CYGNET DAY SCHOOL,KALUPUR vs. THE INCOME TAX OFFICER, WARD - 49(1), KOLKATA

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ITA 1474/KOL/2026Status: DisposedITAT Kolkata14 September 2026AY 2019-206 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal found that the school is owned and run by the Bongaon Education Welfare Trust, and the PAN was obtained for administrative purposes. The Tribunal noted that the same income was being taxed twice and directed the AO to re-verify the matter in light of previous orders.

What were the facts?

The assessee, Cygnet Day School, did not file its return of income for AY 2019-20. Based on SFT information, cash deposits of Rs. 2,33,58,103/- were noticed. The assessee claimed these were school fees collected by Bongaon Educational Welfare Trust, which runs the school, and already included in the Trust's return.

What were the issues?

Whether the cash deposits representing school fees collected by a unit school, which are already offered to tax by the parent trust, can be treated as unexplained money and taxed separately in the hands of the school. The issue also involves whether the AO properly adjudicated the case based on the provided documentation and prior assessment orders.

Which sections of the Income-tax Act were involved?

Section 147,Section 148A,Section 148,Section 142(1),Section 144,Section 69A

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, “C” BENCH, KOLKATA

Before: Shri Rajesh Kumar & Shri Pradip Kumar Choubey

IN THE INCOME TAX APPELLATE TRIBUNAL “C” BENCH, KOLKATA Before Shri Rajesh Kumar, Accountant Member and Shri Pradip Kumar Choubey, Judicial Member ITA No 1474/KOL/2026 Assessment Year- 2019-20 Cygnet Day School……...........................................................................................Appellant Unai, Kalupur, Kalupur B.O, North 24 Parganas, 743235, West Bengal, India, North 24 Parganas West Bengal- 743235 [PAN No. AAIFC1907C] Vs. The Income Tax Officer..................................,..……………....……….Respondent Ward 49(1), Kolkata Appearances by: P.K. Roy, (Adv.) &Trideep Nayak, (A.R), appeared on behalf of the Appellant. Santanu Ghosh, Sr. DR, appeared on behalf of the Respondent. Date of concluding the hearing: July 20, 2026 Date of pronouncing the order: September 14 ,2026 ORDER Per Pradip Kumar Choubey, Judicial Member: This appeal filed by the assessee is directed against the order dated 12.02.2026 of the National Faceless Appeal Centre (NFAC), Delhi passed under Section 147 of the Assessment Year 2019-20 of the Income-tax Act, 1961 (hereinafter referred to as “the Act”). 2. The brief facts of the case of the assessee is that in this case, the assessee had not filed its return of income for A.Y. 2019-20. On the basis of information available through SFT (SFT-004), it was noticed that the assessee had made cash deposits amounting to Rs. 2,33,58,103/-in its bank account maintained with Syndicate Bank (now Canara Bank) during F.Y. 2018-19 relevant to A.Y. 2019-20. Proceedings were initiated u/s 148A and thereafter

ITA No.1474/Kol/2026 notice u/s 148 was issued. During the course of assessment proceedings, various notices u/s 142(1) and 144 were issued. The assessee submitted that the school is run and controlled by Bongaon Educational Welfare Trust and that the income of the school has been included in the return filed by the said Trust. However, as per the Assessing Officer, the assessee did not furnish complete documentary evidences of the trust for the relevant AY as such AO treated the entire cash deposits of Rs. 2,33,58,103/-as unexplained money.

Aggrieved by the said order assessee preferred appeal before the CIT(A) wherein appeal of the assessee has been dismissed by the CIT(A) by holding that assessee did not file complete details such as cash book, ledger of fees and receipts under different heads as asked by the Assessing Officers.

3.

Being aggrieved by and dissatisfied the assessee preferred appeal before us by taking following grounds:-

1.

