TaxTMI 
TaxTMI 
2024 (2) TMI 1558
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....e Tax, Central Range, Bangalore erred in cancelling the registration granted u/s 12AB of the Income Tax Act, 1961 on flimsy grounds without scrutinizing the accounts of the Appellant Trust where there was no diversion of funds other than for the objective of the Trust. 3. On the fact and circumstances of case, under the provisions of law, The Principal Commissioner of Income Tax, Central Range, Bangalore erred in cancelling the registration granted u/s 12AB of the Income Tax Act, 1961 on suspicion and surmises that the payment made by the Appellant Trust for and on behalf of the Trustees are amounting to diversion of funds, but in fact, the said payments were made by debiting the trustees account towards the repayment of loan advanced by the trustee's during prior periods. 4. On the fact and circumstances of case, under the provisions of law, The Principal Commissioner of Income Tax, Central Range, Bangalore erred in cancelling the registration granted u/s 12AB of the Income Tax Act, 1961 by alleging that the Appellant Trust collected capitation fees in cash and not recorded in the books of the Trust as against the fact that the corpus donation was collected f....
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....any other grounds at the time of the hearing, 1.2 Further, the assessee has raised following additions grounds along with petition for admission of additional grounds: 10. On the fact and circumstances of the case, under the provisions of law, The Principal Commissioner of Income Tax, Central Range, Bangalore erred in passing the order u/s 12AB(4)(ii) of the Income Tax Act, 1961 for the A.Y 2021-22 for cancelling the registration granted u/s 12AA/12AB of the Income Tax Act, 1961 by ignoring the position of law that the provisions of Sec. 12AB(4)(ii) of the Income Tax Act, 1961 was introduced by the Finance Act, 2022 w.e.f 01/04/2022. Therefore, not applicable for the A.Y 2021-22 11. On the fact and circumstances of the case, under the provisions of law, The Principal Commissioner of Income Tax, Central Range, Bangalore erred in ignoring the fact that there has been no case that the activity of the Trust/Institution were no genuine and also, it was not proved that the activity was not being carried on in accordance with the objects of the Trust/Institution and therefore the circumstances contemplated u/s 12AB(4) of the Income Tax Act, 1961 were not satisfied, ev....
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....volve legal issues in passing the order by ld. PCIT u/s 12AB(4)(ii) of the Act and does not involve any investigation of facts otherwise on record and he submitted that these additional grounds may be admitted and adjudicated to render substantial justice. He also placed reliance on the judgement of Hon'ble Supreme Court in the case of NTPC Vs. CIT (229 ITR 383). 1.3 We have heard both the parties on admission of additional grounds. In our opinion, all the facts are already on record and there is no necessity of investigation of any fresh facts for the purpose of adjudication of above additional grounds. Accordingly, by placing reliance on the judgement of Hon'ble Supreme Court in the case of NTPC Vs. CIT 229 ITR 383 (SC), we are inclined to admit these additional grounds for the purpose of adjudication as there was no investigation of any fresh facts otherwise on record and the action of the assessee is bona fide. 2. Facts of the issue are that the assessee is a Trust based in Bengaluru, with the stated objectives to open, establish, construct and maintain school, college and other educational institutions, to impart education in arts, crafts, science and vocational/professi....
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....ed on the file and the records were returned back to the AO by the ld. PCIT. In light of the same, the explanations furnished by the assessee were carefully considered by ld. PCIT. Exercise of blocking the merit seats and allowing to lapse; 2.6 Ld. PCIT observed that on detailed analysis of the students who surrendered their seats after Mop Up Round in NEFT, KEA counselling 2020 in Akash Institute of Medical Sciences and Research Centre that majority of these candidates belong to one state viz Rajasthan. These students with high AIR in NEET were allotted Merit seats in Akash Medical College in All India Quota and presumably in a Government Medical college in Rajasthan in state quota. Even after that they chose to block seat in Akash Medical colleges by paying money, only to surrender the seat later on: after the Mop Up round. The vacancies (referred as Stray vacancies), were then filled by the Management of college at a higher fees and capitation fees. (Management fees). Typically, the candidates admitted in management seats had low marks and their AIR were higher than 2 lacs (2,00,000) whereas, candidate who got the AIR of merit seats were below 20,000. The rank wise details....
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....e, the assessee has not been able to deny the transactions, however it has just offered an unconvincing and feeble argument that the money was transferred from Shri K. Muniraju to account of Shri Rahul Kumar for purchase of property. The argument, its logic so flawed that, the assessee could not even substantiate it with a modicum of relevant details or verifiable evidences. Even otherwise this specious contention advanced by assesses doesn't explain why the said Rahul Kumar purchased Demand Drafts in favour of the ED of KEA to block the seat of Keshav Saini in the Medical College run by the Assessee. Hence, the ld. PCIT observed that the explanation of the Trustee deserves to be rejected. 2.11 The above contrived and dishonest manipulation to block seats is not only repugnant to charitable purposes for which the assessee is registered but it is also an affront to noble objective of ending the evil of capitation fees and providing opportunities to deserving meritorious students of poor and middle class. This lofty and humane intention was given effect to by the Hon'ble Supreme Court in-its Landmark decision dated 11th April 2016 and subsequent decisions. The above activities....
