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Income Tax Appellate Tribunal, [ DELHI BENCH “G”: NEW DELHI ]
Before: SHRI AMIT SHUKLA & SHRI PRASHANT MAHARISHIShri Shiv Charan Goel,
O R D E R PER PRASHANT MAHARISHI, A. M. :
This is an appeal filed by the assessee against the order of the learned CIT (Appeals)-19, New Delhi dated 12.05.2017 for the Assessment Year 2010-11.
2. The assessee has raised the following grounds of appeal :-
“1. That the assessment order passed u/s 143(3) r.w.s. 147 of the Act on 11.03.2016 is perverse to the law and to the facts of the case, because of not invoking the provisions of law contained u/s 153C of the I.T. Act, which the Ld. CIT(A) has failed to appreciate while passing the appellate orders. (Del) of 2017 – Shri Shiv Charan Goel, Delhi.
That the order passed u/s 143(3) / 147 of the Income Tax Act, 1961, on 11.03.2016 by the Assessing Officer, is further perverse to the law and to the facts of the case, because of invoking provisions of law u/s 147 of the Act only upon the borrowed information without having any of his own satisfaction thereof on the availability of any of the material available with him prior to record reasons, which also the CIT(A) has failed to consider while passing the appellate orders.
That the provisions of law invoked u/s 147 is further not legal as tenable because the Assessing Officer did not possess any material on his record which could ever confirm, that only the assessee has paid the donation / capitation fee of Rs. 55 lakhs, in cash at the time of admission of his son in PG Course to Santosh Medical College, Ghaziabad, against whom the proceedings have been invoked / initiated under section 147 of the Income Tax Act, 1961.
4. That the order passed by the Assessing Officer were also frivolous and vexatious, therefore, not tenable, because of getting and granting the approval by the Addl. CIT, Range-56 on a mechanical manner u/s 151 of the Income Tax Act, 1961 as only putting ‘YES’, which the Ld. CIT (Appeals) has further not appreciated while adjudicating the appeal of the appellant.
That the order passed are further not legal because of not taking into consideration the Affidavit filed by the assessee in the course of Assessment proceedings having declined to pay any donation / capitation fee at the time of admission of his son in Santosh Medical College, Ghaziabad.
That the orders passed were also not legal under the law and to the facts of the case, because the Assessing Officer has not called upon the management of the college, in lieu of the rebuttal of Affidavit filed by the appellant declining thereby to pay any capitation / donation fee to the college at the time of admission of his son in PG Courses, who was major and also an independent assessee at that time, of admission of his son in PG courses, who was major and also an independent assessee at that time.
That on the facts and circumstances of the case, the orders passed by the Assessing Officer were not legal, as the Assessing Officer failed to examine the College Authorities u/s 131 of the Page | 2 (Del) of 2017 – Shri Shiv Charan Goel, Delhi. Act, in order to deviate the facts given in the Affidavit filed by the appellant, which has also not been considered by the CIT (Appeals).
8. That the copies of documents if any be available with the Assessing Officer while taking cognizance of Section 147 of the Income Tax Act, 1961, has never been discussed in the reasons recorded, therefore, appears to be not available at that time, which has only thereafter been received from the office of DI(Inv.), during the course of assessment proceedings.
9. That the reasons so recorded by the Assessing Officer talks about the information only and did not discuss about any material if any be received from the office of DI (Inv.), Delhi, prior to record reasons and thereafter to the issuance of notice u/s 148 to the appellant, as such, the orders passed are illegal and not tenable.
That the orders passed are unconstitutional, therefore, not tenable, because the copy of Statement of Dr. P. Mahalingam of Santosh Medical College, received and possessed by the Assessing Officer did not confirm that they have received any donation / capitation fee from the appellant assessee at the time of admission of his son Dr. Neeraj Kumar Goel in Post Graduate Course.
That the copies of seized material if any confirms to be available with the Assessing Officer, from which it could infer, that the assessee has factually paid a sum of Rs. 55 lakhs in cash as donation / capitation fee to Santosh Medical College, were never confronted to the appellant for its rebuttal thereof prior to pass the orders, as such the orders passed are unconstitutional, having no locus standi under the law.
That the orders passed are further illegal because of drawing inference only on the photocopies of the material if any claimed / purported to have been received by the Assessing Officer from the office of DI (Inv), Delhi, after recording the reasons, without confirming to its bonafide and genuineness thereof.
