Ajit Kumar Jain, Bhopal V. The ITO 1(1), Bhopal

ITA 349/Ind/2020

• Counselvise Citation: [2022] 103 COUNSELVISE.COM (IT) 8761 (ITAT-INDORE)
• Duration Of Justice: 1 year(s) 10 month(s) 30 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-11-2022
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 08-11-2022
• Assessment Year: 2006-2007
• Appeal Filed On: 10-12-2020
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Search and seizure; Loose papers; Reason to believe; Reassessment proceedings; TDS
• Section: 147; 131; 148; 69C; 133A; 234B

Judgement Text

आयकर अपील य अ धकरण, इ दौर यायपीठ, इ दौर IN THE INCOME TAX APPELLATE TRIBUNAL INDORE BENCHE, INDORE BEFORE SHRI CHANDRA MOHAN GARG, JUDICIAL MEMBER AND SHRI B.M. BIYANI, ACCOUNTANT MEMBER ITA No.349/Ind/2020 Assessment Year: 2006-07 Shri Ajit Kumar Jain E-7/43/1, Manas Apartment, Area Colony Bhopal बनाम/ Vs. ITO 1(1) Bhopal (Appellant) (Respondent ) P.A. No.AAMPJ 1557 H Appellant by Shri Anil Khabya, AR Revenue by Shri Ashish Porwal, Sr. DR Date of Hearing: 09.11.2022 Date of Pronouncement: 10.11.2022 आदेश / O R D E R PER CHANDRAMOHAN GARG, J.M: This appeal has been filed by the Assessee against the order of Ld. Commissioner of Income Tax(Appeals)-1 Bhopal (in short ‘CIT(A)’), dated 28.08.2020 for the A.Y. 2006-07. 2. Grounds raised by the Assessee reads as follows: “1.That the Ld. CIT(A) erred in not holding that the order of assessment passed by the AO was bad in law and same deserved to be annulled. 2.That the Ld. CIT(A) ought to have held that the Ld. AO erred in reopening the assessment u/s 147 that the action of the AO in re- Ajit Kumar Jain ITANo.349/Ind/2022 A.Y.2006-07 2 opening the assessment was without jurisdiction and the same was barred by limitation. 3.That in the facts and circumstances of the case, the Ld. CIT(A) erred in maintaining addition of Rs.17,50,000/- u/s 69C as alleged unexplained expenditure in making donation for admission of daughter. 4.That in the facts and circumstances of the case, the Ld. CIT(A), erred in maintaining charging of interest u/s 234A of Rs.4,94,807/- when there was no delay in filing return of income. 5. That in the facts and circumstances of the case, the Ld. CIT(A) erred in maintaining charges of inters u/s 234B of Rs.5,16,793/- ” 3. Apropos to ground no.1 & 2 the ld. AR submitted that the Ld. AO has initiated reassessment proceedings u/s 147 of the Act and has also issued notice u/s 148 of the Act by recording a satisfaction note but without application of mind and without having valid reason to believe that income has escaped assessment for relevant assessment year 2006-07. Ld. AR drew our attention towards paper book pages 7,8 & 9 and submitted that from the material seized during search and seizure operation of People’s Group thereby no mentioning of any donation received from the assessee. He further submitted that from the copy of the statement, recorded statement of assessee’s wife recorded by the Ld. AO. 4. It is also clear that in question no.10 the Ld. AO himself noted that before the name of your daughter nil cash amount has been shown and wife of assessee has also replied that no cash amount has been given to the college as donation or capital fees. Therefore, Ld. AO proceeded to initiate reassessment proceedings without having any incriminating facts or material in his hands and without application of mind, therefore, initiation of reassessment proceedings u/s 147 of Ajit Kumar Jain ITANo.349/Ind/2022 A.Y.2006-07 3 the Act, notice u/s 148 of the Act and consequential reassessment order dated 17.01.2014 may kindly be quashed. 5. Replying to the above Ld. Sr. DR vehemently supported the initiation of reassessment proceedings and submitted that during search and seizure operation of People’s Group some incriminating documents were found and seized from Mr. Vijay Varigya and out of those documents and facts of giving cash donation/capital fees was revealed which was given by the number of parents including the assessee. Therefore, the Ld. AO had reasoned to believe that the amount of cash donation/capital fees given by the assessee to People’s Group to secure the admission in the MBBS course was escaped assessment and therefore, initiation of reassessment proceedings, issuance of notice u/s 148 of the Act and consequent assessment order dated 17.1.2014 has been made after assuming valid jurisdiction, therefore, legal ground 1 & 2 may kindly be dismissed. 