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Facts
The Revenue's appeal challenges the deletion of an addition of Rs. 33.99 crore, which was part of the total Rs. 35.34 crore treated as anonymous donations by the Assessing Officer (AO). The additions were based on cash deposits found during a search, which the AO considered anonymous donations under Section 115BBC of the Income-tax Act.
Held
The Tribunal held that the AO failed to establish that the cash deposits were anonymous donations. The assessee provided sufficient evidence showing the deposits originated from legitimate sources like tuition fees, other institutional charges, and voluntary donations. The Tribunal also noted that taxing these deposits again would amount to double taxation, as similar amounts were already accounted for in earlier proceedings.
Key Issues
Whether the cash deposits in the bank accounts of the educational institutions can be treated as anonymous donations under Section 115BBC of the Income-tax Act, and if the deletion of the addition by the Ld.CIT(A) was justified.
Sections Cited
115BBC, 143(3), 132(4A), 292C, 139(1), 143(2), 142(1)
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, ‘B’ BENCH, CHENNAI
Before: SHRI GEORGE GEORGE K & SHRI S.R. RAGHUNATHA
आदेश /O R D E R
PER S. R. RAGHUNATHA, AM:
The present appeal of the Revenue is directed against the order dated 21.03.2025 passed by the Learned Commissioner of Income Tax (Appeals)-19, Chennai [hereinafter referred to as “the Ld.CIT(A)”] arising out of the assessment order dated 30.03.2016 framed u/s.143(3) of the Income-tax Act, 1961 [hereinafter referred to as “the Act”] pertaining to the Assessment Year 2014-15.
At the outset, we note that the appeal filed by the Revenue is delayed by six days. The Revenue has filed a petition along with an affidavit explaining the reasons for the said delay. Upon careful consideration of the submissions and :-2-: ITA. No:1664/Chny/2025 perusal of the material placed on record, we are satisfied that the Revenue was prevented by sufficient and reasonable cause from filing the appeal within the prescribed period of limitation. Accordingly, the delay of six days in filing the appeal is hereby condoned and the appeal is admitted for adjudication on merits.
The Revenue has raised the following grounds of appeal:
The order of the learned Commissioner of Income Tax (Appeals) is erroneous on facts of the case and in law.
The Ld.CIT(A) erred in deleting the addition of Rs.33.99 crore out of the total Rs.35.34 crore treated as anonymous donations under Section 115BBC without appreciating that during the course of search at the premises of the trust office, loose sheets were seized vide ANN/CS/MAT/LS/S numbered 1 to 158. Pages 16 to 36 containing details of cash deposit made in various bank accounts of the assessee and M/s Muthukumaran Educational Trust.
The Ld.CIT(A) failed to comprehend and appreciate that the opening cash balances reported by the assessee, based on which the relief was granted to the assessee, were only nominal and not real as discussed in the assessment order of the assessee for the preceding year, AY 2013-14.
The Ld.CIT(A) failed to appreciate that the AO had relied upon the sworn statements of the Trustee, Sh Radhakrishnan, Shri. Naveen Rakesh, Mr. Muthusamy and assistant manager G. Kannan, who looked after the admission process in UG and PG courses of the medical colleges of the Trust & the Loose sheets seized vide ANN/VJ/RNR/LOOSE SHEETS/F & S/1-4 containing details of capitation fees collected for MBBS and BDS seats for the impugned additions in the assessments.
The Ld.CIT(A) failed to appreciate the legal presumption laid down in Section 132(4A) & section 292C which affirm the evidentiary value of any material seized during the course of search for the purposes of search assessments. 6. For these grounds and any other ground including amendment of grounds that may be raised during the course of the appeal proceedings, the order of learned CIT(Appeals) may be set aside and that of the Assessing Officer be restored.
The brief facts of the case as emanate from the records are that the assessee is a charitable trust engaged in the running of educational institutions. For the A.Y.2014-15, the assessee filed its return of income u/s.139(1) of the Act on 26.10.2015, declaring NIL total income.
