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case of M/s. Santosh Gupta of Institution Maharaji Educational Trust and D.P. Mahalingam, Ghaziabad whose statement was recorded on oath on 27.06.2013 under section 132(4) of the I.T. Act, 1961 and Dr. P. Mahalingam, Chairman of the M/s. Santosh Medical College/Maharaji Educational Trust has confessed that an amount of Rs.19,57,14,500/- as his unaccounted income, in which, a sum of Rs.31,18,000/- stated to have been paid by the assessee was included. The A.O. based upon the information received from the DDIT (Inv.) Unit-V(1), New Delhi noted that assessee's income to the extent of Rs.31,18,000/- has escaped assessment during the F.Y. 2012-13 relevant to A.Y. 2013-14 and proceedings under section 147 of the I.T. Act, 1961 have been initiated on 16.03.2016 after satisfaction note recorded thereof, with the prior approval of the JCIT, Range-43, New Delhi. During the course of assessment proceedings, the A.O. noted that the assessee has paid a sum of Rs.19,50,000/- towards capitation fee/donation for admission of his daughter Miss Gunjan Gahlot for the course of MBBS during the year

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under consideration. The A.O. issued statutory notices to the assessee under sections 147 and 142(1) requiring the assessee to furnish full details and documents and the return of income for the A.Y. 2013-14. During the course of assessment proceedings, the assessee denied that he had made payments of Rs.19,50,000/- in cash to the Institution towards capitation fee/donation. However, the A.O. was not satisfied with the explanation furnished by the assessee and treated the amount of Rs.19,50,000/- as income escaping assessment under section 147 of the I.T. Act, 1961 and added the same back to the income of the assessee and determined the total income of the assessee at Rs.23,20,580/- as against the returned income of assessee at Rs.3,70,580/- under section 143(3)/147 of the I.T. Act, 1961 vide order dated 08.12.2016 and initiated penalty proceedings under section 271(1)(c) of the I.T. Act, 1961 separately.

2.1. The assessee challenged the initiation of re- assessment proceedings under section 148 of the I.T. Act and addition on merit before the Ld. CIT(A). The Ld. CIT(A)

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did not accept the contention of assessee as regards initiation of re-assessment proceedings and addition on merit and did not accept the contention of assessee that no opportunity have been provided to him to cross-examine the person on the basis of whose statement the allegations have been made against the assessee that he has paid capitation fee/donation and without following the principles of natural justice. The assessee also took the plea that the amount is not assessable in the hands of the assessee. The Ld. CIT(A), however, did not accept the contention of assessee and appeal of assessee was accordingly dismissed by confirming the addition made by the A.O.

3. The assessee in the present appeal has challenged the initiation of re-assessment proceedings and addition on merit.

4. During the course of hearing, the Learned Counsel for the Assessee submitted that the entire case is set-up on the basis of information received from DDIT (Inv.), New Delhi in respect of the search conducted and statement recorded of Shri P. Mahalingam, Chairman/Director of

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Santosh Medical College Group of institution whose statement was never provided to assessee and was not subjected to cross-examination on behalf of the assessee. He has submitted that assessee since beginning has denied to have contributed any amount for admission of her daughter to MBBS course. He submitted that there is no evidence on record that assessee made any payment of the impugned amount in question. Therefore, no addition could be made in the hands of the assessee. He has further submitted that even the re-assessment proceedings is illegal and bad in law because it would not make-out any case of reopening of the assessment. He has also submitted that on the day of reopening of the assessment, she was major and as such no reopening could be done in the hands of the assessee and no addition could be made against the assessee. He has submitted that issue is covered by the Order of ITAT, Delhi SMC-Bench, Delhi in the case of Shri Naresh Pamnani, Delhi vs., ITO, Ward 61(5), New Delhi, in ITA.No.1561/Del./2018 Dated 05.03.2019 in which on

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identical facts addition on merit have been deleted by the Tribunal.

5. The Ld. D.R. on the other hand, vehemently relied on the orders of the lower authorities and also filed written submissions. He submitted that the assessee did not dispute the admission of his daughter in Santosh Medical College in MBBS course and that his daughter's name Ms. Gunjan Gahlot was included at S.No.34 in the list of cash received of Rs.23 lakhs on 10.07.2012 as noted by the Ld. CIT(A) in his order at para No.4.1 at page-3 and 4 of the order. Since the assessee failed to prove that he has not paid any capitation fee/donation towards admission of his daughter Ms. Manjeet Singh Gahlot in MBBS Course in Santosh Medical College/Maharaji Educational Trust, he, submitted that addition have been rightly made in the hands of assessee and that reopening of the assessment is wholly justified. He, therefore, prayed that the order of the Ld. CIT(A) be confirmed.

