TaxTMI 
TaxTMI 
2016 (4) TMI 914
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....ence they are heard together and disposed 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 The registration u/s 12A of the Act continues and has not been withdrawn till date.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 ....
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....vouchers have not been produced as discussed. earlier in the order. Therefore 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 f....
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.... Rs.3,37,12,921. 3.1. Aggrieved the assessee carried the matter in appeal. The First Appellate Authority had granted 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....
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...., perusal of material on record, orders of lower authorities, case laws cited, we hold as follows. 5. After hearing rival contentions, we find that, the addition made by 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 I....
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....ecords, documents and books of accounts of the Trust were destroyed and washed away during tsunami. 5.7. In our view there is no ground made out by the A.O. for denying benefit of exemption u/s 11 to the assessee for this A.Y. Admittedly the objects of the 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,....
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....ution run by the assessee was generating surplus out of their gross receipts year after year. On a Writ Petition held that "the rejection of the application is solely on the ground that there has been some profit was not justified." 6.6. As already stated, the A.O. has allowed exemption u/s 11 of the 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 i....
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.... with reference to the said seized material in his individual status as his income. The case of the assessee is that, the income relatable to these particular seized material has been disclosed by the Chairman of the Trust Dr.P.Mahalingam, as his income and that a perusal of the seized material on facts cannot lead to a conclusion that the income pertains to the 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 ....
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....to the assessment year 2007-08 for which I shall be paying taxes as per law this will be my additional income which will be over and above the normal returned income declared approx. 6 lakhs. Since I have totally co-operated with the Department in the best positive manner no prosecution and penalty proceedings should be initiated against me. Further I may be allow to credit this amount 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 questi....