PUSHPA VIDYA NIKETAN SAMITI,,KOTA vs. ACITDCIT,CENTRAL CIRCLE, KOTA, KOTA

1. The survey u/s. 133A carried out on the office premises of M/s. Quick Advertisement Co., 149, Ballabhbari, Kota on 02.02.2017 is illegal, void ab initio being without jurisdiction and therefore any inference or implications flowing from such an illegal survey, deserves to be ignored or be not given effect to while adjudicating the other grounds relating to the additions towards the declared income or otherwise.

2. The statements recorded on dated 04.02.2017 u/s. 131 of the Act were recorded unauthorized and illegally by the person who was not authorized in law to administer oath. Consequently, there is no evidentiary value of such illegally recorded statement being without authority of law, hence the implication or inference flowing from such statements may be directed to be completely ignored.

(2017-18), the assessee has raised the following grounds of appeal:

1. The survey u/s. 133A carried out on the office premises of M/s. Quick Advertisement Co., 149, Ballabhbari, Kota on 02.02.2017 is illegal, void ab initio being without jurisdiction and therefore any inference or implications flowing from such an illegal survey, deserves to be ignored or be not given effect to while adjudicating the other grounds relating to the additions towards the declared income or otherwise.

3. Rs. 20,30,710 /-: The Ld. CIT(A) erred in law as well as on the facts of the case in confirming the addition made by the Ld. AO on account of alleged suppressed school fees, completely ignoring the consistently followed method of accounting, and other material available on record. The addition so made and confirmed being contrary to provision of law and facts the same may kindly deleted in full. 4.1 The Ld. CIT (A) further erred in law as well as on the facts of the case in confirming the denial of the benefit of exemption of income u/s. 11 & 12 of the Act despite the appellant trust already enjoying the registration under S. 12AA of the Act. Hence, the benefit so denied and confirmed by the CIT (A) being contrary to the provision of law and facts, the authorities below may be directed to allow the benefit of exemption income, as claimed. 4.2 Alternatively, and without prejudice to above, if the addition of the suppressed school fees of Rs. 20,30,710/- is upheld, the same may kindly be declared as entitled to the exemption u/s. 11 & 12 of the Act and thus, assessing the total income at nil. 5. The ld. CIT (A) has erred in law as well as in facts in confirming the charging interest made by the AO u/s. 234A, 234B & 234C of the Act. The appellant totally denies it liability of charging of any such interest. The interest, so charged, being contrary to the provisions of law and facts, kindly be deleted in full. 6. the appellant prays your honor to add, amend or alter any of the grounds of the appeal on or before the date of hearing. In A. The following ground of appeal is modified, as under:

2. The ld. CIT(A) and the AO seriously erred in alleging / taking stand that statement of the assessee recorded during survey on 04.02.2017 were recorded u/s 131, against the correct factual and legal position that the statements were recorded u/s 133A(3)(iii) and therefore such survey statement has no evidentiary value at all. Therefore the reliance placed by the AO and supported by CIT(A) for making/confirming the additions (on this legal aspect that statement were recorded u/s 131 on oath has evidentiary value hence can be used against the assessee), is a complete misinterpretation of law and misreading of the facts on record and hence, the stand of Revenue deserves to be rejected and moreover the implications flowing from such statements may be directed to be completely ignored.”

B. The following additional grounds of appeal are being raised, as under:

7. The impugned notice u/s 148 dt. 15.03.2019 is void ab initio and a nullity, having been issued completely without jurisdiction u/s 147, instead of issuing the notice u/s 153C. Consequently, the impugned assessment proceedings having being initiated in consequence to certain material seized during search & seizure proceedings in the case of Allen Group Kota, the assessment proceedings were to carried out u/s 153C only, being a third party case. Hence, the impugned notice u/s 148 dated 15.03.2019 and the consequent impugned assessment order deserves to be quashed and set-aside.

8. The impugned assessment order dated 30.12.2019 is a nullity being non-est and must be considered as never passed in as much as no DIN number has been generated as per the prescribed procedure, which is in violation of the binding instructions of CBDT and hence, the impugned assessment order may kindly be held as non-est and may kindly be quashed. In 314/JP/2024, A. The following ground of appeal is modified, as under:

2. The ld. CIT(A) and the AO seriously erred in alleging / taking stand that statement of the assessee recorded during survey on 04.02.2017 were recorded u/s 131, against the correct factual and legal position that the statements were recorded u/s 133A(3)(iii) and therefore such survey statement has no evidentiary value at all. Therefore the reliance placed by the AO and supported by CIT (A) for making/confirming the additions (on this legal aspect that statement were recorded u/s 131 on oath has evidentiary value hence can be used against the assessee), is a complete misinterpretation of law and misreading of the facts on record and hence, the stand of Revenue deserves to be rejected and moreover the implications flowing from such statements may be directed to be completely ignored.” B. The following additional grounds of appeal are being raised, as under:

