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TMI BlogTax Exemptions: Capitation Fees in Educational Institutions: A Legal QuagmireX X X X Extracts X X X X X X X X Extracts X X X X ..... and the revenue authority. The primary issue revolves around the alleged collection of unaccounted capitation fees by the assessee for admission to its educational institutions, a practice prohibited under the trust's norms and relevant statutes. Background The assessee, registered under Section 12A and approved under Section 80G of the Income Tax Act , faced allegations from the re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ence and Its Evidentiary Value: Seizure from Employees' Residences: The primary evidence, including documents and digital data indicating the collection of capitation fees, was seized from the residences of the assessee s employees, not from the assessee directly. This raises crucial questions regarding the direct link between the seized materials and the assessee's operations. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mining their reliability. Income Declaration Scheme (IDS) 2016 and Its Role: Employees Use of IDS 2016: The employees declared the seized cash as their income under IDS 2016. The AO interpreted this as a directive from the assessee-trust, aiming to divert legal scrutiny away from the trust. Legal Interpretation: This action raises questions about the true nature of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... most of which was obtained from employees and not directly from the assessee. The credibility of the employee statements, their subsequent retractions, and the use of IDS 2016 add layers of complexity to the case. It also highlights the nuanced application of legal provisions related to charitable trusts, the collection of unauthorized fees, and the admissibility of evidence in tax-related cases. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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