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2013 (11) TMI 664 - HC - Income Tax


Issues:
Cancellation of registration under Section 12AA of the Income Tax Act, 1961 based on seized documents indicating unaccounted cash receipts during counseling sessions for admissions. The Commissioner of Income Tax (Central) cancelled the registration granted under Section 12AA and directed the computation of income as if no registration existed. The Income Tax Appellate Tribunal (ITAT) allowed the appeals filed by the assessees, setting aside the Commissioner's order.

Analysis:
The judgment revolves around the cancellation of registration under Section 12AA of the Income Tax Act, 1961, due to alleged unaccounted cash receipts during counseling sessions for admissions. The Commissioner of Income Tax (Central) cancelled the registration granted under Section 12AA based on seized documents indicating cash receipts against admission forms during counseling sessions. Following a search and seizure operation, certain documents were found, suggesting cash receipts against admission forms during counseling sessions by Gautam Budh Pravadhik University. The Commissioner relied on the seized document and issued notices to the assessee for unaccounted donations. The assessee failed to provide satisfactory explanations, leading to the cancellation of registration.

The ITAT, in its judgment, analyzed the evidence found during the search and seizure operations. The ITAT observed that the cancellation of registration seemed to be based on taxing the surplus of income over expenditure, rather than substantive violations. The ITAT highlighted that the cancellation was premature, as the assessment proceedings were ongoing. Referring to a similar case, the ITAT concluded that the cancellation was unjustified, as the assessee's activities aligned with the objectives of an educational trust. The ITAT also noted discrepancies in the seized papers, indicating they were not conclusive evidence of unaccounted cash receipts by the assessee trust.

The High Court upheld the ITAT's decision, emphasizing that no substantial questions of law arose from the findings of fact recorded by the ITAT. The High Court concurred with the ITAT's assessment that no concrete evidence of unaccounted donations or capitation fees was found during the search and seizure operation. The High Court affirmed that the presumption under Section 292C of the Income Tax Act was rebutted, and no corroborative evidence was presented against the assessee. Consequently, the High Court dismissed both income tax appeals, affirming the ITAT's decision to allow the appeals filed by the assessees.

In conclusion, the judgment delves into the cancellation of registration under Section 12AA of the Income Tax Act, 1961, based on seized documents indicating unaccounted cash receipts during counseling sessions for admissions. The ITAT's decision to set aside the Commissioner's order was upheld by the High Court, emphasizing the lack of substantial legal questions arising from the factual findings. The judgment underscores the importance of concrete evidence and procedural fairness in tax assessment proceedings.

 

 

 

 

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