MUMBRA SHIKSHAN PRASARAK MANDAL,THANE vs. ITO (EXEMPTION) - THANE, DY. CIT (CENTRAL CIRCLE) - 1, THANE, THANE

IN THE INCOME-TAX APPELLATE TRIBUNAL“B” BENCH,
MUMBAI
BEFORE SHRI NARENDER KUMAR CHOUDHRY, JUDICIAL MEMBER
&
SHRI PRABHASH SHANKAR, ACCOUNTANT MEMBER
ITA No.376/MUM/2024

(A.Y. 2015-16)
Mumbra Shikshan
Prasarak Mandal
16,
Manpada
Road,
Shubhangi Darshan, Near
Shivaji Statue, Dombivali
(East)
–
421
201,
Maharashtra v/s.
बनाम
Income Tax Officer(Exemption),
Thane / Dy. CIT, Central Circle –
1,6th Floor, Ashar IT Park, Road
Number 16Z, Nehru Nagar, Wagle
Industrial Estate, Thane(West) –
400 604,Maharashtra
स्थायी लेखा सं./जीआइआर सं./PAN/GIR No: AABTM3427G
Appellant/अपीलार्थी
..
Respondent/प्रतिवादी

Appellant by :
Shri Rajesh S. Athavale,AR
Respondent by :
Shri Leyaqat Ali Aafaqui, (Sr.AR)

Date of Hearing
08.07.2025
Date of Pronouncement
16.09.2025

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A.Y. 2012-13, 2013-14, 2014-15, 2015-16, 2016-17, 2017-18

Mumbra Shikshan Prasarak Mandal

आदेश / O R D E R

PER PRABHASH SHANKAR [A.M.] :-

The above captioned appeals have been filed by the assessee against the orders of even date as passed by the Learned Commissioner of Income- tax, Appeal, CIT(A), Pune-11 [hereinafter referred to as “CIT(A)”]
pertaining to the assessment orders passed u/s 147 r.w.s.144 of the Income-tax Act, 1961 [hereinafter referred to as “Act”] for the Assessment
Years 2012-13, 2013-14, 2014-15, 2015-16, 2016-17 and 2017-18.Since the issues involved are common, the facts being identical, barring figurative variations and also that appeals were heard together, they are being taken up for adjudication vide this composite order for the sake of brevity. We take up appeal for AY 2012-13 as the ‘Lead case’. Decision rendered herein would apply mutatis mutandis to rest of other appeals.
2. ITA No.379/MUM/2024(AY 2012-13)
The grounds of the appeals are as under:
1. The learned CIT(A) erred in not declaring the assessment being completed by the learned assessing officer as void-ab-initio.
2. The learned CIT(A) erred in not directing the learned assessing officer for not to rely upon the statement of the trustee recorded during the survey as the same was retracted later.
3. The learned CIT(A) erred in not directing the assessing officer to determine the income of the appellant as per Sections 11 and 12 considering the appellant is a charitable trust registered under Section 12A of the Income tax Act.

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13 to 2017-18 by way of issue of notices u/s 148 of the Act. The assessee did not co-operate in the assessment proceedings and accordingly assessments were completed as per the provisions of sec. 144 of the Act for all the assessment years.
4. For the AY 2012-13, the assessee did not file any return of income u/s 139 of the Act. As mentioned above, a survey action u/s 133A of the Act was conducted in the case of the assessee. On the basis of findings of survey operation, notice u/s 148 was issued. However, no return of income in response to this notice was filed by the assessee. During the assessment proceedings, the AO issued various notices as well as show cause notices from time to time. However, the assessee kept on taking adjournments and did not file the requisite details. The AO also noticed that the auditor of the assessee trust resigned during the assessment proceedings for the reasons that relevant details were not given to him by the trustees for representing the matter before him. Subsequently, after giving final show cause notice, the AO completed the assessment u/s 144 of the Act by making following additions :- i.
Surplus of Rs. 11,88,565/- as per income and expenditure account was treated as income of the assessee trust, denying the exemption u/s 11 and 12 of the Act for the reasons that the P a g e | 5

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Mumbra Shikshan Prasarak Mandal assessee trust was not registered u/s 12A/12AA of the Act and also there are violations of provisions of sec. 13(1)(c) of the Act.
ii.
Addition of Rs. 53,00,321/- was made on account of inflation of expenses, as admitted during the survey operation.

