DCIT, CIRCLE-1, (EXEMPTIONS), CHADNIGARH, CENTRAL REVENUE BUILDING vs. SADR ANJUMAN AHMADIYYA, GURDASPUR

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ITA 1430/CHANDI/2025Status: DisposedITAT Chandigarh27 July 2026AY 2018-198 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal found that neither the AO nor the CIT(A) had adequately examined the issue of domestic corpus donations. The assessee failed to provide complete donor particulars to the AO, and the CIT(A) accepted the explanation without verification.

What were the facts?

The assessee, a charitable trust, declared Nil income after claiming exemption. During assessment, the AO added ₹24.24 crores of domestic corpus donations as unexplained cash credit due to lack of satisfactory evidence regarding donors' identity and source. The CIT(A) deleted the addition, accepting the assessee's explanation of a clerical error in reporting.

What were the issues?

Whether the assessee discharged its onus to prove the identity and genuineness of domestic corpus donations, and whether the CIT(A) erred in deleting the addition without proper verification.

Which sections of the Income-tax Act were involved?

Section 68

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, DIVISION BENCH, ‘B’ CHANDIGARH

Before: SHRI LALIET KUMAR & SHRI MANOJ KUMAR AGGARWAL

For Appellant: Shri Parikshit Aggarwal, CA
For Respondent: Smt. Kusum Bansal, Pr. CIT DR
Hearing: 27.07.2026Pronounced: 27.07.2026

आयकर अपील�य अ�धकरण,च�डीगढ़ �यायपीठ, च�डीगढ़ IN THE INCOME TAX APPELLATE TRIBUNAL DIVISION BENCH, ‘B’ CHANDIGARH BEFORE SHRI LALIET KUMAR, JUDICIAL MEMBER AND SHRI MANOJ KUMAR AGGARWAL, ACCOUNTANT MEMBER आयकर अपील सं./ ITA No. 1430/CHD/2025 �नधा�रण वष� / Assessment Year: 2018-19 The DCIT, Sadr Anjumam Ahmadiyya, Circle-1 (Exemptions), Vs Qadian, Gurdaspur. Chandigarh. �थायी लेखा सं./PAN NO: AAATS5184K अपीलाथ�/Appellant ��यथ�/Respondent Assessee by : Shri Parikshit Aggarwal, CA Revenue by : Smt. Kusum Bansal, Pr. CIT DR Date of Hearing : 27.07.2026 Date of Pronouncement : 27.07.2026

HYBRID HEARING O R D E R PER LALIET KUMAR, JM

This is an appeal filed by the Revenue feeling aggrieved by the order passed by the ld. Commissioner of Income Tax (Appeals) NFAC [in short ‘the CIT (A)’] dated 19.09.2025 passed for assessment year 2018-19.

2.

The brief facts of the case are that the assessee is a Charitable and Religious Trust registered under section 12A and also enjoying approval under section 10(23C)(v) of the Act. For

ITA No.1430/CHD/2025 A.Y.2018-19 2 the year under consideration, it filed its return declaring Nil income after claiming exemption. During the scrutiny assessment, one of the issues selected under CASS related to the receipt of voluntary contributions forming part of the corpus. The assessee disclosed corpus donations aggregating to ₹66.74 crores, comprising foreign corpus donations of ₹42.49 crores and domestic corpus donations of ₹24.24 crores.

3.

The Assessing Officer examined the details furnished by the assessee and found that while the foreign corpus donation was claimed to have been received through Ahmadiyya Muslim Jamat, London, the assessee failed to furnish satisfactory evidence regarding the balance domestic corpus donations amounting to ₹24,24,30,511/-. The Assessing Officer observed that no proper break-up of the domestic donors, their identity, or supporting documentary evidence establishing the source of such donations had been produced. Holding that the assessee had failed to discharge the onus cast upon it under section 68 of the Act in respect of the domestic corpus donations, the Assessing Officer treated the sum of ₹24,24,30,511/- as unexplained cash credit and added the same to the total income of the assessee.

4.

The assessee went in appeal before the ld.CIT (Appeals) and the learned CIT(A) accepted the explanation of the assessee that

ITA No.1430/CHD/2025 A.Y.2018-19 3 the corpus receipts of ₹66.74 crores consisted of foreign donations of ₹42.49 crores and domestic corpus donations of ₹24.24 crores and that the entire amount had been reflected under the foreign contribution column in the ITR merely on account of a clerical error. The learned CIT(A) further observed that the foreign contribution stood duly reconciled with the FCRA returns and that the Assessing Officer had not carried out adequate enquiry before invoking section 68. On that basis, the learned CIT(A) deleted the addition made by the Assessing Officer.

5.

The learned CIT-DR vehemently supported the assessment order. It was submitted that the Assessing Officer had made the addition only in respect of the domestic corpus donations amounting to ₹24,24,30,511/- after granting sufficient opportunity to the assessee. Despite repeated requisitions, the assessee failed to furnish the names and addresses of the domestic donors, their identity, PAN, mode of payment, or any documentary evidence establishing the genuineness of the donations. It was contended that the assessee had failed to discharge the primary burden cast upon it under the Act to establish the identity of the donors and the genuineness of the receipts. The learned CIT-DR further submitted that the learned CIT(A) deleted the addition merely by accepting the explanation

ITA No.1430/CHD/2025 A.Y.2018-19 4 that the discrepancy had arisen due to a clerical error in the return of income without directing any independent verification of the domestic donations. According to the learned CIT-DR, the appellate authority could not have accepted the explanation without examining whether the domestic corpus donations were supported by cogent evidence. It was, therefore, prayed that the order of the learned CIT(A) be set aside and that of the Assessing Officer be restored, or alternatively, the matter be remanded for proper verification of the domestic donations.