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....ver to 'Madam'. Perusal of top portion of page shows that on previous day the net cash balance has been handed over to 'Chairman'. The chairman and managing Trustees have explained the noting in Q. No. 16 and 15 of their statements dated 17/02/2021. All such pages of seized materials above indicating such receipts of capitation fees have been examined, collated and the total cash fees collected for each financial year is compiled by the ld. PCIT as under: - Admissions & confirmations during examination on oath 2.15. During the search a statement on oath was recorded by the ld. PCIT on 17/02/2021 of Smt. M Pushpa wherein she has confirmed that: (i) She is Trustee and chairperson of assessee (trust) and she derives income from the schools & institutions run by assessee trust (Q.5) (ii) That her husband Shri Muniraju Kempanna is Managing Trustee and Secretary. Elder son Shri Amar Gowda looks after day-to-day activities of the Akash Hospital & Medical College and younger son, Shri Akash Gowda works as construction supervisor for the assessee (Q.6) (iii) Shri Prabhakar Ramdas is CFO of the assessee and he is aware of all the....
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....n note book maintained by employee Sri Anand Kumar SJ, wherein cash fees received from students are mentioned and Shri K Muniraju confirmed the note book contains capitation fees received from students and payments made to various persons in cash. He further confirmed that net of the receipt and payments in cash is received by him (Q.15). Smt. M Pushpa has also stated the same independently in her statement dt. 17/02/2021. 2.21 Thereafter, during the post search proceedings by ld. PCIT, the financial year wise details of capitation fees received from students, were collated and compiled from the seized materials as discussed in above paragraph, were shown to Shri K Muniraju on 17.09.21 during his examination on oath. Shri K Muniraju on being confronted with these incriminating evidences and details, admitted and confirmed that these are the capitation fees received from students and that they are not accounted for in books of accounts. The financial year wise details of the unaccounted capitation fees admitted to have been so received in cash for 3 years total up to Rs. 29.65 crores as under are as under: (ref Q 12 to 16 of statement dated 17.9.2021) Analysis of the asse....
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....e of commencement of this Act. Since the assessee Trust is established on 04.06.2009 i.e., after the commencement of the said Act, thus the exemption would not apply to the assessee. Further, the Section 5 of the KEIFCF Act regulates fees as follows: "5. Regulation of fees, etc.- (1) It shall be competent for the Government, by notification, to regulate the tuition fee or any other fee or deposit or other amount that may be received or collected by any educational institution or class of such institutions in respect of any or all class or classes of students. (2) No educational institution shall collect any fees or amount or accept deposits in excess of the amounts notified under sub-section (I) or permitted under the proviso to section 3, (3) Every educational institution shall issue an official receipt for the fee or capitation fee or deposits or other amount collected by it. (4) All monies received by any educational institution by way of fee or capitation fee or deposits or other amount shall be deposited in the account of the institution, in any Scheduled Bank and shall be applied and expended for the improvement of the institution ....
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.... stand. If the assessee believed it was exempt from application of Sec 3 of the KEIPCF Act, then it would have collected the said capitation fees through banking channels or at least accounted the same in books of account even when received in cash. The very intention and conduct of the assessee to keep these collections but of books of account shows that it knew that collecting capitation fees is violation of sec 3 of the KEIPCF Act 1984, Moreover, by receiving in cash and not accounting the same in books of accounts, the assessee has also violated sec 5 of the KEIPCF Act, 1984. He observed that the explanation and argument taken by the assessee/Trustees in the current proceedings before him was just a gratuitous, self-serving after thought. 2.28 Before ld. PCIT, the assessee has relied upon decisions of ITAT Chennai & Hyderabad Benches, however he observed that they would not be of use to assessee in view of the judgement of Hon'ble High Court of Madras in the case of CIT V/s M/s MAC Public Charitable Trust, where in the Hon'ble High Court held that the capitation fee received cannot be held as application as per provisions of section 11. The Hon'ble Court further directed....
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....nted funds of the assessee (Trust) had been applied towards personal benefits of the Trustees as discussed above. Under the facts and circumstances, the ld. PCIT observed that, it is evident that specified violations defined in clause (a), (e) and (f) in Explanation to Sec 12AB (4) of the Act have occurred. Application of accounted funds other than for purposes of Trust: 2.32 The ld. PCIT further observed that the examination of seized evidences and books of accounts indicate the following application of accounted funds of assessee for purposes other than objects the assessee (Trust). (Diversion of funds). 2.32.1 Examination of accounts of assessee and seized evidences A/AIMSC/132-13 revealed that payments have been made towards various personal expenses of family members like EMI payments of car owned by Sri K. Muniraju, Chit fund contribution on behalf of Sri Muniraju & family members, College fees of Sri Amar Gowda for higher education in Singapore, transfer of funds to bank account of Sri Muniraju, repayment of personal car loan, purchase of jewellery, purchase of property in name of Chairperson Smt. M Pushpa etc. All such payments appearing in TALLY ledger accounts A/....
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....idences gathered in search show that funds of assessee have been diverted to commercial entities with profit motive belonging to Trustees and family members namely (1) Nibha Projects P. Ltd (2) Aakash Enterprises owned by Shri K Muniraju & Srnt. M Pushpa. From examination of books of account of assessee, it was observed that funds have been diverted as under: (1) Nibha Projects P. Ltd 2.36 From the above, he observed that Rs. 40.76 lacs have been transferred to Nibha Projects Ltd and Rs 31.42 lacs to Akash Enterprises. Neither during the post search proceedings nor during the current proceedings has the assessee provided any explanation or justifiable reason for these transfers of funds to the extent of Rs. 72.18 lacs to the commercial entities owned by Trustees or their family members. Accordingly, the ld. PCIT has cancelled the registration granted to the assessee u/s 12AA/12AB of the Act w.e.f previous year 2020-21 relevant to assessment year 2021-22 and for all subsequent assessment years. Against this assessee is in appeal before us. 3. The ld. A.R. submitted that in response to the said show cause notice, the Assessee Trust filed its reply on 10/04/20....
