ACIT, Trichy V. M/s. Titan Educational Trust, CHENNAI

ITA 471/CHNY/2011

• Counselvise Citation: [2011] 140 COUNSELVISE.COM (IT) 52184 (ITAT-CHENNAI)
• Duration Of Justice: 9 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 16-12-2011
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: D
• Assessment Year: 2006-2007
• Appeal Filed On: 09-03-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: K E B RENGARAJAN JR
• Assessee Lawyers: V SUBBARAYAN
• Keywords: Unexplained cash credit; Gift; Charitable institution; Principle of natural justice
• Section: 133A; 153A

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL BENCH D CHENN AI BEFORE SHRI ABARAHAM P.GEORGE ACCOUNTANT MEMBER AND SHRI GEORGE MATHAN, JUDICIAL MEMBER .. ITA NO.471/MDS./2011 ASSESSMENT YEAR:2006-07 ITA NO.472/MDS./2011 ASSESSMENT YEAR:2007-08 ASST. COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE-I, TIRUCHIRAPPALLI. VS. M/S.TITAN EDUCATIONAL TRUST, NO.26,1 ST FLOOR,DEENADAYALU STREET, T.NAGAR, CHENNAI 600 017. PAN AABTT 1951 E (APPELLANT) (RESPONDENT) ITA NO.221/MDS./2011 ASSESSMENT YEAR :2006-07 M/S.TITAN EDUCATIONAL TRUST, NO.26,1 ST FLOOR,DEENADAYALU STREET, T.NAGAR, CHENNAI 600 017. VS. ASST. COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE-I, TIRUCHIRAPPALLI. PAN AABTT 1951 E (APPELLANT) (RESPONDENT) DEPARTMENT BY : SHRI K.E.B.RENGARAJAN JR.STANDING COUNSEL ASSESSEE BY : SHRI V.SUBBARAYAN DATE OF HEARING : 30.11.11 DATE OF PRONOUNCEMENT : 16.12 .11 O R D E R PAGE OF 32 M/S.TITAN EDUCATIONAL TRUST 2 PER GEORGE MATHAN, JUDICIAL MEMBER : ITA NO.471/MDS/11 IS AN APPEAL FILED BY THE REVE NUE AGAINST THE ORDER OF COMMISSIONER OF INCOME TAX(A),TIRUCHIRAPALLI IN APPEAL NO.430/08-09 DATED 02.12.2010 FOR ASSESSMENT YEAR 2006-07. ITA NO.221/MDS/11 IS AN APPEAL FILED BY THE REVENUE AGAINST THE ORDER OF COMMISSIONER OF INCOME TAX(A),TIRUCHIRAPALLI IN APP EAL NO.430/08-09 DATED 02.12.2010 FOR ASSESSMENT YEAR 2 006-07. ITA NO.472/MDS/11 IS AN APPEAL FILED BY THE REVENUE AGAINST THE ORDER OF COMMISSIONER OF INCOME TAX(A),TIRUCHIR APALLI IN APPEAL NO.431/08-09 DATED 02.12.2010 FOR ASSESSMENT YEAR 2007-08. AS ALL THE APPEALS RELATED TO THE SAME AS SESSEE AND ARE INTERCONNECTED, ALL THE THREE APPEALS ARE BEING DISPOSED OF BY THIS COMMON ORDER. 2. SHRI K.E.B.RENGARAJAN, JUNIOR STANDING COUNSEL REPRESENTED ON BEHALF OF THE REVENUE AND SHRI V.SUB BARAYAN REPRESENTED ON BEHALF OF THE ASSESSEE. ITA NO.471/MDS./2011 & ITA NO.221/MDS./2011 3(A) IN THE REVENUES APPEAL, THE REVENUE HAS RAI SED THE FOLLOWING GROUNDS. 1.A . ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD. COMMISSIONER OF INCOME TAX(A) HAS ERR ED PAGE OF 32 M/S.TITAN EDUCATIONAL TRUST 3 IN OBSERVING THAT THE ASSESSMENT MADE U/S.153C IS WITHOUT JURISDICTION. 1.B . THE LD. COMMISSIONER OF INCOME TAX(A) HAS FAILED TO NOTE THAT SEARCH WAS CONDUCTED ON 05.10.2 006 AT THE RESIDENTIAL PREMISES OF THE MANAGING TRUSTEE SHRI P.MURUGESAN AND SURVEY WAS ALSO CONDUCTED SIMULTANEOUSLY AT THE PREMISES OF SRI PONNIAH RAMAJEYAM EDUCATIONAL CHARITABLE TRUST DURING THE COURSE OF WHICH INCRIMINATING DOCUMENTS (ANNEXURE- KT/LS/IMP/6 PAGES 1-17) RELATING TO ALLEGED GIFT OF THREE INSTITUTIONS TO THE ASSESSEE WERE FOUND AND IMPOUND ED AND HENCE THE ASSESSMENT MADE U/S.153C IS PER JURISDICTION. 1.C . THE LD. COMMISSIONER OF INCOME TAX(A) HAS FAILED TO NOTE THAT THE ASSESSMENT ORDERS U/S.153C FOR SEVERAL ASSESSMENT YEARS INCLUDING THE ASSESSMENT ORDER FOR ASSESSMENT YEAR 2006-07 RELATING TO SRI PONNIAH RAMAJEYAM EDUCATIONAL CHARITABLE TRUST ON THE SAME SET OF FACTS WERE UPHELD BY THE C.I.T.(A) TRIUCHY VIDE ORDERS DATED 09.11.2009. 2.A . ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE , THE LD. COMMISSIONER OF INCOME TAX(A) HAS ERRED IN GRANTING EXEMPTION U/S.11 WITHOUT NOTING THAT THE ASSESSEE NOT FULFILLING THE BASIC CONDITION OF CHA RITABLE PURPOSE IS NOT ELIGIBLE FOR EXEMPTION U/S.11 AS PE R THE JUDGEMENT OF JURISDICTIONAL HIGH COURT IN THE CASE OF P.S.GOVINDASAMY NAIDU AND SONS VS. ACIT REPORTED IN ITR 324 P.44(MAD.)AND ALSO THE JUDGEMENT OF ITAT PAGE OF 32 M/S.TITAN EDUCATIONAL TRUST 4 HYDERABAD IN THE CASE OF VODITHALA EDUCATION SOCIET Y VS. ADIT(EXEM)(ITAT,HYD.) 20 SOT 353. 2.B . THE LD. COMMISSIONER OF INCOME TAX(A) OUGHT TO HAVE CONFIRMED THE ADDITIONS ESPECIALLY WHEN HE UPH ELD IN PARA 10.2.3. OF THE APPELLATE ORDER THAT RS.33,7 0,000 REPRESENTED EXTRA FEES COLLECTED FROM THE STUDENTS AND THE SAME WERE UNACCOUNTED. 