6. I have heard the Learned Representatives of both the parties and perused the material on record.

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7. I have considered the rival submissions of both the parties and perused the material on record. It is not in dispute that the assessee has filed original return of income for the assessment year under appeal on 30.09.2013 declaring income of Rs.3,70,580/-. Such fact is also mentioned in the assessment order. Copy of the notice under section 148 and reasons for the belief that income has escaped assessment are filed at page-13 and 14 of the PB in which the A.O. has recorded that as per information received from Investigation Wing search was carried-out on 27.06.2013 in Santosh Medical College Group of Institutions and Dr. P. Maha Lingam, who was Chairman/ Director of this Institution, in which, he has admitted to have received regular fees by cash as well as unaccounted money and surrendered the same for taxation. During the course of assessment proceedings, the assessee has denied that he had made payment of Rs.19,50,000/- to the Institution. From the careful perusal of the assessment order, it is noticed that the entire case is set-up against the assessee on the basis of statement recorded of Shri P.

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Mahalingam, Chairman/Director of Santosh Medical College Group recorded during the course of search and seizure operation. It is not brought on record if his statement was ever supplied to assessee or subjected to cross-examination on behalf of assessee. There is no other material available on record to justify the addition made against the assessee. vide assessment order dated 08.12.2016. The assessee since beginning of the re-assessment proceedings have denied to have paid any amount to the Medical College. The assessee in his explanation has affirmed that he has not paid any amount for admission of his daughter to MBBS Course. Thus, no material is available on record to prove that assessee made any payment on behalf of his daughter for admission to the MBBS Course. Since the Revenue alleged that the amount in question is paid by assessee for admission of his daughter to the Medical Course, therefore, the burden is very heavy upon Revenue to prove by positive evidence that assessee has in fact made the payment to the Medical College for admission for his daughter. However, no evidence is available on record to prove such contention and

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initial denial of the assessee itself supports the explanation of assessee that no amount is paid by assessee for admission of his daughter in Medical Course. An identical issue on similar set of facts have been considered by ITAT, Delhi Bench in the case of Shri Naresh Pamnani, Delhi vs., ITO, Ward-61(5), New Delhi reported in 2019 (3) TMI 1787 - ITAT Delhi, which is placed on record by the Learned Counsel for the Assessee at pages 75 to 77 of the paper book. The Order of the Tribunal is reproduced as under :

"IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCHES "SMC" : DELHI

BEFORE SHRI BHAVNESH SAINI, JUDICIAL MEMBER

ITA.Nos.1561/Del./2018

Assessment Year 2010-2011

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ORDER

This appeal by assessee has been directed against the Order of Ld. CIT(A)-27, New Delhi, Dated 29^thJanuary, 2018, for the assessment year 2010-2011.

2. Briefly the facts of the case are that assessee filed return of income declaring income of Rs.29,14,950/-. An information was received from DDIT, Investigation, New Delhi, on the basis of which, the case of the assessee was reopened under section 147 of the Income-Tax Act, 1961. The reasons are reproduced in the assessment order, in which, it is mentioned that information was received from DDIT, Investigation, New Delhi, regarding donation/ capitation fees paid for the regular course fees to Santosh Medical College, Ghaziabad, for assessment year 2009-2010 through Pr.CIT, Delhi-15. The DDIT, Investigation New Delhi has submitted that a search and seizure action under section 132 of the Income Tax Act was carried out on 27^thJune, 2013 in Santosh Group of Institute & Dr. P. Mahalingam. During the search, certain documents/books of account were seized from the premises of H-1 to H-6, Santosh Nagar, Pratap Vihar. The

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main administrative block of the college which revealed receipts of donation/capitation fee, over and above the regular course fees, paid in cash by the parents of students admitted of accepting the donation/ capitation fees in cash and offered the unaccounted money so received for taxation in the relevant assessment year, In the case of the assessee, it was mentioned that he had made cash payment of Rs.19,75,000/- towards donation/ capitation fee over and above the regular course fees to the above college. Therefore, notice under section 148 was issued. The assessee was confronted with the query regarding cash payment to the above college. The assessee was asked to furnish documentary evidences of the source of the aforesaid payments in cash. The assessee is a Doctor by profession. During the course of assessment proceedings, statement of assessee was recorded under section 131 of the Income-Tax Act. The A.O. noted that Dr P Mahalingam has admitted in his statement under section 132(4) of the Income Tax Act that he had accepted the capitation fees from the assessee and surrendered the amount for taxation. The assessing officer,

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therefore, made addition of Rs.19,75,000/- in the hands of the assessee.