6. On careful consideration of rival submissions first of all we note that the Ld. AO recorded following reasons before issuing notice u/s 148 of the Act. “ Reasons to reopen the case u/s 147 of the I.T. Act, 1961 A TDS survey u/s 133A was conducted on the premises of Sarvja Jankalyan Parmarthik Nyas on 09.08.2005. During the course of such proceedings, some documents/loose papers were found and impounded from briefcase of Shri Ram Vilas Vijayvarigya. On perusal of the loose papers, it was found that these documents record amounts received by People’s College of Medical Science and Research Centre in lieu of admission given to various students in MBBS Course. One noticeable Ajit Kumar Jain ITANo.349/Ind/2022 A.Y.2006-07 4 feature of these documents is that the amounts are writing in coded form and that too in pencil. During the course of assessment proceedings for A.Y. 2006-07, the assessing officer i.e. ACIT-1(1) Bhopal found that the list found contained to admission details of all the students mentioning their name, address, phone numbers, sex, date of birth, marks obtained in PCB (Physics, Chemistry and Biology) and DD amount received. The amounts written in pencil represent codes of figure in lakhs which were paid i cash by the donors for securing admission in medical course. The AO added total amount of Rs.j8,65,00,000/- received in cash in the hands of Sarvjanik Jankalyan Parmarthik Nyas as unexplained receipts in the form of donation for A.Y.2006-07. During the course of assessment proceedings for A.Y.2006-07, summons u/s 131 were issued by the then AO to all the above persons’/donors. The statements of these persons were recorded on oath by then AO. It is pertinent here to mention that a number of donors have independently. Confirmed having made the cash payments to the Peoples Group for admission of students to Medical Courses. A search and seizure action on various concerns of the Peoples Group was also carried out in July 2009 and assessments have been completed u/s 153A/153C by the AO i.e. ACIT-1(2), Bhopal in December, 2012. The AO again found cash received from students for admission in medical courses as unexplained and added the same amount in the hands of Sarvjanik Jankalyan Parmarthik Nyas for A>Y.2006-07. As per encloses list of medical students impounded during the course of TDS survey, it is clear that Peoples group has given admission to the medical students only after taking donation in cash from the parents/guardians of the students. 7. Further from copy of the statement of assessee’s wife Smt. Raj Jain available at page no.13 to 16 of assessee’s paper book, we further note that the ld. AO raised question no.10 which as replied by Smt. Raj Jain by stating that they have not paid any cash amount. For the sake of completeness question no.10 asked by Assessing officer and answer to the same given by the asessee’s wife is being reproduced as follows: Ajit Kumar Jain ITANo.349/Ind/2022 A.Y.2006-07 5 न-10 दनांक 09.08.2005 को पीप ु स ु प म ट .डी.एस सव! के दौरान %ी राम&वलास &वजयवग+य के ,ीफके स से अन ु ल/नक-ए िजसम 1क चार प ृ 4ठ है ज8त 1कया गया । इसम पीप ु स कॉलेज म एड=मशन के =लए गये =श?णाAथCयD के नाम, पते, फोन नं., जFमGतAथ, फHस Iडमांड JाKट नं. के अलावा क ु छ राश जो 1क नकद द गई है, =लखी गई है । प ृ 4ठ –4 पर इनका क ु ल योग Qपये 8.41 करोड दशाCया गया है, जो यह दशाCता है 1क एड=मशन के =लए आपके Sवारा अGतTरUत रा=श नगद द गई है । आपकH बेटे/बेट के नाम के सWम ु ख ...NIL.....रा=श नगद देना दशाCया है, क ृ पया इसका YZोत बताएँॽ उ^तर- हमने कोई रा=श नगद नह ं द है । 8. Even from the page no.7,8 & 9 a list to be found and seized from Mr. Vijayvargiya during the search and seizure operation of People’s Group at serial no.52 against Richa Jain i.e. Daughter of assessee nil amount has been mentioned and thus, we safely presume that allegation of the Ld. AO in the satisfaction note regarding escapement of assessment becomes baseless. In view of above noted facts we compel to hold that the ld. AO proceeded to initiate reassessment proceedings without application of mind to the material received from the Investigation Wing and without having reason to believe that income as escaped assessment for A.Y. 2006-07. Therefore, we incline to hold that the initiation of reassessment proceedings u/s 147 of the Act, notice u/s 148 of the Act and impugned reassessment order dated 17.1.2014 passed u/s 147 r.w.s. 143(3) of the Act is bad in law being initiated and passed without assuming valid reason as per mandate of section 147 and 148 of the Act. Accordingly, impugned notice u/s 148 and impugned reassessment order are hereby quashed. Ground no. 1 & 2 of the assessee are allowed. Ajit Kumar Jain ITANo.349/Ind/2022 A.Y.2006-07 6 9. Since by the earlier part of this order, we have allowed legal ground no.1 & 2 of the assessee and have quashed notice u/s 148 of the Act and reassessment order dated 17.01.2014 (supra), therefore, other grounds of assessee on merits are not being adjudicated. 10. In the result, the appeal of the Assessee is allowed. Order was pronounced in the open court on 10 .11.2022. Sd/- ( B.M. BIYANI) Sd/- (CHANDRA MOHAN GARG) लेखा सद य/ACCOUNTANT MEMBER या यक सद य / JUDICIAL MEMBER Indore; दनांक Dated : 10/ 11/2022 ctàxÄ? P.S/.Gन.स. Copy to: Assessee/AO/Pr. CIT/ CIT (A)/ITAT (DR)/Guard file. By order Sr. Private Secretary , Indore