AI OCR 
TaxTMI 
TaxTMI 
TaxTMI 
2019 (10) TMI 976
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....utes in the name of Dev Bhoomi Group of Institutes at Dehradun and Saharanpur. The society has also been approved for exemption under clause 10(23C)(vi) of the I.T. Act, 1961 by the CCIT, Dehradun vide order F.No. CCIT/DDN/5/10(23C)(vi) and (via) dated 18.03.2008 w.e.f. 1.4.2007. A search & seizure operation was conducted u/s 132 of the I.T. Act, 1961 on the Dev Bhoomi Institute of Technology, Uttrakhand Uthan Samiti and other group concerns on 26.04.2012. Vide centralization order u/s 127 of the Income Tax Act, 1961 dated 16.01.2013 of Commissioner of Income Tax, Dehradun, the case of the above assessee has been centralized with Central Circle, Dehradun falling within the administrative control of the DGIT(Inv.), Lucknow. Certain evidences were gathered during the course of search & seizure, post search enquiries by the investigation wing and subsequent enquiries by the Assessing Officer during the course of assessment proceedings. As a result of enquiry, certain facts emerged which indicated that the activities of the assessee society was not in accordance with conditions for allowance of exemption u/s.10(23C)(vi) of the Income Tax Act, 1961 and it has violated the provision cont....
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....this account during the F.Y. 2008-09 to 2010-11 was Rs. 2.99 crore and Shri Dandriyal was showing income from salary of Rs. 1 lakh in the return filed u/s 139 for earlier years upto assessment year 2011-12. However, after the search, he has disclosed business income from sale of computers in two concerns, namely, M/s Fortech Computer System and M/s Cad Arena who have shown to have started business in F.Y. 2008-09. He noted that in the case of M/s Cad Arena, whose proprietor is Shri Sunil Dandriyal, the bank account was opened on 25th September, 2010 which remained operative till 12th February, 2011 and there were deposits to the tune of Rs. 17,86,174/-. Similarly, there was another concern in the name of Shri Sunil Dandriyal, namely, M/s Nice Home Builders which is the proprietor concern of Shri Sunil Dandriyal wherein the total receipts and withdrawals during the F.Y. 2010-11 were to the tune of Rs. 58,50,000/-. He observed that M/s Drishti Associates was the proprietorship concern of Smt. Mamta Dandriyal, w/o Shri Sunil Dandriyal wherein receipts and withdrawals to the tune of Rs. 58 lakhs has taken place during F.Y. 2010-11 and Rs. 52,60,000/- during F.Y. 2011-12. Smt. Mamta Da....
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.... No books of account were found in cases of concerns where search was carried out. Even in other cases no books of accounts produced even before the AO. iv) These concerns were having only one client that is Uttarkhand Uthan Samiti. These were not supplying anything to any other person. In many case proprietors did not have any business experience. v) The amounts credited in the bank accounts of the fictitious concerns are from the term loans and OD accounts of Uttarakhand Uthan Samiti and bank account of DBIT college for expenditure booked against the bogus purchases shown from these concerns. The repayments of these term loan and OD accounts have been made from funds of the society through account number 1175009301046063 with PNB, Kaulagarh road Dehradun of society and account number 1175002100008302 of DBIT college. Payments have been made through cheques, and subsequently cash has been immediately withdrawn from the bank accounts of these fictitious concerns by issuing bearer cheques which have been examined by the Assessing Officer. The cash was received mainly by four persons Shri Sunil Dandriyal, Shri Sushil Kumar, Shri Atul Dixit and Shri Neeraj Tyagi, who are the trust....