2.1. The assessee challenged the reopening of the assessment as well as the addition on merit before the Ld. CIT(A). However, appeal of assessee has been dismissed.

3. The assessee, in the present appeal, challenged the reopening of the assessment as well as the addition on merit.

4. I have heard the Learned Representatives of both the parties and perused the material available on record.

5. Learned Counsel for the Assessee submitted that assessee raised specific ground on merit to challenge the addition on merit, but, the Ld. CIT(A) without any reason noted in the impugned order that assessee has not raised any ground in this regard. He has submitted that Ld. CIT(A) has reproduced all the grounds in the appellate order, in which, in Ground No.6, assessee has challenged the addition of Rs.19,75,000/-. He has submitted that A.O. or the Investigation Wing have not supplied copy of the statement of

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Dr P Mahalingam to him for rebutting his statement and no cross-examination to his statement have been allowed at any stage, therefore, this statement cannot be read in evidence against the assessee. He has referred to the statement of assessee recorded at assessment stage, copy of which is filed on record, in which he has denied to have paid any amount to Dr P Mahalingam or the above college as capitation fees. He, therefore, submitted that since no material has been confronted to assessee, therefore, no addition could be made against the assessee.

6. On the other hand, Ld. D.R. relied upon orders of the authorities below.

7. After considering the rival submissions, I am of the view that addition on merit is wholly unjustified. It is well settled Law that unless the incriminating documents or statement used against the assessee are confronted to assessee and assessee have been allowed to cross-examine such statements, no such material or statement, could be read in evidence against the assessee. I rely upon the decision of the Hon'ble Supreme Court in the case of Kishan

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Chand Chellaram 125 ITR 713 (SC). In the present case, the A.O. has relied upon the statement of Dr P Mahalingam, recorded during the course of search, under section 132(4) of the Income Tax Act against the assessee, in which he has admitted to have received capitation fees from the assessee of Rs.19,75,000/- in cash. The assessing officer recorded statement of assessee at assessment stage, in which, the statement of Dr P Mahalingam recorded under section 132(4) of the Income Tax Act, have been referred to, but, it is nowhere mentioned in which statement, if such copy of the statement was provided to assessee for explanation of assessee. The assessee denied to have made any cash payment to Dr P Mahalingam. The assessing officer in the assessment order also did not mention any fact if statement Dr P Mahalingam have been provided to the assessee for his comments or was confronted to assessee at any stage. The assessing officer did not record in the assessment order if statement of Dr. P Mahalingam recorded at the back of the assessee by the Investigation Wing, was allowed for cross examination on behalf of the assessee at any stage,

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therefore, statement of third party, cannot be used against the assessee unless assessee has been allowed a right to cross-examine such statement. The A.O. in the assessment order also did not mention, if any, material found during the course of search, was confronted to the assessee. Thus, assessee was justified in denying in making any cash payment to Dr. P Mahalingam at any stage. There is no material available on record to justify the addition against the assessee on merits. In the absence of any material on record against the assessee and in the absence of cross examination to the statement of Dr P Mahalingam on behalf of the assessee, such material cannot be used against the assessee so as to make the impugned addition. I, accordingly, set aside the Orders of the authorities below and delete the addition of Rs.19,75,000/-.

8. Both the parties also argued on initiation of reassessment proceedings and have also cited various case Laws and Ld. D.R. also submitted written submissions. However, in view of the fact that addition on merit have been deleted, the issue of reopening of assessment is left with

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academic discussion only. I do not propose to decide the same. In view of the above, appeal of assessee is allowed.

9. In the result, appeal of Assessee is allowed."

7.1. Considering the totality of the facts and circumstances of the case noted above in the light of material on record as well as Order of the Tribunal in the case of Shri Naresh Pamnani, Delhi (supra), I am of the view that no addition could be made against the assessee of the impugned amount. In view of the above, I set aside the Orders of the authorities below and delete the entire addition in the hands of the assessee. Since the addition on merit have been deleted, therefore, the issue of reopening of the assessment is left with academic discussion only and I do not propose to decide the same. In view of the above, appeal of the assessee is allowed.

8. In the result, appeal of the Assessee is allowed. Order pronounced in the open Court on 04.10.2022. Sd/-

[CHANDRA MOHAN GARG]

JUDICIAL MEMBER

Delhi, Dated 04^thOctober, 2022 VBP/-

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Copy to

//By Order//

Assistant Registrar, ITAT, Delhi Benches,

Delhi.