ACIT CC-2(3) AHMEDABAD, AHMEDABAD vs. AADHAR FOUNDATION, AHMEDABAD

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ITSSA 26/AHD/2024Status: DisposedITAT Ahmedabad25 September 2025AY 2021-227 pages
AI SummaryDismissed

What did the Tribunal hold?

The Tribunal held that the CIT(A) had correctly noted that the Assessing Officer made an addition of Rs. 1,82,35,966/- on a protective basis as unexplained cash credit under Section 69A read with Section 115BBE. The corresponding substantive addition was made in the hands of Shri Bhadiadra, and this amount was purportedly to be remitted to Shri Bhadiadra, thus not belonging to the assessee, as per the CIT(A)'s findings. The AO had rejected the assessee's explanation. However, this amount was already part of the total deposits in Kotak Mahindra Bank which had been brought to tax in the hands of the assessee under Section 68 read with Section 115BBE for Assessment Years 2015-16 to 2021-22, amounting to Rs. 111,73,83,638/-. Therefore, the CIT(A) was correct in holding that adding this amount again in the hands of Aadhar Foundation, without prejudice to the addition made in the hands of Shri Saumil Bhadiadra, constituted double taxation of the same receipt. The Tribunal found no reason to interfere with the CIT(A)'s finding and dismissed the appeal of the Revenue.

What were the facts?

The assessee, Aadhar Foundation, is a charitable organization registered under Section 12A of the Income Tax Act. A search and seizure operation under Section 132 was conducted on February 2, 2021, and subsequent dates, covering political parties and charitable organizations. The assessee's premises were searched on March 26, 2021. A survey under Section 133A was also conducted on February 2, 2021. A notice under Section 153A was issued on November 15, 2011, and the assessee filed a return of income on January 24, 2022, declaring nil income. The Assessing Officer (AO) observed that the trust's bank accounts were used to receive donations which were then routed through dummy concerns and returned to donors. The AO made an addition of Rs. 68,20,45,483/- representing total credit received in the assessee's bank account. Additionally, an addition of Rs. 1,82,35,966/- was made on a protective basis under Section 69A read with Section 115BBE for unexplained money seized from a bank account. The CIT(A) partly allowed the assessee's appeal.

What were the issues?

1. Whether, in the facts and circumstances of the case and in law, the learned CIT(A) was correct in deleting the addition of Rs. 1,82,35,966/- made on account of unexplained money under Section 69A read with Section 115BBE on a protective basis, without considering that the substantive addition was not accepted by Shri Saumil Bhadiadra? (Question of law and fact) Assessee's contentions: Not recorded as the assessee did not appear before the Tribunal. Revenue's contentions: The CIT(A)'s deletion of the addition of Rs. 1,82,35,966/- made on a protective basis under Section 69A read with Section 115BBE was not justified because it was made without considering the substantive addition in the case of Shri Saumil Kiritbhai Bhadiadra. The revenue argued that the deletion was not justified.

Which sections of the Income-tax Act were involved?

Section 69A,Section 115BBE,Section 132,Section 133A,Section 153A,Section 139(1),Section 143(2),Section 142(1),Section 44AB,Section 271B,Section 12A,Section 80G,Section 68

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, AHMEDABAD “B” BENCH

Before: Ms. Suchitra Kamble & Shri Narendra Prasad Sinha

For Respondent: Shri R.P. Rastogi, CIT-D.R

आदेश/ORDER

Per Suchitra Kamble, Judicial Member:

This is an appeal filed against the order dated 22-01- 2024 passed by CIT(A)-12, Ahmedabad for assessment year 2021-22.

2.

The grounds of appeal are as under:-

“1). "Whether, in the facts and on the circumstances of the case and in law, the ld CIT(A) is correct in deleting the addition made of Rs 1,82,35,966/- on account of unexplained money u/s. 69A r.w.s. 115BBE on Protective basis, without considering the facts that, the substantive addition was not accepted by Shri Saumil Bhadiadra?"

I.T.A No. 26/Ahd/2024 Aadhar Foundation, A.Y. 2021-22

3.

