M/S. SRI. DEVARAJ URS EDUCATIONAL TRUST FOR BACKWARD CLASSES(REGD),KOLAR vs. ASSISTANT COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE-1(4), BANGALORE

ITA 1561/BANG/2024Status: DisposedITAT Bangalore08 September 2025AY 2019-2053 pages
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What did the Tribunal hold?

The Tribunal decided the issues based on the findings for AY 2019-20, which were agreed to be applied to AY 2017-18 and AY 2018-19. For AY 2019-20, the appeal of the assessee was decided in its favour, leading to the allowance of the assessee's grounds of appeal for AY 2017-18 and AY 2018-19 regarding the addition of capitation fees. The Tribunal noted that the issues raised by the assessee for AY 2018-19 were identical to those for AY 2017-18 and AY 2019-20. Consequently, the grounds of appeal concerning the addition of capitation fees for AYs 2017-18 and 2018-19 were allowed. The Tribunal also noted that the assessee's grounds challenging the validity of search proceedings, assessment orders under section 153A, and notices under section 153A were dismissed as infructuous because the merit of the case was decided in favour of the assessee. The issue regarding compliance with section 65B of the Indian Evidence Act was dismissed as not pressed. The Tribunal did not explicitly decide the addition for AY 2020-21 in the provided excerpt, but the overall result indicates a mixed outcome.

What were the facts?

The Income Tax Appellate Tribunal (ITAT) heard cross-appeals by M/s Sri Devaraj Urs Educational Trust (assessee) and the Assistant Commissioner of Income Tax (Revenue) for Assessment Years (AYs) 2017-18 to 2020-21. The appeals arose from orders of the Commissioner of Income Tax (Appeal). A search under section 132 of the Income Tax Act, 1961, was conducted on the assessee's premises on October 10, 2019. During the search, an Excel sheet was found from the cashier's computer, allegedly detailing capitation fees collected for PG courses and old UG courses. The cashier stated that cash was received by Shri Nagaraj. Incriminating documents related to capitation fee admissions were also found during a search at Sri Siddhartha Education Society and from an agent, Shri T Babu. The Assessing Officer (AO) inferred receipt of unaccounted capitation fees based on these findings.

What were the issues?

1. Whether the addition of Rs. 23,77,50,000/- on account of collection of capitation fees for AY 2020-21 is valid, based on an Excel sheet found during a search and statements recorded under sections 132(4) and 131(1) of the Act, corroborated by materials found from an agent. Assessee's Contention: The assessee's grounds of appeal, particularly for AY 2020-21, pertain to the addition of capitation fees. The judgment does not explicitly detail the assessee's arguments against this addition, but it implies a challenge to the AO's findings and the validity of the addition. The assessee also raised grounds challenging the validity of search proceedings, assessment orders under section 153A, and notices under section 153A, as well as the absence of incriminating material and lack of proper approval under section 153D. Additionally, a ground regarding compliance with section 65B of the Indian Evidence Act was raised but not pressed. Revenue's Contention: The judgment does not explicitly detail the Revenue's arguments. However, it is implied that the Revenue supported the AO's additions based on the search findings and statements.

Which sections of the Income-tax Act were involved?

Section 132,Section 131(1),Section 153A,Section 153D,Section 65B

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Before: SHRI WASEEM AHMED & SHRI KESHAV DUBEY

For Respondent: Shri Murali Mohan, CIT (DR)
Hearing: 16.07.2025Pronounced: 08.09.2025

ITA No.1060-1559-1560-1561/Bang/2024 & 903-1547-1548-1549/Bang/2024

PER WASEEM AHMED, ACCOUNTANT MEMBER:

This is a set of 8 cross appeals filed by the assessee and the revenue arising from the order of Commissioner of Income Tax (Appeal) [hereafter learned CIT(A)] for

The order continues below.

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