DE vs. MEDICAL AND EDUCATIONAL SOCIETY,HYDEARABADVS.ITO, EXEMPTION WARD-1(1), HYDERABAD

6. It is contended that the lower authorities are not justified in magnifying the errors committed in filing the Return and the explanations given in the limited time during the Covid period in December, 2020

3 ITA.No.845/Hyd./2025 7. Alternatively, it is claimed that the additions are made arbitrary and excessive

For these and other grounds that may be urged at the time of hearing it is prayed that the Order of the Assessing Officer be set aside or modified as may be deemed fit.”

5 ITA.No.845/Hyd./2025 has not claimed or declared any donation amount, but the entire receipt was on account of tuition fee, admission fee, hospital and canteen fee, bus transport fee and other incomes of the assessee from the medical college in respect of in- patient fee, out-patient fee, surgical services etc. He has referred to the computation of income and expenditure account of the assessee for the year under consideration and submitted that the assessee has given all the bifurcated details of receipts as well as expenses and therefore, the assessee has not claimed any exemption or deduction u/secs.11 and 12 of the Act except the actual expenditure incurred by the assessee for the main activities of the assessee running the medical college and other educational institutions. He has also referred to the schedules to the financial statements giving details of each institution i.e., Allopathy Hospital, Homeopathy College and Hospital, Junior College, Naturopathy, School of Nursing and Devs Nursing College. Similarly, the expenses are also categorized and separately bifurcated for each of these educational institutions. Thus, the learned Authorised Representative of 6 ITA.No.845/Hyd./2025 the Assessee has submitted that the claim and details as furnished before the Assessing Officer are duly supported by the books of accounts and financial statements of the assessee which are duly audited as per the Audit Report furnished along with the return of income in Form-10B. Thus, he has submitted that when no donation was received or claimed by the assessee, but the entire income was from the main education activity of the assessee, then, the addition made by the Assessing Officer on account of anonymous donation is highly unjustified and arbitrary and based on presumption without any material. Since it was the Covid- 2019 pandemic period when the assessment was framed, therefore, the assessee could not produce this supporting evidence in the shape of financials and books of accounts and other bifurcated details. Therefore, the assessee has now filed an application under Rule 29 of ITAT Rules, 1963 for admission of the additional evidence. He has further submitted that the learned CIT(A) has also confirmed the addition made by the Assessing Officer without verifying the facts and relevant material. Hence, the learned Authorised

7 ITA.No.845/Hyd./2025 Representative of the Assessee has submitted that the impugned order of the learned CIT(A) may be set aside and the matter may be remanded to the record of the Assessing Officer for fresh adjudication, after considering the supporting evidence in the shape of financial statements and other details/ledger accounts of income as well as expenses which are filed by the assessee along with the application for additional evidence.

The same is not acceptable due to following reasons- 1. As the assessee didn't have identity of the persons from whom the amount of Rs.2,68,22,173/- received, it has tried to justify the same through unsecured loans from the received from small-time different individuals situated in nearby villages, to whom society provides medical facility and has been used for providing medical facility for the benefit of such individuals. Now, the assessee changed its stand that it was mistake in filling the response. There may be probability of human error and mistakes but such mistake doesn't have such a justification as given by the assessee. The response of the assessee filed on 17/12/2020, which now claiming as mistake is reproduced as under- 2. The society has not received any donations during the year. Therefore the following are not applicable to the society and no further explanation is required for the following points.

