Mohd. Arif Ahmed, Delhi V. ACIT, New Delhi

ITA 1868/DEL/2017

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 3784 (ITAT-DELHI)
• Duration Of Justice: 7 month(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-10-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2013-2014
• Appeal Filed On: 29-03-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: SUKHDEV SINGH
• Keywords: Opportunity of being heard
• Section: 142(1); 148

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH SMC, NEW DELHI BEFORE SHRI R. K. PANDA, ACCOUNTANT MEMBER ITA NO.1868/DEL/2017 ASSESSMENT YEAR : 2013-14 MOHD. ARIF AHMED, F- 198/S- 2, DILSHAD COLONY, DELHI. VS. ACIT, CIRCLE- 56(1), NEW DELHI. PAN : ADDPA8429P (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI SUKHDEV SINGH, A.R. DEPARTMENT BY : SHRI AMIT JAIN, SR.DR DATE OF HEARING : 24-10-2017 DATE OF PRONOUNCEMENT : 31-10-2017 O R D E R PER R. K. PANDA, AM : THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAIN ST THE ORDER DATED 18.01.2017 OF CIT(A)- 19, NEW DELHI RELATING TO ASS ESSMENT YEAR 2013-14. 2. ALTHOUGH A NUMBER OF GROUNDS HAVE BEEN RAISED BY THE ASSESSEE, THEY ALL RELATE TO THE ORDER OF THE LD. CIT(A) IN SUSTAINING THE ADDITION OF RS.21,00,000/-. 3. FACTS OF THE CASE, IN BRIEF, ARE THAT THE ASSESS ING OFFICER REOPENED THE ASSESSMENT BY ISSUING NOTICE U/S 148 OF THE ACT ON THE GROUND THAT THE ASSESSEE HAS PAID CAPITATION FEE OF RS.21,00,000/- FOR ADMIS SION OF HIS SON IN SANTOSH MEDICAL COLLEGE. SUBSEQUENTLY, THE ASSESSING OFFIC ER ALSO ISSUED NOTICE U/S 142(1) AND 143(2) ALONG WITH THE QUESTIONNAIRE. IN RESPONSE TO THE SAID STATUARY NOTICES, THE AR OF THE ASSESSEE APPEARED BEFORE THE ASSESSING OFFICER. THE 2 ITA NO.1868/DEL/2017 ASSESSING OFFICER DIRECTED THE AR TO PRESENT THE AS SESSEE BEFORE HIM ALONG WITH BANK STATEMENT OF THE ASSESSEE AND HIS WIFE FOR ASS ESSMENT YEAR 2013-14. THE ASSESSING OFFICER SUBSEQUENTLY RECORDED THE STATEME NT OF THE ASSESSEE WHO STATED THAT HE HAS GIVEN TOTAL FEES OF RS.11 LAKHS TO SANTOSH MEDICAL COLLEGE IN FINANCIAL YEAR 2012-13. OUT OF THE ABOVE RS.11 LAK HS, RS.5.5 LAKHS WAS THE REGULAR FEES WHICH WAS PAID IN TWO INSTALLMENTS OF RS.3.5 LAKHS ON 10.09.2012 AND RS.2 LAKHS ON 09.10.2012 AND ALONG WITH THESE I NSTALLMENTS THE CAPITATION FEES OF RS.5.5 LAKHS WAS ALSO GIVEN. THE ASSESSEE ALSO FILED THE RECEIPT OF FEES GIVEN BY SANTOSH MEDICAL COLLEGE IN SUPPORT OF HIS CLAIM. THE ASSESSING OFFICER ASKED THE ASSESSEE TO SUBSTANTIATE THE SOUR CE OF FEES PAID TO WHICH THE ASSESSEE FILED THE DETAILS