6.

Per contra, the learned AR supported the order of the learned CIT(A). It was submitted that the total corpus donations received during the year aggregated to ₹66.74 crores, comprising foreign corpus donations of ₹42.49 crores and domestic corpus donations of ₹24.24 crores. It was argued that the entire corpus amount was inadvertently reflected under the foreign contribution column of Schedule VC in the return of income due to a clerical mistake, though the audit report, books of account and other records correctly disclosed the total corpus receipts. The learned AR submitted that the foreign corpus donations stood fully reconciled with the FCRA returns and the corresponding bank records and there was no dispute regarding the receipt of foreign contributions through authorised banking channels. It was further contended that the domestic corpus

ITA No.1430/CHD/2025 A.Y.2018-19 5 donations formed part of the total corpus receipts already disclosed in the books and, therefore, the addition under section 68 resulted in taxing an amount which already stood accounted for by the trust. It was also submitted that the trust receives donations from thousands of followers spread across the country, ranging from small amounts to larger contributions, and that the receipts are duly recorded in the regular books of account. Reliance was placed upon the findings recorded by the learned CIT(A) to contend that the Assessing Officer had not conducted any meaningful enquiry before invoking section 68. However, when queried by the Bench, the learned AR fairly submitted that if this Bench considers it necessary for proper verification of the domestic corpus donations, the assessee shall produce before the Assessing Officer complete particulars of the domestic donors, including their names, addresses, PAN, identity documents, mode of payment, bank details, UPI particulars wherever applicable, and all other supporting evidence, and shall fully cooperate in the de novo proceedings.

7.

We have heard the rival contentions of the parties and perused the material available on record. After giving our thoughtful consideration to the rival submissions and the material placed before us, we are of the considered opinion that neither the assessment order nor the appellate order has

ITA No.1430/CHD/2025 A.Y.2018-19 6 examined the issue in the manner required under law. The addition made by the Assessing Officer pertains exclusively to the domestic corpus donations aggregating to ₹24,24,30,511/-. It is an admitted position that the foreign corpus donations received from the overseas donor have been separately explained and supported by the FCRA records. However, so far as the domestic corpus donations are concerned, the assessee admittedly did not furnish before the Assessing Officer the complete particulars of the individual donors.

8.

In our considered view, whenever a substantial amount is claimed to have been received as corpus donation from domestic donors, the primary onus lies upon the assessee to establish the identity of the donors, the genuineness of the transaction and such other particulars as may be necessary to satisfy the statutory requirements. Mere disclosure of an aggregate amount in the books of account or audit report cannot, by itself, dispense with this statutory obligation. At the same time, we also find that the learned CIT(A), while deleting the addition in entirety, has accepted the explanation of the assessee without directing verification of the particulars of the domestic donors. The issue, therefore, requires proper factual verification before any final conclusion can be reached.

9.

Accordingly, in the interest of justice, we deem it

ITA No.1430/CHD/2025 A.Y.2018-19 7 appropriate to set aside the impugned order of the learned CIT(A) on this issue and restore the matter to the file of the Assessing Officer for de novo adjudication. The assessee is directed to furnish complete details of the domestic corpus donations, including, inter alia:

 the name and complete address of each donor;  PAN, wherever available; proof establishing the identity of the donor;  the source of the donation and supporting evidence;  mode of payment;  bank account particulars reflecting the receipt;  in case the donation has been received through UPI or  other electronic modes, the UPI transaction particulars, mobile number linked with the transaction and other relevant payment details; and such other documentary evidence as may be required  by the Assessing Officer for verifying the genuineness and creditworthiness of the donors.

10.

The Assessing Officer shall verify the identity of the donors, the genuineness of the donations and the source from which such contributions have been received and thereafter decide the issue afresh in accordance with law after affording adequate opportunity of being heard to the assessee. We make it clear that we have expressed no opinion on the merits of the addition and all issues are left open to be adjudicated by the Assessing Officer independently on the basis of the evidence that may be produced

ITA No.1430/CHD/2025 A.Y.2018-19 8 by the assessee. Accordingly, the grounds raised by the Revenue are allowed for statistical purposes.

11.

In the result, appeal of the Revenue is allowed for statistical purposes.

Order pronounced on 27 th July,2026.

Sd/- Sd/-

(MANOJ KUMAR AGGARWAL) (LALIET KUMAR) ACCOUNTANT MEMBER JUDICIAL MEMBER “Poonam” आदेश क� �ितिलिप अ�ेिषत/ Copy of the order forwarded to : अपीलाथ�/ The Appellant 1. ��यथ�/ The Respondent 2. आयकर आयु�/ CIT 3. िवभागीय �ितिनिध, आयकर अपीलीय आिधकरण, च�डीगढ़/ DR, ITAT, CHANDIGARH 4. गाड� फाईल/ Guard File 5.

सहायक पंजीकार/ Assistant Registrar

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