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....rsed to the society in lieu of 800 laptops worth Rs. 299.52 lakhs purchased for distributing to the students in favour of Uttrakhand Uthan Samiti. This loan amount was disbursed through account No. 117500IC00000378. The bank provided the copy of sanction letter dt. 25.3.2009, copy of invoice No. 1984 dated 16.10.2008 of M/s Fortech Computer Systems Pvt. Ltd. (2008-09), G-10, Sidhartha Building, 96-Nehru Place, New Delhi and a copy of letter dated 14.11.2008 of Uttarakhand Uthan Samiti addressed to Branch Manager, PNB, Kaulagarh Road, Dehradun stating that the society has received the laptop in 20.10.2008 via Bill No. 1984 dated 16.10.2008 and the payment paid to the supplier by the society from Society's reserved fund. From the details furnished by the bank, it is seen that the bank has sanctioned loan of Rs. 224.64 lacs to the society to be reimbursed to the society in lieu of 800 laptops worth Rs. 299.52 lakhs purchased for distributing to the students on the basis of two documents submitted by the society namely Invoice No. 1984 dated 16.10.2008 of M/s Fortech Computer Systems Pvt. Ltd., 96 Nehru Place, Delhi and the letter dt. 14.11.2008 written by Chairman, Uttarakhand Uthan S....
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.... only documents submitted by M/s Uttrakhand Uthan Samiti to the bank in support of the purchase of 950 Business Note Book (computers) and the end use of the loan sanctioned. After sanctioning and disbursing the said Term Loan, the bank has not obtained the purchase bill from the society in support of purchase of Laptop/computers for which the loan was sanctioned. Moreover, while sanctioning the loan vide letter dt. 05.11.2009, the bank has waived the condition of insurance of laptops/ Business Note Books. Moreover, no Inspection report in respect of End Use of the Term loan is available with the bank as stated in letter dt. 27.7.2012 of Chief Manager, PNB, Avas Vikas branch, Saharanpur .Therefore, as already confirmed by the firm M/s Strategic marketing, bogus expenditure has been debited in their names in books of society. (c) A further term loan of Rs. 262 lakhs was sanctioned by the bank PNB NAV, Saharanpur to the society Uttrakhand Uthan Samit, Dehradun vide letter dated 07.09.2010. This loan was sanctioned for purchase of 1050 laptops worth Rs. 393.12 lakh to be distributed to the students of the institute. This loan amount was disbursed through account No. 117500IC00000448.....
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.... and fabricated one. In view of the reply of HPISPL only 251 laptop were purchased by Devbhoomi Institute of Technology and no computer/laptops were supplied by them against the purchase order No. DBIT/Order/09-10/198 dated 9.8.2010 of Uttrakhand Uthan Samiti. These three documents namely Proforma Invoice No. J9AD109932) of Hewlett-Packard India Sales Pvt. Ltd., the alleged letter by Naman Patil (Manager Sales-North India) of HPISPL, and purchase order No. DBIT/Order/09-10/198 dated 9.8.2010 of Uttrakhand Uthan Samiti are the only documents made available by the bank in support of purchase of 1050 laptops and in support of the end use of the term loan of Rs. 262 lakh disbursed to the society. From the above facts, it is established that Uttrakhand Uthan Samiti has not purchased any laptop/computers (HP Compaq 420 Business class Notebook (XL189PA#AC) against the Term loan of Rs. 262 lakh sanctioned by the bank. (d) The society allegedly made purchase for building materials and construction material from the above mentioned fictious concerns for construction of college building and saraswati hostel:- s.no Name of party Amount of purchases 1 Negi builders and suppliers 2....
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....ed by Univeral Iron Store, Dhamala Wala, Dehradun in the name Dev Bhoomi Institute of Technology, Saharanpur have been prepared by Shri Sanjay Bansal. In fact, no such bills were issued by M/s Universal Iron Store, Dhamawala Dehradun. The Society has thus, claimed bogus expenses of Rs. 2,30,100/- and Rs., 1,38,597/- through these two bogus bills. (b) Bills of Shree Jee Enterprises Pro: Anuj Rana, Lower Tunwala Dehradun for supply of bricks : Shri Anuj Rana, Propr. Shree Jee Enterpries, Lower Tunwala, Dehradun in his statement denied of being engaged in the business of supply of bricks. However, he admitted of having supplied 48,000 bricks (four trucks) to Shri Sanjay Bansal for his college at Dehradun directly from the brick kiln on commission basis. Except supplying 48000 bricks to Shri Sanjay Bansal at Dehradun, he denied of having supplied any bricks to Dev Bhoomi Institute Dabki Road, Saharanpur. Examination of bills submitted by Shri Sanjay Bansal revealed that he has submitted following bills allegedly issued by Shree Jee Enterprises Prop. Anuj Rana. Bill No. 325 dt. 12.3.2011 for Rs. 2,40,480/- Bill No. 325 dt. 28.2.2011 for Rs. 2,31,120/- Bill No. 325 dt. 21.2.2....