SUBSTANTIATING THE SOURC E OF FEES. HOWEVER, THE ASSESSING OFFICER WAS NOT SATISFIED WITH THE DETAIL S GIVEN BY THE ASSESSEE ON THE BASIS OF THE INFORMATION AVAILABLE ON RECORD. HE H ELD THAT THE ASSESSEE IN THIS CASE HAS INCURRED CASH EXPENDITURE OF RS.21 LAKHS F OR PAYMENT OF CAPITATION FEES TOWARDS ADMISSION OF HIS SON IN SONTOSH MEDICAL COL LEGE FOR THE COURSE OF MBBS. APPLYING THE PROVISIONS OF SECTION 69C, THE ASSESSING OFFICER MADE AN ADDITION OF RS.21 LAKHS TO THE TOTAL INCOME OF THE ASSESSEE. 4. IN APPEAL, THE LD. CIT(A) UPHELD THE ACTION OF T HE ASSESSING OFFICER BY OBSERVING AS UNDER :- 6. I HAVE GONE THROUGH THE FACTS OF THE CASE. IT IS AN UNDISPUTED FACT THAT THE SEARCH & SEIZURE OPERATION WAS CARRIED OUT ON THE S ANTOSH GROUP OF INSTITUTIONS WHICH HAS VARIOUS ENGINEERING/MEDICAL COLLEGES IN D ISTRICT GHAZIABAD (UP). IT IS A WELL KNOWN FACT THAT BESIDES TUITION FEES THEY WERE ALSO CHARGING MONEY UNDER THE GUISE OF CAPITATION FEE AND DONATION FOR ADMITTING STUDENTS TO THE COLLAGES. THE SEARCH REVEALED A NUMBER OF DOCUMENTS AND REGISTER CONTAIN ING LEDGER SHEET IN RESPECT OF EACH STUDENT WHICH MENTION THE PROFILE OF THE STUDE NT, ROLL NUMBER AND FEES RECEIVED 3 ITA NO.1868/DEL/2017 FROM HIM. THESE DOCUMENTS ALSO MENTIONED THE TOTAL AMOUNT PAID FOR ADMISSION, THE AMOUNT OFFICIALLY RECEIVED AND DISCLOSED AND THE AM OUNT OF CAPITATION FEE. THESE DOCUMENTS WERE CONFRONTED TO CHAIRMAN OF SANTOSH GR OUP OF INSTITUTIONS DR. P. MAHALINGAM WHO ADMITTED THAT ONLY AMOUNTS OF TUITIO N FEES HAVE BEEN DISCLOSED IN THE BOOKS OF ACCOUNTS. THE AMOUNT OF CAPITATION FEE S / DONATION WAS KEPT OUT OF THE BOOKS. HE WAS THEREAFTER ASKED TO RECONCILE AND QUA NTIFY THE AMOUNT OF SUCH CAPITATION FEE/DONATION RECEIVED OVER THE YEARS. TH E DETAILS WAS FURNISHED BY HIM VIDE HIS LETTER DATED 20/08/2013 WHICH HAS BEEN REPRODUC ED AS ABOVE. HE QUANTIFIED THE TOTAL AMOUNT OF RS. 159.34 CRORE HAVING BEEN RECEIV ED FROM THE STUDENTS AS CAPITATION FEE / DONATION WHICH HAD NOT BEEN DISCLOSED IN THE BOOKS OF ACCOUNTS OF THE SANTOSH GROUP OF INSTITUTIONS. HE ALSO GAVE STUDENT WISE LI ST GIVING NAME, ROLL NUMBER, COURSE PURSUED, DATE OF RECEIPT AND RELEVANT LEDGER NUMBER , WHEREIN AMOUNT HAS BEEN MENTIONED. THE NAME OF THE ASSESSEE SON MOHD. FUKRA N IS APPEARING AT SI. NO. 84 OF SUCH LIST CLEARLY SHOWS THAT RS. 21 LACS HAD BEEN P AID ON 10/0912012. 