to the invocation of Rule 27 of the ITAT Rules stating that if assessee is so aggrieved by upholding the re- assessment proceedings by the first appellate authority, it should have filed an appeal. 15. We have carefully considered the contentions of the parties and find that Rule 27 provides that though the respondent might not have appealed against on any of the grounds decided against him, he can support the order of the learned CIT A . Honourable High Court in case of Sanjay Sawhney vs. PCIT in ITA No. 834/2019 dated May 18, 2020 has held that: ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed in the course of the search. He referred to the provisions of Section 153A of the Act and submitted that it bars invocation of the provisions of Section 147 of the Act. He submitted that Revenue unjustly has tried to extend the block period for the six assessment years by indirectly by invoking the provisions of Section 147 of the Act on the basis of the material seized during the course of search. He claimed that such action would run contrary to the provisions of Section 153A of the Act. Thus, he submitted that the action of the Assessing Officer of invoking Section 147 of the Act is clear violation of Section 153A of the Act. For this proposition, he relied on following judicial precedents:- i. Cargo Clearing Agency vs. JCIT 307 ITR 1 (Guj); ii. Rajat Shubra Chatterji v. ACIT (ITA 2430/Del/2015) 47 CCH 0135; iii. ACIT v. Arun Kapur 140 TTJ 249 (Amritsar); iv. Sangeeta Chhabravs ITO (ITA 1853/Del/2017 Dated 21.04.2017) ; v. G Koteswara Rao vs DCIT 64 Taxmann.com 159 (Viz Bench of ITAT); vi. Shri Navratan Kothari Vs ACIT(ITA 425/JP/2017 Dt 13.12.2017); vii. Sushil Gaur and Shelly Agarwal vs ITO in ITA No.1500 1501/Del/2017 Dated 08.08.2017 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 7) 395 ITR 265 (Del.) and the decision of the co-ordinate bench in Brijpal Singh Tomar Vs. ITO in ITA. 2539/Del/2019 dated 26.04.2019. 20. He further referred to the proforma for obtaining sanction of the Act u/s 151 of the Act and referred to column No. 6.1 of the proforma stating that the Assessing Officer mentioned that assessed income of the assessee is ₹ 15,03,47,006/-, but he missed out the consequent appellate orders where ultimately the income of the assessee was assessed at ₹ 21,66,000/-. He submitted that mentioning the incorrect income proves that the Assessing Officer has not examined the returned income of the assessee as well as consequent appellate order and mentioning of such incorrect fact shows non-application of mind both by the Assessing Officer and by the authorities granting sanction. To support his contention, he referred to the decision of the Hon ble Delhi High Court in Residing Asia PTE Ltd. Vs. DDIT in WPC No. 614/2014 dated 31.08.2017 and passed Cyber City Pvt. Ltd. Vs. ITO in WPC No. 12360/2018 dated 21.05.2019. He further referred to para No. 10 at Page Nos. 18 to 25 of the decision of Omkar Developers Vs. ITO in ITA. No. 6862/Del/2018 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Bom.); viii. Ankita A. Choksey vs. Income Tax Officer And Others (2019) 411 ITR 207 (Bon.); ix. DCIT vs M/s KLA Foods (India) Ltd and others ITA No.2846/Del/2015 dt: 08.04.2019 x. M/s SPJ Hotels P Ltd ITA No.2857/Del/2017, xi. M/s Superior Build well P Ltd ITA No.3301/Del/2017, xii. M/s Superior Technologies P Ltd ITA No.2269/Del/2017, xiii. M/s Shiv Sai Infrastructure P Ltd ITA No.2527/Del/2017, xiv. ITO vs Randeep Investment (P) Ltd ITA No.4365 4005/Del/2015 dt: 26.03.2019 xv. Shree Balkrishan Aggarwal Glass Industries Ltd ITA No.5798/Del/2016 dt: 21.09.2020 23. He further submitted that non-application of mind is further evident from the fact that the Assessing Officer failed to consider the important answers given by Dr. P. Mahalingam. He referred to page Nos. 21 to 45 of the Paper book. He stated that Dr. P. Mahalingam never admitted any un-accounted in the hands of the appellant trust, but he has admitted unaccounted receipts in the hands of M/s. Santosh Trust. He further stated that the reasons shown that as per Annexure A-62 to A-64 and the other annexure such as A-58 to A-61 are not pertaining to this year, but to assessment y ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y pointed out. This should have been corrected before the approval was accorded. As they were not corrected, it shows that the above authority has acted mechanically in granting satisfaction under Section 151 of the Act. He relied on the decision of the Hon ble Delhi High Court in Symphony Trade Links Vs. ITO (supra) and the decision of the co-ordinate bench in Eminent Computers Pvt. Ltd. Vs. ITO (ITA. No. 6372/Del/2019 dated 24.11.2020. He specifically referred to para Nos. 20 to 23 of the said decision. He further relied on following judicial precedents:- i. Chhugamal Rajpal vs. S.P. Chaliha Ors. - 79 ITR 603 (SC); ii. Arjun Singh vs Asstt. Director of Income Tax (M.P.) reported in (2000) 246 ITR 363 (MP); iii. CIT vs M/s S.Goyanka Lime and Chemicals Ltd 231 Taxman 0073 Dated 15.10.2014 (MP) approved by Hon'ble Supreme Court in 64 taxmann.com 313 (SC). iv. Pr. CIT vs. N. C. Cables Ltd 391 ITR 11 (Del) v. Maruti Clean Coal Power Ltd Vs ACIT WP(T) No.346 of 2017 Dated 03.01.2018 (Chattisgarh High Court); vi. German Remedies Ltd. vs. Dy. CIT (2006) 287 ITR 494 (Bom); vii. United Electrical Company PLtd. vs. CIT Ors(2002) 258 ITR 317 (Del) ; ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... llenged. It was stated that I am satisfied is a proper satisfaction as the reasons recorded are backed by proper material referring to page No. 18 of the Paper book. She Referred to the decision of Honourable Delhi High court in case of Experion Developers Limited as well as decision of Synfonia Trade link where the earlier decision is upheld. c. re-opening has been made on the statement of Mr. Mahalingam with respect to the several discrepancies pointed out by the ld. AR in the figures. She submitted that these are figures given by investigation wing , but not absolute figures based on which re-opening has been made. The figures are given by the Investigation Wing. The ld. DR supported her argument by the decision of Aas Paas Multimedia Ltd. of Hon ble Gujarat High Court 405 ITR 512 , Ankit Aggarwal of Hon ble Rajasthan High Court and Mona Mahesh BHojani [2017] 83 taxmann.com 363 (Gujarat) of Hon ble Gujarat High Court. d. at the time of recording of the reasons, the Assessing Officer is not required to correctly state the quantum of escaped income otherwise what is left to be done at the time of the assessment. It was further stated that the reasons are required to be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rned AO with respect to Allowance of exemption u/s 11 of IT Act of ₹ 10,80,98,671/-, it was submitted that reason given by the AO is in para 6 at page 7 of assessment order, as per which, the assessee respondent is not engaged in charitable activities and activities of the assessee trust is commercial in nature. The Ld AO found that the appellant has been charging different amount from different students on the basis of the bargaining with the students or his/her parents. The AO has confirmed that sec 2(15) are not satisfied in the present case. The respondent trust is duly registered u/s 12A of the Act as charitable trust, registration has been granted by the CIT from 13.01.1995 (PB 103), and the same has not been withdrawn till date. So far as the application of sec 2(15) is concerned, it is submitted that as per proviso to sec 2(15), the applicability of this section is restricted to the entities pursuing any other objects of public utility implying that the institutions engaged in education/medical relief are not within the ambit of the above proviso. The CBDT Circular No.11/2008 dt: 19.12.2008 in para 2.1 clarifies that The newly inserted proviso to section 2(15) w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ial of exemption u/s 11 in the Hon ble Income Tax Settlement Commission order dt: 27.11.2015 (PB 104-133) and also acknowledgment of the fact that in para 8 to 8.3 at pages 117-118 that the registration u/s 12AA and notification under 10(23C)(vi) has been granted and the same has not been withdrawn. Withdrawal of exemption u/s 11 is a case of judicial in-discipline and against the principle of consistency. The reason being the lower authorities i.e. DCIT are not competent to revisit the issue of grant of exemption u/s 11 of the Act based on the registration u/s 12A granted by the higher authorities i.e. CIT. The Ld CIT(A) has rightly followed the circular No.11 of 2008 and proviso to sec 2(15) in para 4.1.4 at internal page 13 and the Hon ble ITAT order dt: 17.03.2016 in appellant s own case for assessment years including the AY under appeal to allow exemption u/s 11 of IT Act. He referred to para 4.1.5 at internal page 13-14. In the context of sec 11 of IT Act, the Hon ble Apex Court in case of CIT Vs. Andhra Pradesh State Road Trpt. Road Corpn. 159 ITR 1 (SC) have held that a trust or institution may run on commercial lines. If the dominant object is to carry out charitable activ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r is spent for purposes which are not charitable, exemption may be denied to the assessee trust or institution. No such converse finding has been given by the AO in this case. Respondent also draws support from Circular no.194/16- 17 II(AI) in which the question referred to board is; whether an educational institution existing solely for educational purpose but which shows some surplus at the end of the year is 5 eligible for exemption. The board had replied this question in the following manner: If the profit of the educational institution can be