RITNAND BALVED EDUCATION FOUNDATION,DEFENCE COLONY vs. CIT (EXEMPTION), CIVIC CENTRE

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ITA 6617/DEL/2025Status: DisposedITAT Delhi18 September 2026AY 2023-243 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal held that the assessee acted as a conduit for payments made on behalf of the educational service organization. These payments were treated as receivables and not claimed as the assessee's own expenditure.

What were the facts?

The assessee made payments on behalf of an educational service organization. The Assessing Officer (AO) made an addition under Section 40(a)(ia) for 30% of these payments, disallowing them as expenditure.

What were the issues?

Whether payments made by the assessee as an intermediary on behalf of another organization are disallowable under Section 40(a)(ia) as expenditure.

Which sections of the Income-tax Act were involved?

Section 40(a)(ia)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, DELHI BENCH “B”, DELHI

Before: SH. M. BALAGANESH & SH. SUDHIR KUMAR

Hearing: 22/07/2026Pronounced: 18/09/2026

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH “B”, DELHI BEFORE SH. M. BALAGANESH, ACCOUNTANT MEMBER AND SH. SUDHIR KUMAR, JUDICIAL MEMBER ITA No.6617/DEL/2025 Assessment Year: 2023-24 Ritnand Balved Education Vs. CIRCLE EXEMPTION 2(1), Foundation, NEW DELHI New Delhi E-27, AKC House, Defence Colony, South Delhi- 110 024 [PAN: AAATR7314Q)

(APPELLANT) (RESPONDENT)

Appellant by Sh. Alok Mittal, CA Respondent by Sh. Rajesh Kumar Dhanesta, Sr. DR

Date of hearing: 22/07/2026 Date of Pronouncement: 18/09/2026

ORDER PER SUDHIR KUMAR, JUDICIAL MEMBER: This appeal by the assessee is directed against the order of the National Faceless Appeal Centre, Delhi [hereinafter referred to as “NFAC”] vide order dated 21.08.2025 pertaining to A.Y. 2023-24 arising out the assessment order dated 18.03.2025 passed u/s.143(3) of the Income-tax Act, 1961, (in short ‘the Act’) by the Assessment Unit, Income Tax Department. 2. Ld. AR for the assessee has only pressed the following ground of appeal:-

3)i) The CIT(A) has erred in law and on fat in not deleting the addition of Rs. 2,82,08,435/- made under section 40(a)(ia) of the Act, being 30% of the payment of Rs. 9,40,28,115/- which represented payments made by the appellant on behalf of the educational service organisation.

3.

We have heard the rival contentions and perused the records. Before us, Ld. Counsel for the assessee submitted that Ld. CIT(A) erred in not deleting the addition of Rs. 2,82,08,435/- made under section 40(a)(ia) of the Act, being 30% of the payment of Rs. 9,40,28,115/-, which represented payments made by the appellant on behalf of the Educational Service Organisation is concerned, it was submitted by the Ld. AR that payments were made to discharge any liability or expenditure of the assessee. Instead, the assessee acted merely as a conduit or an intermediary, facilitating payments to various third parties purely on behalf of, at the instance of, and for the ultimate benefit of Education Service Organisation. The transaction, in its substance, is one of principal-to-principal between the education service organization and the ultimate third party vendors. It was further submitted that the assessee had no underlying contractual or statutory obligations towards the third party payees. It was further submitted that the said amounts have been consistently recorded as receivables and the ledger reflects a running receivable balance recoverable by RBEF from ESO, substantiating that the payments were made purely on behalf of ESO. Thus, the sum of Rs. 9,40,28,115/- was never claimed by the assessee as its own expenditure or as an application of income, but has been consistently and correctly treated as recoverable dues, thereby reflecting its true nature as pass through payments. Ld. DR relied upon the order of the CIT(A). In view of the factual matrix, we are of the considered view that the aforesaid aspect of the ld. Counsel for the assessee needs to be verified/examined at the level

of the AO, accordingly, we deem it fit and proper to remit back the issues to the file of the AO for fresh adjudication, after giving adequate opportunity of being heard to the assessee, in accordance with law. We hold and direct accordingly. 4. In the result the appeal of the assessee is allowed for statistical purposes. Order pronounced in the open court on 18.09.2026.

Sd/- Sd/- (M. BALAGANESH) (SUDHIR KUMAR) ACCOUNTANT MEMBER (JUDICIAL MEMBER) Date: 18.09.2026

SR Bhatnaggar Copy forwarded to: 1. Appellant 2. Respondent 3. CIT 4. CIT(Appeals) ` 5. DR: ITAT ASSISTANT REGISTRAR ITAT DELHI

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