7. A PERUSAL OF THE LEDGER SHEET SHOWS THAT IT CONT AINS VARIOUS PAYMENTS ON DIFFERENT DATED. SOME SUCH PAYMENTS MENTIONED IN TH E SAME PAGE HAVE BEEN ACCEPTED BY THE ASSESSEE, LEDGER SHEET IS WRITTEN IN DUE COU RSE AND IF A PART OF THE SAME ARE FOUND TO BE CORRECT, OTHER ENTRIES WRITTEN ON THE S AME HAVE TO BE PRESUMED TO BE CORRECT. A DOCUMENT CANNOT BE HELD PARTLY TO BE TRU E AND PARTLY UNTRUE. WHERE TWO ENTRIES ARE WRITTEN IF ONE IS FOUND TO BE CORRECT T HE OTHER IS BOUND TO BE CORRECT. THEREFORE, THERE IS A REBUTTABLE PRESUMPTION THAT A SUM OF RS. 21 LACS HAS BEEN PAID. THE ASSESSEE HAS NOT BEEN ABLE TO REBUT THIS PRESUM PTION BY PRODUCING ANY DOCUMENTS OR OTHER EVIDENCE. HE HAS NEITHER SOUGHT CROSS EXAM INATION OF DR. P. MAHALINGAM NOR HAS HE PRODUCED ANY CERTIFICATE FROM HIM FOR NOT HA VING RECEIVED THE SUM OF RS. 21 LACS FROM THE ASSESSEE. ON THE OTHER HAND THE REVEN UE HAS BEEN ABLE TO ADDUCE THE EVIDENCE FROM THE CHAIRMAN OF THE GROUP THAT THE SU M OF RS. 21 LACS WAS PAID BY WAY OF CAPITATION FEE. IT IS ALSO AN UNDISPUTED FACT TH AT NO ADMISSION TO THE INSTITUTE WAS CARRIED WITHOUT PAYMENT OF ANY DONATION OR CAPITATI ON FEES, AS OBSERVED FROM THE LETTER FILED BY SH. P. MAHALINGAM AND AS EXPLAINED IN THE COURSE OF EXAMINATION OF DR. P. MAHALINGAM DURING THE SEARCH. IN THE FOLLOWING CASES, THE ASSESSEES HAVE ALREADY ADMITTED PAYING DONATION/CAPITATION FEE FOR THE ADM ISSION OF THEIR CHILDREN - SH. CIT(A) K AGGARWAL SON MR. ANKUR GARG - SH. R. C. BAISLEY SON MR. VIPUL BAISLEY - SH. A. K. SABHARWAL SON MR. ANIL SABHARWAL - SH. V. K. GUPTA SON MR. VIKAS GUPTA - SH. JAI BHAGWAN ARORA SON MR. PRADEEP ARORA - MOHD. AHSAN ALI SON SARFRAJ SUCH NAME ALSO APPEAR IN THE LIST FURNISHED BY DR. P. MAHALINGAM. THIS ALSO SHOWS LETTER DATED 20/08/2013 AND ANNEXURE THERETO ARE CORRECT. 8. AS A RESULT, APPEAL OF THE APPELLANT IS DISMISSE D. 5. AGGRIEVED WITH SUCH ORDER OF THE LD. CIT(A), THE ASSESSEE IS IN APPEAL BEFORE THE TRIBUNAL. 6. THE ASSESSEE ALONG WITH HIS AUTHORIZED REPRESENT ATIVE APPEARED BEFORE THE TRIBUNAL AND SUBMITTED THAT THE ASSESSEE WAS NO T GIVEN SUFFICIENT 4 ITA NO.1868/DEL/2017 OPPORTUNITY BEFORE THE CIT(A) TO SUBSTANTIATE HIS C ASE. HE SUBMITTED THAT THE NOTICE DATED 24.11.2016 WAS RECEIVED FIXING THE CAS E FOR HEARING BEFORE THE LD. CIT(A) ON 07.12.2016. THE ASSESSEE APPEARED BEFORE THE LD. CIT(A) AND FILED EVIDENCE FROM SANTOSH MEDICAL COLLEGE REGARDING AMO UNT PAID AND THE FEES OUTSTANDING. SUBSEQUENTLY, THE HEARING OF THE APPE AL WAS FIXED FOR 23.12.2016. HOWEVER, WHEN THE AUTHORIZED REPRESENTATIVE APPEARE D BEFORE THE CIT(A) ON THAT DATE HE WAS INFORMED THAT THE HEARING WAS FIXE D FOR 21.12.2016. ACCORDINGLY, THE ASSESSEE WAS GIVEN ANOTHER DATE FO R