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....Sanjay Bansal to the bank in support of purchase of Yamuna Dust. As already discussed that bank account opened in the name of Pawan Kumar and co. was bogus and therefore expenditure debited to this account is bogus. (e) The bills of following parties submitted to the PNB bank had been forged. The bills of these parties submitted to bank show that the bills issued by these parties against the supply made to DBIT/UUS Dehradun have been tempered with and fabricated showing inflated amount of bill and also showing address of DBIT Saharanpur in place of DBIT/UUS, Dehradun.: - M/s United Enterprises, 55 Park Road, Dehradun - Pradeep Electricals, 84 Peepal Mandi, Dehradun - Chopra Plywood Co., Devki Complex MotiBazar, Dehradun - M/s Shri Ganesh Trading Co. 36, Arhat Bazar, Saharanpur Chowk, Dehradun, -M/s Shree Ganesh Traders, behind subzi Mandi, near Nitco Transport Co., Niranjanpur, Dehradun, - National Hardware Agencies, 2 Malviya Road, Dehradun, - Kukreti Timbers, 13/1 Saharanpur Road, Dehradun, - M/s Super Paint and Hardware Store, 6 Cross Road, Dehradun, - Shree Ceements Ltd., - Shree grinding Unit, Laksar, - M/s Uttranchal Iron & Ispat Pvt. Ltd., Muzaffamagar ....
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....s 10(23C)(vi) of the IT Act to the assessee trust from assessment year 2007-08 onwards. The relevant observations of DGIT (Inv.), vide para 14 of his order read as under:- "14. A show cause notice was issued to the assessee vide letter dated 22/11/2013. Thereafter opportunities were further provided vide letters dated 03.01.2014 & 31.01.2014 & 08.07.2014, but the assessee has failed to avail any of the four opportunities given to him and has simply requested either to adjourn the case or withdraw the proceedings by sending letters. On none of the occasion it presented itself through Authorized Representative before the undersigned. Even no written submission on issues raised was filed. Hence the only logical conclusion is that he has nothing to say in this regard. At this point it is also important to consider that the above analysis is based on the documents, evidences, information found during the course of a search and seizure operation and from part of Panchnama drawn in the case of the assessee. In terms of section 292C of the IT Act, these documents are presumed to be belonging to the assessee and that the contents of such books of account and other documents are true. The ....
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....se and in law the Director General of Income Tax (Investigation) has erred in passing ex-parte i.e. without giving any proper and reasonable opportunity of presenting its case and of being heard, which is in violation of the principles of natural justice. Additional Ground 6 - That the documents filed or available on record have not been properly considered. The order passed is not justified in view of the documents available on record." 9. Referring to the decision of the Hon'ble Supreme Court in the case of NTPC Ltd. v.CIT, reported in 229 ITR 383, the ld. counsel for the assessee submitted that all these grounds go to the root of the matter and the relevant facts are already on record and no new facts are required to be investigated. He accordingly submitted that the additional ground raised by the assessee should be admitted. 10. After hearing both the sides and considering the fact that all relevant facts are already on record and no new facts are required to be investigated, the additional grounds raised by the assessee are admitted for adjudication. 11. The ld. counsel for the assessee referred to copy of show cause notice issued by the DGIT (Inv.) dated 22nd Novemb....
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....action of the competent authority. Unless such satisfaction is discernible from the show cause notice, the assessee could not have objected to the show cause notice. He submitted that the assessee has to be put on notice after the satisfaction of the competent authority. Since it is not discernible from the notice regarding the satisfaction of the competent authority, therefore, the notice is invalid and, therefore, the subsequent order is also invalid. 14. Without prejudice to the above, the ld. counsel for the assessee submitted that the copy of the order has been signed by the Joint Director of Income-tax and not signed by the Director General of Income-tax (Inv.). Therefore, this notice itself is not valid. Referring to the paper book filed by the ld. DR, he submitted that the proposal was received by the DGIT, Central Circle from the DCIT, Central, Dehradun for cancellation of exemption granted u/s 10(23C)(vi) of the IT Act. Therefore, the due process of law has not been followed and the letter was not given by the Chief Commissioner of Dehradun who had granted the approval to the assessee and, therefore, the requirement of law has not been fulfilled. The ld. counsel for the ....
