Case Number: ITA 1595/DEL/2019
Appellant: Maharishi Markandeshwar University Trust, Ambala Cantt
Respondent: Pr.CIT, Central, Gurgaon
Assessment Year: 2010-11
Order Type: Final Tribunal Order
Date of Order: 19th August 2019
Pronounced On: 19th August 2019
IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCHES ‘G’, NEW DELHI
Before Sh. H. S. Sidhu, Judicial Member and Dr. B. R. R. Kumar, Accountant Member
ITA No. 1595/Del/2019 : Asstt. Year : 2010-11
Appellant: Maharishi Markandeshwar University Trust, Ambala Cantt
Respondent: Pr.CIT, Central, Gurgaon
PAN: AACTM0573G
Assessee by: Sh. Ashwani Kumar, CA, Sh. Rohit Goel, CA
Revenue by: Sh. S. S. Rana, CIT DR
Date of Hearing: 3rd July 2019
Date of Pronouncement: 19th August 2019
Order Per Dr. B. R. R. Kumar, Accountant Member:
The appeal is filed by Maharishi Markandeshwar University Trust, Ambala Cantt against the order of Principal Commissioner of Income Tax (Pr.CIT), Central, Gurgaon for the assessment year 2010-11.
A search and seizure operation under section 132 and a survey operation under section 133A were conducted at the premises of Maharishi Markandeshwar University Trust group of cases, Mullana, and their trustees on 31st October 2014.
The trustees of the assessee trust include:
The Principal CIT exercised revisionary powers under section 263 of the Income Tax Act, alleging that the assessment order was erroneous and prejudicial to the interests of the Revenue. The grounds of appeal raised by the assessee were primarily centered around the alleged siphoning of trust funds, bogus expenditures, and diversion of funds to trustees and their relatives.
The distribution of seats in MBBS and BDS courses showed that 50% of seats were reserved for management and NRI quotas. The trust admitted Indian resident students in the NRI quota, violating MCI guidelines. Statements from students and their parents were recorded, revealing that substantial amounts were received by the trust from parents seeking admission under the NRI quota. The Principal CIT held that the guidelines were violated, and the assessment order was set aside on this ground.
Upon review, the tribunal found that the Assessing Officer had examined the issue in detail. Complete details, including FIRC, affidavits of parents, and MCI norms, were provided. The tribunal concluded that no adverse finding by any regulatory authority or any violations of RBI or foreign exchange regulations were noted. The foreign currency received was duly accounted for, and the tribunal held that no action under section 263 was warranted on this ground.
The Principal CIT noted that payments for vehicles purchased in the name of trustees were reimbursed by the trust, violating section 13 of the Act. The tribunal reviewed the evidence and found that the vehicle was purchased by obtaining a loan in the trustee’s name but was used for trust purposes. The vehicle was included in the trust’s fixed assets, and depreciation was claimed. The tribunal held that there was no benefit derived by the trustee from the trust, and no action under section 263 was warranted on this ground.
The Principal CIT alleged that salaries paid to teachers were not properly inquired into by the Assessing Officer. The tribunal reviewed the records and found that the Assessing Officer had examined the issue in detail, including statements from doctors, affidavits, and other evidence. The tribunal held that the payments were genuine, and no case for revision under section 263 was made out.
The Principal CIT noted that servants working at the residences of trustees were employees of the trust, providing services to trustees. The tribunal reviewed the statements and evidence, finding that no salary was paid by the trust for personal services to trustees. The tribunal concluded that no benefit was derived by the trustees from the trust, and no action under section 263 was warranted on this ground.
Based on the detailed review of the issues raised, the tribunal concluded that the assessment order was neither erroneous nor prejudicial to the interests of the Revenue. The tribunal set aside the order passed under section 263 by the Principal CIT, Central, Gurgaon.
This judgment provides a comprehensive overview of the legal and factual aspects considered by the tribunal in reaching its decision.
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