Case Number: ITA 1594/DEL/2019
Appellant: Maharishi Markandeshwar University Trust, Ambala Cantt
Respondent: Pr. CIT, Central, Gurgaon
Assessment Year: 2009-10
Result: 2009-10
Case Filed on: 2019-02-27
Order Type: Final Tribunal Order
Date of Order: 2019-08-19
Pronounced on: 2019-08-19
Tribunal: 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
This case pertains to the assessment year 2009-10 involving Maharishi Markandeshwar University Trust (hereinafter referred to as the ‘assessee’) and the Principal Commissioner of Income Tax (Pr. CIT), Central, Gurgaon. The primary issue revolves around the exercise of revisionary powers under section 263 of the Income Tax Act, 1961, by the Pr. CIT, alleging erroneous and prejudicial assessment orders against the interest of Revenue.
The assessee raised several grounds of appeal challenging the order passed by the Pr. CIT under section 263 of the Income Tax Act. The key points of contention were:
The Pr. CIT alleged that the assessee had siphoned money from the trust by booking bogus expenditures in the form of mess charges and payments to contractors. These allegations were based on suspicions and without conducting any independent inquiry. The assessee argued that the Pr. CIT’s conclusions were formed on the basis of conjectures and lacked substantial evidence.
It was alleged that the assessee was diverting trust money into the hands of trustees and their family members in the form of salaries, interest, and rent payments. The Pr. CIT claimed that trustees obtained other benefits such as the services of employees of the trust and purchased vehicles at discounted values in violation of the provisions of section 13 of the Act.
The Pr. CIT accused the assessee of violating Medical Council of India (MCI) guidelines in the admission of students, which allegedly involved admitting Indian resident students under the NRI quota. The assessee provided comprehensive details, including FIRCs, affidavits from parents, and students’ statements, asserting compliance with MCI norms.
The Pr. CIT contended that the Assessing Officer (AO) did not conduct proper inquiries regarding the payment of salaries to teachers, construction payments, and the purchase of vehicles. The assessee maintained that all relevant documents were submitted, and the AO formed a considered opinion on these issues during the assessment proceedings.
After thorough examination, the Tribunal addressed each ground of appeal as follows:
The Tribunal found that the AO had duly examined the issue of mess charges and payments to contractors during the assessment proceedings. The allegations of bogus expenditure were unsupported by substantial evidence, and the assessee provided detailed records and explanations.
The Tribunal noted that the vehicles purchased in the name of trustees were used for the trust’s purposes and duly recorded in the books of the trust. The reimbursement of vehicle loans was accounted for, and depreciation was claimed on these assets. The Tribunal found no evidence of personal benefit derived by the trustees from these transactions.
The Tribunal examined the MCI guidelines and the assessee’s compliance with the admission process for NRI quotas. The AO had obtained and verified detailed documentation, including affidavits, student statements, and FIRC receipts. The Tribunal held that the assessee adhered to the guidelines, and no unaccounted funds were identified.
The Tribunal observed that the AO conducted extensive inquiries and gathered necessary information during the assessment proceedings. The allegations of improper inquiries were unfounded as the AO formed a reasoned opinion based on available records and documents submitted by the assessee.
The Tribunal concluded that the Pr. CIT’s order under section 263 lacked merit and was based on conjectures and suspicions. The assessment order passed by the AO was neither erroneous nor prejudicial to the interests of Revenue. Consequently, the Tribunal set aside the Pr. CIT’s order and allowed the appeal filed by Maharishi Markandeshwar University Trust.
Case Conclusion: The final judgment was pronounced in the Income Tax Appellate Tribunal, Delhi Benches ‘G’, before Sh. H. S. Sidhu, Judicial Member, and Dr. B. R. R. Kumar, Accountant Member, on 19th August 2019, thereby concluding the case in favor of Maharishi Markandeshwar University Trust for the assessment year 2009-10.
Maharishi Markandeshwar University Trust vs Pr. CIT: ITA No. 1594/DEL/2019 for AY 2009-10
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