:-3-: ITA. No:1664/Chny/2025
The present proceedings emanate from a search conducted u/s.132 of the Act in the case of the assessee on 30.07.2013. Consequent thereto, the return of income filed for the relevant assessment year was selected for scrutiny and notice u/s.143(2) of the Act dated 29.10.2014 was issued. Thereafter, the AO issued notice u/s.142(1) of the Act calling for various details and explanations, which were duly furnished by the assessee from time to time.
Thereafter, the AO passed an order u/s.143(3) of the Act on 30.03.2016, determining the total income at Rs.59,61,31,350/-, after making the following additions:
i. Rs.2,16,35,000/- on account of accommodated anonymous donations; ii. Rs.35,34,40,000/- representing cash deposits in bank accounts, treated as anonymous donations u/s.115BBC of the Act; and iii. Rs.9,05,74,600/- towards hospital donations, treated as anonymous donations.
Aggrieved by the aforesaid assessment order, assessee carried the matter in appeal before the Ld.CIT(A).
The Ld.CIT(A), vide the impugned appellate order dated 21.03.2025, has (i) deleted the addition of Rs.2,16,35,000/- made on account of alleged accommodated anonymous donations; (ii) deleted the addition to the extent of Rs.33,99,68,999/- out of the total addition of Rs.35,34,40,000/- made by treating the cash deposits in the bank accounts as anonymous donations; and (iii) sustained the addition of Rs.9,05,74,000/- made by the AO by treating the hospital donations as anonymous donations.
:-4-: ITA. No:1664/Chny/2025
Aggrieved of the deletion of addition of Rs.33,99,68,699/- by the Ld.CIT(A), the Revenue is in appeal before us. The relevant observations of the Ld.CIT(A) in deleting the said addition are as under:
“6.3.3 The undersigned has carefully examined the issue under consideration. As evident in the assessment order, this ground emanates from the action of the AO in making an addition of Rs. 35,34,00,000/- u/s 115BBC of the Act, treating the entire cash deposits made into the bank accounts of the various educational institutions run by the appellant trust as anonymous donations. The appellant has contended that the addition is based on erroneous assumptions and lacks concrete evidence to support the claim that the cash deposits are anonymous donations. 6.3.4 During the course of the assessment proceedings, certain loose sheets were seized during the course of search, and the same contained details of cash deposits made into various bank accounts of the educational institutions operated by the appellant trust. The AO, upon examining these deposits, arrived at a conclusion that they represented anonymous donations, and accordingly, made an addition of Rs.35,34,00,000/- u/s 115BBC of the Act. 6.3.5 On examination of the submission made by the appellant, it can be seen that the appellant has clarified the issue as under:- • The cash deposits in the bank accounts of the institutions were sourced from legitimate sources, including tuition fees, donations, and transfers from the institutions run by M/s. Meenakshi Ammal Trust, which were properly recorded in the books of account. • The cash book records for each institution have been submitted as evidence, clearly demonstrating the legitimate sources of the deposits. • The appellant has also provided supporting documents, including bank statements, transfer records, and details of donations received from other trust • i.e. M/s. Sri Muthukumaran Educational Trust. • The opening cash balance for the year was legitimate and was confirmed by the closing balance of the previous year. • The AO has failed to provide any corroborative evidence to suggest that the cash deposits are unaccounted for or anonymous. • The cash deposits, when traced to their legitimate sources, cannot be considered as anonymous donations. 6.3.6 The undersigned has carefully examined the submissions made by the appellant, as well as the materials available on record. The undersigned observes that the cash deposits in the bank accounts of the various institutions run by the appellant have been sourced from legitimate receipts, including tuition fees, various other educational fees (such as examination,