diverted for the personal use of the proprietor thereof, then the income of the educational institution will be subject to tax. However, there may be cases where the educational institutions may be owned by the trusts or societies to whom the provisions of section 11 may be applicable. Where all the objects of these trusts are educational, and the surplus, if any, from running the educational institution is used for educational purposes only, it can be held that the institution is existing for educational purposes and not for purposes of profit. However, if the surplus can be used for non-educational purposes, it cannot be said that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... income for AY 2007-08. The offer of additional income of ₹ 3 Crore has been considered by the co-ordinate Bench in ITAT order for AY 2007-08 in ITA No.1477/Del/2011 dt:17.03.2016 in para 8.4 therein and the Hon ble ITAT has approved the grant to exemption u/s 11 of IT Act as allowed by the Ld CIT(A). Although decision of the Settlement Commission is not for the AY 2007-08 and strictly not binding on authorities for the matters for AY 2007-08 but Ld CIT(A) has followed the above finding in other years but for the sake of consistency, the surplus of 22% is accepted by the Ld CIT(A). A Chart showing the calculation of exemption u/s 11 for the assessment year under appeal after taking into account the seized annexure A-21 (Back Page 114) shows that the ultimate income left after granting exemption u/s 11 is Nil. He therefore submitted that the issue of taxability of the above sum is also correctly decided by the learned CIT A. In the result he submitted that appellant prays that the reopening of the assessment proceeding is held to be invalid and even otherwise on the merits of the addition the issue is correctly decided by the learned CIT A. 31. We have carefully c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... been prepared. As per this working the total unaccounted receipts for the financial year 2006 07 has been worked to ₹ 196,497,500/ in the case of Maharaj educational trust. The list of Year wise and annexure wise summary of such unaccounted receipt of fee/donation received in cash, worked out on the basis of seized documents is reproduced as Under:- annexure/financial year 2006 07 A 58 21,00,000 A 59 19,75,000 A 60 74,51,500 A-61 2,70,61,000 A 62 13,79,50,000 A 63 1,39,50,000 A 64 60,10,000 Total 19,64,97,500 Dr P Mahalingam, in his statement recorded u/s 132 (4) of the IT Act, during the course of search on 27/6/2013 (which continued and concluded on 29.6.2013) admitted the fact in unambiguous terms that the receipts appearing in seized documents/registers were ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... filed petition for settlement of the tax issue dispute before the income tax settlement commission in case of the assessee, Santos trust for the assessment year 2008 09 to 2014 15, which was decided by the order dated 23/05/2014. Accordingly, in the assessee trust total disclosure for these assessment years was made of ₹ 33.87 crores whereas in the Santos trust it was ₹ 18 crores. Further for the impugned assessment year in case of the trustee Dr P Mahalingam the assessee also offered a sum of ₹ 3 crores which was assessed by order u/s 143 (3) of the act for assessment year 2007 08 at the total income of ₹ 30,942,840/ . 36. It is also important to note that assessee has recorded the total fee income of ₹36,31,73,074 the financial year 2006 07 relevant to the assessment year 2007 08. According to the objects of the trust, it is established for the sole purpose of providing education through medical, dental, paramedical in para dental colleges located at Chennai and at Ghaziabad. 37. The assessee raised an objection on 24/11/2014 on the issue of notice u/s 148 of the act, which was disposed of by the learned assessing officer by pass ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... serial number particulars amount in Rs. amount in Rs. Amount received during the year financial year 2006 07 as the reconciliation statement filed and examined 14,94,46,000 Less amount out of project work receipts transferred to fee account during the year in the books of accounts as disclosed in the income tax return 7,46,51,210 Less excess of receipt taken in settlement commission is opening balance for the assessment year 2008 09 60,19,364 Less Amount of project work receipt already added as income of the trust in assessment order passed u/s 143 (3) for the assessment year 2007 08 1,70,23,219 Balance of receipts 5,32,52,207 Less amount of expenses of the project work already added as incom ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... reduced a sum of ₹ 117,85,000 and found the balance fees of ₹ 178,482,000. He further noted that as sum of ₹ 74,651,210/ is already income included in the income and expenditure statement the amount of the balance sum required to be added is only ₹ 103,830,790/ . Thereafter he denied the exemption to the assessee u/s 11 of the act and made an addition of ₹ 103,830,709 to the returned income of the assessee of ₹ 108,098,671/ and determined the total income of the assessee has ₹ 211,929,461. The learned CIT A upheld the reopening of the assessment but has granted assessee the benefit of Section 11 and therefore the addition was deleted. 