The Kolkata Bench of Income Tax Appellate Tribunal ( ITAT ) ordered deletion of Rs.52.25 Lakh addition under section 69A of Income Tax Act,1961 for unaccounted fees due to evidence of proper accounting.
Future Education & Research Trust,appellant-assessee,was registered under sections 12A and 10(23C)(vi) of the Act, with the main objective of providing education. It filed its return of income for the assessment year 2013-14 on September 24, 2013, declaring nil income. The case was selected for scrutiny, and notices were issued and served.
During the assessment, the Assessing Officer (AO) requested details of students admitted through the management quota. In response, the Chairman, Shri Silajit Ghosh, submitted a list of extra fees charged, stating that the fees followed the order from the Government of West Bengal’s Department of Higher Education.
Understanding Common Mode of Tax Evasion with Practical Scenarios, Click Here
However, the Commissioner of Income Tax (Appeals) [CIT(A)] noted that the additional fee of ₹52,25,000 was not shown in the Income and Expenditure Account. As a result, the CIT(A) added this amount under Section 69A in the assessment order dated February 22, 2016, ignoring the facts provided.
The assessee’s appeal to the CIT(A) was dismissed because the assessee did not provide any information to dispute the AO’s findings. The assessment was made ex parte, leading to the dismissal of the appeal.
The two member bench comprising Rajpal Yadav(Vice President) and Rajesh Kumar(Accountant Member) after hearing the rival contentions and reviewing the material on record, overruled the CIT(A)’s decision. It was found that the assessee, engaged in providing higher education and approved under sections 12A and 10(23C)(vi) of the Act, had received additional fees amounting to Rs. 52,25,000.
Understanding Common Mode of Tax Evasion with Practical Scenarios, Click Here
The AO had added this amount under section 69A, stating it was not reflected in the books of accounts. However, the CIT(A) dismissed the appeal without considering the assessee’s online submissions and evidence presented during the hearing.
The appellate tribunal observed that the assessee had provided details and documents proving that the fee payments were made via bank transfers. The submissions had been made on multiple occasions and were available in the paper book.
The tribunal found that the fees were properly accounted for by the assessee and, consequently, set aside the CIT(A)’s order while directing the AO to delete the addition of Rs. 52,25,000.
In short,the appeal filed by the assessee was allowed.
Support our journalism by subscribing to Taxscan premium. Follow us on Telegram for quick updates
