TaxTMI 
TaxTMI 
TaxTMI 
2026 (3) TMI 239
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.... case of search conducted in an Education Institution under Section 132(4) of the Income Tax Act, 1961. On receipt of the information that huge cash was collected as capitation fees for admission to the college, a search of the college premises, where Dental College is established, yielded Rs. 3,69,950/- and Rs. 20,00,000/- was recovered from the premises, where the Engineering College runs. The residence of the Managing Trustees led to the seizure of 5036 grams of gold jewellary. A statement of one Dr.B.Muthukumaran was recorded, who has allegedly confessed that they used to collect Rs. 1,00,000/- as capitation fees. Admission of students in the Engineering College under the Management quota and Government quota were examined and a stateme....
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....eged seizure of money and jewels and the allegation that the trustees were collecting huge capitation fees, was found to be false and there is no proof for the said allegation 4. Merely on suspicion, the premises were searched and though no substantial material was collected, on presumption, tax has been assessed by the Department under the following heads:- "Income returned :Rs. Nil ADD: 1.Capitation fees collected from the students as discussed above :Rs.1,27,00,000 2.Unaccounted cash as discussed above :Rs. 3,69,950 3.Excess income as per Income and Expenditure Account as per proviso to S.164(1) as discussed above :Rs.5,26,21,407 Assessed Income :Rs.....
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....rovisions. The further submission is that as per the definition under Section 212(A) of the the Income Tax Act, 1961 defines, books of account, includes day book, cash book, accounts books and other books. Therefore, the slips 56 in number were recovered during the search process being books of account maintained in the regular course of administering the college/trust. Sections 132(4) and 132(4A) of the Income Tax Act, 1961, squarely apply to draw the statutory presumption. Having failed to apply the statutory presumption, both the first Appellate Authority as well as the Tribunal grossly erred. 7. We gave anxious consideration in the above submissions. The presumption under Sections 132 (4) and Section 132(4A) of the Income Tax Act, 19....
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....f any particular person or which may reasonably be assumed to have been signed by, or to be in the handwriting of, any particular person, are in that person's handwriting, and in the case of a document stamped, executed or attested, that it was duly stamped and executed or attested by the person by whom it purports to have been so executed or attested." 8. The statutory presumption as found in the above Sections is not a conclusive presumption, but a rebuttable presumption. Even to draw the presumption, at the first instance, the Department is bound to place material facts to lay a foundation for drawing such presumption. In this case, the material placed, even after the enquiry before the first Appellate Authority as well the Tribun....
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.... the other Managing Trustees, will not form the foundation for drawing such presumption. The further contention of the learned counsel is that the money collected as capitation fees is not utilised for the purpose of trust and thus, there is a subsequent violation. 11. We are of the view that the second contention of the learned counsel regarding non-utilisation of the funds for the trust will not arise in the case in hand, since the collection of funds for the purpose of the trust has not been proved by the Department even by the preponderance of probabilities. 12. We find, in these appeals, the following Substantial Questions of Law as framed by the Court as below:- 1.Whether on the facts and circumstances of the case, the ....