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Mumbra Shikshan Prasarak Mandal produced. No return for A.Ys. 2012-13 to 2017-18 was filed by it. He also referred to statements of various key persons of the trust during survey were recorded which further revealed that the assessee trust violated various provisions of the Act and had ignored various statutory compliances consistently for the entire period under consideration.
Appeal filed by the assessee was ultimately dismissed by him upholding the action of the AO.
6. In ground no.1, it is stated that the learned CIT(A) erred in not declaring the assessment being completed by the learned assessing officer as void-ab-initio.
6.1
Before us, the ld.AR has not able to bring on record any material or cogent evidence in support of the above ground. We however, find that before the ld.CIT(A),in the modified grounds of appeal no.1 the assessee had contested the assessment order being devoid of proper assumption of juri iction by the AO. We notice that the ld.CIT(A) dismissed this ground after detailed discussion. Before us in the grounds of appeal, the assessee did not contest the dismissal of its ground by the ld.CIT(A) in respect of juri iction issue but has made a general observation that the assessment was null and void without

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Mumbra Shikshan Prasarak Mandal substantiating the same. Accordingly, we hold that the ground is devoid of any merit and is therefore, dismissed.
7. In ground no.2 it is claimed that the ld.CIT(A) erred in not directing the AO not to rely on the statements of the trustees which were retracted later.
8. We find that the ld.CIT(A) has made a detailed deliberation on this issue. He observed that during the survey operation, statement of Shri M.N. Sheth, Auditor of the trust was also recorded wherein in response to Q. No. 6, 7 and 8, stated that the audit work of the trust for A.Ys. 2012-13 to 2017-18 was not completed in time because the trust did not submit the books of accounts to him for the purpose of audit work in time. A perusal of assessment order further suggested that since the trustees were not cooperating with the auditor Shri Sheth, vide letter dated 14.05.2019, he resigned from the trust as auditor for the following reasons as mentioned in this letter:- i.
Despite the request of the AR, the accounts for F.Y. 2017-18 were not completed as a result the return for A.Y. 2018-19 could not be filed before
31/03/2019. ii.
Despite the AR giving a copy of affidavit to be made for submission of annual accounts to the Charity Commissioner, the same was not done.
iii.
Despite the AR’s request for payment of taxes for A.Ys. 2012-13 to 2017-18, the same was not done as a result of which the returns for the said years in the response to notice u/s 148 could not be filed.

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Mumbra Shikshan Prasarak Mandal iv.
Application for 12AA was made by the AR but due to non-cooperation, the relevant details could not be submitted as a result of which the 12AA application was rejected.
8.1 During the survey operation, statement of Shri Chintamani V.
Dixit Hardikar, Accountant of the trust was also recorded on wherein he informed that last return of the trust was filed for A.Y.
2011-12 and no return for any subsequent assessment year was filed. With regards to the non-filing of ITR, he stated that the trustees were sending documents only after the expiry of the time limit for filing the ITR and therefore, no ITR was filed. As regards to the details of compliance before Charity Commissioner, Shri Hardikar stated in response to Q. No. 7 that as per his memory, the return with Charity Commissioner were filed only till F.Y.
2008-09. 8.2 The ld.CIT(A) also referred to the statement recorded during the survey of Shri Sunil G. Patil, Trustee who admitted that after the death of his father, the books of accounts of the trust remained to be taken care of. He further stated that there were some mistakes in the books of accounts of the trust and these mistakes will not be repeated in future.
8.3 The ld.CIT(A) has also relied on various judicial decisions while observing that retraction being after thought and that without any P a g e | 9