:-5-: ITA. No:1664/Chny/2025 hostel, application, etc.), and transfers from related trusts such as M/s. Muthukumaran Educational Trust and M/s. Meenakshi Medical College & Research Institute run by the M/s. Meenakshi Ammal Trust. The appellant has provided detailed cash books and supporting documents for all these receipts which were made available before the AO during the course of assessment proceedings. 6.3.7 During the course of appellate proceedings, the appellant has provided a detailed breakdown and explanation for the source of the cash deposits made in the bank accounts of its institutions by way of cash in-flow statement. The appellant has furnished the cash book for the respective periods which were made available before the AO during the course of assessment proceedings and clearly demonstrated that the cash deposits were made from legitimate fees receipts generated from their educational activities. A total of 19 educational institutions are run by the appellant trust. The appellant has highlighted multiple sources for the cash deposits, including tuition fees, hostel fees, development fees, mess fees, transport fees, examination fees, rent collections, hospital donations, and transfers from other institutions within the trust. These receipts typically reflect the day-to-day operations of educational institutions, upon which the AO did not bring on record any adverse findings. In particular, the appellant has provided copies of cash books for all the institutions. The appellant has also provided evidence to address the concerns regarding the reclassification of accounting heads in the books of account. It has been clarified that the reclassification of certain receipts does not alter the reality of the cash balance or its availability for future deposits. This re-classification is merely an accounting adjustment and does not impact the legitimacy of the cash deposits. 6.3.8 The appellant explained that cash deposits were sometimes sourced from previous cash withdrawals, which were also documented in the cash books and bank statements. For example, cash withdrawals from the bank accounts of institutions were re-deposited, and the respective amounts were duly reflected in the cash books and bank statements. The AO did not dispute the existence or legitimacy of these withdrawals, and the re-deposits were fully explained as part of the normal financial cycle of the institutions. The cash book entries for all the institutions proves the source(s) for the cash deposits of the appellant’s claims. The AR emphasized that there was no observation from the AO that the withdrawals were unaccounted for or did not originate from legitimate sources. 6.3.9 A key aspect of the appellant’s submissions relates to inter- institutional transfers within the trust. The appellant explained that transfers were made between different institutions under the trust for various operational purposes. The appellant’s submission includes evidence to support the claim that these transfers were legitimate, with the cash being transferred from the opening balances of the institutions run by the trust and voluntary contributions received during the year. These transactions were documented, and relevant copies of cash books for the respective institutions were provided for review before the AO. 6.3.10 Further, as evident from the cash inflow statement, it can be seen that the appellant trust has made, the total cash inflows for various educational
:-6-: ITA. No:1664/Chny/2025 institutions and units under the umbrella of the appellant trust during the period of 01.04.2013 to 31.07.2013 are summarized below: • Vani Vidhyalaya: The total cash inflow amounted to Rs. 9,20,47,792. This includes sources such as tuition fees (Rs. 2,03,03,065), withdrawals from the bank (Rs. 20,21,924), and donations received from various sources including the institutions run by M/s.Meenakshi Ammal Trust (Rs. 3,50,00,000). Other significant sources include hostel receipts, hospital collections, various fees (such as application, bus, book, etc.), and exam fees. • Mufet: The total cash inflow was Rs. 2,60,98,767, with major contributions from tuition fees (Rs. 2,05,14,352), withdrawals from the bank (Rs. 2,965), and hostel receipts (Rs. 35,42,641), among other fees and receipts. • MMCHRI (Meenakshi Medical College & Research Institute): The total cash inflow for MMCHRI was Rs. 24,50,43,626, including large amounts from donations (Rs. 4,98,26,200), bank withdrawals (Rs. 6,83,73,124), and significant receipts from various operations like hospital collections and fees. • Meenakshi College of Engineering: A total of Rs. 12,53,86,660 was received, mainly from tuition fees (Rs. 44,48,446), bank withdrawals (Rs. 41,66,801), and • substantial donations (Rs. 10,74,05,000). • AMACE (Meenakshi Amman College of Engineering): The cash inflow totalled Rs.9,12,53,234, including sources like tuition fees (Rs. 1,71,56,151), donations from Meenakshi Ammal Trust (Rs. 5,80,00,000), and various other fees. • Meenakshi Amman Dental College: This unit saw a total cash inflow of Rs. 2,69,64,169, which primarily came from exam fees and donations. • AMA Public School: The total cash inflow was Rs. 46,75,849, with contributions from tuition fees (Rs. 31,31,250), bank withdrawals (Rs. 50,612), and other minor receipts. 