Bombay High Court
The Pr. Commissioner Of Income ... vs Sinhagad Technical Education Society on 24 November, 2021
Author: Amit B. Borkar
Bench: K. R. Shriram, Amit B. Borkar
1 913-ITXA 1454-17.odt
IN THE HIGH COURT OF JUDICATURE AT BOMBAY
ORDINARY ORIGINAL CIVIL JURISDICTION
INCOME TAX APPEAL NO.1454 OF 2017
The Pr. Commissioner of Income Tax (Central) ]
- Pune ] ... Appellant
Versus
Sinhagad Technical Education Society ] ... Respondent
Mr. Sham V. Walve for Appellant.
Mr. R. V. Easwar, Senior Advocate a/w Mr. Niraj D. Sheth i/b Mr. Nitin
Dhumal for Respondent.
CORAM :- K. R. SHRIRAM &
AMIT B. BORKAR, JJ.
DATE :- 24 NOVEMBER, 2021
P. C. :-
1. Heard.
2. Following substantial questions of law are proposed by the Appellant :
(i) Whether on the facts and in the circumstances of the case, the Hon'ble ITAT was right in deleting the addition of Rs.22,45,06,500/- made on account of cash donation collected outside the books of accounts, ignoring the presumption cast against the assessee under Section 292C read with Section 132(4A) to explain plethora of evidence seized during the search from residence of Principal Trustee of assessee society ?
URS 1 of 3 Digitally signed UMESH by UMESH RAMESH RAMESH SHINDE SHINDE Date: 2021.11.25 15:08:00 +0530 2 913-ITXA 1454-17.odt
(ii) Whether on the facts and in the circumstances of the case and in law, the Hon'ble ITAT was right holding that violation of conditions under Section 13(1)(c) would not result in denial of exemption on the whole income and denial be restricted to the income in violation of provisions of Section 13(1)(c) relying on the decision of Bombay High Court in the case of Sheth Mafatlal Gagalbhai Foundation Trust [2001] 249 ITR 533 (Bom) whereas in that case Hon'ble High Court had held that income in violation of Section 13(1)(d) shall be subjected to maximum marginal rate and remainder income shall be chargeable at normal rate of taxes. As such, interpretation of Mafatlal decision is in direct contravention of the earlier decisions of Bombay High Court in the case of Shardaben Bhagubai Mafatlal Public Charitable Trust (247 ITR 1) and also of the Hon'ble Apex Court in the case of Director of Income Tax Vs. Bharat Diamond Bourse, 2002 ?
3. As regards Question (ii), we are not inclined to entertain the same inasmuch as by Finance Act, 1984 - Circular No.387 dated 06/07/1984 issued by the Income Tax Department, Government of India, at 28.6, it is mentioned "In other words, where such a trust contravenes the provisions of section 13(1)(c) or (d) of the Act, the maximum marginal rate of income-tax will apply only to that part of the income which has forfeited exemption under the said provisions ". Copy of the said circular that was tendered by the learned Senior Advocate appearing for Respondent is taken on record and marked 'X' for identification.
URS 2 of 3
3 913-ITXA 1454-17.odt
4. Question (i) is framed as under :-
(i) Whether in the facts and the circumstances of the
case, the Hon'ble ITAT was right in deleting the addition of Rs.22,45,06,500/- that was added by the Assessing Officer relying on documents found during the search at the residence of Principal Trustee of Respondent - Society ?
4. Mr. Easwar, learned Counsel for respondent, waives service.
5. The Registrar (Judicial) / Registrar, High Court, Original Side, Bombay to ensure that the original record in relation to this Appeal is summoned from the Tribunal and offered for inspection of the parties. This paper book is treated sufficient for the purpose of admission of this Appeal. However, the Registry must further ensure preparation of complete paper book in accordance with the rules. The registry in the first instance must send intimation of admission of this Appeal enclosing therewith a copy of this order so as to enable the Tribunal to act accordingly.
(AMIT B. BORKAR, J.) (K. R. SHRIRAM, J.) URS 3 of 3