NEW HORIZON EDUCATION SOCIETY, NAVI MUMBAI,MUMBAI vs. DCIT EXEMPTION CIRCLE - 2 MUMBAI, MUMBAI

As per the facts set up by the assessee, the assessee is a Public Charitable Trust registered under the Bombay Public Trust Act under the name and style New Horizon Education Society situated at Thane West Mumbai. The trust was created for the purpose of spreading education and is an old trust and registration were granted u/s 11 & 12A/12AA of the Act. The assessee has maintained regular books of account and books of account were audited as per section 12A(b) of the Act. The Audit Report in Form No. 10B alongwith audited Balance Sheet, Income and Expenditure A/c., Receipt and Payment account alongwith all schedules were submitted. The trust had also filed return of income on 12/09/2022 vide acknowledgement no 486271111120922 u/s 139(1) as determining net taxable income NIL.

The case of the assessee was selected for the scrutiny on the following issues:

It was submitted that the assessee is registered u/s 12A/12AA of the Act and had received donation from Roma Builders Pvt. Ltd. of Rs. 10,65,00,000/- for charitable aims and objects during the previous year relevant to A.Y. 2022-23. The

Since, the assessee did not received any notice therefore could not file proper reply, thus the AO without going into the merit of the case passed assessment order and made addition of Rs. 10,65,00,000/-.

It was also submitted that during the previous year relevant to Assessment Year 2018-19, the assessee had purchased pieces and parcels of land situated at Village Kolshet, District and Taluka Thane, within the limits of Thane Municipal Corporation, bearing Survey Nos. 182/1, 182/3, 182/4, 183/2, 183/3, 183/4, 183/5, 187/1, 188/1, 188/2, 188/3, 299 & 279 from Roma Builders Pvt. Ltd. The Lease Deed was registered before the Sub- Registrar Office, Thane, and the consideration for the aforesaid land was Rs. 47,63,13,000/-, which was paid by the assessee. Further, it came to the notice of the assessee that the title of the property was under dispute, involving ownership of a third party in respect of Survey No. 183/3. Since the assessee had already paid the full and final consideration for the said pieces and parcels of land, the dispute travelled to the court of law and was amicably settled through mutual understanding between the

The assessee thereafter preferred an appeal against the assessment order dated 06/03/2024 passed by the Assessment Unit before the learned CIT(A)/National Faceless Appeal Centre. The learned CIT(A)/NFAC, vide order dated 30/12/2025, confirmed the addition. Being aggrieved, the assessee has filed the present appeal before us on the grounds mentioned hereinabove.

The learned counsel for the assessee submitted that the trust has filed return of income on 12/09/2022 vide acknowledgement no 486271111120922 u/s 139(1) as determining net taxable income NIL. The assessee trust is

The learned counsel for the assessee further submitted that the case was selected for the scrutiny on the following issue (1) Large investment in property (Form 26QB) as compared to total income (2) Provisional registration obtained U/s. 80G and large voluntary contributions received. The counsel for the assessee submitted that the assessee has obtained the order for provisional approval for the period from 24/09/2021 to 2024- 2025 [Page-123 & 124 of PB]. Thereafter the assessee has also obtained order for permanent registration for the period from 2022-2023 to 2026-2027 [Page-125 To 127 of PB]. In the return of income the assessee trust has claimed benefit of U/s. 11 & 12 by submitting copy of 12A registration.

The counsel for the assessee further submitted that the AO has made addition of Rs. 10,65,00,000/- towards Variation with respect to voluntary donations received Rs. 10,65,00,000/-. During the course of assessment proceedings before the assessing officer as well as during course of appellate proceedings the assessee has submitted the Consolidated Income & Expenditure Account [PB Page-4], Balance Sheet [PB Page-5], copy of provisional registration, which was valid upto from 24/09/2021 To A.Y. 2024-2025 i.e. 31/03/2024 [PB Page-123 & 124], Copy of Permanent Registration dated 28/12/2024 for the period from 2023-2024 To 2026-2027 [PB-125 To 127].

The counsel for the assessee also submitted that the assesse has received donation for a sum of Rs. 10,65,00,000/- form Roma Builders Pvt. Ltd during the previous year relevant to Asstt. Year 2022-2023. So far as creditworthiness of Roma Builder Pvt. Ltd. is concerned the assessee has submitted copy of acknowledgment of return [PB Page-128] and confirmation [PB Page-156] of Roma Builder Pvt. Ltd. & for identification of Roma Builder Pvt. Ltd. the assessee has submitted details of Ministry of Corporate Affairs [PB P-157 To 160]. The entire donation were duly recorded in the books of account of the assessee and also in the books of account of Roma Builder Pvt. Ltd. [Copy of ledger A/c. [PB Page-118 & 120]

The counsel for the assessee further submitted that since the entire donation received were used for purchase of land and therefore exempt – Income & Expenditure Account [PB Page-4] & Balance Sheet [PB Page-5]. All along in the past the exemption has been granted and return income has been accepted by the Department. In support of its contention the counsel submitted copies of previous assessment order in case of the assessee, which are as under:

The aforesaid facts indicated that the entire income of the assessee were exempt and earlier in the past A.Y. i.e. A.Y. 2016-

Judgment of Hon’ble Income Tax Judg. Part Appellate Tribunal, Pune Bench 01 To 07 “B”, Pune dated 12/09/2012 vide Rel.Pg-5 ITA No. 1539/PN/2008 in case of Serum Institute of India Research Foundation –Vs.- Income Tax Officer

Judgment of Hon’ble Income Tax Judg. Part Appellate Tribunal “D” Bench, 09 To 23 Mumbai dated 12/08/2016 vide Rel. Page ITA No. 230/Mum/2016 in case of 15 & 16 Chandrapabhu Jain Swetamber Mandir –Vs.- Assistant Commissioner of Income Tax

(2018) 409 ITR 545 (Bom. HC) Judg. Part Principal Commissioner of 90 To 93 Income Tax –Vs.- Quest Rel. Pg-90 Investment Advisors (P) Ltd.