HEARING WHICH WAS 06.01.2017. THE LD. CIT(A) ASKED THE ASSESSEE FOR PROOF OF CAPITATION FEES AND THE CASE WAS ADJOURNED TO 16.01.2017. HE SUBMITTED THAT THE CASE WAS DECIDED AGAINST THE ASSESSEE DUE TO LACK OF ANY EVIDENCE OF CAPITATION FEE FROM SANTOSH MEDICAL COLLEGE. THE LD. COUNSEL FOR THE ASSESSEE FURTHER SUBMITTED THAT THE ASSESSEE IS AN UNEDUCATED PERSON AND TAILOR BY PROF ESSION. HE HAS PAID ONLY RS.5,50,000/- TOWARDS REGULAR FEES. FURTHER AMOUNT OF RS.9,52,500/- IS STILL PENDING TO BE PAID TO SANTOSH MEDICAL COLLEGE. HE SUBMITTED THAT THE ASSESSEE WAS NOT GIVEN PROPER OPPORTUNITY TO SUBSTANTIATE HI S CASE AND, THEREFORE, THE MATTER MAY BE RESTORED TO THE FILE OF THE LD. CIT(A ) WITH A DIRECTION TO GIVE ONE MORE OPPORTUNITY TO SUBSTANTIATE HIS CASE. 7. LD. DR ON THE OTHER HAND HEAVILY RELIED ON THE O RDER OF THE LD. CIT(A). 8. I HAVE CONSIDERED THE RIVAL ARGUMENTS MADE BY BO TH THE SIDES AND PERUSED THE ORDERS OF THE AUTHORITIES BELOW. I FIND THE LD . CIT(A) ON THE BASIS OF CERTAIN PERSONS WHO HAVE ADMITTED TO HAVE PAID CAPITATION F EES SUSTAINED THE ADDITION 5 ITA NO.1868/DEL/2017 MADE BY THE ASSESSING OFFICER. HOWEVER, IT IS NOT BORNE OUT OF THE ORDER OF THE LD. CIT(A) AS TO WHETHER IN THE CASE OF THOSE PERSO N WHO HAVE ADMITTED TO HAVE PAID DONATIONS OR CAPITATION FEES FOR THE ADMISSION OF THEIR CHILDREN HAS FINALLY SUSTAINED IN APPEAL. IT IS ONE OF THE SUBMISSION O F THE LD. COUNSEL FOR THE ASSESSEE THAT AN AMOUNT OF RS.9,52,500/- IS STILL P ENDING. HOWEVER, WHEN THE ASSESSEE HAS EXPLAINED THAT HE HAS PAID ONLY CAPITA TION FEES AT RS.5,50,000/-, IT IS NOT UNDERSTOOD AS TO HOW THE ASSESSING OFFICER HAS MADE ADDITION OF RS.21,00,000/- TOWARDS DONATION OR CAPITATION FEES WHICH HAS BEEN UPHELD BY THE LD. CIT(A). CONSIDERING THE TOTALITY OF FACTS OF THE CASE AND IN THE INTEREST OF JUSTICE, I DEEM IT PROPER TO RESTORE THE ISSUE TO T HE FILE OF THE ASSESSING OFFICER FOR FRESH ADJUDICATION OF THE ISSUE. THE ASSESSING OFFICER SHALL DECIDE THE ISSUE IN ACCORDANCE WITH LAW AFTER GIVING DUE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. I HOLD AND DIRECT ACCORDINGLY. THE GROU NDS RAISED BY THE ASSESSEE ARE ACCORDINGLY ALLOWED FOR STATISTICAL PURPOSES. 9. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 31 ST DAY OF OCTOBER, 2017. SD/- (R. K. PANDA) ACCOUNTANT MEMBER DATED: 31-10-2017. SUJEET 6 ITA NO.1868/DEL/2017 COPY OF ORDER TO: - 1) THE APPELLANT 2) THE RESPONDENT 3) THE CIT 4) THE CIT(A) 5) THE DR, I.T.A.T., NEW DELHI BY ORDER //TRUE COPY// ASSISTANT REGISTRAR ITAT, NEW DELHI