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....n existence which was introduced by Finance Act 2021 w.e.f 01.04.2021. "12AB(4) Where a registration of a trust or an institution has been granted under clause (a) or clause (b) of sub-section (1) and subsequently, the Principal Commissioner or Commissioner is satisfied that the activities of such trust or institution are not genuine or are not being carried out in accordance with the objects of the trust or institution, as the case may be, he shall pass an order in writing cancelling the registration of such trust or institution after affording a reasonable opportunity of being heard." 3.3 He submitted that the assessment involved in appeal is A.Y. 2021-22. The law relating to cancellation of registration has under gone changes in as much as the said provisions were different for the A.Y. 2020-21, 2021-22 and again for A.Y. 2022-23. The Pr. Commissioner of Income Tax (Central) has invoked the provisions which were applicable from A.Y. 2022-23 for a default alleged to have been occurred in A.Y. 2021-22. He submitted that prima-facie invoking the provisions which are applicable for the A.Y. 2022-23 and cancel registration for the A.Y. 2021-22 is bad in law. Cancellation ....
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....eply dated 07/04/2023 at Page No. 5 has in detail explained the procedure and mandate of the Karnataka Examinations Authority (KEA) in respect of conduct of centralized counselling in MBBS admission. 3.8 He submitted that the Principal Commissioner of Income Tax, Central Range, Bangalore at Para 3.1.2 alleged that the management have used the Trust money for payment to the agent who orchestrated the blocking of merit seats, but in fact, the Trust money was not used for the payment to the agent and also not claimed as application of income for object of the Trust. The payment made to Mr. Rahul Kumar was on behalf of the Trustee for the Trustee's personal liability. In the books of the Assessee Trust, the payment is debited to the Trustee's account. Hence, he submitted that the Principal Commissioner of Income Tax, Central Range, Bangalore allegation that Trust fund was utilized for payment to the students and agent who are blocking the merit seat and releasing the said merit seat after the mop-up round is against the fact and based on suspicion and surmises. 3.9 He submitted that at Para 3.2 of the order, the Principal Commissioner of Income Tax alleged that the A....
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....ve been diverted to commercial entities of Mr. K Muniraju and Smt. M Pushpa which are a. Nibha Projects Pvt Ltd. b. Akash Enterprises. Here also, the Assessing Officer as well as the ld. PCIT fails to appreciate and verify the accounting treatment made in the books of the Assessee Trust. The fund invested in the above-mentioned entities were made or done on behalf of Mr. K Muniraju and Smt. M Pushpa by debiting their personal a/c as re-payment of loan. Hence, he submitted that the allegations of the ld. PCIT and the Assessing Officer, the ld. DCIT, Central Circle - 2(1), Bangalore is purely based on suspicion and surmises. 3.10 He submitted that the ld. PCIT at Para 4 of Page No. 38 has given his finding that in view of the detailed discussion at Para 3.1, 3.2 and 3.3 [The Assessee Trust vehemently denied the discussion and findings of The Principal Commissioner of Income Tax, Central Range, Bangalore], he is satisfied that specified violations in (a), (e) and (f) of the explanation to Sec. 12AB(4) of the Act have occurred in the last few years including F.Y 2020-21 relevant to the A.Y 2021-22. Accordingly, registration granted u/s 12AB to the Assessee Trust is cancelled wi....
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.... or separate books of account are not maintained by such trust or institution in respect of the business which is incidental to the attainment of its objectives; or (c) the trust or institution has applied any part of its income from the property held under a trust for private religious purposes, which does not ensure for the benefit of the public; or (d) the trust or institution established for charitable purpose created or established after the commencement of this Act, has applied any part of its income for the benefit of any particular religious community or caste; or (e) any activity being carried out by the trust or institution,- (i) is not genuine; or (ii) is not being carried out in accordance with all or any of the conditions subject to which it was registered; or (f) the trust or institution has not complied with the requirement of any other law, as referred to in item (B) of sub-clause (/) of clause (b) of sub-section (1), and the order, direction or decree, by whatever name called, holding that such noncompliance has occurred, has either not been disputed or has attained finality [; or] (g) the application r....
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.... concerned university, college or other institution, recommend to the Central Government to withdraw the approval and that Government may by order, withdraw the approval and forward a copy of the order to the concerned university, college or other institution and * the Assessing Officer." 3.10.3 By conjoint reading of the said provisos prior to 01-042022 and after 01-04-2022, he submitted that it is clearly evident that the Deputy Commissioner of Income Tax under proviso 2 to section 143(3) of the Act has no authority or jurisdiction to refer to the Principal Commissioner of Income Tax, Central Range, Bangalore for any specific violation as defined in Explanation 2 of the fifteenth proviso to clause (23C) of the section 10 or Explanation to the subsection (4) of the section 12AB of the Act as the case may be. 3.11 In view of the above, the ld. A.R. submitted that the Deputy Commissioner of Income Tax has got authority/jurisdiction to refer to the Principal Commissioner of Income Tax to withdraw the approval or registration granted to the Institution/Trust referred to in section 11- of the Act, such authority has been granted by the Finance Act 2022 which is applicable from th....
