Pushpa Vidya Niketan Samiti Vs ACIT (ITAT Jaipur)
The Income Tax Appellate Tribunal (ITAT), Jaipur bench, has provided relief to Pushpa Vidya Niketan Samiti by deleting additions made by the Assessing Officer (AO) on account of alleged suppressed school fees for the assessment years 2015-16, 2016-17, and 2017-18. The ITAT’s order, addressing three appeals filed by the assessee against the Commissioner of Income Tax (Appeals) [CIT(A)] order, emphasized that statements recorded during a survey under Section 133A of the Income Tax Act, 1961, lack independent evidentiary value without corroborative evidence.
The case originated from a survey conducted at the premises of M/s. Quick Advertisement Co. in Kota, following a search action involving the Allen Group. During the survey, certain documents, including lists of students and fee collections of Bhagat Public School (run by the assessee), were seized. These documents were confronted with Shri Naresh Jain, an accountant representing the assessee, who initially admitted discrepancies in the disclosed fee collection and offered a sum of Rs. 50 lakhs for taxation for each of the assessment years in question. However, the assessee later retracted this statement and did not include the surrendered amount in their income tax returns.
The AO, relying on the seized documents and the initial statement of the accountant, made additions to the assessee’s income, alleging suppressed school fees amounting to Rs. 56,16,513 for 2015-16, Rs. 36,43,740 for 2016-17, and Rs. 20,30,710 for 2017-18. The AO also denied the benefit of exemption under Sections 11 and 12 of the Act, which are applicable to charitable trusts. The CIT(A) partly allowed the assessee’s appeal but upheld the additions related to suppressed school fees. Aggrieved by this, the assessee approached the ITAT.
The ITAT, in its order, addressed the primary contention of the assessee regarding the evidentiary value of statements recorded during the survey. Relying on a coordinate bench decision in the case of M/s. Nikhaar Fashions and the judgment of the Madras High Court in CIT v. S. Khader Khan Son, which was affirmed by the Supreme Court, the ITAT reiterated the settled legal position that Section 133A does not empower income tax authorities to record sworn statements. Consequently, statements obtained during a survey do not automatically bind the assessee and lack conclusive evidentiary value. The burden lies on the assessee to demonstrate that such admissions were incorrect, supported by substantive evidence.
Furthermore, the ITAT examined the applicability of Section 292C of the Act, which raises a presumption about the truthfulness of documents found during a search or survey. The Tribunal noted that the documents in question were seized from the premises of M/s. Quick Advertisement Co., a third party, and not directly from the possession or control of the assessee school. Citing the principle laid down by the Supreme Court in Tarulata Shyam v. CIT, which emphasizes the literal interpretation of statutes, and other judicial precedents like L.P. Cardoza v. Agrl. ITO and Orissa State Warehousing Corporation v. CIT, the ITAT held that the presumption under Section 292C applies to the person from whose possession the documents are found. Since the documents were not recovered from the assessee’s premises during a survey conducted on them, this presumption could not be directly invoked against Pushpa Vidya Niketan Samiti. The ITAT also pointed out that the AO had not conducted any independent verification or presented further evidence to substantiate the alleged suppression of fees based on the seized documents. Consequently, the ITAT allowed the assessee’s appeal on the addition of suppressed school fees, directing the AO to delete the respective amounts for all three assessment years. The grounds related to the denial of exemption under Sections 11 and 12 and other legal grounds were either considered consequential or left open.
Appellant was represented by : Mr. Mahendra Gargieya, Adv. & Mr. Hemand Gargieya, Adv.
