ANAND EDUCATION TRUST,AHMEDABAD vs. THE ITO, WARD-1 (EXEMPTIONS), AHMEDABAD

ORDER \nPER MAKARAND V. MAHADEOKAR, AM:\nThis appeal by the assessee is directed against the order dated\n26.07.2024 passed by the Commissioner of Income Tax (Appeals), National\nFaceless Appeal Centre (NFAC), Delhi (hereinafter referred to as “CIT(A)"],\nunder Section 250 of the Income-tax Act, 1961 [hereinafter referred to as \"the\nAct\"] for the Assessment Year (AY) 2018-19, confirming the assessment order\npassed under Section 147 r.w.s.144 and 144B of the Act dated 22.03.2023,\nwherein the Assessing Officer [hereinafter referred to as “AO”] made an\naddition of Rs.1,37,90,000/- under Section 69A of the Act, taxed under Section\n115BBE of the Act.\nFacts of the Case:\n2.\nThe assessee is a charitable trust engaged in running Government-\napproved educational institutions – Shree Panchtirth Vidhyalaya (standards\n1 to 8) and Shree Panchtirth Higher Secondary School (standards 9 to 12).\nBased on AIR information under the Insight Portal, it was observed that the\nassessee had deposited cash aggregating to Rs.1,37,90,000/- during Financial\nYear (FY) 2017-18. The assessee had not filed the return of income for the\nrelevant year. The case was flagged as a non-filer in the NMS module,\ntriggering issuance of notice under Section 148 of the Act, after approval from\nthe Pr.CIT. Subsequent to the reopening, the AO issued multiple statutory\nnotices to the assessee seeking compliance and submission of supporting\nevidence. Further, a letter of non-compliance was issued on 28.01.2023 with a\ndue date of 02.02.2023, but no compliance was made. A Show Cause Notice\n(SCN) under Section 144B(1)(ix) of the Act was issued on 07.02.2023, granting\ntime till 10.02.2023 to respond, followed by a final SCN issued on 15.02.2023,\nrequiring reply by 20.02.2023. Despite multiple opportunities, no response\nwas received from the assessee to any of these notices. The AO, in absence of\nany explanation or documentary evidence from the assessee, proposed an\naddition of Rs.1,37,90,000/- under Section 69A of the Act, being unexplained\nmoney representing cash deposits in the following accounts:\nRs.60,10,000/- in ICICI Bank A/c No. 084405001155 (in name of Shree\nPanchtirth Higher Secondary School).\nRs.77,80,000/- in ICICI Bank A/c No. 084405001156 (in name of Shree\nPanchtirth Vidhyalaya).\n2.

1. The AO specifically requisitioned supporting evidence such as Bank\nstatements, Attendance registers, Fee structure circulars issued to parents,\nBooks of accounts (Income & Expenditure Account, Balance Sheet),\nAcknowledgment of return filing and explanation for non-filing. However,\nno response was received, and the assessment was completed ex-parte by\ntreating the entire amount of cash deposit as unexplained money under\nSection 69A and taxed at the applicable rate under Section 115BBE of the Act.\nPenalty proceedings under Section 271AAC and Section 272A(1)(d) of the Act\nwere also initiated.\n3.\nAggrieved by the reassessment order, the assessee filed appeal before\nthe CIT(A). However, even during the appellate proceedings, the assessee\ndid not file any written submissions or evidence, despite issuance of multiple\nnotices. The CIT(A) dismissed the appeal relying on some judicial precedents.\nThe CIT(A) held that the AO had passed a reasoned order, and in absence of\nany material placed on record during appeal, the additions stood confirmed.\nAggrieved by the order of CIT(A), the assessee is in appeal before us with\nfollowing solitary ground:\n4.\nThe learned CIT(A) erred in law and on facts in confirming the addition made by\nAO in respect of cash deposited to the Bank amounting to Rs.1,37,90,000/-under\nSection 69A of the Income Rs.2,25 Tax Act, 1961 read with Section 115BBE of the\nIncome Tax Act, 1961, such addition is requested to be deleted.\nAt the time of hearing, the learned Authorized Representative (AR)\nfiled an application seeking adjournment of the matter, on the ground that\nthe books of accounts and supporting documents were being compiled and\ntranslated into English for proper presentation. It was submitted that the\naccountant was in the process of entering the accounts into Tally Software,\nand the required documentation could be furnished only after a few days.\nHowever, considering the fact that the matter had already been pending since\nlong, and that both the orders of the lower authorities were passed ex-parte\ndue to persistent non-compliance by the assessee, we found no justification\nto further prolong the proceedings. In the absence of any cogent or\ncompelling reason, the application seeking adjournment was rejected and the\nmatter was taken up for hearing on merits.\n4.

1. Upon being confronted with the repeated failure to appear and comply\nbefore the AO as well as the CIT(A), the learned AR submitted that the\ntrustees were not conversant with procedural formalities and hence could not\npursue the proceedings properly. He fairly admitted the lapse on the part of\nthe assessee in the earlier stages but pleaded that the assessee now stands\nprepared to produce all supporting records and evidence. The AR also agreed\nto pay a cost of Rs.10,000/-, acknowledging the inconvenience and judicial\ntime lost on account of such default.\n5.\nThe learned Departmental Representative (DR) did not object to\nrestoring the matter back to the file of AO considering the nature of additions\nmade in absence of compliance.\n6.\nWe have carefully considered the rival submissions and perused the\nmaterials on record. It is undisputed that the assessment order as well as the\nCIT(A)'s order both were passed ex-parte, in the absence of any response or\ncompliance from the assessee despite multiple statutory notices and show\ncause opportunities. The default was consistent before both authorities.\nHowever, considering the nature of addition and the plea now advanced by\nthe assessee that the cash deposits pertain to school fee collections from\nstudents of government-approved educational institutions, and given the\nassurance of cooperation in the remand proceedings, we are of the view that\none final opportunity deserves to be granted in the interest of substantial\njustice.\n6.