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Mumbra Shikshan Prasarak Mandal basis had no significance. The plea of any coercion by the authorities concerned during survey operations has not been made out. He placed reliance on Pebble
Investment and Finance
ITA
No.988/2014(Bombay High Court) upheld by the hon’ble
Supreme
Court in SLP(C)
No.11784/2017
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Mumbra Shikshan Prasarak Mandal dated 26.09.2019 submitted that the trust had obtained both 12AA and 80G certificates. However, due to heavy rains 12AA certificate was lost.
Further, it was seen from the assessment order that the appellant trust filed return for AY 2011-12 along with some registration number of 12A certificate on the said ITR. Thus, apparently, for A.Y. 2011-12, the appellant had claimed exemption u/s 11 and 12 of the Act.
13.1 The ld.CIT(A) further observed that the AO from the return of income filed for A.Y. 2011-12 some registration number of 12A/12AA certificate was mentioned on the said return. During the present assessment proceedings, the AO specifically asked the appellant to furnish the same, however, no documentary evidence was filed. Further, during the appellate proceedings, the AR of the appellant as well as trustee were asked to file the copies of ITRs filed for the assessment years prior to A.Y. 2012-13, however, no such copies of ITRs were filed till the last date of hearing before him. The AR of the trust on 16.11.2023
stated that same were not readily available. He further noted that even though the appellant trust filed return of income for AY 2011-12, no copy of said return was filed before him for the reasons best known to the appellant.

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Mumbra Shikshan Prasarak Mandal the same, RTI application was also filed before DCIT(Exemption) on 5.10.2020 which rejected. Consequently, appeal was filed before First
Appellate authority on 2.11.2020 which was responded on 27.11.2020
who despite request refused to issue duplicate certificate in the absence of necessary details.
15. The ld.DR relied on the appellate order.
16. With regard to the ground in connection with the findings of the AO regarding inflation of expenses and suppression of receipts, the ld.CIT(A) observed that during the survey proceedings, the survey team found that for many expenses, hand made vouchers in one hand writing were prepared. All these expenses were paid in cash. Besides this, there were certain expenses debited in the income and expenditure account without any supporting bill. This fact was confronted with Shri Sunil Gorakh Patil during the survey wherein he admitted that these expenses exist only on papers and were debited for taking away cash for personal use. Further, during the survey operation, it was found that for some assessment years the assessee trust had suppressed the receipts. When confronted Shri Sunil
Gorakh Patil in the statement recorded during the survey offered the same for tax. These discrepancies were separately confronted

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Mumbra Shikshan Prasarak Mandal with Shri Milind Gorakh Patil, trustee on 25.10.2018, wherein he also admitted that they used to take out money from the trust by way of showing inflated expenses.
16.1 During the appellate proceedings, the AR stated that Shri
Sunil G. Patil had retracted his statement on 31.10.2018.The ld.CIT(A) observed that perusal of same clearly suggested that this was not a retraction but reconfirmation of the declaration made earlier during the survey. In this statement, Shri Sunil Patil admitted that there were mistakes in the trust’s books of accounts and he reiterated the declaration by stating that the mistakes committed in past shall not be repeated in future. Besides this, the appellant could not point out any retraction letter filed before the AO. Accordingly, the claim of the appellant that the statement had been retracted, was found factually incorrect. Besides Shri Sunil G. Patil, statements of other two trustees namely Shri Anil Patil and Shri
Milind Patil were also recorded during the survey wherein they admitted the deficiencies in the accounts of the trust. These statements of Shri Anil Patil and Shri Milind Patil had also not been retracted by them. Since the statements recorded during the survey had not been retracted before the AO, the ld.CIT(A) held that the decision rendered in P a g e | 16

