Sinhagad Technical Education Society Vs DCIT (ITAT Pune)
The case concerns cross appeals filed by Sinhagad Technical Education Society and the Revenue against the common orders of the Commissioner of Income Tax (Appeals) for Assessment Years 2008-09 to 2014-15. The society, registered under Section 12A and engaged in running educational institutions across Maharashtra, was subjected to a search under Section 132 on 6 August 2013. During the search, cash, loose papers, application forms, chits, recommendation letters, SMS records and other documents were seized. The Assessing Officer treated these materials as evidence that the society had collected capitation fees in cash from students admitted under the management quota.
Based on the seized documents and statements recorded under Section 132(4) from Shri Arvind Deshpande, Shri Sharad Bhosale and Dr. Janardan Garde, the Assessing Officer concluded that the society had systematically collected unaccounted capitation fees. According to the assessment, negotiations regarding donations were undertaken by senior officials, students were directed to deposit cash with the accounts officer, and no receipts were issued. The Assessing Officer also relied upon recommendation letters seeking concession in donations, SMS exchanges, documents relating to admission agents, refund records of donations on cancellation of admissions, and confirmation by one student and her father regarding payment of capitation fees. Capitation fees of ₹52.2385 crore for the relevant period, including ₹22.6625 crore for AY 2014-15, were brought to tax. Exemption under Section 11 was denied and the income was assessed accordingly.