Judgment of Hon’ble Income Tax Judg. Part Appellate Tribunal, Indore Bench, 24 To 89 Indore dated 09/03/2021 vide Rel. Pg.-27, IT(SS)A No. 201 & ITA No. 28 & 79 1043/Ind/2016 in case of Deputy Commissioner of Income Tax –Vs.- N.R. Finance Pvt. Ltd.

As to Ground No. 6: The counsel for the assessee submitted that the AO has made addition on the basis of variation in respect of unexplained investment duly reflected in 26QB is concerned, the details are as under:

The counsel further submitted that the assessee has taken lease property in the year 2017. The assessee has purchased the land from Roma Builders Pvt. Ltd. for a sum of Rs. 47,63,13,000/- [PB Page-108]. A suit was filed by Ramabai Sitaram Purnekar before Joint Civil Judge, Senior Division, Thane and other against Roma Builders Pvt. Ltd. [PB Page-61 To 73/R-Pge-65] – the said fact was also shown in the statement of facts before the CIT(A). The settlement cum Lease Deed executed

We have gone through the facts of the case it is and admitted fact the assessee is a registered charitable trust registered under the Bombay Public Trust Act and the trust was created for spreading education and to promote educational activities. The trust is an old trust and registration was granted U/s. 11 & 12A/12AA of the Act all along in the past the exempted income was accepted by the Department. The assessee has

It is also an admitted fact that the provisional registration was valid when the assessment order has been passed. The donation received from Roma Builders are duly reflected in the return of income [Page-128 of PB]. The returned income of the Roma Builder were Rs. 326.97 Cr. [Confirmation of donation Page-156 of PB]. The details of Roma Builders submitted to the Ministry of Corporate Affairs [Page-157 To 160 of PB], Ledger account of Roma Builder [Page-118-120 of PB]. Since the entire donation received was used for purchase of land and therefore is liable to be exempt [Income & Expenditure and Balance Sheet Page-4 & 5 of PB]. All along in the past exemption has been granted and return income has been accepted by the department [Copy of Assessment order for A.Y. 2016-17 to A.Y. 2023-2024 Page-179 To 214 of PB]

Be that as it may, without going into the merits of the case and considering the facts that the assessee could not make an effective representation to substantiate its claim, we are of the

As regarding variation in respect of unexplained investment duly reflected in 26QB [Page-77 To 116 of PB. It is admitted fact that during the previous year relevant to assessment year 2018- 2019. The assessee has purchased pieces and parcel of land situated at Village Kolshet, Dist and Taluka Thane within the limits of Thane Municipal Corporation and bearing Survey Nos. 182/1, 182/3, 182/4, 183/2, 183/3, 183/4, 183/5, 187/1, 188/1, 188/2, 188/3, 299 & 279 from Roma Builders Pvt. Ltd. The entire consideration of the aforesaid land was at Rs. 47,63,13,000/- paid by the assessee. Thereafter, it came to knowledge of the assessee that the title of the property was in dispute, having ownership of third party on the Survey No. 183/3. It is also admitted fact that the assessee has paid full and final consideration for the said piece and parcel of the land.

The dispute travelled to the court of law and it was amicably settled by mutual understanding between the assessee, Builder and the original owner family for which the assessee has paid Rs.

The assessee has purchased land from Roma Builders Pvt. Ltd. at Rs. 47,63,13,000/-. The suit filed by Ramabai Sitaram Purnekar before Joint Civil Jude, Senior Division, Thane and other against Roma Builders Pvt. Ltd. [Copy of suit Page- 61 to 73 of PB]. The aforesaid facts were also shown in statement of fact before the CIT(A). The settlement cum lease deed [Page-77 to 90 of PB]. The Punekar family also confirmed payment made of 9 Crore and 2 Crores respectively. [Receipt Page-110 To 113 PB]. The assessee has shown addition of Rs. 11,23,87,449/- and same were duly reflected in the books of account [Page-8 & 120 of PB]. The assessee has passed resolution of New Horizon on 15/03/2024. [Copy of Resolution Page-119 PB]. The entire transactions were duly reflected in the books of account of the assessee and shown in the Balance sheet also. [Copy of B/S Page-15 of PB]. The entire payments were also made through

The entire income of the assessee was exempt earlier in the past also (A.Y. i.e. 2016-2017 to 2023-2024) as has been accepted by the Department in the earlier year. [Copy of order Page-179 To 214 of PB]

Be that as it may, without going into the merits of the case and considering the facts that the assessee could not make an effective representation to substantiate its claim, we are of the view that the matter be restored to the file of the AO, in terms of the above-stated grounds, to adjudicate the same afresh by way of a de novo assessment. The AO shall decide the issues afresh after considering the submissions of documents of the assessee as mentioned by us above and after providing adequate opportunity of being heard to the assessee. The assessee shall not seek adjournments on frivolous grounds and shall remain cooperative during the course of the proceedings.

Before parting, we make it clear that our decision to restore the matter to the file of the AO shall in no manner be construed as having any bearing on the merits of the dispute, which shall be adjudicated independently by the AO in accordance with law. Needless to mention, the AO shall provide adequate opportunity of being heard to the assessee.

In the result, the appeal filed by the assessee stands allowed for statistical purposes.