7. The impugned notice u/s 148 dt. 15.03.2019 is void ab initio and a nullity, having been issued completely without jurisdiction u/s 147, instead of issuing the notice u/s 153C. Consequently, the impugned assessment proceedings having being initiated in consequence to certain material seized during search & seizure proceedings in the case of Allen Group Kota, the assessment proceedings were to carried out u/s 153C only, being a third party case. Hence, the impugned notice u/s 148 dated 15.03.2019 and the consequent impugned assessment order deserves to be quashed and set-aside.

8. The impugned assessment order dated 31.12.2019 is a nullity being non-est and must be considered as never passed in as much as no DIN number has been generated as per the prescribed procedure, which is in violation of the binding instructions of CBDT and hence, the impugned assessment order may kindly be held as non-est and may kindly be quashed. In A. The following ground of appeal is modified, as under:

2. The ld. CIT(A) and the AO seriously erred in alleging / taking stand that statement of the assessee recorded during survey on 04.02.2017 were recorded u/s 131, against the correct factual and legal position that the statements were recorded u/s 133A(3)(iii) and therefore such survey statement has no evidentiary value at all. Therefore the reliance placed by the AO and supported by CIT(A) for making/confirming the additions (on this legal aspect that statement were recorded u/s 131 on oath has evidentiary value hence can be used against the assessee), is a complete misinterpretation of law and misreading of the facts on record and hence, the stand of Revenue deserves to be rejected and moreover the implications flowing from such statements may be directed to be completely ignored.” B. The following additional grounds of appeal are being raised, as under:

7. The impugned notice u/s 143(2) dt. 13.11.2019 is void ab initio and a nullity, having been issued completely without jurisdiction, instead of issuing the notice u/s 153C. Consequently, the impugned assessment proceedings having being initiated in consequence to certain material seized during search & seizure proceedings in the case of Allen Group Kota, the assessment proceedings were to carried out u/s 153C only, being a third party case. Hence, the impugned notice u/s 143(2) dated 13.11.2019 and the consequent impugned assessment order deserves to be quashed and set-aside.

8. The impugned assessment order dated 31.12.2019 is a nullity being non-est and must be considered as never passed in as much as no DIN number has been generated as per the prescribed procedure, which is in violation of the binding instructions of CBDT and hence, the impugned assessment order may kindly be held as non-est and may kindly be quashed.

2. For sake of convenience we are taking (A.Y. 2015-16) first as the facts of the matter for all the years are identical, results of this appeal will apply mutatis mutandis to the other two appeals also. The assessee filed its return of income on 31.03.2016 u/s. 139(4) of the Act declaring total income at Rs. 1, 03,060/-. The assessee is running an educational institution; a survey u/s. 133A of the Act was carried out at the premises of the assessee in consequence to the search action in the case of “Allen Group, Kota” on 03.02.2017. Notice u/s. 148 of the Act was issued on 15.03.2019. The assessee again filed its return of income at Rs. 1, 03,060/- in compliance to notice u/s. 148 of the Act. The AO found that the total fee received as per the details in assessment order was 2, 19, 60,470/-, whereas the assessee has shown only 1, 63, 43,957/-, i.e. a difference of Rs. 56, 16,513/-. Although Shri Naresh Jain, Accountant on behalf the assessee surrendered a sum of Rs. 50 Lacs to cover all the error and omissions, but retracted from his statement and not included the same in return of income. Ultimately, the case of the assessee was assessed after making addition of Rs. 56, 16,513/- without giving benefit of section 11 & 12 of the Act. The assessee being aggrieved with the same preferred an appeal before the Ld. CIT (A) - Udaipur-2, who in turn allowed the appeal of the assessee on partly basis. Still, the assessee being aggrieved with the order of the Ld. CIT (A) preferred the present appeal before us.

3. We have gone through the order of the AO, order of the Ld. CIT (A) and submissions of the assessee alongwith grounds taken before us. Ground No. 1 is not pressed, hence dismissed. Ground No. 2 is a legal ground taken by the assessee, wherein it was under challenge that “The statements recorded vide dated:04.02.2017 u/s. 131 of the Act were unauthorized and illegal. Consequently, there is no evidentiary value of such illegally recorded statement being without authority of Law, hence the implication or inference flowing from statements may be directed to be completely ignored.” We have considered the ground taken by the assessee in the light of provisions of section 131 of the Act and judicial pronouncements of various coordinate benches and Hon’ble High Courts and Apex Court.