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....re relied on the Clause (a), (e) and (f) of the explanation for cancelling the registration. Clause (a), (e) and (f) were brought under the Act by the Finance Act, 2022 with effect from 01-04-2022, applicable to the A.Y 2022-23. 3.16 He submitted that in view of the narrated facts in the Statement of Facts the Assessment involved in the Appeal is A.Y 2021-22. The law related to the cancellation of registration has undergone changes as much as the said provision as changed over the difference Assessment Years 2020-21, 2021-22 and again for the A.Y 2022-23. The Principal Commissioner of Income Tax, Central Range, Bangalore has invoked the provisions of Section 12AB(4)(ii) of the Income Tax Act, 1961 which were applicable from A.Y 2022-23 for a default alleged to have been occurred in the last few years including F.Y 2020-21 relevant to the A.Y 2021-22. Hence prima facie invoking the provisions of the said Section 12AB(4)(ii) of the Income Tax Act, 1961 which are applicable for the AY 2022-23 and cancelling the registration for the A.Y 2021-22 is bad in law." The cancellation of a registration is penal in nature. The consequences thereof are that, the exemption enjoyed by the Asses....
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....ranted u/s 12A of the Act dated 21.7.1989 cannot be cancelled by Id. PCIT (Central) vide order dated 6.3.2023 w.e.f. assessment year 2016-17, by invoking the provisions of section 12AB(4)(ii) of the Act. Accordingly, we allow the primary ground nos.2, 3, 5 & 12 and order of Id. PCIT passed u/s 12AB(4)(ii) of the Act is quashed". This judgment is squarely applicable to the Assessee Trust's case. 3.18 In view of the above submission, the ld. A.R. for the assessee requested this Bench to annul the Order dated 27-09-2023 of the Principal Commissioner of Income Tax, Central Range, Bangalore as the said Order was against the law prevailing for the F.Y 2020-21 relevant to the A.Y 2021-22, but applying provisions which are effective from A.Y 2022-23. 4. The ld. D.R. relied on the provisions of section 12AB(4)(ii) of the Act and submitted that ld. PCIT has power to cancel the registration granted u/s 12AA/12AB of the Act in these assessment years. 5. We have heard the rival submissions and perused the materials available on record. In this case, registration has been granted u/s 12AA of the Act vide registration No. DIT(E)BLR/12AA/A-1202/AACTA7888E/ITO(E)-1/Vol 2010-11 dat....
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....rding a reasonable opportunity of being heard." 5.3 This section has been amended by Finance Act, 2022 w.e.f. 1.4.2022 as follows: 12AB(4): Where registration or provisional registration of a trust or an institution has been granted under clause (a) or clause (b) or clause (c) of subsection (1) or clause (b) of sub-section (1) of section 12AA, as the case may be, and subsequently,-- a) The Principal Commissioner or Commissioner has noticed occurrence of one or more specified violations during any previous year; or b) The Principal Commissioner or Commissioner has received a reference from the Assessing Officer under the second proviso to sub-section (3) of section 143 for any previous year; or c) Such case has been selected in accordance with the risk management strategy, formulated by the Board from time to time, for any previous year; The Principal Commissioner or Commissioner shall- i. call for such documents or information from the trust or institution, or make such inquiry as he thinks necessary in order to satisfy himself about the occurrence or otherwise of any specified violation; ii. pass an order in writing....
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....ith the objects of the Trust or institution, as the case may be, he shall pass an order in writing cancelling the registration of such Trust or institution after affording reasonable opportunity of being heard. As per section 12AB(5) of the Act, when Trust or institution complied wholly or in part of the income of such Trust or institution in violation of section 13(1) of the Act or if they complied with any other law, for the time being in force by the Trust or institution as are material for the purpose of achieving its objectives as mentioned in section 12AB(1)(b)(ii)(B) of the Act. However, in the present case, the ld. PCIT invoked the provisions of section 12AB(4)(a)(ii) of the Act as stood in the assessment year 2022-23. The objection of the ld. A.R. is that for the cancellation of registration for the assessment year 2021-22, he could not invoke the provisions of section 12AB(4)(ii) of the Act which is introduced by Finance Act, 2022 w.e.f. 1.4.2022 and this provisions of section 12AB(4)(ii) of the Act is applicable for the assessment year 2022-23 and onwards and have no retrospective application. 5.5 At this point of time, it is relevant to place reliance on the judgemen....
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...., relied upon a decision of this court in CIT v. Isthmian Steamship Lines, where it was held as follows: 'It will be observed that we are here concerned with two datum lines: (1) the 1st of April, 1940, when the Act came into force, and (2) the 1st of April, 1939, which is the date mentioned in the amended proviso. The first question to be answered is whether these dates are to apply to the accounting year or the year of assessment. They must be held to apply to the assessment year, because in income-tax matters the law to be applied is the law in force in the assessment year unless otherwise stated or implied. The first datum line therefore, affected only the assessment year of 1940-41, because the amendment did not come into force till the 1st of April, 1940. That means that the old law applied to every assessment year up to and including the assessment year 1939-40.' This decision is authority for the proposition that though the subject of the charge is the income of the previous year, the law to be applied is that in force in the assessment year, unless otherwise stated or implied. The facts of the said decision are different and distinguishable and the High C....