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Mumbra Shikshan Prasarak Mandal the case of S. Khader Khan Son (supra) shall not be applicable to the present case.
16.2 The ld.CIT(A) further stated that the issue of evidentiary value of a statement recorded during the survey operation has been examined by various courts from time to time wherein it has been held that the statement recorded during the survey carries an evidentiary value and can be used while completing the assessment. The case laws clearly lay down a position that the statement recorded during survey operation does carry an evidentiary value and can be used by the AO while framing the assessment. It is true that the statement recorded during the survey can be retracted but such retraction can be held as valid only when such statement was recorded under threat or coercion or there is mistake in recording of facts in the statement. It has also been held that retraction if any, should be immediate and also such retraction should be supported by documentary evidences. If any of these ingredients is not present in a case, the retraction will not be considered as valid and such statement can be used as evidence. In the present case, three trustees of the appellant trust admitted in their separate statements that cash was taken away from the trust for their personal benefit as well as that there is suppression of receipts. The statement of Shri Sunil Patil was again recorded u/s P a g e | 17

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131 of the Act on 31.10.2018, wherein the disclosure made at the time of survey was reconfirmed. Thus, after making disclosure during survey, the trustee of the appellant trust has re-confirmed his disclosure. As discussed above, these statements were not retracted before the AO.
16.3 Considering the above discussion and the case-laws mentioned above, the modified ground no. 2 raised by the appellant was dismissed by him.
17. In so far as the issue relating to the addition made by the AO on account of surplus in ‘income and expenditure account, ‘suppressed receipts’ and ‘inflated expenses’ is concerned, these additions were made by the AO for the following reasons:- i.
The assessee trust is not registered u/s 12A/12AA of the Act. No such registration certificate was produced during the survey operation as well as during the assessment proceedings.
ii.
The trustees had accepted that cash was taken out from the trust by debiting bogus expenses and the said cash was used for trustees personal purposes, iii.
There are instances of suppression of receipts which has been admitted by the trustees of the appellant trust iv.
There are violations of section 13(1)(c) of the Act because the cash taken out from the trust was used by trustees for their personal purposes.

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Mumbra Shikshan Prasarak Mandal registered u/s 12A of the Act. For this proposition, the appellant has relied on the decision of Hon’ble ITAT in the case of Rotary Club of Poona Downtown Charitable Trust (supra). He found that in this case, the registration u/s 80G was renewed till the year 2007 as against the present case wherein the 80G was granted only upto FY 1983-84. This fact is very important because the clause (vi) in section 80G(5) was inserted only w.e.f. 1.10.1991 vide the Finance
(No.2) Act, 1991. Before insertion of clause (vi) in section 80G(5), there was no requirement of any statutory approval of CIT, for the purposes of section 80G. This is clear from the CBDT’s Explanatory Circular No. 621 dated 19/12/1991, wherein it has been explained that before this amendment, the trusts seeking donations u/s 80G, were required to take only ‘administrative approval from CIT’. It has further been explained that after the amendment, the trusts are now required to be statutorily approved by the Commissioner.
17.3 It was further noted that the Rule 11AA of Income
Tax Rules 1962 was inserted only w.e.f. 21.09.1992, wherein the filing of registration certificate u/s 12A of the Act along with 80G application, was made mandatory. Thus, before this amendment u/s 80G w.e.f. 1.10.1991 and insertion of Rule 11AA, there was no statutory requirement that in order to obtain administrative

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Mumbra Shikshan Prasarak Mandal approval for the purposes of section 80G of the Act, the trust was required to mandatorily have registration u/s 12A of the Act.
17.4 In respect of the copies of 80G certificates filed by the assessee for F.Ys. 1982-83 and 1983-84, the ld.CIT(A) observed that no copy of 80G approval certificate for any subsequent year had been filed by the appellant. As discussed above, in F.Ys. 1982-83 and 1983-84, there was no requirement of any statutory approval for the purposes of section 80G and since there was no Rule 11AA at that time, therefore, on the basis of 80G approval certificates for F.Ys. 1982-83 and 1983-84, it could not be presumed that the trust had 12A registration at that time because the same was not mandatory as per above discussion. On the other hand, in the decision of Rotary Club (supra) relied upon by the appellant, the 80G registration certificates upto year 2007 were available on records meaning thereby that the said society was granted
80G registration even after insertion of clause (iii) in section 80G(5).
Therefore, the decision of hon’ble Tribunal in the case of Rotary Club
(supra) was not found applicable to the facts of present case.
17.5 He further observed that the fact of taking out cash from the appellant trust by the trustees by way of booking bogus expenses and suppressing the receipts, had been accepted on multiple occasions. The P a g e | 21