The assessee is a charitable organization having registration u/s. 12A of the Income Tax act. The return of income u/s. 139(1) of the Act was filed on 23-02-2016 declaring total income nil. A search and seizure action u/s. 132 of the Act was conducted on 02-02-2021 and on subsequent dates, the cases related to political parties and charitable organizations group. The search operation covered mainly through registered un-recognized political parties namely Manvadhikar National Party, Kisan Adhikar Party and Kisan Party of India and along with two charitable organizations namely All India Social Educational Charitable Trust and Aadhar Foundation run by two group of individuals. One group comprises of Ram Bhawan Ojha and his brother Tribhawan Ramkalp Ojha, controlling two political parties namely Manvadhikar National party and Kisan Adhikar Party along with one charitable organization called All India Social Education Trust. The second group is of Shri Saumil Kiritbhai Bhadiadra who is looking after activities of Kisan Party of India and Aadhar Foundation a search action u/s 132 of the Act was also conducted in case of the M/s. Aadhar foundation on 26.03.2021. Further, a survey action u/s. 133A of the Act was also conducted at business premises of the assessee on 02.02.2021. In furtherance of notice u/s. 153A of the Act was issued on 15- 11-2011 and served upon the assessee. Confirmatory copy of the said notice was also served through registered post of the assessee and the assessee was requested to file return of income within 30 days of its receipt of notice. In response

I.T.A No. 26/Ahd/2024 Aadhar Foundation, A.Y. 2021-22 to the same, the assessee filed return of income on 24-01- 2022 declaring total income nil. Subsequently, notice u/s. 143(2) of the Act was issued on 03-02-2022 and served to the assessee on his e-filing application. Thereafter, notice u/s. 142(1) detailed questionnaire was issued on 22-01- 2022 and on subsequent dates. The Assessing Officer observed that it was established on 30-08-2012 that Smt. Arunaben Kiritbhai Bhadiadra is the settlor and her son Saumil Kiritbhai Bhadiadra is the trustee. This entity in the guise of charitable organization involved in the scam of providing accommodation entries in the form of donation which was wrongly claimed as deductions u/s. 80G of the Act. During the search and seizure operation large number of incriminating evidences were found and seized from various premises that confirmed the said suspicious involvement of the trust in the said activities. During the search through Saumil Kiritbhai Bhadiadra who is the trustee of Aadhar Foundation admitted that the trust bank accounts are being utilized for the sole purpose of receipt funds in the garb of donations which are then routed through numerous layers of various dummy concerns and finally return to the original disclosed either in the form of cash or through banking channels. After taking cognizance of the materials seized and found from residential premises of Shri Saumil Kiritbhai Bhadiadra, the A.O. held that it is confirmed that the practice of earning commission on retuning the donation amounts to the original donors. The Assessing Officer further submitted that the books of account of the trust are prepared by one Sukla who had 07-

I.T.A No. 26/Ahd/2024 Aadhar Foundation, A.Y. 2021-22 06-2022 in compliance to the summons u/s. 131(1A) and in his statement. He admitted that he has prepared the books for the assessee for financial year 2018-19 and 2019-20 and admitted that no supporting evidence like bills, vouchers, receipts, price list, other relevant documents were brought/utilized for preparing the book of the trust. He admitted that books were prepared only on the basis of bank statements for the respective years establishing that no charitable activities were undertaken by the trust. After taking into account all these details and the statements, the Assessing Officer held that the modus operandi of the assessee’s claim rests on the received in the bank account of the charitable organization/trust and hence the Assessing Officer made addition of Rs. 68,20,45,483/- which is total credit received in assessee’s bank account during the year under consideration. The Assessing Officer also held that the assessee has neither got its accounts and nor filed audit report as per the provisions of the section 44AB of the act and therefore the penalty proceedings u/s. 271B of the Act should be quashed. The Assessing Officer also made addition of Rs. 1,82,35,966/- on protective addition regarding unexplained money seized from the bank account of Kotak Mahindra Bank Paldi branch, Ahmedabad. The said amount was added on substantive basis under the provisions of section 69A of the Act during the year of seizsure i.e. A.Y. 2021-22. Thus, addition of Rs. 1,82,35,966/- is made u/s. 69A r.w.s. section115BBE of the Act being unexplained cash in the hands of the assessee in A.Y. 2021-22.