6.3.11 Thus, the total cash inflow across all institutions amounted to Rs.61,14,70,097/- which implies that the appellant trust had sufficient funds from legitimate sources. Further the appellant was able to demonstrate the source for the funds that was transferred from appellant trust to Other institutions of the trust. The total funds available for transfer from appellant trust to other units during the period are sourced as under. • Opening Cash Balance: Rs. 3,64,47,970/- • Donation from Public: Rs. 1,34,71,001/- • Donation from Sri Muthukumaran Educational Trust: Rs. 15,90,00,000 (These donations were allowed in the hands of the Sri Muthukumaran Educational Trust, and the ledger accounts were provided as evidence.) • Cash Withdrawals from Bank Accounts: Rs. 7,60,000/-
:-7-: ITA. No:1664/Chny/2025 • Total Source Funds: Rs. 20,96,78,971/- 6.3.12 The undersigned after carefully examining the above submission made by the appellant and the evidence provided, including the cash books, bank statements, and other supporting documents, it is found that the cash deposits were sourced from legitimate operations of the educational institutions. These include: • Tuition Fees: A significant portion of the cash deposits was derived from tuition fees received from students across the institutions. • Hostel, Application, Transport, and Other Fees: The appellant trust also received cash for various operational charges such as hostel fees, application fees, bus fees, and examination fees, which are legitimate receipts of the institutions. • Donations: Donations from patients, the public, and transfers from other related institutions run by M/s. Meenakshi Ammal Trust and Sri Muthukumaran Educational Trust have been duly recorded and substantiated with relevant documentation. • The appellant has adequately demonstrated that the opening cash balance was legitimate and sourced from previous years' receipts. The re-deposits of cash withdrawals have been explained and corroborated with relevant bank statements. • The cash withdrawals from the bank accounts were re-deposited, and these withdrawals were shown to have been made for operational purposes, which is consistent with the normal functioning of educational institutions. • The AO's assumption that the cash deposits constituted anonymous donations under Section 115BBC of the Income Tax Act is not supported by any concrete evidence. The appellant has provided detailed documentation proving that the deposits were sourced from legitimate fee collections and donations that were not anonymous. • The appellant’s submission includes: -Cash books and bank statements clearly outlining the source of each cash deposit. - Detailed breakdowns of donations, such as donations from institutions run by M/s. Meenakshi Ammal Trust and M/s. Sri Muthukumaran Educational Trust, both of which were substantiated with proper documentation. 6.3.13 A critical factor in this case is that no incriminating evidence was found during the course of the search that could suggest any of the cash deposits were from unaccounted or non-genuine sources. The AO based upon the bank statements of the appellant trust has arrived at a conclusion that these transactions in the nature of cash deposits as anonymous donation(s). At the outset the cash book cannot constitute a incriminating material. The appellant has duly recorded the transactions as receipt in their books of :-8-: ITA. No:1664/Chny/2025 accounts. As evident in the assessment order, the AO has not made any findings about the maintenance of books of accounts. The AO having accepted in toto the books of accounts, cannot make any adverse findings about the transactions recorded in the book unless and until, the AO has come across any evidence that suggested that the appellant trust’s own money was routed back into the books by way of various receipts. The AO has not brought on record about any evidence to challenge the authenticity of the receipts, such as fake or manipulated records etc.. Furthermore, no evidence was unearthed to suggest that any of the deposits in question were from anonymous or undisclosed sources. The appellant’s institutions maintain proper accounting records, and no evidence was found during the search that would indicate discrepancies or irregularities in their financial operations. The absence of evidence to the contrary is a crucial point in establishing the credibility of the appellant's explanations. 