That the orders passed u/s 143(3) / 147 of the Income Tax Act, 1961, are further not tenable because the Assessing Officer was not having his proper jurisdiction to decide this case. Page | 3 (Del) of 2017 – Shri Shiv Charan Goel, Delhi.
That the initiation of penalty proceedings u/s 271(l)(c) of the Act, is also illegal, as such not tenable.
That charging of interest u/s 234B Income Tax Act, 1961 is also illegal as against the law and to the facts of the case. ”
3. The assessee in his appeal has mainly challenged the action of the learned Assessing Officer in re-opening the assessment under section 147 of the Income Tax Act and further confirmation of the addition of Rs.55 lakhs under section 69C of the Act. The assessee is aggrieved with both the actions and has preferred an appeal before us.
The brief facts of the case is that assessee is an Individual, who filed his return of income originally at Rs.1,52,100/- applying the provisions of section 44AD of the Income Tax Act. Subsequently, there was a search under section 132 of the Act on 27.06.2013 at ‘Santosh Group of Institution’. After the search an information was passed on from the DIT, Investigation, New Delhi, vide letter dated 11.03.2015 that assessee has paid Rs.70 lakhs at the time of admission of his son, Dr. Neeraj Goel in MD Course to Santosh Medical College, Ghaziabad on 3.02.2010. Therefore, the learned Assessing Officer recorded the reason on 27.03.2015 and issued notice under section 148 of the Act to the assessee. In response to the notice the assessee appeared before the Assessing Officer and he was asked to submit the source of income and source of fees paid to the above institute. The assessee submitted that he has paid a fees of Rs.15 lakhs only which is the regular fees, but has not paid Rs.55 lakhs, which is claimed to be capitation fees. The learned Assessing Officer rejected the contention of the assessee for the reason that cash donation is found during the search on Santosh Group of Institutions. Dr. P. Mahalingam, the Managing Trustee was examined, who confessed about receiving the capitation fees. He also submitted a date wise list showing the name of the persons and the course for the above Page | 4 (Del) of 2017 – Shri Shiv Charan Goel, Delhi. capitation fees wherein the name of the son of the assessee was found. It was also noted that on 3.02.2010 a sum of Rs.55 lakhs was paid. Therefore, order under section 143(3) read with section 147 of the Act was passed on 11.03.2016 determining the total income of the assessee at Rs.56,52,100/- against the returned income of Rs.1,52,100/-.
5. On appeal before the learned CIT (Appeals) assessee challenged the re-opening on the ground that the learned Assessing Officer has re-opened the case of the assessee purely on the basis of the information received from Investigation Wing without application of his own mind. It was further contended that satisfaction recorded by the approving authority is also not proper as he has not given any reason. On the merits of the case it was contended that assessee has not paid Rs.55 lakhs as alleged by the learned Assessing Officer. It was further stated that there is no evidence that assessee has paid any sum for capitation. The learned CIT (Appeals) rejected the contention of the assessee. According to him, there was a definite information from the Investigation Wing, therefore, the re-opening is made on the definite information. He further stated that as assessee has not filed any return of income, there is no occasion available with the Assessing Officer of making any verification. With respect to the non-application of mind, he held that the assessee has paid Rs.55 lakhs which is not disclosed in his return of income or not as per his known sources of income. Therefore, the reason to belief of the Assessing Officer is correct. Regarding satisfaction of the higher authorities, he held that satisfaction is duly recorded in view of complete details available with the Addl. Director of Investigation. On the merits of the case he held that the name of the son of the assessee appears at Serial No. 117 wherein on 03rd February, 2010 a sum of Rs.55 lakhs was paid for his admission in MD Course. The details are available in the chart submitted by Mr. P. Mahalingam. He further held that several parents have already accepted the payment of the above donations, which were part of above chart. He, therefore, held that addition under section 69C of the Act is correctly made. Page | 5 (Del) of 2017 – Shri Shiv Charan Goel, Delhi.