I.T.A No. 26/Ahd/2024 Aadhar Foundation, A.Y. 2021-22

4.

Being aggrieved by the assessment order, the assessee filed appeal before the CIT(A). The CIT(A) partly allowed the appeal of the assessee.

5.

At the time of hearing despite giving notices, the assessee has not appeared nor his representative appeared before the Tribunal at the time of hearing. Therefore, we are proceeding and on the basis of submissions made by the assessee which are incorporated in the order of the CIT(A) and the assessment order. The matter was adjourned for 15 occasions but despite this, the assessee has not bothered to appear before us.

6.

The ld. D.R. submitted that the CIT(A) has rightly confirmed the addition of Rs. 68,20,45,483/-. The assessee has not brought on record in respect of transactions including that of donation. The trustee i.e. Saumil Kiritbhai Bhadiadra has categorically mentioned and admitted that the books were prepared only on the basis of bank statement and there is no proof given by the assessee either before the Assessing Officer or before the CIT(A) that the assessee has conducted any charitable activity for which it had obtained registration u/s. 12A of the Act. The assessee has categorically failed to explain the deposits of cheques in the bank accounts and has also not given the detail of its activities which can be called as charitable activities as contemplated u/s. 12A and section 80G of the Act. Thus, the CIT(A) has rightly upheld the addition and there is no

I.T.A No. 26/Ahd/2024 Aadhar Foundation, A.Y. 2021-22 need to interfere with the findings of the CIT(A). As regards the grounds of appeal of the Revenue, the ld. D.R. submitted that the addition made of Rs. 1,82,35,966/- on account of unexplained money u/s. 69A r.w.s. 115BBE on protective basis without considering the substantive addition in the case of Shri Saumil Kiritbhai Bhadiadra and therefore the said deletion is not justified.

7.

We have heard ld. Departmental Representative and all the materials available on record. It is pertinent to note that the CIT(A) has given a categorical finding that the Assessing Officer has made an addition of Rs. 1,82,35,966/- on protective basis in the hands of the assessee as unexplained cash credit u/s. 69A r.w.s 115BBE. The corresponding substantive addition was made in the hands of the Shri Bhadiadra and this amount was supposed to remitted to Shri Bhadiadra as per the submission of the assessee and does not belong to the assessee as mentioned by the CIT(A) in para 18.4 of the order. The Assessing Officer has rejected his explanation, however this amount is part of the total deposit in the Kotak Mahindra Bank which has already been brought to tax in the hands of the assessee u/s. 68 r.w.s 155BBE as total deposit not explained for A.Y. 2015-16 to 2021-22 amounting to Rs. 111,73,83,638/-. Thus, the CIT(A) has rightly held that without prejudice to the addition made in the hands of Shri Saumil Bhadiadra of this amount, the addition of this amount again in the hands of Aadhar Foundation is not justifiable as it is double taxation of same receipt. There is

I.T.A No. 26/Ahd/2024 Aadhar Foundation, A.Y. 2021-22 no need to interfere with the finding of the CIT(A) which is found to be correct. Hence the appeal of the Revenue is dismissed.

8.

In the result, the appeal of the Revenue is dismissed.

Order pronounced in the open court on 25-09-2025

Sd/- Sd/- (Narendra Prasad Sinha) (Suchitra Kamble) Accountant Member Judicial Member Ahmedabad : Dated 25/09/2025 आदेश क� ��त�ल�प अ�े�षत / Copy of Order Forwarded to:- 1. Assessee 2. Revenue 3. Concerned CIT 4. CIT (A) 5. DR, ITAT, Ahmedabad 6. Guard file. By order/आदेश से,

उप/सहायक पंजीकार आयकर अपील�य अ�धकरण, अहमदाबाद

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