DCIT CENTRAL CIRCLE 2 , FARIDABAD vs. AGGARWAL VIDYA PRACHARINI SABHA, FARIDABAD

ITA 58/DEL/2024Status: DisposedITAT Delhi29 September 2026AY 2016-1719 pages
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What were the facts?

The Income Tax Appellate Tribunal (ITAT) Delhi Bench heard appeals and a cross-objection concerning Aggarwal Vidya Pracharini Sabha for Assessment Years (AY) 2015-16 to 2020-21. The appeals arose from orders passed by the Assessing Officer (AO) under Section 143(3)/153A of the Income Tax Act, 1961, and subsequent appeals to the Commissioner of Income Tax (Appeals) (CIT(A)). A search and seizure operation in the Dev Wine Group on February 19, 2020, led to the assessee's jurisdiction being transferred to the Central Circle, followed by a notice under Section 153A on November 13, 2020. The assessee trust, controlled by the Dev Wine Group, is involved in imparting education. For AY 2015-16 to 2017-18, the CIT(A) deleted additions, holding that no incriminating material was found during the search. For AY 2018-19 to 2020-21, additions were made alleging diversion of funds to specified persons, leading to denial of exemption under Sections 11 & 12 and taxation of surplus at the maximum marginal rate under Section 164(2).

What did the Tribunal hold?

For AY 2015-16 to 2017-18, the Tribunal held that there was absolutely no material before it or in the impugned orders of the lower authorities to suggest that the AO had relied on any seized material or called for explanations based on incriminating material found during the search of the group. The Tribunal found no substance in the grounds raised by the department and agreed with the CIT(A)'s finding that in the absence of incriminating material found or seized during the search, the additions could not be sustained for these AYs. The Tribunal thus upheld the deletion of additions by the CIT(A). For AY 2018-19 to 2020-21, the Tribunal noted the admitted position that the assessee trust runs educational institutions. The AO alleged diversion of funds to other entities controlled by the chairman for personal benefit. Specifically, for AY 2018-19, an allegation of diversion of Rs. 100,00,00,000/- to M/s Tirupati Realbuild Pvt. Ltd. was made, with the AO observing that this entity and others were used as conduits for channeling funds. The judgment does not explicitly state the Tribunal's final decision on the denial of exemption and taxation of surplus for these years, but it details the allegations and the AO's observations regarding fund diversion. The operative part of the judgment for these years is not fully elaborated in the provided text, but the Tribunal's reasoning for AY 2015-16 to 2017-18 suggests a focus on the absence of incriminating material.

What were the issues?

1. Whether, on the facts and in the circumstances of the case and in law, the CIT(A) was right in deleting the addition of Rs. 12,52,47,528/- for AY 2015-16 by holding that documents impounded during a survey operation under Section 133A are not incriminating and cannot be used for assessment under Section 153A. The assessee argued that the CIT(A) correctly deleted the addition as no incriminating material was found during the search. The revenue contended that the CIT(A) erred in deleting the addition, relying on the grounds of appeal which questioned the CIT(A)'s reliance on specific case laws like *Commissioner of Income Tax, Chennai v. S. Ajit Kumar* and *PCIT vs. Abhisar Buildwell Pvt Ltd*, and argued that documents impounded during a survey are not necessarily non-incriminating. 2. Whether, on the facts and in the circumstances of the case and in law, the CIT(A) was right in holding that documents impounded during a survey operation under Section 133A do not amount to incriminating documents, keeping in view the ratio laid down by the Hon'ble Apex Court in the case of *Commissioner of Income Tax, Chennai v. S. Ajit Kumar*. 3. Whether, on the facts and in the circumstances of the case and in law, the CIT(A) was right in placing reliance on the decision of the Hon'ble Apex Court in the case of *PCIT vs. Abhisar Buildwell Pvt Ltd*, ignoring the facts that the assessment order in this case was framed on the basis of incriminating material impounded during the course of survey operation in the case of M/s Tirupati Realbuild Pvt Ltd under Section 133A. 4. Whether the exemption claimed by the assessee under Sections 11 & 12 of the Act was rightly denied for AY 2018-19 to 2020-21 due to alleged diversion of funds to specified persons, leading to taxation of surplus at the maximum marginal rate under Section 164(2). The assessee argued that the CIT(A) had deleted additions for AY 2015-16 to 2017-18 due to lack of incriminating material. The revenue contended that funds were diverted, justifying the denial of exemption and taxation of surplus.

Which sections of the Income-tax Act were involved?

Section 143(3),Section 153A,Section 133A,Section 13(3),Section 11,Section 12,Section 164(2)

AI-generated summary — verify with the full judgment below

P a g e | 1 9 Appeals Aggarwal Vidya Pracharini Sabha (AY. 2015-16 to 2020-21) INCOME TAX APPELLATE TRIBUNAL, DELHI BENCHES, NEW DELHI BENCH: H BEFORE SHRI ANUBHAV SHARMA, JUDICIAL MEMBER AND SHRI KRINWANT SAHAY, ACCOUNTANT MEMBER

ITA Nos. 49, 57 & 58/DEL/2024 (निर्धारणवर्ा/Assessment Years: 2015-16 to 2017-18) DCIT, CENTRAL CIRCLE-2, AGGARWAL VIDYA FARIDABAD PRACHARINI SABHA 3RD FLOOR, INCOME TAX TIGAON DEPARTMENT, CGO ROAD,BALLABHGARH, COMPLEX, NIT FARIDABAD, FARIDABAD Vs. HARYANA, FARIDABAD- 121001, HARYANA FARIDABAD-121004, HARYANA अपीलधर्थी Appellant प्रत्यर्थी Respondent Permanent Account Number of AABTA3409Q Assessee: ITA Nos.3201 to 3203/DEL/2023 (निर्धारणवर्ा/Assessment Years: 2018-19 to 2020-21) AGGARWAL VIDYA DCIT, CENTRAL CIRCLE- 2, FARIDABAD FARIDABAD-121004, FARIDABAD-121001, HARYANA HARYANA अपीलधर्थी Appellant प्रत्यर्थी Respondent

P a g e | 2 9 Appeals Aggarwal Vidya Pracharini Sabha (AY. 2015-16 to 2020-21) Permanent Account Number of AABTA3409Q Assessee:

C.O.Nos.8 to 10/DEL/2024 In ITA Nos. 49, 57 & 58/Del/2024 (निर्धारणवर्ा/Assessment

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