2.C . THE LD. COMMISSIONER OF INCOME TAX(A) HAS FAILED TO NOTE THAT THE PROVISIONS OF SECTIONS 11,12,13 OP ERATE AS AN INTEGRATED CODE AND HENCE EVEN SINGLE VIOLATI ON IS SUFFICIENT TO DENY EXEMPTION U/S.11; THERE WERE SEV ERAL VIOLATIONS IN THIS CASE AND HENCE DENIAL OF EXEMPTI ON U/S.11 IS CORRECT. 3.A . ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E, THE LD. COMMISSIONER OF INCOME TAX(A) HAS ERRED IN DELETING THE ADDITIONS MADE BY THE ASSESSING OFFICE R RELATING TO CORPUS DONATION AT RS.2,46,99,161 WITHO UT NOTING THAT THE ASSESSEE DELIBERATELY AVOIDED FULL- FLEDGED ENQUIRES AND DUE PROCESS OF LAW BY FILING R ETURN OF INCOME U/S.153C ONLY ON 30.10.2008 IN SPITE OF SERVICE OF NOTICE U/S.153C ON THE ASSESSEE AS EARL Y ON 13.11.2007. 3.B . THE LD. COMMISSIONER OF INCOME TAX(A) HAS ERRED IN DELETING THE ADDITIONS BASED ON THE ARGUME NT OF THE A.R. WITHOUT VERIFYING/CAUSING NECESSARY ENQUIR IES RELATING TO CORPUS DONATION ESPECIALLY WHEN THE COMMISSIONER OF INCOME TAX(A) HELD THAT THE ASSESSI NG OFFICER MADE ENQUIRIES ONLY WITH VERY SMALL NUMBER OF PAGE OF 32 M/S.TITAN EDUCATIONAL TRUST 5 DONORS AND MADE THE ADDITIONS ON THAT BASIS THEREBY NOT CONDUCTING ENQUIRY WITH LARGE NUMBER OF DONORS. 3.C . THE LD. COMMISSIONER OF INCOME TAX(A) HAS FAILED TO NOTE THAT THE ASSESSEE DID NOT EXIST FOR CHARITABL E PURPOSE AND IN THE ABSENCE OF ADEQ2UATE PROOF REGARDING THE SOURCES AND GENUINENESS, THE ASSESSIN G OFFICER WAS JUSTIFIED IN ADDING THE RECEIPTS FROM T HE DONORS AS UNEXPLAINED CREDIT U/S.68. 4 . ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE , THE LD. COMMISSIONER OF INCOME TAX(A) HAS ERRED IN DELETING THE ADDITIONS MADE BY THE ASSESSING OFFICE R RELATING TO GIFT FROM SRI PONNIAH RAMAJEYAM EDUCATI ONAL CHARITABLE TRUST AT RS.1,82,00,000 MERELY BASED ON THE ARGUMENT OF THE A.R. WITHOUT VERIFYING/CAUSING NECESSARY ENQUIRIES RELATING TO THE GIFT ESPECIALLY WHEN THE COMMISSIONER OF INCOME TAX(A) HELD THAT THE ASSESSING OFFICER HAS NOT MADE ANY EFFORT TO VERIFY THE GENUINENESS OF THE GIFTS. 5.A . ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD. COMMISSIONER OF INCOME TAX(A) HAS ERR ED IN DELETING THE ADDITIONS MADE BY THE ASSESSING OFF ICER RELATING TO UNEXPLAINED UNSECURED LOANS AT RS.2,85,00,000/- 5.B .THE LD. COMMISSIONER OF INCOME TAX(A) HAS FAILED T O NOTE THAT THE ASSESSEE HAS NOT PROVED CREDITWORTHIN ESS OF THE CREDITORS AND GENUINENESS OF THE TRANSACTION S. 6. A. . ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD. COMMISSIONER OF INCOME TAX(A) HAS ERRED IN GRANTING EXEMPTION U/S.11(1)(A) FOR THE SUSTAINED PAGE OF 32 M/S.TITAN EDUCATIONAL TRUST 6 ADDITION OF RS.33,70,000 AND IN GRANTING RELIEF AT RS.19,20,000 TOWARDS UNACCOUNTED FEES RECEIVED FROM 12 STUDENTS OF B.ED. COURSE. 6.B. THE LD. COMMISSIONER OF INCOME TAX(A) HAS FAILED TO NOTE THAT WHEN COLLECTION OF EXTRA FEES I N RESPECT OF 28 STUDENTS IS PROVED BY IMPOUNDED DOCUMENT LS NO.120, NO SEPARATE PROOF IS REQUIRED FOR THE REMAINING 12 STUDENTS SINCE ALL THE 40 STUDENTS WERE ADMITTED DURING THE SAME FINANCIAL YEAR, FOR THE SA ME COURSE. 6.C . THE LD. COMMISSIONER OF INCOME TAX(A) HAS FAILED TO NOTE THAT COLLECTION OF RS.33,70,000/- BY WAY O F EXTRA FEES FROM THE STUDENTS CANNOT BE TERMED CHARITABLE PURPOSE AS PER SEVERAL JUDICIAL DECISIONS AND HENC E THEY ARE NOT ELIGIBLE FOR EXEMPTION U/S.11. 7.A . ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD. COMMISSIONER OF INCOME TAX(A) HAS ERR ED IN DELETING THE ADDITION TOWARDS CONTRACT PAYMENTS AT RS.67,80,000/-. 7.B . THE LD. COMMISSIONER OF INCOME TAX(A) HAS ERRED IN RELYING UPON THE ARGUMENTS OF AR AND DELETING TH E ADDITIONS WITHOUT ANY ACTUAL VERIFICATION BY HIM DI RECTLY OR CALLING FOR REMAND REPORT FROM THE A.O. 8.A . ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E, THE LD. COMMISSIONER OF INCOME TAX(A) HAS ERRED IN DELETING THE ADDITIONS TOWARDS DISALLOWANCE U/S.40A (3) AMOUNTING TO RS.9,16,000. 8.B . THE LD. COMMISSIONER OF INCOME TAX(A) HAS FAILED TO NOTE THAT THE ASSESSING OFFICER HAS RIG HTLY PAGE OF 32 M/S.TITAN EDUCATIONAL TRUST 7 INVOKED THE PROVISIONS OF SEC.40(A)(3) SINCE THE ASSESSEE EXISTED ONLY FOR THE PURPOSES OF THE PROF IT AND THE EXPENSES WERE DISALLOWABLE AS PER RELEVANT PROVISION. 