1. We are herewith attaching the bank statement of the society 1. The society has no fresh Loans received under secured loans. Unsecured loans of Rs.2,08,66,998/- have been received from small-time different individuals situated in nearby villages, to whom society provides medical facility and 9 ITA.No.845/Hyd./2025 has been used for providing medical facility for the benefit of such individuals" 6.1. Thus, the Assessing Officer has again assumed this amount of Rs.2,68,22,173/- as donation received by the assessee despite the fact that the assessee has specifically stated in the reply that this receipt is from the main objects and activities of the assessee. The Assessing Officer again issued a show cause notice which was also replied by the assessee vide reply dated 18.03.2021 and giving the details of income as under:

"We are providing the following breakup of the Income: Tuition fees 16,866,938 Admission fees 753,968 Hostel and canteen fees 1,565,300 Bus Transport Fees 1,588,600 Other Fees 613,123 Misc Income 23,200 In patient Fees 483,385 Out Patient Fees 480,100 4,447,560 Surgical Services

10 ITA.No.845/Hyd./2025 6.2. Thus, all the details are reproduced by the Assessing Officer in the assessment order which manifest that the assessee has explained the source of the amount shown as income. However, the Assessing Officer has treated the entire receipt as anonymous donation. This action of the Assessing Officer treating the receipt as anonymous donation without any material to contradict the claim of the assessee is highly arbitrary and unjustified on the part of the Assessing Officer. It is rather assumption of the said amount as anonymous donation without any basis. The Assessing Officer has not contradicted the claim of the assessee by bringing any fact or record. Similarly, the learned CIT(A) has also misconceived the facts and confirmed the addition by giving the reasons in Para nos.8.4 and 8.4.1 as under:

“8.4. Further, it is pertinent to mention that the appellant initially vide his response dated 17.12.2020, submitted before the AO that the amount of Rs.2,08,66,998/- out of the total amount of Rs.2,68,22,173/- was unsecured loan from different individuals situated in nearby villages wherein the appellant society provides medical facilities. The AO considered the appellant's submission and requested to provide the details of the persons from whom the purported unsecured loans are received. The appellant has failed to provide such details called for by the AO. Let alone submitting

11 ITA.No.845/Hyd./2025 the details, the appellant has completely changed his stand by stating the same as revenue receipts. When the appellant has changed its stand, it shall be supported by strong clinching evidence. Even in support of the alternative claim, the appellant has not furnished any documentary evidence substantiating such claim. In view of the inconsistency in filing the submission, the AO has found the appellant's explanation unsatisfactory. 8.4.1. The appellant has repeatedly altered their stance during the course of the appellate proceedings, demonstrating a clear inconsistency in submissions. Such shifting arguments not only weaken the credibility of the claim but also indicate an attempt to circumvent scrutiny. Furthermore, the appellant has failed to furnish any substantive documentary evidence in support of the claim, relying solely on written submissions that lack corroborative proof. Mere assertions, without tangible evidence, cannot be accepted as valid justification. In view of these inconsistencies and the absence of verifiable proof, the appellant's claim is devoid of merit and stands rejected. Further, the appellant has not furnished plausible submissions even before the appellate authority. The mere contentions that the receipts are genuine without proving the genuineness of the same cannot be accepted. As such, The AO's conclusion of treating the gross receipts as anonymous donations is justified as the appellant has failed to provide credible explanation regarding the nature of receipts regarding the source of the amount it received. Hence, the Sole Ground of the appeal is hereby dismissed.”

6.3. Thus, there was no change of any stance on the part of the assessee which is misconceived by the learned CIT(A) while considering explanation of the assessee that the 12 ITA.No.845/Hyd./2025 receipt of Rs.2,68,22,173/- is comprising of tuition fee, admission fee etc., from running of the medical colleges, hospital and other educational institutions and the another amount of Rs.2,08,66,998/- as unsecured loans as an alternative claim or change of stand of the assessee. Accordingly, in the facts and circumstances of the case, we set aside the impugned order of the learned CIT(A) and also admit the additional evidence filed by the assessee to be verified and examined at the level of the Assessing Officer. Hence, in the interest of justice, the matter is remanded to the record of the Assessing Officer for fresh adjudication, after considering the additional evidence filed by the assessee and by giving an appropriate opportunity of hearing to the assessee before passing the fresh order.