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....e character or intend. Therefore, without a specific mention of the amended provisions to operate retrospectively, the cancellation cannot operate from a past date. 21 On the third question of the effective date of operation of the cancellation order, it was held that the cancellation will take effect only from the date of the order/notice of cancellation of registration. Since the act of cancellation of registration has serious civil consequences and the amended provision is held to have only a prospective effect the effect of cancellation, in' the event the pending tax appeal is decided in favour of the Revenue, will operate only from the date of the cancellation order, that is December 30, 2010. In other words, the exemption cannot be denied to the petitioner for and up to the assessment year 2010-11 on the sole ground of cancellation of the certificate of registration." 5.10 In this case, the ld. PCIT has cancelled the registration under the new provisions of the Act i.e. 12AB(4)(ii) of the Act, which specifically provides that cancellation can be done for such previous year and all subsequent previous years, which makes it clear that the cancellation cannot be ....
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....e of such conferment of power the Government the delegated authority has no power to issue a notification with retrospective effect. Therefore, in the absence of any provision contained in legislative Act the delegatee cannot make a delegated legislation with retrospective effect. When no power has been conferred by the act on the competent authority to withdraw the approval retrospectively, then the withdraw of the approval u/s 10(23C)(vi) of the Act can only be prospective. Hence such of approval gentled under section 12A from back date are also not according to the law and facts of the case and at the worst after the year of notice it can be done if any." In the case of Indian Medical Trust V/s PCIT (Central) 2019 (6) TMI 996 (Rajasthan) it has been held that: 28. Indisputably, the order dated 16th Jan, 2018, made by the Commissioner of Income Tax thereby canceling the registration granted under section 12A and withdrawing the approval given under section 10 (23C) (v) & 10 (23A) (via) of the Act of 1961, to the petitioner Trust with retrospective effect from the date of 01st April, 2006, was arbitrary in the face of the provisions of the Act of 1961; and theref....
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....p;15 to the writ petition) as per the then law is without power and jurisdiction and therefore, it is liable to be set quashed. 27. Accordingly, the impugned order dt. 9th March, 2004, passed by opposite party No. 2 withdrawing/rescinding the order granting registration on 1st April, 1999, to the petitioner's society under Section 12A of the Act, is quashed. Consequently, the registration granted to the petitioner's society on 1st April, 1999, stands restored for the assessment years under consideration." Thus, keeping in view the above discussion, we are of the opinion that in the present case the ld. Pr.CIT(Central) has no jurisdiction to pass the impugned order. Accordingly, we quash the same. Even otherwise we are also of the view that no retrospective cancellation could be made as neither in the Sec. 12AA(3) nor in Sec. 12AA(4) it has been provided or is seen to have explicitly provided to have a retrospective character or intend. Therefore, without a specific mention of the amended provisions to operate retrospectively no cancellation for the past years could be ordered. In this regard, the Hon'ble Madras High Court on the question as to whether....
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....h retrospective effect from AY 2021-22 and onwards, which is bad in law. As such, assumption of jurisdiction for cancelling the registration of subsequent to AYs 2021-22 is also bad in law. If there is any specified violation in subsequent assessment years from AY 2021-22 and onwards, which could be cancelled by the ld. PCIT on pointing out the specified violation noticed in the subsequent assessment years only and not on the basis of violation in assessment year 2021-22. As such, we make it clear that ld. PCIT is at liberty to pass fresh order of cancellation independently u/s 12AB(4)(ii) of the Act for the subsequent assessment year 2021-22 onwards, if so advised and not on the basis of violation noticed in the assessment year 2021-22. Accordingly, we allow the additional grounds raised by the assessee, order of ld. PCIT dated 27.9.2023 passed u/s 12AB(4)(ii) of the Act is quashed. 5.15 Since we have quashed the impugned order itself, the main grounds of appeal raised by assessee on merits herein above have become infructuous and we are refraining from going into adjudication of these ground on merit. 6. In the result, appeal of the assessee is allowed. Order pronounced ....
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....between the medical college management, prospective students seeking converted seats bypassing merit and the meritorious students who were involved in converting the merit seats into management seats by deliberately creating stray vacancies. These agents contacted the meritorious students mostly from coaching institutes. These meritorious students would apply for KEA counselling to ge MBBS seat allotted to them in the medical colleges in Karnataka. Even if they were allotted a seat through Medical College Counselling or other state counselling in other medical colleges, they would continue to hold on to a seat allotted to them through KEA counselling till the 'mop up' round. After 'mop up' round, the students would give up/surrender their seats thereby creating stray vacancies which would be filled up subsequently by the management of the trust. The college management had filled such seats by demanding substantial capitation fee in cash. A detailed analysis of the students who surrendered their seats after Mop Up Round in 2020 in Akash Institute of Medical Sciences and Research Centre shows that majority of these candidates belonged to one state, Rajasthan and had good NEET rank....