9.A . ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE , THE LD. COMMISSIONER OF INCOME TAX(A) HAS ERRED IN DELETING THE ADDITION TOWARDS VALUE OF ASSETS TRAN SFERRED AT THE TIME OF TRANSFER EXCLUDING BUILDINGS AT RS.82,97,676/-. 9.B . THE LD. COMMISSIONER OF INCOME TAX(A) HAS FAILED TO NOTE THAT ADDITION RELATING TO CORPUS D ONATION WAS DELETED BY THE COMMISSIONER OF INCOME TAX(A) ON A WHOLE WITHOUT ANALYZING THE BREAK UP AMOUNTS AND AS SUCH THE ADDITION MADE ON A PROTECTIVE BASIS WHICH HAS TREATED AS NON GENUINE GIFT OUGHT TO HAVE BEEN UPHE LD BY HIM. 3(B). IN THE ASSESSEES APPEAL, THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS. 1 . THE ORDER OF THE LD. COMMISSIONER OF INCOME TAX()A IS OPPOSED TO LAW INASMUCH AS THE SAME HAS BEEN PASSED WITHOUT FULLY CONSIDERING AND APPRECIAT ING THE FACTS OF THE APPELLANTS CASE. 2 . THE LD. COMMISSIONER OF INCOME TAX(A) FAILED TO NOTE THAT THE LD. A.O. DID NOT TAKE ANY STEPS TO WARDS VERIFYING THE CORRECTNESS OF THE FEES COLLECTIONS B Y SUMMONING THE PERSONS CONCERNED, AS DEMANDED BY THE ASSESSEE DURING THE COURSE OF ASSESSMENT PAGE OF 32 M/S.TITAN EDUCATIONAL TRUST 8 PROCEEDINGS AND THUS THE ACTION OF THE ASSESSING OFFICER VIOLATED THE PRINCIPLES OF NATURAL JUSTICE. 3 . THE LD. COMMISSIONER OF INCOME TAX(A) HAVING OBSERVED THAT THE JOTTINGS IN THE LOOSE SHEE T (IMPOUNDED DOCUMENT) FOUND DURING THE COURSE OF SURVEY U/S.133A DID NOT RELATE TO THE PREVIOUS YEAR RELEVANT TO A.Y. 2006-07 ERRED IN LAW IN PARTLY SUSTAINING THE ADDITION. 4 . FOR THE ABOVE AND OTHER GROUNDS THAT MAY BE ADDUCED AT THE TIME OF HEARING, IT IS PRAYED THAT T HE HONBLE ITAT MAY DELETE THE ADDITION OF RS.33,70,00 0/- AND THUS RENDER JUSTICE. 4. AS A TECHNICAL GROUND HAS BEEN RAISED BY THE RE VENUE IN GROUND NOS.1.A, 1.B & 1.C AGAINST THE ACTION OF THE LD. C.I.T.(A) IN OBSERVING THAT THE ASSESSMENT MADE U/S .153C IS WITHOUT JURISDICTION, THE SAME IS BEING DECIDED FI RST. IT WAS SUBMITTED BY THE LD. DR THAT THE ASSESSEE IS A TRUS T, WHICH IS DOING THE ACTIVITY OF RUNNING EDUCATIONAL INSTITUTI ONS. IT WAS THE SUBMISSION THAT THERE WAS A SEARCH AND SEIZUR E OPERATION CARRIED OUT ON SHRI R.VISWANATHAN EX.-MIN ISTER, GOVERNMENT OF TAMILNADU AND OTHER RELATED PERSONS O N 23.08.06. IN THAT PROCESS OF SEARCH, THE REGISTERED OFFICE OF THE ASSESSEE WAS ALSO COVERED UNDER A SURVEY U/S.133A. IT WAS THE SUBMISSION THAT IN COURSE OF SEARCH/SURVEY, CER TAIN PAGE OF 32 M/S.TITAN EDUCATIONAL TRUST 9 DOCUMENTS IN RELATION TO THE ASSESSEE HAVE BEEN FOU ND. IT WAS THE SUBMISSION THAT NOTICE U/S.153A(A) HAS BEEN ISSUED AND ASSESSMENT HAD BEEN COMPLETED ON THE SEARCHED PERSONS. AS THE EVIDENCES HAVE BEEN FOUND IN THE C OURSE OF SEARCH ON OTHER PARTIES ON WHOM ASSESSMENT U/S.153A HAD BEEN DONE, ASSESSMENT IN THE CASE OF THE ASSESSEE H AD BEEN MADE U/S.153C. AS THE ASSESSMENT U/S.153C WAS WITH IN JURISDICTION, THE ORDER OF THE COMMISSIONER OF INCO ME TAX(A) ON THIS ISSUE WAS LIABLE TO BE REVERSED. IN REPLY , LD. AR SUBMITTED THAT THE SEARCH HAD BEEN CONDUCTED ON VAR IOUS PERSONS. NO EVIDENCE HAD BEEN FOUND AGAINST THE AS SESSEE IN ANY OF THE SEARCHES OR SURVEYS. IT WAS THE SUBMI SSION THAT EVEN IN THE ASSESSMENT ORDER THERE IS NO ALLEGATION , NOR WAS ANYTHING FOUND IN THE COURSE OF SEARCH ON ANY OF T HE PERSONS. IT WAS THE SUBMISSION THAT ONLY ONE SHEET OF PAPER WAS FOUND IN THE COURSE OF SURVEY IN THE PREMISES OF NPR GRO UP OF COLLEGES IN DINDIGUL IN REGARD TO FIXING OF THE FEE S AS AGAINST THE COLLECTION OF THE FEES FOR THE ASSESSMENT YEAR 2007-08, BUT THE ADDITION HAD BEEN MADE IN THE ASSESSMENT FO R ASSESSMENT YEAR 2006-07. IT WAS THE SUBMISSION THA T AS NOTHING WAS FOUND IN THE COURSE OF SEARCH, ASSESSM ENT U/S.153C WAS NOT CALLED FOR IN THE HANDS OF THE ASS ESSEE. IT PAGE OF 32 M/S.TITAN EDUCATIONAL TRUST 10 WAS ALSO THE SUBMISSION THAT NO SATISFACTION HAD BE EN RECORDED AS REQUIRED U/S.153C IN ANY OF THE CASES W HERE THE SEARCH HAD BEEN CONDUCTED AND WHERE ANY OF THE ALLE GED INCRIMINATING EVIDENCE AGAINST THE ASSESSEE HAD BEE N FOUND. IT WAS THE SUBMISSION THAT AS THERE WAS NO INCRIMIN ATING EVIDENCE ITSELF, THERE WAS NO QUESTION OF RECORDING THE SATISFACTION. IT WAS FURTHER SUBMISSION BY THE LD. AR THAT ASSESSMENT IN THE CASE OF THE ASSESSEE WAS ON PROTE CTIVE BASIS AND THE SUBSTANTIVE ASSESSMENT HAS BEEN DONE IN THE HANDS OF SHRI R.VISWANATHAN AND CONSEQUENTLY THERE COULD BE NO RECORDING OF SATISFACTION FOR MAKING AN ADDITION IN THE HANDS OF ASSESSEE MUCH LESS AN ASSESSMENT U/S.153C. THE SUBMISSION IS THAT IF SATISFACTION WAS THERE, THEN THERE WAS NO ROOM FOR PROTECTIVE ASSESSMENT. 