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Mumbra Shikshan Prasarak Mandal quantification of income on these issues had also been accepted in the statements recorded under oath and additional income for respective assessment years were disclosed. As discussed earlier in this order, these statements had not been retracted and therefore were valid evidences for the purpose of assessments. Till date, no documentary evidence contrary to above admissions/findings, has been filed by the appellant.
17.6 Considering the above discussion, he held that the trustees of the trust inflated the expenses and cash was withdrawn for their personal use. Therefore, the provisions of section 13(1)(c) of the Act have also been violated. Therefore, the addition of Rs.
11,88,565/- on account of surplus as per “income and expenditure account” as well as the addition of Rs. 53,00,321/-towards the ‘inflated expenses as made were upheld. Further, since the appellant failed to substantiate that it was registered u/s 12A/12AA of the Act for the year under consideration and also since there were violations of section 13(1)(c) of the Act, the appellant trust was not eligible for exemption u/s 11 and 12 of the Act. The modified ground no. 3 raised by the appellant was dismissed.
18. Before us, the ld.AR has reiterated the same contentions as made before the appellate authority. It is contented that subsequent to P a g e | 22

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Mumbra Shikshan Prasarak Mandal survey operation, it had obtained the registration u/s 12AB of the Act and therefore, it should be granted the benefit of exemption u/s 11 and 12 of the Act. A perusal of this certificate dated 24.09.2021 suggests that the same is valid only for A.Y. 2022-23 onwards. It is also seen that the said registration was issued by CIT, CPC, Bangalore on the basis of certification of the appellant trust in its application, wherein the appellant had mentioned that it is already registered u/s 12A of the Act, as the said application was made u/s 12A(1)(ac)(i) of the Act. As discussed above, this claim of the appellant is not factually correct.
Moreover, the said registration is valid only for AY 2022-23 onwards and has no applicability for the year under consideration. In view of above, the said certificate has no bearing for the year under consideration.
18.1 We find that the ld.CIT(A) has duly taken note of all the relevant facts of the case. In so far as the contention of the ld.AR that the trust was already allowed registration u/s 80G of the Act is concerned, we find that despite given more than adequate opportunity of hearing right from the day survey conducted in 2018 till the passing of the appellate order, the assessee failed to demonstrate that during the impugned period from AY 2012-13 to 2017-18, it was granted certificates u/s 80G as well as 12A of the Act. The contention of the assessee is P a g e | 23

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Mumbra Shikshan Prasarak Mandal devoid of any merit and the affidavits and annexed documents do not give any inkling of existence of such registrations. The statements of key persons including the trustees and the auditors emphasized existence of registration which never came to light. Even the claim of 80G certificates upto AY 2011-12,as stated above despite specific request of the Bench, the ld.AR could not produce the original thereof.
18.2 As regards adverse drawn w.r.t. receipts and expenditure nothing has been brought on record to rebut the contentions of key persons of the trust including three of the trustee admitting misappropriation of funds of the trust notwithstanding their subsequent denial through retracted statements. The fact that the assessee did not file its returns of income for the entire period under consideration either u/s 139 r or even u/ 148 of the Act in itself casts serious doubts about the claimed charitable nature of the assessee trust. Even the auditors admitted lapses in getting the books of account audited by him.
18.3 Considering the totality of facts and the circumstances of the case, we do not find any infirmity in the conclusion drawn by the ld.CIT(A) and dismissing the grounds pertaining to the claim of exemption as also suppression of receipts and inflation of expenses for P a g e | 24