General Ground Against Dismissal: That on the facts and in the circumstances of the case, the Ld. Commissioner of Income Tax (Appeals) [CIT(A)] erred in law and on facts in dismissing the appeal and confirming the addition of Rs. 2,33,58,103/- made by the Assessing Officer (AO). 2. Erroneous Addition u/s 69A of the Act: That the Ld. CIT(A) was not justified in upholding the treatment of cash deposits amounting to Rs. 2,33,58,103/- as "unexplained money" under Section 69A. The authorities failed to appreciate that these deposits represent legitimate school fees and admission fees collected from students, which are consistent with the regular educational operations of the appellant. 3. Failure to Recognize the Unit-Trust Relationship: That the Ld. CIT(A) erred in treating the Appellant (Cygnet Day School) as a separate taxable entity. The school is a unit solely owned and operated by the Bongaon Education Welfare Trust (PAN: AACTB8454B). The PAN (AAIFC1907C) used by the school was obtained solely for administrative and banking purposes as required by the bank, and not for independent tax filing, although both Assessees (PAN AACTB8454B and AAIFC1907C) have the same jurisdiction, i.e. under Ward 49(1), Kolkata. 4. Issue of Double Taxation and Prior Filing by Trust: That the Ld. CIT(A) ignored the that the entire income and all transactions of Cygnet Day School, including the impugned bank deposits, were already incorporated into the audited financial statements and the Income Tax Return filed by the parent entity, Bongaon Education Welfare Trust, for A.Y. 2019-20 Confirming this addition leads to the manifest injustice of double taxation on the same income. 5. Violation of the Principle of Consistency: That the Ld. CIT(A) failed to apply the Principle of Consistency as for the subsequent A.Y. 2020-21 the Income Tax Department accepted the same explanation for identical cash deposits. In the assessment order for A.Y. 2020-21 (dated 05.03.2025), the department concluded that the income was duly reported under the Trust's PAN and no variation was required.

ITA No.1474/Kol/2026 6. Denial of Opportunity and High Court Directions: That the Ld. CIT(A) failed to property adjudicate the case on its merits as directed by the Hon'ble High Court at Calcutta in W.P.A 11291 of 2024. The Ld. CIT(A) erroneously concluded a lack of "one-to-one correlation" despite the appellant providing audited books and bank statements that established the nexus between receipts and deposits. 7. Arbitrary "Best Judgment Assessment: That the Ld. CIT(A) erred in sustaining an assessment framed under Section 144, ignoring that the appellant had submitted responses and documents clarifying that the school's accounts were part of the Trust's tax-compliant records. 8. Prayer for Relief: The Appellant craves leave to add, alter, amend, or withdraw any of the grounds of appeal at or before the time of the hearing. It is prayed that the addition of Rs. 2,33,58,103/-and the consequential demand be deleted in the interest of justice. 3.1. The ld. AR submits that identical educational fee receipts have already been disclosed and accounted for in the audit books and the Income Tax return of the parent trust and that cannot be taxed in the second time in the hand of the unit school. The Ld. AR submits that assessee is not an independent, commercial, proprietary or corporate entity andit is merely an educational unit wholly owned administered, managed and controlled by Bongaon Education Welfare Trust (Parent Trust. The Ld. AR has filed an assessment order after assessee for the A.Y 2020-21 in which Assessing Officers has held that income of the assessee has been duly reported in the ITR filed under the name of Bongaon Education Welfare Trust. The prayer of the AR is that the appeal of the assessee be remitted back to the file of the AO with a direction to pass order afresh after keeping in mind the assessee is not an independent, commercial, proprietary or corporate entity rather it is controlled by Bongaon Education Welfare Trust.

The Ld. DR did not raise any objection in remitting the appeal before the AO.

4.

Upon hearing the submission of the counsel of the respective parties and going over the documents filed by the AR we find that school is completely owned and run by Bongaon Education Welfare Trust and PAN was obtained solely for administrative and banking purpose for dragging financial transaction only. We further find that assessee has filed computation sheet of the A.Y.

ITA No.1474/Kol/2026 2017-18 of Bongaon Education Welfare Trust and also filed the assessment order passed in favour of the assessee for the A.Y. 2020-21. The submission of the AR is that addition of Rs. 2,33,58,103/-against the assessee means taking the exact same educational receipts twice once in the hands of the parents trust and again in the hands of the school.

5.

Keeping in view the discussion made above and considering the submission, we are in this view that matter in dispute be required to be proper verification by the AO in the light of the order passed by the AO against the assessee for the A.Y. 2020-21,and in the light of the assessment passed against the parent trust being the Bongaon Education Welfare Trust. Accordingly we set aside the matter to the file of the AO with a direction to pass a fresh order after hearing the assessee and after proper verification of the documents filed by the AR.

In the result, the appeal of the assessee is allowed for statistical purpose.

Kolkata, the 14th September , 2026.

Sd/- Sd/- [Rajesh Kumar] [Pradip Kumar Choubey] Accountant Member Judicial Member

DC Dated: 14 .09.2026. Copy of the order forwarded to: 1. Appellant - 2. Respondent - 3. CIT(A)- 4

ITA No.1474/Kol/2026 4. CIT- 5. CIT(DR)

//True copy// By order

ITA No.1474/Kol/2026

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