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Income Tax Appellate Tribunal, Hyderabad ‘ B ‘ Bench, Hyderabad
Before: Smt. P. Madhavi Devi & Shri S.Rifaur Rahman
Per Smt. P. Madhavi Devi, J.M.
Both are assessee’s appeals for the A.Ys 2011-12 & 2012-13 against the order of the CIT (A)-3, Hyderabad, dated 18.12.2018 and 26.12.2018 respectively.
Brief facts of the case are that the assessee is an individual and a medical practitioner. As per the information received by the Department, the assessee has received an amount of Rs.20 lakhs on 1-3-2011 during the financial year 2010-11 and Rs.14.25 lakhs on 30.04.2011 during the financial year 2011-12 as donation and capitation fees in cash over and above the regular fee prescribed by the Govt. for admission of his son, Shri Anuj Kumar Patel, into Chalimeda Ananda Rao Institute of
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ITA Nos 156 and 157 of 2019 Hemant Kumar Patel Hyderabad.
Medical Sciences run by Arihant Educational Society. This was brought to the notice of the Dy. CIT, Central Circle 2(2) Hyderabad consequent to a search and seizure operation conducted in the case of M/s. Arihant Educational Society on 25.7.2013. Therefore, a notice u/s 153C was issued to the assessee on 22.2.2017 and further notices u/s 143(2) and 142(1) were also issued to the assessee. Subsequently, a show-cause notice was issued on 20.12.2017 to the assessee to produce the requisite material essential for completing the assessment. In response to the same, the assessee filed a reply denying any payment in cash over and above the regular fee prescribed by the Govt. to the Arihant Educational Society and also requested the AO to give him an opportunity to examine the evidence mentioned in the show-cause notice issued by the AO. The assessee requested that the same may be provided to him on or before 25.12.2017 as he had to proceed to a conference/seminar out of Hyderabad. The AO however, observed that the assessee had decided to proceed to out station purposely and that the conference is a ploy to evade the proceeding, even though the intervening days happened to be holidays. He therefore, held that the assessee has not utilized the opportunity given to him and on the basis of the statements of parents of two of the students who have admitted their children to the Arihant Educational Society, he held that the assessee has also paid a sum of Rs.20.00 lakhs in the financial year relevant to the A.Y 2011-12 and Rs.14.25 lakhs in the financial year relevant to the A.Y 2012-13 and brought it to tax as unexplained payment.
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ITA Nos 156 and 157 of 2019 Hemant Kumar Patel Hyderabad.
Aggrieved, the assessee preferred an appeal before the CIT (A) raising a ground also and that he no opportunity was provided to him and also that he was not provided with the copies of the evidence of such seized material, sworn statements, declaration made by Arihant Educational Society etc., for rebuttal. The CIT (A) however, confirmed the order of the AO without deciding the grounds raised by the assessee against non- providing of the copy of the seized material to him. The CIT (A) only considered that the issue has already been settled before the settlement commission whereas the Arihant Educational Society has accepted to have received the donation in cash. Aggrieved by the order of the CIT (A), the assessee is in appeal before us by raising the following grounds of appeal:
“1. The order of the CIT (A) is in gross violation of the provisions of law and hence is bad in law. 2. The CIT (A) erred in upholding the order of the AO which is in gross violation of principles of natural justice and hence bad in law. 3. The CIT (A) has erred in upholding the allegation of the AO that I made a payment of Rs.14.25 lakhs over and above the regular fee prescribed by the Govt. for securing the admission of my son into the College run by the Arihant Educational Society. 4. Any other grounds that may be urged at the time of hearing”.
The learned Counsel for the assessee while reiterating the submissions made before the authorities below, has drawn our attention to the reply given by the assessee to the AO’s notice dated 20.12.2017 both by email as well as by paper mail. He submitted that the assessee was never provided with the details
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ITA Nos 156 and 157 of 2019 Hemant Kumar Patel Hyderabad.
and even the notices issued earlier are devoid of any details and therefore, the assessee was prevented by reasonable cause in supporting and substantiating his case with necessary evidence.
The learned DR, however, relied upon the orders of the authorities below and submitted that the additions are supported by admission made by the Arihant Educational Society and also similarly placed parents of two other students.
Having regard to the rival contentions and the material on record, we find that the assessee has received the notice dated 22.12.2017 for appearing before the AO on 27.12.2017, whereas the assessee being a medical practitioner was attending a medical conference from 25.12.2017. Therefore, the assessee vide letter dated 22.12.2017, had requested the AO to provide the necessary evidence and the statements and also give an opportunity for cross examining the Director of the Arihant Educational Society. But, we find that neither the AO nor the CIT (A) have furnished the required information to the assessee, thus violating the principles of natural justice. Therefore, we deem it fit and proper to set aside the assessment order and direct the AO to provide all the required details to the assessee and also provide him an opportunity to cross examine the Director of the Arihant Educational Society and any other parties whose statements are relied upon by the AO if the assessee so requests. Needless to mention that the assessee shall be given a fair opportunity of hearing.
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ITA Nos 156 and 157 of 2019 Hemant Kumar Patel Hyderabad.
In the result, assessee’s appeals for both the A.Ys are treated as allowed for statistical purposes.
Order pronounced in the Open Court on 31st July, 2019.
Sd/- Sd/- (S.Rifaur Rahman) (P. Madhavi Devi) Accountant Member Judicial Member
Hyderabad, dated 31st July, 2019. Vinodan/sps
Copy to:
1 Shri Hemant Kumat Patel, 14-2-332/1/2 Vaishno Gyan Bagh Colony, Hyderabad 500012 2 Asstt. CIT, Circle 7(1), 8th Floor, Signature Towers, Kondapur, Hyderabad 500084 3 CIT (A)-3 Hyderabad 4 Pr. CIT – 3 Hyderabad 5 The DR, ITAT Hyderabad 6 Guard File
By Order
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