42. On the above set of the facts, we need to examine whether the reopening is valid or not and further if the reopening is valid, whether the addition has been made correctly by the learned assessing officer or not. 43. The first argument of the learned authorised representative is that the present assessment year i.e. assessment year 2007 08 could not have been reopened by invoking the provisions of Section 147 of the income tax act as the search in the case of the assessee took place on 27/6 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... notice for reopening of assessment proceedings under section 151 of the Act that the Principal Chief Commissioner or Chief Commissioner or Principal Commissioner or Commissioner is satisfied, on the reasons recorded by the Assessing Officer, that it is a fit case for issuance of such notice. 41. In the recorded reasons also, it has been noted that necessary sanction to issue notice under section 148 of the Act is being obtained separately from the Principal Commissioner of Income-tax, Delhi-03, New Delhi as per the provisions of section 151 of the Act . In its reply on this issue, in the order dated September 25, 2019 dismissing objections of the petitioners to the notice under section 148, it has been pointed out that the approval of the competent authority was obtained vide note sheet entries dated March 31, 2019 and the same was enclosed along with the order. However, the same has not been annexed to the present petitions. It has been argued that obtaining approval of the Additional Commissioner of Income-tax is not provided for under section 151 and therefore, the same is not justified. However, in the present case, approval/sanction has been obtained from both, the Addl. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was also challenged before the honourable Delhi High Court in case of Synfonia Trade links Pvt Ltd in 435 ITR 642 (Del) wherein the honourable High Court after considering the decision of the Experion Developers has held as Under:- 10.4. The reliance placed by Mr. Singh on paragraphs 40 to 43 of the judgment of a Division Bench of this court in Experion Developers Pvt. Ltd. v. Asst. CIT [2020] 422 ITR 355 (Delhi) in support of his submissions that the order granting sanction for initiation of proceedings under section 147 was valid is misconceived as a careful perusal of paragraph 42 of the said judgment would show that the learned judges were of the view that there was no requirement to provide elaborate reasoning while granting approval if the Principal Commissioner was satisfied with the reasons recorded by the Assessing Officer. In that case, while according sanction, the Principal Commissioner had at least paid lip service to the provision by noting I am satisfied that it is a fit case for notice under section 148 . In the instant case, respondent No. 2, i. e., the Principal Commissioner, has not even made such an endorsement. This apart, the endorsement of the Assistan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rein. In addition, for this reason the reopening of the assessment is invalid as incorrect facts are recorded in the performa for seeking approval. We have carefully considered this argument, find that the Performa for seeking an approval is an internal mechanism of the income tax department, and are not a statutory form. Despite this, it is correct that incorrect recording of the facts therein the approval granted by the higher authority is invalid. There cannot be any doubt on this issue. The issues have also been decided by the various coordinate benches where one of us is an author laying the above principle. Nonetheless, on the facts of this case it is required to be seen that whether the learned assessing officer should have recorded the income finally assessed after the order of the coordinate bench or he has correctly recorded the income originally assessed. We find that income originally assessed is ₹ 150,347,006 according to the order passed u/s 143 (3) of the act. There is no requirement to mention there the income pursuant to the orders of the appellate authorities subsequently. In view of this objection of the learned authorised representative does not deserve to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ficer in reason recorded is incorrect, learned AO immediately approached learned DDIT (investigation) stating