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Before: Shri Laliet Kumar & Dr. Mitha Lal Meena
ORDER Per Laliet Kumar, J.M.
The present appeal was filed by the assessee on the following grounds for the assessment year 2009 – 10.
(1) Because the Ld. CIT(A) has erred in confirming the addition of Rs.10,00,000 for alleged donation to an educational institution. (2) Because the Ld. CIT(A) has erred in not giving proper opportunity of being heard.
ITA 201/Agr/2018 2
(3) Because the order appealed against is contrary to the facts, law and principles of natural justice,
Because in any view, the impugned addition of Rs. 10,00,000/- for payment of so called unaccounted donation/capitation fee, made on protective basis, by recourse to proceedings u/s 147 is perverse, wrong & illegal and bad in law. Because in any view, the proceedings initiated u/s 147/148 in the peculiar facts and law of the case is wrong and illegal.
2.2- Because in any view, the proceedings u/s 147/148 are merely on "reason to suspect" as for the so called same expenditure of Rs.10,00,000/- of fees to Rohilkhand Medical College (under the trust M/s. RohilkahndEductaion Charitable Trust), proceedings has also been initiated u/s 147/148 in the case of the guardian Dr. Ahmad Tariq Jameel of the appellant.
2.3- Because in any view, the so called notice issued u/s 148 dated 28.03.2016 has not been properly served as per law.
2.4 Because in any view, the impugned assessment framed u/s 144/147 is bad in law. 2.5 Because in any view, the impugned addition of Rs. 10,00,000/- deeming as income of the appellant for so called non submission of explanation of source of investment of so called expenditure in cash of Rs.10,00,000/for his admission in Rohilkhand Medical College (under the trust Mis. RohilkahndEductaion Charitable Trust) is grossly arbitrary, highly unjust, wrong & illegal and against the peculiar facts and law of the case. 2.6 Because in any view, while making the impugned addition of Rs.10,00,000/-
ITA 201/Agr/2018 3 nowhere it has been found or established that the appellant has paid any impugned amount. The protective addition made in the hands of appellant is wrong, illegal and bad in facts and law of the case. Because in any view, the interest charged u/s 234A of Rs. 19,008/-, and u/s 234B of Rs. 1,96,370/- as per Notice of Demand dt.19.12.2016 is wrong and illegal. Because in any view, and without prejudice to the aforesaid grounds, the income assessed, additions made, interest charged in/and the Assessment Order passed u/s 144/147 are wrong, illegal, without proper opportunity, bad in law and against the facts and law of the case.
At the outset the Ld.AR for the assessee has drawn our attention to the order passed by the assessing officer more particularly paragraph 4 wherein, the AO has acknowledged that the substantive additions were made in the hands of the guardians of the assessee. Paragraph 4 of the order of AO provides as under:
“4. Since, the assessee has not filed return in response to notice u/s 148 dated 28/03/2016, this office left with no option but to pass order u/s 144 as per material on records. Order u/s 144)/ 147 has also been passed by Ld. DCIT (International taxation), Noida in the case of guardian of above assessee Shri Dr. Ahmad Tariq jameel vide order dated 30 / 11/2016 after making an addition of Rs. 10,00,000/- for payment of unaccounted donation/ capitation fees. The order in the case of assessee Shri Ahmed Saib Jameel is being passed in his hands on protective basis to protect the interest of revenue” Further our attention was drawn to the following paragraph of the order
ITA 201/Agr/2018 4 of the AO whereby the additions were made in the hands of the assessee, it was to the following effect: “In view of the above the amount of the expenditure of Rs. 10,00,000/- is deemed to be the income of the assessee in this financial year relevant to assessment year 2009-10, and the same is hereby deemed to be income of the assessee on protective basis to protect the interest of revenue. ”
The AR for the assessee has submitted that the additions made in the hands of Dr. Ahmad Tariq Jameel , were settled by the said assesseein the VSV scheme of the revenue. He had also drawn our attention to form 3 issued by the Department in the case of Dr. Ahmad Tariq Jameel. It was submitted by the Ld.AR that since the additions on substantive basis have been settled by the said assessee therefore the additions made on protective basis in th hands of assessee are required to be deleted.
On the other hand the DR for the revenue had not disputed the settlement of the matter by Dr. Ahmad Tariq Jameel and and further the fact that the additions were made in the hence of the assessee on protective basis.
We have considered the rival contention of the parties and perused the material available on record, including the judgments cited at bar during the hearing by both the parties. Admittedly the additions were made in the hands of the assessee on protective basis whereas the additions were made in the hands of Dr. Ahmad Tariq Jameel , on substantive basis. Further it is a matter
ITA 201/Agr/2018 5 of record that the tax liability of Dr. Ahmad Tariq Jameel have been settled in the scheme of the revenue and revenue had also issued form 3 in favour of Dr Jameel.
As the tax liability on substantive basis have been settled by Dr Jamail, therefore the tax liability on protective basis, cannot stand or sustained in the eyes of law after the settlement of the tax lability on substantive basis in the hands of assessee, as the additions were made on protective basis in the hands of the assessee with a view to protect the interest of the revenue. Once the interest of the revenue is protected by way of settlement of the tax liability in the hands of the right person, there is no occasion to tax the assessee who had been assessed on protective basis.
In view of the above we find force in the argument of the assessee, that the additions in the hands of the assessee are required to be deleted. In view of the above and on account of the fact that AO himself as made the addition on protective basis in the hands of the assessee, therefore on the settlement of the dues of Dr Jamil, no tax liability can be fastened on the assessee. Therefore the addition made in the hands of the assessee are deleted.
In view of the above the appeal of the assessee is allowed.