5. AS THE ISSUE OF SATISFACTION HAS BEEN RAISED B Y LD. AR , LD. DR HAD BEEN DIRECTED TO PRODUCE THE ASSESS MENT RECORD IN THE CASE OF R.VISWANATHAN OR IN ANY OF TH E SEARCH CASES WHERE THE SATISFACTION WAS RECORDED IN REGARD TO THE ASSESSEE HEREIN. LD. DR HAS PLACED BEFORE US A COP Y OF THE ASSESSMENT ORDER IN THE CASE OF R.VISWANTHAN PASSED BY THE ASST. C.I.T, CENTRAL CIRCLE-I, TIRUCHIRAPPALLI ON 3 0.12.2008 PAGE OF 32 M/S.TITAN EDUCATIONAL TRUST 11 U/S.153A(A) OF THE ACT. HE ALSO PLACED BEFORE US, A COPY OF THE SHOW CAUSE NOTICE ISSUED IN THE CASE OF R.VISWANATH AN DATED 18.12.2008 AS ALSO THE ORDER SHEET NOTING IN THE CA SE OF R.VISWANATHAN FOR ASSESSMENT YEAR 2006-07. 6. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND WE HAVE ALSO PERUSED THE DOCUMENTS PLACED BEFORE US. AT TH E OUTSET, IT IS NOTICED FROM THE ASSESSMENT ORDER THAT LD. AS SESSING OFFICER IS RELYING UPON THE SEARCH DONE IN THE CASE OF R.VISWANATHAN AND THE SURVEY CONDUCTED IN THE CASE OF THE ASSESSEE AND NPR GROUP OF COLLEGES FOR THE PURPOSE OF COMPLETING THE ASSESSMENT U/S.153C.PERUSAL OF THE ASSESSMENT ORDER IN THE CASE OF SHRI R.VISWANTHAN A S ALSO THE SHOW CAUSE NOTICE SHOWS THAT THE ASSESSING OFFI CER IS QUESTIONING THE CREATION OF THE ASSESSEE TRUST AS A LSO THE GENUINENESS OF ITS TRUSTEES IN THE ASSESSMENT ORDER AND SHOW CAUSE NOTICE. THE ASSESSING OFFICER IN THE ASSESSM ENT ORDER OF SHRI R.VISWANATHAN HAS BASICALLY ATTEMPTED TO HO LD THAT THE ASSESSEE TRUST IS UNDER THE CONTROL OF SHRI R.VISWA NATHAN AND THAT IT IS HIS MONEY, WHICH HAS BEEN ROUTED THROUGH TO ASSESSEE TRUST. NO WHERE IN THE SHOW CAUSE NOTICE OR IN THE ASSESSMENT ORDER IS THERE ANY WHISPER OF ANY EVID ENCE PAGE OF 32 M/S.TITAN EDUCATIONAL TRUST 12 HAVING BEEN FOUND IN THE COURSE OF THE SEARCH AGAIN ST THE ASSESSEE TRUST. A COPY OF THE ORDER SHEET NOTING I N THE CASE OF R.VISWANATHAN, A COPY OF WHICH IS ENCLOSED WITH THIS PART OF THE ORDER, AS ANNEXURE- A DOES NOT SHOW OF ANY SA TISFACTION HAVING BEEN RECORDED FOR THE PURPOSE OF MAKING AN ASSESSMENT IN THE CASE OF THE ASSESSEE TRUST. PERU SAL OF THE PROVISIONS OF SEC.153C SHOWS THAT IT CATEGORICALLY USE THE WORDS WHERE THE ASSESSING OFFICER IS SATISFIED IN .. BELONG TO A PERSON OTHER THAN THE PERSON REFERRED TO IN SE C.153A. THESE WORDINGS ARE IDENTICAL TO THE WORDINGS IN SEC .158BD. THE HONBLE SUPREME COURT IN THE CASE OF MANISH MAH ESWARI REPORTED IN [2007] 289 ITR 341(SC) HAS CATEGORICALL Y HELD THAT IT IS INCUMBENT TO RECORD SATISFACTION IN THE HANDS OF THE PERSON SEARCHED BEFORE INITIATING THE PROCEEDINGS IN THE HANDS OF THE PERSON AGAINST WHOM INCRIMINATING EVID ENCES HAVE BEEN FOUND. IN THE CIRCUMSTANCES, RESPECTFULL Y FOLLOWING THE DECISION OF THE HONBLE SUPREME COURT IN THE C ASE OF MANISH MAHESWARI (SUPRA) AS NO SATISFACTION HAS BEE N FOUND RECORDED IN THE CASE OF R.VISWANATHAN, THE INITIATI ON OF PROCEEDINGS U/S.153C AND THE CONSEQUENTIAL ASSESSME NT ON THE ASSESSEE WOULD HAVE TO BE HELD TO BE BAD IN LAW AND THE FINDING OF THE LD. C.I.T.(A) ON THIS ISSUE STANDS C ONFIRMED. PAGE OF 32 M/S.TITAN EDUCATIONAL TRUST 13 7. FURTHER READING OF THE ASSESSMENT ORDER IN THE CASE OF ASSESSEE CLEARLY SHOWS THAT SOME ADDITIONS HAVE BEE N MADE ON THE BASIS OF EVIDENCES FOUND IN THE COURSE OF SU RVEY IN THE PREMISES OF NPR GROUP OF COLLEGES AT DINDIGUL. HER E A PERUSAL OF THE PROVISIONS OF SEC.153C CLEARLY USES THE WORDS SEIZED OR REQUISITIONED. SEIZURE IS NORMALLY DONE BY INVOKING PROVISIONS OF THE SEC.132 AND REQUISITION BY INVOKI NG THE PROVISION OF SEC.132A. SURVEY IS UNDER SECTION 133A . WHERE ANY EVIDENCE IS FOUND IN THE COURSE OF SURVEY, THE SAME CAN VALIDLY BE USED FOR MAKING AN ASSESSMENT UNDER THE REGULAR PROVISIONS. WHERE EVIDENCES ARE FOUND IN THE COURS E OF SEARCH OR REQUISITION, THEN SUCH PROVISIONS OF SEC. 153A, C ETC. COME INTO PLAY. THE PERUSAL OF THE ASSESSMENT ORDE R IN THE CASE OF THE ASSESSEE CLEARLY SHOWS THAT THERE IS NO EVIDENCE WHICH HAS BEEN USED BY THE LD. ASSESSING OFFICER FO R MAKING THE ASSESSMENT THAT HAS BEEN FOUND