6.3.14 Further, as evident in the assessment order, the AO failed to bring on record any corroborative evidence, beyond the seized loose sheets and bank counterfoils, to support the allegation that the cash deposits represent anonymous donations. The mere fact that cash deposits exists in the bank accounts of the institutions does not imply that they are anonymous donations, especially when the sources have been clearly identified. There exists no evidence to indicate that the donations / fees received from the students to be treated as anonymous. As evident in the assessment order, the AO has already made an addition for hospital donations, including those same amounts again as part of the cash deposits for the period from April to July 2013 resulting in a double addition. The undersigned is of the view that taxing the same income twice is against the basic principles of taxation, and such double taxation cannot be justified under the law. 6.3.15 The AO has treated the deposits as anonymous donations u/s 115BBC of the Act. However, the appellant provided sufficient evidence to demonstrate that the cash deposits were not anonymous donations, but rather, legitimate receipts from students and other stakeholders for services rendered by the educational institutions. The appellant has adequately substantiated the source of funds, including the payment of fees, receipts from various services provided by the institutions (such as hostel accommodation, canteen, and bus services), and voluntary donations. As evident in the assessment order passed, the AO’s assumption that these deposits were anonymous donations is not supported by any specific findings or facts. The mere fact that the deposits were in cash does not automatically render them anonymous, especially in the context of an educational institution where cash receipts are common and legitimate. 6.3.16 The appellant has demonstrated that the cash deposits in the bank accounts of each institution were derived from genuine fees and donations. The fees collected from students, as well as voluntary donations, were legitimate sources of income for the institutions. The AO did not raise any doubt or question the authenticity of these fee collections or donations, making the treatment of these deposits as anonymous donations unjustifiable. There exists no dispute about the existence of all the 19 educational institution run by the appellant trust, these include a medical college, engineering college, dental college etc. The AO has not attempted to bifurcate the real fees received from the students and the anonymous donations received. In the absence of any such bifurcations, treating the :-9-: ITA. No:1664/Chny/2025 entire bank deposits as anonymous donations lacks merits. The provisions of Section 115BBC of the Act applies to any anonymous donation received by a charitable trust or institution, and such donations are subject to taxation. However, the appellant has demonstrated that the deposits were not anonymous and that the trust had adequate documentation to prove the authenticity of the sources of the receipts. Therefore, the application of section 115BBC to these deposits as anonymous donation is inappropriate to the facts and circumstances of the case of the appellant trust. 6.3.17 Based on the above findings, the appellant has successfully demonstrated that the cash deposits made in the bank accounts of the institutions were not anonymous donations, but were instead legitimate receipts from various operations of the trust. The AR has provided adequate documentation and evidence to substantiate the sources of these deposits, and the AO has failed to establish that these were unaccounted for or false. More particularly, the addition of Rs.35,34,40,000/- was made without a proper basis and constitutes a double addition, given that similar deposits had already been accounted for in the previous assessment year. Therefore, the addition made by the AO is not justified. Further out of the amount of Rs. 35,34,40,000/- a sum of Rs. 1,34,71,001/- was admitted by the appellant trust as anonymous donation, during the course of search proceedings. hence the AO is directed to delete the addition of Rs. 33,99,68,999/-.”
The Ld.DR, appearing on behalf of the Revenue, took us through the relevant portions of the assessment order and, while strongly supporting the findings recorded therein, vehemently contended that the Ld.CIT(A) has erred in deleting the addition made by the AO. The Ld.DR, therefore, prayed that the impugned order of the Ld.CIT(A) be set aside and the addition made by the AO be restored.
