Case Law Details
Shri R. Bhoopathy Vs CIT (Madras High Court)
he scourge of Capitation Fee by Medical and Engineering Colleges is an infamous and thoroughly extortionist act that is going on in the education sector in our country and it is almost a known fact that these so called Educational Institutions act more like Business Houses rather than Educational Institutions, throwing out of gear the entire higher educational system in India. Parents and students, who are compelled to pay such high Capitation Fee in different forms developed in innovative ways, have no choice in the matter and such Capitation Fee is just extracted from them, making an affordable higher education a mirage for middle class families. What the Revenue-Department i.e., Income Tax Department, having come to know of such facts existing should have proceeded against such Engineering Colleges cancelling their Section 11 exemption entitlements, which most of them illegally enjoy, rather than punishing parents and students by imposing tax on such alleged Undisclosed Income merely on the basis of the so called admission made in the statements recorded under Section 132 (4) of the Act, which too, as we have found in the present case, does not support the case of the Revenue at all.
Therefore, we find that the orders passed by both the Appellate Authorities below are perverse and unsustainable. As we have found the admission made by the Assessee in the statements recorded under Section 132 (4) of the Act was merely to the extent of payment of Capitation Fee and nothing about the source of such payment was disclosed by the Assessee in the said statements, much less such source being an Undisclosed Income liable to be taxed in the hands of the Assessee besides the declared income in the Return filed, this Appeal of the Assessee deserves to be allowed and the same is, accordingly, allowed.
FULL TEXT OF THE ITAT JUDGMENT
Assessee has filed this Appeal, raising the following Substantial Question of Law, arising from the order of the learned Income Tax Appellate Tribunal, in short, ‘Tribunal’, dated 19.01.2007, whereby the learned Tribunal dismissed the appeal of the Assessee and upheld the Addition of Rs.5,60,000/- made in the hands of the Assessee as Undisclosed Income of the Assessee. The Substantial Questions of Law is quoted below for ready reference :
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