IN THE COURSE OF SEARCH. IN FACT IN PARA 6.1 OF THE ASSESSMENT ORDER, ASSESS EE HAS CATEGORICALLY RAISED THIS ISSUE BEFORE THE ASSESSIN G OFFICER AND THE LD. ASSESSING OFFICER HELD THAT ASSESSEE AP PEARS TO BE MYOPIC IN VIEWING THE PROVISIONS OF SEC.153C R.W .S. 153A. LD. AO HAS ALSO MENTIONED THAT INCRIMINATING DOCUME NTS HAVE PAGE OF 32 M/S.TITAN EDUCATIONAL TRUST 14 BEEN SEIZED FROM THE OFFICE OF SPRECT TANJORE, FROM THE RESIDENCE OF THE SO CALLED MANAGING TRUSTEES SHRI P .JANAKAR AND SIGNED CHEQUE BOOKS AND OTHER VALUABLES FROM TH E HOUSE OF SHIVAKUAMR, ADMINISTRATIVE OFFICER OF THE ASSESS EE. HOWEVER, NONE OF THESE INCRIMINATING EVIDENCES FOUN D HAVE BEEN USED AGAINST THE ASSESSEE IN THE ASSESSMENT. FURTHER PERUSAL OF THE GROUND NO.1.B ALSO CLEARLY SHOWS THA T LD. ASSESSING OFFICER IS CLEARLY RELYING ON THE SEARCH IN THE CASE OF MANAGING TRUSTEES MR.P.MURUGESAN AND SURVEY ON T HE PREMISES OF PONNAIAH RAMAJEYATHAMMAL EDUCATIONAL A ND CHARITABLE TRUST. AGAIN NO SATISFACTION NOR ANY INC RIMINATING EVIDENCES FOUND AGAINST THE ASSESSEE HAS BEEN SHOWN TO HAVE BEEN RECORDED OR USED. JUST BECAUSE SEARCH HA S BEEN CONDUCTED ON A PERSON, EVEN ASSUMING HE HAS ANY CHA RGE OR CONTROL OF THE INSTITUTION, IT WOULD NOT MEAN THAT THE INSTITUTION WOULD ALSO BE LIABLE FOR AN ASSESSMENT U/S.153C AS THE WORDS USED U/S.153C USES THE WORDS BELONGS OR BELONG TO A PERSON OTHER THAN A PERSON REFERRED TO SEC.153A. SO UNLES S ANY INCRIMINATING EVIDENCE IS FOUND AND SHOWN TO BE REL ATING TO THE PERSON OTHER THAN THE PERSON SEARCHED, THE PROVISIO NS OF SEC.153C CANNOT BE INVOKED ON SUCH OTHER PERSON, WH O IS NOT SEARCHED AND IN WHOSE CASE NO INCRIMINATING EVI DENCE PAGE OF 32 M/S.TITAN EDUCATIONAL TRUST 15 HAS BEEN FOUND OR USED. EVEN ON THIS GROUND IT IS FOUND THAT THE ASSESSMENT ORDER PASSED U/S.153C IN THE CASE OF THE ASSESSEE IS LIABLE TO BE QUASHED AND WE DO SO. 8. THE OTHER ASPECT THAT HAS BEEN RAISED WHICH SUP PORTS THE CONTENTION OF THE LD. AR THAT NO SATISFACTION H AS BEEN RECORDED IS THAT IN THE ASSESSMENT ORDER OF THE ASS ESSEE THE ADDITIONS ARE MADE PROTECTIVELY. THE FACT THAT PRO TECTIVE ADDITIONS HAVE BEEN MADE SHOWS THAT THE ASSESSING O FFICER HIMSELF WAS NOT SATISFIED IN REGARD TO THE HAND IN WHICH THE ADDITION IS LIABLE TO BE MADE. MUCH WORSE THE ASSES SING OFFICER WAS SATISFIED THAT THE SUBSTANTIVE ADDITION WAS LIABLE TO BE MADE ONLY IN OTHER HANDS. THIS BY ITSELF QUASHE S ANY DOUBT IN REGARD TO THE POSSIBILITY OF RECORDING OF SATISFACTION. IN THE CIRCUMSTANCES, WE ARE OF THE VIEW THAT ASSES SMENT ORDER PASSED BY LD. ASSESSING OFFICER U/S.153C R.W. S. 153A DT.30.12.08 IN THE CASE OF THE ASSESSEE FOR ASSESSM ENT YEAR 2006-07 IS WITHOUT JURISDICTION AND STANDS QUASHED. IN THE CIRCUMSTANCES THE FINDING OF THE LD. COMMISSIONER O F INCOME TAX(A) ON THIS ISSUE STANDS UPHELD. AS WE HAVE QUA SHED THE ASSESSMENT ORDER ITSELF ON ACCOUNT OF THE JURISDICT IONAL ASPECT, WE HAVE NOT GONE INTO THE ISSUE ON MERITS OF THE AD DITION. PAGE OF 32 M/S.TITAN EDUCATIONAL TRUST 16 9. IN REGARD TO THE APPEAL FILED BY THE ASSESSEE, IT WAS SUBMITTED THAT LD. COMMISSIONER OF INCOME TAX(A) HA D SUSTAINED THE ADDITION TO THE EXTENT OF RS.33,70,00 0/- ON THE BASIS OF DOCUMENT FOUND IN THE COURSE OF SURVEY. I T WAS THE SUBMISSION THAT THE DOCUMENT ITSELF DID NOT RELATE TO THE ASSESSMENT YEAR 2006-07 AS THE DATE OF DOCUMENT ITS ELF WAS AS ON 08.08.06. IN REPLY LD. DR VEHEMENTLY SUPPO RTED THE ORDER OF THE LD. COMMISSIONER OF INCOME TAX(A). PE RUSAL OF THE DOCUMENT, WHICH IS THE IMPOUNDED LOOSE SHEET FO UND IN THE COURSE OF SURVEY CONDUCTED IN THE PREMISES OF N PR GROUP OF COLLEGES, DINDIGUL ON 23.08.06 CLEARLY SHOWS THA T THE DOCUMENT MENTIONS THE DATE AS 08.08.06. OBVIOUSLY, THIS RELATES TO THE ASSESSMENT YEAR 2007-08. NO ADDITION ON THIS COUNT CAN BE MADE AT ALL IN ASSESSMENT YEAR 2006-07 . IN ANY CASE, IN REVENUES APPEAL, WE HAVE ALREADY UPHELD T HE ACTION OF THE LD. COMMISSIONER OF INCOME TAX (A) AND QUASH ED THE ASSESSMENT ORDER. CONSEQUENTLY, THIS ISSUE WOULD BE COME ACADEMIC IN NATURE AS IT IS PART OF THE ASSESSMENT FOR THE ASSESSMENT YEAR 2006-07, WHICH WAS MADE BY THE ASSE SSING OFFICER AND HAS BEEN QUASHED BY US. IN THE CIRCUMST ANCES, THE APPEAL OF THE REVENUE IN ITA NO.471/11 IS DISMI SSED AND APPEAL OF ASSESSEE IN ITA NO.221/11 IS ALLOWED. PAGE OF 32 M/S.TITAN EDUCATIONAL TRUST 17 ITA NO.472/MDS./2011 10. IN THIS APPEAL THE REVENUE HAS RAISED THE FOLL OWING GROUNDS:- 1.A. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD. COMMISSIONER OF INCOME TAX(A) HAS ERR ED IN DELETING THE ADDITIONS MADE BY THE ASSESSING OFF ICER RELATING TO CORPUS DONATION AT RS.20,95,000 WITHOUT NOTING THAT THE ASSESSEE DELIBERATELY AVOIDED FULL- FLEDGED ENQUIRES AND DUE PROCESS OF LAW BY FILING R ETURN OF INCOME U/S.153C ONLY ON 30.10.2008. 1.B. THE LD. COMMISSIONER OF INCOME TAX(A) HAS E RRED IN DELETING THE ADDITIONS RELYING ON THE ORDER OF T HE COMMISSIONER OF INCOME TAX(A) FOR ASSESSMENT YEAR 2006-07 SINCE THE ISSUES HAVE NOT BECOME FINAL IN T HE ASSESSMENT YEAR 2006-07 AND THE DONORS, QUANTUM ETC . ARE NOT THE SAME FOR THE ASSESSMENT YEARS 2006-07 AND 2007-08. 2.A. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD. COMMISSIONER OF INCOME TAX(A) HAS ERRED IN DELETING THE ADDITIONS MADE BY THE ASSESSING OFFICE R RELATING TO UNEXPLAINED UNSECURED LOANS AT RS.1,50,00,000/-. 2.B. THE LD. COMMISSIONER OF INCOME TAX(A) HAS FAI LED TO NOTE THAT THE ASSESSEE HAS NOT PROVED CREDIT WORTHINESS OF THE CREDITORS AND GENUINENESS OF THE TRANSACTION. 3. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE, THE LD. COMMISSIONER OF INCOME TAX(A) HAS ERRED IN PAGE OF 32 M/S.TITAN EDUCATIONAL TRUST 18 GRANTING EXEMPTION U/S.11 WITHOUT NOTING THAT THE ASSESSEE NOT FULFILLING THE BASIC CONDITION OF CHA RITABLE PURPOSE IS NOT ELIGIBLE FOR EXEMPTION U/S.11 AS PE R THE JUDGEMENT OF JURISDICTIONAL HIGH COURT IN THE CASE OF P.S.GOVINDASAMY NAIDU AND SONS VS. ACIT REPORTED IN ITR 324 P.44(MAD.)AND ALSO THE JUDGEMENT OF ITAT HYDERABAD IN THE CASE OF VODITHALA EDUCATION SOCIET Y VS. ADIT(EXEM)(ITAT,HYD.) 20 SOT 353. 11. IN REGARD TO GROUND NO.1.A & 1.B, IT WAS THE S UBMISSION OF THE LD. DR THAT THE LD. COMMISSIONER OF INCOME T AX(A) HAS ERRED IN DELETING THE ADDITION MADE BY THE ASSE SSING OFFICER RELATING TO THE CORPUS DONATION AT RS.20,95 ,000/-. IT WAS THE SUBMISSION THAT IN THE ACCOUNTS OF THE ASSE SSEE, THE ASSESSEE HAD SHOWN CORPUS DONATIONS, WHICH HAVE BEE N RECEIVED FROM VARIOUS PERSONS. IT WAS FURTHER SUBM ISSION THAT INFORMATION FROM THE DONORS HAD BEEN CALLED FOR U/S .133(6) AS ALSO IN SOME CASES BY SENDING INSPECTORS FOR VERIFI CATION. IT WAS THE SUBMISSION THAT MANY OF THE DONORS HAD GIVE N MULTIPLE DONATIONS. IT IS FURTHER SUBMISSION THAT MANY OF DONORS ALLEGED THREATS. IT WAS THE SUBMISSION THAT UNACCOUNTED MONEY OF SOME PERSONS HAD BEEN INTRODUC ED IN THE FORM OF CORPUS DONATION AND HAVE BEEN USED TO E XPLAIN THE COST OF CONSTRUCTION. IT WAS FURTHER SUBMISSIO N THAT LD. PAGE OF 32 M/S.TITAN EDUCATIONAL TRUST 19 COMMISSIONER OF INCOME TAX (A) DELETED THE ADDITION BY FOLLOWING HIS ORDER FOR ASSESSMENT YEAR 2006-07 WHE REIN LD. COMMISSIONER OF INCOME TAX (A) HAD DELETED THE ADDI TION BY UPHOLDING THAT THERE WAS VIOLATION OF NATURAL JUSTI CE INSOFAR AS THE EVIDENCE HAD BEEN COLLECTED BEHIND THE BACK OF THE ASSESSEE AND NO OPPORTUNITY HAD BEEN GRANTED TO ASS ESSEE TO REBUT IT. IT WAS FURTHER SUBMISSION THAT THE ASSES SING OFFICER DID NOT HAVE THE REQUISITE TIME TO GRAND THE ASSESS EE SUCH OPPORTUNITY AS ASSESSEE HAD FILED RETURN OF INCOME VERY LATE. IN REPLY LD. AR SUBMITTED THAT RETURN OF INCOME FOR THE ASSESSMENT YEAR 2007-08 WAS FILED ON 03.11.08. IT WAS FURTHER SUBMISSION THAT THE ASSESSEE HAD ALSO RESP ONDED TO THE SHOW CAUSE NOTICE ISSUED. IT WAS ALSO SUBMITTE D THAT THE RETURN COULD BE FILED ONLY ON 03.11.08 AS MANY OF T HE BOOKS OF ACCOUNT OF ASSESSEE WERE ALSO IN THE HANDS OF THE DEPARTMENT. IT WAS FURTHER SUBMISSION THAT THERE I S NO ALLEGATION OF NON REPRESENTATION OR NON CO-OPERATIO N BY THE ASSESSEE. IT WAS THE SUBMISSION THAT ANY EVIDENCE WHICH HAD BEEN FOUND AGAINST THE ASSESSEE COULD HAVE BEEN GIV EN TO THE ASSESSEE. IT WAS FURTHER SUBMISSION THAT EVEN ASSUMING THAT THE ADDITION COULD BE MADE, STILL IT IS ADMITT ED BY THE LD. ASSESSING OFFICER THAT THIS MONEY HAS BEEN USED TOW ARDS THE PAGE OF 32 M/S.TITAN EDUCATIONAL TRUST 20 COST OF CONSTRUCTION, WHICH IS APPLICATION OF INCOM E AND EVEN ON THAT GROUND AS THE AMOUNT HAS BEEN USED FOR APPL ICATION IN THE CONSTRUCTION OF THE BUILDING WHOSE VALUATION IS NOT DISPUTED, NO ADDITION CAN BE MADE IN THE HANDS OF T HE ASSESSEE. 12. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. IT IS NOTICED THAT ADDITION, WHICH HAS BEEN PROPOSED BY THE LD. A SSESSING OFFICER IS ON ACCOUNT OF CORPUS DONATION. IT IS NO TICED THAT IT IS CATEGORICALLY ADMITTED BY HIM IN PAGE-8 OF HIS ORDE R; IT HAS BEEN USED TO EXPLAIN THE COST OF CONSTRUCTION. ONCE IT IS NOTICED THAT THE AMOUNT HAS BEEN EXPENDED TOWARDS T HE COST OF CONSTRUCTION, THE SAME WOULD HAVE TO BE TREATED AS APPLICATION AND CONSEQUENTLY, NO ADDITION ON THIS C OUNT WOULD REMAIN. EVEN ON MERITS, IT IS NOTICED THAT THE ASS ESSEE HAS CATEGORICALLY ON 26.02.08 INFORMED THE ASSESSING OF FICER THAT IF INFORMATION COLLECTED FROM THE DONORS IS GOING T O BE USED AGAINST HIM, HE SHOULD BE GIVEN AN OPPORTUNITY. TH IS SPECIFIC REQUEST HAS ALSO BEEN TOTALLY OVERLOOKED BY THE ASS ESSING OFFICER. IN THE ASSESSMENT PROCEEDINGS, IT IS INCUM BENT THAT EVIDENCES WHICH ARE COLLECTED BEHIND THE BACK OF TH E ASSESSEE AND WHICH IS PROPOSED TO BE USED AGAINST HIM PAGE OF 32 M/S.TITAN EDUCATIONAL TRUST 21 MUST BE GIVEN TO HIM FOR HIS REBUTTAL. IF THIS IS N OT DONE, IT WOULD VITIATE THE VERY ADDITION. IT IS NOTICED THA T LD. COMMISSIONER OF INCOME TAX(A) HAS RELIED UPON THE D ECISION OF HONBLE SUPREME COURT IN THE CASE OF SAHARA INDI A (FARM) REPORTED IN 300 ITR 403 FOR THE PURPOSE OF DELETING THE ADDITION. IN THE SAID CASE, HONBLE SUPREME COURT HAD HELD THAT EVEN IF THE RULES OF NATURAL JUSTICE ARE NOT E MBODIED RULES, THE RULE IS TO BE FOLLOWED TO CHECK ARBITRARY EXERC ISE OF POWER, AND TO SECURE JUSTICE AND TO PREVENT MISCARRIAGE OF JUSTICE. IN THE PRESENT CASE, IT IS NOTICED THAT THE ASSESSEE H AS SPECIFICALLY ASKED FOR OPPORTUNITY AND THAT HAS BEE N COMPLETELY DENIED. IN THE CIRCUMSTANCES, ON MERITS WE ARE OF THE VIEW THAT NO ADDITION ON THIS COUNT IS LIABLE T O BE MADE IN THE HANDS OF THE ASSESSEE. 13. IN REGARD TO GROUND NO.2.1. & 2.B, IT WAS THE SUBMISSION BY THE LD. DR THAT THE COMMISSIONER OF INCOME TAX(A ) ERRED IN DELETING THE ADDITIONS MADE BY THE ASSESSING OF FICER RELATING TO UNEXPLAINED UNSECURED LOANS AT RS.1,50, 00,000. IT WAS THE SUBMISSION THAT ASSESSEE HAD TAKEN A LOAN F ROM M/S.M.G.M.BENEFIT FUND INDIA PVT LTD.. IT WAS THE SUBMISSION THAT THE LOAN WAS TAKEN ON THE PERSONAL SECURITY OF SHRI P.JANAKAR, ONE OF THE TRUSTEES. IT WAS THE SUBMISSI ON THAT SHRI PAGE OF 32 M/S.TITAN EDUCATIONAL TRUST 22 P.JANAKAR WAS NOT CAPABLE OF GIVING SUCH A GUARANTE E AND SHRI P.JANAKAR AND THE ASSESSEE ARE SMOKE SCREENS/N AME LENDERS OF SHRI R.VISWANATHAN. IT WAS THE SUBMISSIO N THAT THE ORDER OF LD. COMMISSIONER OF INCOME TAX (A) BE REVE RSED. 14. IN REPLY, LD. AR SUBMITTED THAT ALL THE EVIDEN CES IN REGARD TO THE LOAN FROM M/S.M.G.M. BENEFIT FUND IND IA PVT. LTD. HAD BEEN PLACED BEFORE THE ASSESSING OFFICER. IT W AS THE SUBMISSION THAT THE AMOUNT OF RS.1.5 CRORES WAS REC ORDED IN THE BOOKS OF ACCOUNT OF THE ASSESSEE. IT WAS FURTH ER SUBMISSION THAT THE ASSESSING OFFICER HAS DONE NOTH ING TO VERIFY WITH THE CREDITORS WHETHER THEY HAD GIVEN TH E LOANS. IT WAS THE SUBMISSION THAT WHEN IT CAME TO THE CORPUS DONATIONS, THE ASSESSING OFFICER HAD SENT INSPECTORS FOR VERIF ICATION. HOWEVER, WHEN IT CAME TO THE CREDITOR M/S.M.G.M.BEN EFIT FUND INDIA PVT. LTD., THE ASSESSING OFFICER SAYS THAT TH E ASSESSEE IS ONLY THE SMOKESCREENS/NAME LENDERS OF SHRI R.VISWAN THAN. EVEN ASSUMING THAT THE AMOUNT WAS NOT RECEIVED FROM M/S.M.G.M. BENEFIT FUND INDIA LTD., THEN AS PER ASS ESSING OFFICER, THE AMOUNT WOULD HAVE BEEN RECEIVED FROM R.VISWANATHAN. IN ANY CASE, THE SOURCE AND THE IDE NTITY STANDS PROVED, THE ASSESSEE CLAIMS THAT THIS AMOUNT WAS PAGE OF 32 M/S.TITAN EDUCATIONAL TRUST 23 RECEIVED FROM M/S.M.G.M.BENEFIT FUND INDIA LTD. TH E ASSESSING OFFICER WANTS TO SAY THAT THE AMOUNT WAS RECEIVED FROM SHRI R. VISWANATHAN, HOW THE ASSESSING OFFICER TAKES SUCH A STAND OR WHAT IS THE EVIDENCE HE HAS TO TAKE SUCH A STAND IS NOT KNOWN. IT WAS THE SUBMISSION THAT ALL THE EVIDENCES HAVE BEEN PLACED BEFORE THE ASSESSING OFF ICER AND DOCUMENTARY EVIDENCES HAVE NOT BEEN VERIFIED BY THE ASSESSING OFFICER. THE SAME CANNOT BE DISCARDED ON MERE SUSPICION OR SURMISES. IT WAS FURTHER SUBMISSION T HAT ORDER OF LD. COMMISSIONER OF INCOME TAX(A) ON THIS ISSUE WAS LIABLE TO BE UPHELD. 