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....2018 in ITA No. 1118/JP/2016 dated 24.07.2018 Passed by ITAT, Jaipur Bench, Jaipur; 8. CIT Vs. Modern School Society, D.B.ITA No. 172/2018 dated 31.07.2018 passed by Hon'ble High Court of Judicature for Rajasthan Bench at Jaipur; 9. CIT Vs. Modern School Society SLP(c) dismissal dated 11.02.2019 [SLP (c) Diary No. 4190/2019]; 10. Orissa Trust of Technical Education Vs. CCIT, [2009] 178 Taxman 363 (Orissa); 11. Patel Narshi Thakershi and Ors. Vs. Shri Pradyumansinghji Arjun singhji, (1971) 3 SCC 844; 12. CIT Vs. Rajesh Kumar Pandey, [2012] 25 taxmann.com 242 (All.); 13. M/s. Assam Bengal Carriers Kolkata Vs. CIT, ITA No. 706/Kol/2013 dated 15.01.2016 Passed by ITAT, 'D' Bench, Kolkata; 14. ArunKanti Samanta Vs. CIT, ITA No. 1516/Kol/2014 dated 20.02.2015 Passed by ITAT, 'A' Bench, Kolkata; 15. Sona Exports Vs. The Director of Mines & Geology and Ors, W.P.No. 1183/1998 dated 08.09.1998 Passed by Hon'ble High Court of Andhra Pradesh at Hyderabad. 16. Nataraj Theatre Vs. Govt, of Andhra Pradesh, WP No. 21691/1995 dated 26.08.1999 Passed by Hon'ble High Court of Andhra Pradesh at Hyderabad; 17. T. Varghese George Vs. Kora K. George and Ors, (2012) 1 SCC 369; 18. We....
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....tion fees from students for admission to medical colleges, the impugned order passed by the Commissioner (E) cancelling the registration granted to assessee u/s 12AA as well as withdrawing exemption granted to it u/s 10(23C)(vi) and u/s 10(23C)(via) of the IT Act was justified. He submitted that in the case of the assessee also perusal of the order dated 26th March, 2015 clearly and sufficiently reveals that there is enough material brought on record by the DGIT (Inv.) that the assessee was not fulfilling the conditions laid down in section 10(23C)(vi) of the IT Act w.e.f. assessment year 2008-09 onwards. Accordingly, the DGIT (Inv.) has rightly cancelled the exemption to the assessee w.e.f. assessment year 2008-09 onwards. 16.1 So far as the merit of the case is concerned, he submitted that the numerous seized documents extensively discussed by the DGIT (Inv.) in his order dated 26th March, 2015 clearly establishes that the society was not established for the purpose of education and it was not being run as per its stated objects. Various forged documents, manipulation of the bank account and the diversion of funds for personal purposes proved beyond doubt that the trustees were ....
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....ated opportunities granted, the assessee did not file any justification for the irregularities, bogus transaction, etc., nor furnished any evidence which may suggest otherwise. He, therefore, cancelled the approval granted earlier u/s 10(23C)(vi) of the IT Act to the assessee w.e.f. assessment year 2007-08 onwards. The first objection of the ld. counsel for the assessee is that before initiating the proceedings u/s 10(23C)(vi) of the IT Act r.w. the 13th proviso to the said section, only the competent authority i.e., the prescribed authority, can only issue a show cause notice giving an opportunity to the assessee to reply and explain its case. According to him, since the approval was granted earlier by the CCIT, Dehradun, vide his order dated 18th March, 2008, therefore, he is the competent authority to cancel the approval granted earlier and, therefore, DGIT (Inv.) has no authority to issue the show cause notice and, thereafter cancel the registration. 18.1 We do not find any merit in the above argument of the ld. counsel for the assessee in view of the Notification No.20/2015 dated 5th March, 2015 wherein clause (viii) of the said Notification reads as under:- "(viii) for c....