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....a, Bihar 800009 Kshema 374103 Prakasha Page 3 of 8 Akash Institute of Medical Sciences and Research Centre, Admission Year 2020 Students who surrendered their seats after mop up round| Admission Year 2020 Students admitted on stray 1. Name NEET Rank Kank Address SL. I Name NEET Manej Kumar 19919 |176, Ramnagar, Jodhpur 9 Lakshmi Shravya M|380742 18928 Ward No 10 Khandw Fatta Near Tower, Chur Chury, Rajasthan - 31001 0 |Darshan Gowda |TK 476379 11 Priyanka 19001 |Bhagatpura Sikar, Rajasthan 1 |Akshay Ravindra 496676 12 Rajesh Kuma Saini 19037 Rundllya Ki Dhant, Mahar 12 Faraz Pasha 505787 3 Monu Verma 19134 Karniya Shankarpour Bahraich Uttar Pradesh 271875 13 | Gagan R 545859 14 Ankit Kumar Dadarwal 19211 Jato Ka Mohalla. Vpo | Gulabbari Teh Shahpura, 14 | Khadejatul Kubra | 679758 Jeevika L 189080 11 3rd H Main Road 13th Cross, Cholurpaiva Bangalore, Karnataka-560023 15 Bhavana Reddy 782689 Admission Year 2020 Students admitted on stray SL. Rank Kank 9 Ward No 10 Khandw Fatta Near Tower, Chur Chury, Rajasthan - 31001 0 1 Rajesh Kuma Saini Karniya Shankarpour Bahrai....
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....5. Regulation of fees, etc .- (I) It shall be competent for the Government, by notification, to regulate the tuition fee or any other fee or deposit or other amount that may be received or collected by any educational institution or class of such institutions in respect of any or all class or class ept deposits in excess of No educational institution shall collect any fees or amount or accept deposerexcess (2) No educational un the amounts notified under sub sonic er sub-section (1) or permitted under the proviso to section 3. (3) Every educational insti (3) Every educational institution shall issue an official receipt for the fee or deposits or other amount collected by it. (4) All monies received by ts or other action institution way of citation deposits or other amount shall be deposited in the account of the institution, in any Schedules and shall be applied and expended for the vement of the institution and the Bank and shall be applied and expended for the improvement of the Institution development of the educational facilities and for such other related purposes and to such extent and in such manner as may be specified, by order, by the Government." (5) In ord....
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....minorities, whether based on religion or language, shall have the right to establish and administer educational institutions of their choice (LA) In making any law providing for the compulsory acquisition of any property of da educational institution established and administered by a minority, referred to in clause (1 ). the d by or determined under such law for theacquisition of Fach property is such as would not restrict or abrogate the right guaranteed under that clause Page 6 of 8 (2) The state shall not, in granting aid to educational institutions, discriminate against any " coronel institution on the ground that it is under the management of a minority, whether based on religion or language. " Hence the exemption given in Section 10 in The Karnataka Educational Institutions (Prohibition of Capitation Fee) Act, 1984 does not apply to your case as the transaction being referred to does not pertain to fixing the amount for acquisition of property. Hence as per The Karnataka Educational Institutions (Prohibition of Capitation Fee) Act, 1984 the you were not allowed to collect fees `over and above the amount fixed by the Karnataka State Government. As per details colle....
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....de the list of students from whom the Trust has collected the excess fee over and above the fee . The tuition fee for quota/category is same for all students for therespon government Tripartite Consensual Agreement signed e seats allotted and admitted under the non-government gustarcategory 's same for all students for the respective academi by the College , the Government a enconcredas there is a non-gove ory college the fee collected by the college is same for management category students and f for students allo d by the KEA under the non- government category. ) The AO's findings that the Assessee Trust Is involved in the process of conversion of ment seats into management category" Which findings of The a cris perverse, Until the completion of the allocation, allotment and subsequent cancellationsand the entire which findings of the AO is perverse . Until the completion of the involvement in the admission or allotment process and the entire at the sole discretion and authority of the woman and shall be stated under: M/s Akash Educational and Development Trust, PAN: AACTA7888E, Order u/s 12AB(4) "Students are required to appear before the DME and state their reasons f....
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....the surrendered or un-allotted seats of respective medical colleges as management quota seats. Until the conversion of surrendered or un-allotted seats into the management quota seats, the college has no role in that process. Hence, the AO's observation that the involvement of the Trust is conversion or cancellation process is false and against the facts. e) The AO's findings that the Trust has paid for the service of the agents for doing conversion of merit seats into paid seats. The said findings of the AO is wrong. Nowhere the Trust fund has been utilized for payment to the agents. The agents were paid by the Trustees in their individual capacity from their own funds. At any point of time, the Trust funds has not been utilized for making payments to agents. f) Regarding the 15 students' data provided by the AO, which are correct. In such cancellation and allotment, the Trust/College has no role in that process. g) The AO said that the Assessee Trust has transferred the funds into the bank account of the agent Sri. Rahul Kumar Singh. Maybe on the direction of the Trustee Sri. K. Muniraju the Trust has transferred the amount to the bank account of the Sri. Rahul Kumar Sin....
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....permitted under the proviso to section 3. (3) Every educational institution shall issue an official receipt for the fee or capitation fee or deposits or other amount collected by it (4) All monies received by any educational institution by way of fee or capitation fee or deposits or other amount shall be deposited in the account of the institution, in any Scheduled Bank and shall be applied and expended for the improvement of the institution and the development of the educational facilities and for such other related purposes and to such extent and in such manner as may be specified, by order, by the Government. (5) In order to carry out the purposes of sub-section (4), the Government may require any educational institution to submit their programmes or plans of improvement and development of the institution for the approval of the Government. Section 10. Application of the Act to minority institutions .- Nothing in this Act or the rules or orders made thereunder shall apply to any minority educational institution to the extent to which they are inconsistent with the rights guaranteed under article 30 of the Constitution of India. "Article 30 in the Constitution of I....