15. WE HAVE HEARD THE RIVAL SUBMISSIONS. PERUSAL OF THE ASSESSMENT ORDER CLEARLY SHOWS THAT THE AMOUNT OF RS.1,50,00,000 WAS TAKEN DURING THE FINANCIAL YEAR 2006-07 FROM M/S.M.G.M.BENEFIT FUND INDIA LD.,CHENNAI ON TH E PERSONAL SECURITY OF THE UNDATED SIGNED CHEQUES AN D EXECUTING PROMISSORY NOTES OF SHRI P.JANAKAR. SHRI P.JANAKAR IS THE MANAGING TRUSTEES OF THE ASSESSEE TRUST. WE MAY ALSO MENTION HERE THAT THE ASSESSEE TRUST IS REGISTERED U/S.12AA OF THE ACT. THIS REGISTRATION HAS NOT BEEN WITHDRAWN TILL DATE. THUS, FOR THE PURPOSE OF THE INCOME TAX ACT, THE AS SESSEE TRUST IS A CHARITABLE TRUST AND ITS TRUSTEES ARE AS MENTIONED IN PAGE OF 32 M/S.TITAN EDUCATIONAL TRUST 24 THE TRUST DEED. THE FACT THAT U/S.12AA REGISTRATION CONTINUES IS A TACIT ACCEPTANCE THAT THE TRUST IS GENUINE AND IT S ACTIVITIES ARE GENUINE. WHEN THE VERY FOUNDATION OF THE REGISTRAT ION U/S.12AA CONTINUES, ONE CANNOT QUESTION THE ACTIONS OF THE TRUSTEES ON BEHALF OF THE TRUST, WHICH ARE DONE WIT H BONA FIDE INTEREST OF THE TRUST IN MIND. SUCH ACTIONS CANNOT BE WISHED AWAY BY SURMISES AND CONJECTURES. THE ASSESSEE HAS PLACED BEFORE THE ASSESSING OFFICER THE DETAILS OF THE LOA N OF RS.1.5 CRORES TAKEN FROM M/S.M.G.M. BENEFIT FUND INDIA LTD . THIS EVIDENCE HAS NOT BEEN DISPROVED. AS LONG AS THE SAM E EVIDENCE REMAINS UNDISPUTED, NO ADDITION ON THIS CO UNT CAN BE MADE IN THE HANDS OF THE ASSESSEE. IN THE CIRCUMST ANCES, THE FINDINGS OF THE LD. COMMISSIONER OF INCOME TAX(A) O N THIS ISSUE STAND CONFIRMED. 16. IN REGARD TO GROUND NO.3, THE REVENUE HAS CHAL LENGED THE ACTION OF THE COMMISSIONER OF INCOME TAX(A) IN GRANTING EXEMPTION U/S.11. IT IS SUBMITTED BY LD. DR THAT T HE ASSESSEE WAS NOT FULFILLING BASIC CONDITIONS OF THE CHARITAB LE TRUST. CONSEQUENTLY, LD. COMMISSIONER OF INCOME TAX(A) OUG HT NOT TO HAVE GRANTED THE ASSESSEE THE BENEFIT OF EXEMPTI ON U/S.11 OF THE ACT. IN REPLY, LD. AR SUBMITTED THAT THE AS SESSEE WAS REGISTERED U/S.12AA AND THIS REGISTRATION HAS NOT B EEN PAGE OF 32 M/S.TITAN EDUCATIONAL TRUST 25 WITHDRAWN TILL DATE. IT IS THE SUBMISSION THAT THE LD. COMMISSIONER OF INCOME TAX(A) COULD NOT ENTER INTO ADJUDICATION OF THE REGISTRATION OF THE ASSESSEE U/ S.12AA. LD. COMMISSIONER OF INCOME TAX(A) COULD HAVE AT BEST DE CIDED ONLY IN REGARD TO ANY VIOLATION OF SEC.11 & SEC.13 OF THE ACT. IT WAS THE SUBMISSION THAT NO VIOLATION HAD BEEN RAISE D BY THE ASSESSING OFFICER, WHICH COULD HAVE BEEN UPHELD BY THE LD. COMMISSIONER OF INCOME TAX(A). CONSEQUENTLY, THE OR DER OF THE LD. COMMISSIONER OF INCOME TAX(A) WAS LIABLE TO BE UPHELD. 17. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. ADMI TTEDLY, REGISTRATION U/S.12AA IN THE CASE OF THE ASSESSEE R EMAINS VALID. PERUSAL OF THE ASSESSMENT ORDER DOES NOT T ALK OF ANY OF THE ADDITION RESULTING ON ACCOUNT OF VIOLATION OF S EC.11 AND SEC.13(1) OF THE ACT. THOUGH THE SEC.11 & SEC.13 H AVE BEEN REFERRED TO IN THE ASSESSMENT ORDER, NONE OF THE AD DITION ON THIS COUNT HAS BEEN MADE. ADMITTEDLY LD. COMMISSION ER OF INCOME TAX(A) IS NOT THE AUTHORITY, WHO HAS GRANTED THE REGISTRATION U/S.12AA. CONSEQUENTLY, HE CANNOT WIT HDRAW THE SAME. IT IS ALSO NOTICED THAT NOTHING HAS BEEN PRO DUCED BEFORE US TO SHOW THAT THE REGISTRATION U/S.12AA GRANTED T O THE ASSESSEE HAS BEEN WITHDRAWN. AS LONG AS REGISTRATI ON PAGE OF 32 M/S.TITAN EDUCATIONAL TRUST 26 U/S.12AA HAS NOT BEEN WITHDRAWN AND AS LONG AS THER E IS NO ADDITION MADE ON ACCOUNT OF THE VIOLATION OF SEC.13 & SEC.11, THE LD. COMMISSIONER OF INCOME TAX(A) COULD NOT HAV E MADE ANY ADDITION OR SUSTAINED ANY ADDITION ON THIS COUN T. IN THE CIRCUMSTANCES, WE FIND NO ERROR IN THE ORDER OF THE COMMISSIONER OF INCOME TAX(A), WHICH REQUIRES ANY INTERFERENCE. IN THE CIRCUMSTANCES, THE ORDER OF T HE COMMISSIONER OF INCOME TAX(A) STANDS CONFIRMED. 18. IN RESULT, APPEAL OF THE REVENUE IN ITA NO.471 /MDS./11 & ITA NO.472/MDS./11 STAND DISMISSED AND THE APPEAL O F THE ASSESSEE IN ITA NO.221/MDS./11 STANDS ALLOWED. ORDER PRONOUNCED ON 16 DECEMBER, 2011. SD/- SD/- (ABRAHAM P. GEORGE ) ( GEORGE MATHAN ) ACCOUNTANT MEMBER JUDICIAL MEMBER CHENNAI, DATED THE 16 TH DECEMBER, 2011. K S SUNDARAM COPY TO: ASSESSEE/AO/CIT (A)/CIT/D.R./GUARD FILE PAGE OF 32 M/S.TITAN EDUCATIONAL TRUST 27 PAGE OF 32 M/S.TITAN EDUCATIONAL TRUST 28 PAGE OF 32 M/S.TITAN EDUCATIONAL TRUST 29 PAGE OF 32 M/S.TITAN EDUCATIONAL TRUST 30 PAGE OF 32 M/S.TITAN EDUCATIONAL TRUST 31 PAGE OF 32 M/S.TITAN EDUCATIONAL TRUST 32