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Mumbra Shikshan Prasarak Mandal personal gains of the trustees. Accordingly, ground no.3,4 and 5 are dismissed.
19. In ground no.7, it is stated that the ld. CIT(A) erred in confirming the interest levied by the AO under Sections 234A, 234B and 234C of the Act. The ground being consequential, no adjudication at this stage is required as the AO would calculate the interest in OGE depending upon the final determination of the assessed income.
20.In ground no. 8, it is stated that The learned CIT(A) erred in not confirming the action of the AO in initiating the penalty proceedings under Section 271(1)(c) of the Income tax Act. The ground being premature as no penalty order has been passed is infructuous and is accordingly dismissed.
Ground no.6 and Additional ground of appeal
21. The assessee trust has also filed an additional ground for all the assessment years under consideration in the instant appeals before this Bench claiming exemption u/s 10(23)(iiiab) and 10(23)(iiiad) of the Act. Stating it to be purely legal in nature and therefore, may be admitted in view of the landmark decisions of hon’ble Supreme Court decision in the case of NTPC and Jute Corporation of India.

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229 ITR 283 (SC), additional ground raised for the first time before
Tribunal can be admitted provided the facts necessary for adjudication of the additional ground are available on record. The ratio laid down in the decision is that the purpose of the assessment proceedings before the taxing authorities is to assess correctly the tax liability of an assessee in accordance with law and therefore the Tribunal should not be prevented from considering questions of law arising in assessment proceedings although not raised earlier. The claim of the assessee trust is engaged in running of educational institutions which is not disputed.
It is claimed that the receipts of the trust do not exceed the monetary limit laid down in the Act in this regard.
24.1 On due consideration of the above ground, we find that the same are legal in nature and go into the roots of the controversy in hand.
Moreover, no new facts need to be investigated to examine applicability of above sections qua facts on record. Accordingly, we admit the grounds above.
24.2 Considering all the relevant facts and the circumstances of the case, we agree with the ld.AR that the grounds being raised for the first time before the Bench were not considered by the authorities below, as such they may be remanded to them for considering them. The ld.AO

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Mumbra Shikshan Prasarak Mandal would be at liberty to examine the issue after calling for necessary details if any from the assessee and decide the applicability of the above section in accordance with the provisions of the Act. It may be stated here that admission of additional ground by us does not tantamount to appreciation of merits therein for which the AO would be at liberty to take decision in accordance with law. Therefore, we allow the above ground no.6 and the additional ground for statistical purposes.
25. In the result, the appeal of the assessee is partly allowed.
26. ITA No. 378/MUM/2024(A.Y. 2013-14)
27. Facts are similar as in AY 2012-13.No return was filed. The assessment was made u/s 144 of the Act denying the claim of exemption u/s 11 and 12 for the reasons that the trust was not registered u/s 12A/12AA of the Act and also there were violations of section 13(1)(c) of the Act. Addition of Rs 88,38,845/- was also made for inflation of expenses.
27.1 Before the ld.CIT(A)assesse based on certain documents requested for admitting them as additional evidence and to call for remand report which was rejected on the observations that the assessee submitted certain ledger accounts of certain expenses which were already before the survey team which considered bogus expenses. The P a g e | 28

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Mumbra Shikshan Prasarak Mandal assessee could not establish that these expenses were genuine as the survey revealed that the trust booked certain expenses in order to take out cash for the personal use of trustees. Ground being identical as in AY
2012-13 were dismissed.

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Mumbra Shikshan Prasarak Mandal claim of exemption u/s 11 and 12 of the Act. The ld.CIT(A) dismissed the application as the issues were already considered in appeal for AY 2012-
13.Addtion of Rs 52,92,153/- was made for inflation of expenses and Rs
84,36,654/-/-was added on account of suppression of receipts .The ld.CIT(A) based on the decision for AY 2012-13 dismissed all the grounds.

P a g e | 31

ITA No. 374, 375, 376, 377, 378, 379/Mum/2024
A.Y. 2012-13, 2013-14, 2014-15, 2015-16, 2016-17, 2017-18

Mumbra Shikshan Prasarak Mandal

Place: म ुंबई/Mumbai
ददनाुंक /Date 16.09.2025
Lubhna Shaikh / Steno

आदेश की प्रयियलयि अग्रेयिि/Copy of the Order forwarded to :

सत्यावपि प्रवि ////
आदेशानुसार/ BY ORDER,

उि/सहायक िंजीकार (Dy./Asstt.