6. Assessee aggrieved with the order has preferred the appeal before us.
7. The learned authorized representative submitted :-
(i) That the reasons recorded by the Assessing Officer are based on information supplied by the Investigation Wing; there is no independent application of mind by the Assessing Officer. He referred to the reason which clearly shows, according to him, that there is no enquiry made by the Assessing Officer. He, therefore, submitted that the issue is squarely covered in favour of the assessee by the decision of the Hon’ble Delhi High Court in Signature Hotels Pvt. Ltd. Vs. ITO 338 ITR 51 (Del.); (ii) He further stated that satisfaction recorded by the approving authority has merely mentioned “Yes”. He submitted that such satisfaction without any reasoning is incorrect. He referred to the decision of the Hon’ble M.P. High Court in CIT Vs. S. Goyanka Lime and Chemical Ltd. 56 taxman.com 390 (MP). He further stated that Hon’ble Supreme Court has dismissed SLP against the same; (iii) He further stated that information was received during the course of search and, therefore, the learned Assessing Officer should have invoked the provisions of section 153C of the Act and not section 148 of the Act. For this he relied upon the decision of Co-ordinate Bench in Rajat S. Chhaterji Vs. ACIT in (Del) of 2015 [order dated 20.05.2016]; (iv) On the merits of the case he submitted that assessee has not paid any money other than Rs.15 lakhs to the institute and, therefore, in absence of any evidence, addition cannot be made; (Del) of 2017 – Shri Shiv Charan Goel, Delhi.
(v) He further submitted that no cross examination of the person whose statement was recorded was given to the assessee and in absence of cross examination when assessee specifically denied such payment no addition can be made in the hands of the assessee.
7.1 In the end, he submitted that re-opening is invalid and further the addition on the merit also cannot be sustained.
The learned Departmental Representative contested the arguments of the learned authorized representative and submitted that there is a definite information received by the Assessing Officer in the letter that assessee has paid Rs.70 lakhs for the admission of his son. The learned Assessing Officer has reason to believe that income of the assessee has escaped assessment. With respect to the merits he submitted that copy of the statement was given to the assessee and there is no request of cross examination. He, therefore, submitted that assessee does not have any case on the merits. He supported the orders of the lower authorities.
We have carefully considered the rival contentions and also the orders of the lower authorities. The assessee is an Individual, who filed his return of income under section 139(1) of the Act at Rs.1,52,100/-. During the course of search, under section 132 of the Act on 27.06.2013 on Santosh Group of Institutes and Dr. P. Mahalingam, certain documents were seized. The documents revealed receipt of donation over and above the regular course fees. Dr. P. Mahalingam, in his statement under section 132(4) has admitted the receipt of un-accounted money. From those papers it was found that assessee’s son, Dr. Neeraj Goel, who is pursuing MD course in that institute on 3.02.2010 has paid Rs.15 lakhs as regular fees and Rs.55 lakhs as donation. This information was received by the Assessing Officer vide Page | 7 (Del) of 2017 – Shri Shiv Charan Goel, Delhi. letter dated 11.03.2015. Based on this, the learned Assessing Officer recorded the reasons for re-opening under section 147 of the Act, which are placed at page No. 1 of the paper book. The same is as under :-
“ ANNEXURE – A Reasons recorded for issuing Notice u/s 148 of the Act.
Name of the assessee : Shri Shiv Charan Goel Address : 1/7032, Shivaji Park, Shahdara, Delhi – 110 032. PAN : Not-available. Assessment year : 2010-11
A letter dated 05.03.2015 has been received from the Deputy Director of Income Tax (INV.), Unit-5(1), New Delhi in respect of information regarding fee of Rs.70,00,000/- paid in cash to Santosh Medical College, Ghaziabad by Shri Shiv Charan Goel F/O Dr. Neeraj Kumar Goel R/o 1/7032, Shivaji park, Shahdara, Delhi – 110 032. Based on the above information I am satisfied that the fee paid of Rs.70,00,000/- in cash is assessee’s own unexplained income from undisclosed sources and liable to be assessed in the hands of the assessee. Therefore, I have reason to believe that unexplained cash paid towards fee is chargeable to tax and the same has escaped assessment for the year under consideration and is a fit case for reopening u/s 148 of I.T. Act. The proposal for obtaining kind approval of the competent authority; to initiate proceedings u/s 147/148 is hereby put up for necessary approval. Submitted for further directions and approval please. Sd/- (Deepak Kumar ) Income Tax Officer Ward 56 (4), New Delhi.