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.... Welfare Trust Vs. DCIT 10 ITR 479 and Hyderabad Tribunal in case of Vignana Jyothi Vs. DIT TaxPub DT 1200 held that "Capitation Fee if any was received by the Assessee Trust, which was utilized for the objects of the Trust and it was not in violation of the Income Tax Act, 1961, the withdrawal or cancellation of registration therefore is not justified." Now, whether such procedure for converting the merit seats into management quota seats, where there is no role of the Assessee Trust/Institution, in such process, even then if there is any specified violation of Clause (a) and (e) of the explanation to section 12AB(4) our submission is as under: As per Clause (a) the income derived from the Trust at any point of time not utilized other than the objects of the Trust. The repayment of the borrowings earlier received from the Trustees and any other person does not amount to violation of the objects of the Trust. Hence, the AU's reference on clause (a) is not justified. With regard to Clause (e) the activity carried out by the Trustees are genuine one i.e., imparting of medical education. The AO has not brought out any incidence or nature of activity which amounts to non- genu....
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....e downloaded by the student/candidate. The College has no role to play neither in this allotment process nor in collection of fee. Also, the candidate/student has surrendered/cancelled his KEA allotted seat on his own volition which has no bearing on the College admission. This allotment and cancellation is solely under the purview of the KEA/DME and the College has nothing to do with the said allotment or cancellation. Hence, the question of having a ledger account of Mr, Keshav Sain in the books of the Assessee Trust does not arise. Document 4 In reply to the Show Cause Notice, we have made exhaustive and in- detailed submission, in each of the issues which are observed by the AO during the course of scrutiny assessment for the AY 2021-22. For such observations, we have filed our reply by negating the observations of the AO at Para 3 of Page-7. And also, we have replied to the question of law raised by the AO on relying on Sections 3, 5 and 10 of the Karnataka Educational Institutions (Prohibition of Capitation Fee) Act, 1984. For such reliance of the AO in the said sections, the Assessee Trust strongly objected to the AO's reliance of the said sections as the said section....
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.... issued From A/c no 317601503929 / RAHUL KUMAR SINGH in The Name of THE EXECUTIVE DIRECTOR KEA through DD number 511897. and 2nd Demand Draft also issued in the Name of THE EXECUTIVE DIRECTOR KEA through DD number 511898 . and for both Demand draft has been purchased by Mr. Rahul kumar Singh who is account holder of this account. And for Account statement of MR. Rahul Kumar, Account no 317601503929 has been closed on 21/07/2023 and we are unable to download the closed account statement for getting Statement for the Period 01/04/2020 to 31/03/2021 we are raised Placed the request to our central office and we will provide the same before16/08/2023. Thanking you sir. BES :- IÇICI BANK LTD No Tagonis Bosch Manos 1 7 317601503929 ANUL KUMAR SINGH 14TH CROSS 1ST STAGE, CRASHAMY LAYOUT, BANGALORE, 560078 24-08-2023 ANGALORE ENATAKA Nie: 560078 Currency : INDIAN RUPEE User : E90014714 IP Address : 10.160.158.5 01-10-2020 to 31-03-2021 :- Dec MMT/IMPS/034915736 4,100.00 24,571.19Cz :5-Dec KES/APCNS260/CASH 2,500.00 22, 171.19Cr IS-Dec VPS/HARSHITHA M/20 260.00 21,911.19Cr :5-Dec UPI/035021063502/U 150.00 21,761.19C= 16-Dec ....
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....epati Sai Sree 2016-17 25,87,500 5,75,00€ 5,00,000 132 A-AIMSRC-132-01 4 Akula Gnaneswar Kumar 2016-17 25,87,500 5,75,000 19,37,500 132 A-AIMSRC-132-01 Akula Vinay Babu 2016-17 25.87,500 5,75,00 9,87,501 132 A-AIMSRC-132-01 6 Akula Harini 2016-17 25,87,50 5,75,000 19,37,50 132 A-AIMSRC-132-01 Arugula Vijaya Laxmi 2016-17 25.87.500 5,75,000 23,12.50€ 132 A-AIMSRC-132-01 Bikram Biswajit Dash 2016-17 25.87,500 5,75,000 20,62,500 126 A-AIMSRC-132-01 Bommideni Sai Teja 2016-17 25,87,500 5,75,000 15,62.500 132 A-AIMSRC-132-01 10 Cherukuri Hemanth 2016-17 25,87,500 5,75,0 24,25,000 126 A-AIMSRC-132-01 Chitta Naveen Reddy 2016-17 25,87,500 5,75,000 18,37,500 132 A-AIMSRC-132-01 Hethaishy B 2016-17 25,87,500 5,75,000 12,12,500 132 A-AIMSRC-132-01 1 Imaya Barathi M 2016-17 25,87,500 5,75.000 8,00,000 132 A-AIMSRC-132-01 1- Inchara M.E 2016-17 25,87,500 5,75,000 10,00,000 132 A-AIMSRC-132-01 15 Kallupotlu Usha Rani 2016-17 25,87,500 5,75,000 19,12,500 132 A-AIMSRC-132-01 16 Kilaparthi Aishwarya 2016-17 25,87,500 5,75,000 16,69,356 132 A-AIMSRC-132-01 Kokkanti Varshitha 2016-17 25,87,500 5,75,000 13,62,501 132 A-AIMSRC-132-01 18 K....