4. It is found that the similar issue on the validity of statements recorded u/s. 131 of the Act during the survey proceedings u/s. 133A of the Act by the coordinate bench, Jaipur in the case of M/s. Nikhaar Fashions wherein Accountant Member was author and observed as under: “16. Moreover, as far as the authenticity of the statement recorded during the survey proceedings are concerned, Section 133A does not empower the authorities to record the statements. This is a settle position of law that the statement obtained under section133A would not automatically bind upon the assessee. However, an admission is extremely an important piece of evidence but it cannot be said that it is conclusive; and it is open to the person who made the admission to show that it is incorrect. The burden lies on the assessee to establish that the admission made in the statement at the time of survey was wrong and that there was no additional income. Judgment in CIT v. S. Khader Khan Son [2008] 300 ITR 157 (Mad.) is very important as Supreme Court also affirmed this judgment S. Khader Khan Son's case (supra) where it has been held that the statement, obtained under section133A would not automatically bind upon the assessee.”

5. In view of the above and relying on the decision in the case of CIT vs. S. Khader Khan Son (supra) duly affirmed by the Hon’ble Apex Court, Ground No. 2 taken by the assessee is allowed and it is confirmed that section 133A of the Act does not empower the authorities to record the statements and statements obtained during the survey proceedings would not automatically bind the assessee. However, burden still lying on the assessee to prove the statement otherwise in the light of substantive evidences.

6. Ground No. 5 is consequential in nature; hence no specific adjudication is required and Ground No. 6 is general in nature again no specific adjudication is required. Ground Nos. 3, 4.1 and 4.2 are substantive in nature and require specific adjudication by the Bench. The assessee is involved in imparting school education in the name of Bhagat Public School and the administration of the same is being managed by Shri Naresh Jain. A survey was conducted u/s. 133A of the Act at the premises of the assessee and also at M/s. Quick Advertisement Co., Prop. Smt. Nisha Jain. During the survey at M/s. Quick Advertisement Co. certain documents were seized as Annexure A-15/Page No. 37-41, A-15/Page No. 42-49 and A-15/Page No. 1-9 containing list of students, i.e. 12th Allen, 11th Allen and student list of LKG to 12th of Bhagat Public School respectively. These documents were confronted to Shri Naresh Jain who confirmed and admitted that these documents related to class wise actual fee collection of the student of Bhagat Public School and that the lower fee collection has been disclosed as compared to the actual fee collected by the Bhagat Public School and therefore offered for taxation Rs. 50 Lacs for each year, i.e. A.Y.s 2015-16, 2016-17 and 2017-18.

7. Now, here again we would like reiterate that being a survey matter, this bench is relying on the documents being seized in the light of section 292C of the Act and no importance is being given to the statements recorded u/s. 131 of the Act. For sake of ready reference provisions of section 292C of the Act are reproduced herein below as under: “Section - 292C, Income-tax Act, 1961 - FA, 2024 Presumption as to assets, books of account, etc. 292C. (1) Where any books of account, other documents, money, bullion, jewellery or other valuable article or thing are or is found in the possession or control of any person in the course of a search under section 132or survey under section 133A, it may, in any proceeding under this Act, be presumed— (i) that such books of account, other documents, money, bullion, jewellery or other valuable article or thing belong or belongs to such person; (ii) that the contents of such books of account and other documents are true; and (iii) that the signature and every other part of such books of account and other documents which purport to be in the handwriting of any particular person or which may reasonably be assumed to have been signed by, or to be in the handwriting of, any particular person, are in that person's handwriting, and in the case of a document stamped, executed or attested, that it was duly stamped and executed or attested by the person by whom it purports to have been so executed or attested.] (2) Where any books of account, other documents or assets have been delivered to the requisitioning officer in accordance with the provisions of section 132A, then, the provisions of sub-section (1) shall apply as if such books of account, other documents or assets which had been taken into custody from the person referred to in clause (a) or clause (b) or clause (c), as the case may be, of sub-section (1) of section 132A, had been found in the possession or control of that person in the course of a search under section 132.”

(A.Y. 2015-16) is partly allowed in above terms.

Order pronounced in the open court on24th day of March 2025. Sd/- Sd/- (Dr. S. SEETHALAKSHMI) (GAGAN GOYAL) JUDICIAL MEMBER ACCOUNTANT MEMBER Jaipur, िदनांक/Dated: 24/03/2025 Copy of the Order forwarded to: 1. अपीलाथ�/The Appellant , 2. �ितवादी/ The Respondent. आयकर आयु� CIT 3. िवभागीय �ितिनिध, आय.अपी.अिध., Sr.DR., ITAT, 4. गाड� फाइल/Guard file. 5.