that there are inconsistencies in the sum recorded as escaped income for reopening the assessment. The learned AO sent the DDIT the complete annexure, reconciliation of the assessee, as well as the printout of the hard disk. The learned DDIT did not come out on these annexure and informed the learned AO to work out escaped income on his own. This wool instance at the time of assessment came to light that the learned assessing officer has recorded the reasons on what was stated by investigation wing and did not look at several annexure. Otherwise, there would not have been an occasion to write to the investigation wing at the time of assessment. Had learned AO applied his mind at time of recording of the reasons such a situation not have arisen. This shows that the learned assessing officer did not apply his mind to the information received from investigation wing. The learned AO also did not disclose in the reasons recorded that he has received an information from the investigation wing on account of search and seizure operation u/s 132 of the income tax act carried out on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... presentative could show us that annexure A 58 to A 61 relates to assessment year 2007 08. This also shows that the learned assessing officer is failed to apply his mind even to the seized material to determine the escaped income. 52. The learned assessing officer in paragraph number 3 after recording the table of various annexures categorically stated that Dr P Mahalingam in his statement recorded u/s 132 (4) of the act is admitted that this income belongs to the assessee. When the statement of Mr. Mahalingam which is placed at page number 21 45 of the paper book wherein in answer to question number 52 he declared a sum of ₹ 195,714,500 in his own hands and not in the hence of any of the trust. Therefore, the statement of the income is contrary to the reasons recorded by the learned assessing officer. 53. Further in answer to question number 64 Mr. Mahalingam were shown annexure A 44 to annexure A 64. In answer to this question, he replied that these belong to institutions run by Santosh trust. In question number 65, Mr. Mahalingam also stated that these fees are recorded in the regular books of accounts of the trust i.e. Santosh trust. Despite this fact, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e as per 27 of the ITAT rules is allowed. 56. Even otherwise on the merits of the case, it respect to the allowing the exemption u/s 11 of the income tax act we find that the assessee is registered u/s 12 A of the act as well as u/s 10 (23C) (IV) of the act also. This registration certificate is still valid and not withdrawn. Assessee is also held to wholly exist for the purpose of education. The addition of the donation is not been made in the hence of the assessee u/s 68 of the income tax act but as income of the charitable trust denying the exemption u/s 11 of the act. We find that there is no reason to deny assessee benefit of Section 11 of the act when the assessee is registered u/s 12 A as well as u/s 10 (23C)(iv) of the act. It is the case of the revenue that assessee is not utilizing the sum so received towards educational activities. In view of this, we do not find any reason that assessee should not be allowed exemption u/s 11 is and 12 of the income tax act as assessee is doing a charitable activity. Therefore we dismiss ground number 2 and 3 of the appeal of the learned assessing officer and uphold the order of the learned CIT A that extent. 57. Coming to gr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... expenditure of ₹ 2 77,57,629/ (including anonymous donation). However, as noted earlier, a sum of ₹ 3 crores has already been offered to tax by Shri P Mahalingam, and it has been held by the honourable ITAT that income of the appellant can be allowed set-off of ₹ 3 crores. This disclosure being more than the undisclosed excess (excluding anonymous donation), there is no net taxable income in the appellant s hands except a sum of ₹ 2,150,000 which is to be brought to tax separately u/s 115BBC. 58. The learned departmental representative could not show us any infirmity in the order of the learned CIT A. We also find that the learned CIT A has adopted the findings of the settlement commission in case of the assessee for deriving at the set-off of the expenditure. There is no reason to hold that that the reason given by the settlement commission which is adopted by the learned CIT A is not a plausible way of computing excess of income over the expenditure of the assessee. The learned CIT A correct held that a sum of ₹ 2 77,57,629/ after applying the ratio laid down by the settlement commission is an unaccounted excess of income over the ex ..... X X X X Extracts X X X X X X X X Extracts X X X X
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