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....tyawan 2016-17 25.87,500 5,75.000 42.50.000 125 A-AIMSRC-132-01 50 Ravi Kiran.H.G 2016-17 25,87,500 5.75.000 25,75,000 128 A-AIMSRC-132-01 Shruthi Baburaj 2016-17 25,87,500 5,75,000 35,12,500 A-AIMSRC-132-01 2016-12 5,75,00x Suguresh .J. Burta 10,42,26,869 Unaccounted Cash Receipts from The Students for Financial Year 2019-20 S1. No Name of Student Total Packag Capita tog Fee (MDE) MDF Page No. Seized Document Number Bank (Accounted) Cash (Unaccounted) 1 Amrutha M 85,35,132 50,00,000 31,00,000 1,15,000 196 A-AIMSRC-132-04 2 Ananya Chaudhary . Deepika Reddy V 1,00,00,000 70,00,000 60,00,000 10,00,000 79 A-AIMSRC-132-07 4 Dinya Agrawal . Khushi K 75,35,132 40,00,000 . 40,00,000- 15 A-AIMSRC-132-04 Konreddy Reena Reddy . - : Nallamothula Praharsha Paul 1,00,35,050 65,00,000 65,00,00 106 A-AIMSRC-132-04 O Vijaya Bhanu 1,00,35,050 65,00,000 41,00,00 34 A-AIMSRC-132-07 Serah Mariam Khan 10 Shaein Malamel Samuel 95,35,132 6,00,000 45.00,000 15,00,000 A-AIMSRC-132-04 = Shubhi Jaiswal 1,00,35,132 65,00,000 65,00,000 A-AIMSRC-132-04 12 Sriharshavardhana R S 1.00,35.132 65,00.000 10,00,000 42 A-AIMSRC-132-0....
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....52 A-ALMSRC-132-04 TOTAL 38,29.34,352 23,62,00,000 9.57,75,070 13,17,68,600 Unaccounted Cash Receipts hom The Management Quota Students for Financial Year 2020-21 Student Total Courte Fee Capitation MDF Pag Seized Document Number Admission Tuition Lution Lee paid in 2020-21 accounted Fre IMDF) (Accounted) Cash (Unaccounted) No. Ast Natekar 2020-21 44.15,302 9 $1,956 74.00,000 69.00,000 5.00.000 A-AIISRC-132-03 Akshay Ravindra Lendi 2020-21 #4,IS,S02 9.51,956 73.00,000 25,51.195 73 A-ABISRC-132-03 Anand S 2020-21 44,15,502 9,81,956 5.00,000 5.00.000 73 A-ADASRC-132-03 4 Bh Kumar 2020-21 41.18,802 9.51,95% 74,00,000 29,81.195 . A-ADMISRC-132-03 3 Bathula Kavya Rajeswari 2020-21 44.18,502 9,51.956 65,00,000 20.81.195 73 A-AIMISRC-132-03 6 Bhavana Reddy x 2020-21 44.13,802 |9,81.956 $0,00.000 30,00,000 5,00,000 73 A-ALMASRC-132-03 7 Darshan Gowda TK | 2020-21 44.18,802 9.81.956 Faraz Pasta 2020-2 44.18,50 9.81.95 $0.00.00 13.81.195 20,00.000 A-ALMSRC-132-03 Gagan R 2020-21 44, 18,802 9.51,95 73,00.000 30.81.195 . 73 A-AIMSRC-132-03 10 Gaurav N 2020-21 44.19.502 9.51.956 80,00.000 20,51,195 13,33.044 73 A-ADISRC-132-03 Gujjula....
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....59 A-ALMISRC-132-03 38 Surya Shashank 2020-21 44.18,602 9,81.956 75,00,000 20,51,195 10,00,000 69 A-AIMSRC-132-03 39 I Dheeraj 2020-21 44,18,502 |9,51.956 10.00.000 69 A-AIMSRC-132-03 40 Tanmayi V 2020-21 4.18,502 | 9.51,956 73,00,000 29,00,000 69 A-AIMSRC-132-03 41 Tanvi Rahangdale 2020-21 44,18,802 | 9,81,956 70,00,000 15,81,198 10,00,000 69 A-AIMSRC-132-413 42 Tippireddypalli Guru Pujith Nath |2020-21 44,18,802 9,81,956 71,00,000 16,81,198 10,00,000 69 A-AIMSRC-132-03 43 Trisha A 2020-21 44,18,802 9,81,956 75,00,000 20,81,198 10,00,00 69 A-AIMSRC-132-03 44 Vijay Kumar K 2020-21 44,18,802 9,81,956 2,00,000 32,81,198 69 A-AIMSRC-132-03 45 Vyshnavi YS 2020-21 44,18,802 81,956 99,00,000 14,81,198 40,00,000 A-AIMSRC-132-413 TOTAL 4.41,88.020 31,20,63,802 9,16,80,462 6,05,44,034 Darshan Gowda TK Tippireddypalli Guru Pujith Nath SUMMARY OF UNACCOUNTED CASH RECEIVED FROM STUDENTS OF AKASH INSTITUTE OF MEDICAL SCIENCES AND RESEARCH CENTRE Financial Year Amount of Unaccounted Cash Collected 2016-17 2019-20 10,42,26,869/- 13,17,68,600/- 2020-21 TOTAL 6,05,44,034/- 29,65,39,503/- Document 9 SUMMARY OF UNACCOUNTED CASH ....