Per contra, the Ld.AR for the assessee placed reliance on the order of the Ld.CIT(A) and submitted that the same does not suffer from any perversity or infirmity. It was accordingly prayed that the well-reasoned order of the Ld. CIT(A) be upheld and the appeal filed by the Revenue be dismissed.
We have heard the rival contentions, perused the orders of the authorities below and the material available on record. We observe that during the course of search, certain loose sheets were seized vide ANN/CS/MAT/LS/S. The sheets numbered 16 to 36 contained details of cash deposits made into various bank accounts of the educational institutions run by the assessee. The details of cash deposits as considered by the AO for making the addition are as under:
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(Amount in Rupees Lakhs) Tuition Fees Other accounts S. Name of the Total (development No Institute fees Bank A/c No Amount fees, Misc fees etc) 1 M/s. Vani 482041651 330.4 NIL 330.4 Vidyalaya 2 M/s. Mufet 773622807 212.0 NIL 212.0 3 M/s. MMCHRI 481984121 968.6 NIL 968.6 4 M/s. Meenakshi 718837896 908.1 58.2 966.3 College of Engineering 5 M/s. AMACE 482040125 850.1 NIL 850.1 6 M/s. Meenakshi 482037779 167.0 NIL 167 Amman Dental College 7 M/s. AMA Public 6031758920 40.0 NIL 40.0 School TOTAL 3476.2 58.2 3534.4
The month wise breakup of the above are as under:-
(Amount in Rupees Lakhs) April May June July S. Name of the Total 2013 2013 2013 2013 No Institute 1 M/s. Vani 25.70 131.50 158.00 15.20 330.40 Vidyalaya 2 M/s. Mufet 0 96.00 116.00 0 212.00 3 M/s. MMCHRI 5.00 389.40 392.00 182.20 968.60 4 M/s. Meenakshi 1.50 385.80 545.00 34.00 966.30 College of Engineering 5 M/s. AMACE 2.80 325.50 396.00 125.80 850.10 6 M/s. Meenakshi 0 56.00 99.00 12.00 167.00 Amman Dental College 7 M/s. AMA Public 0 0 20.00 20.00 40.00 School Total 35.00 1384.20 1726.00 389.20 3534.30
:-11-: ITA. No:1664/Chny/2025 14. Based solely on the loose sheets and bank counterfoils, the AO issued show cause notice dated 25.02.2016 and tabulated cash deposits aggregating to Rs.35,34,40,000/-. The AO proceeded to treat the said deposits as anonymous donations within the meaning of section 115BBC of the Act and made the impugned addition.
At the outset, it is observed that the impugned addition is founded entirely on loose sheets seized during the course of search and the corresponding bank counterfoils evidencing cash deposits. The seized sheets merely tabulate dates and amounts of deposits into various institutional bank accounts. They do not, in any manner, record receipt of donations nor do they contain particulars of any unidentified contributors. Thus, the primary material relied upon by the AO only evidences deposits of cash and does not establish the character of such receipts as “donations”, much less “anonymous donations” as defined u/s.115BBC of the Act.
It is a settled proposition of law that section 115BBC of the Act is a special charging provision and its application is contingent upon the Revenue first discharging the burden of proving that (i) the receipts are in the nature of donations, and (ii) the identity of the donors has not been maintained. Mere cash deposits in bank accounts of charitable or educational institutions do not ipso facto attract section 115BBC of the Act unless these statutory conditions are cumulatively satisfied. In the present case, neither limb of this requirement has been demonstrated by the AO relating to the cash deposits made in the bank accounts.
On the contrary, the assessee has produced complete cash books for each institution, along with supporting bank statements and inter-trust transfer records before the Ld.CIT(A). From these, it is evident that the deposits emanate from identifiable and accounted sources such as tuition fees, development fees, examination fees, OP collections, hostel receipts,
:-12-: ITA. No:1664/Chny/2025 application fees, sale of books, caution deposits, miscellaneous institutional receipts, withdrawals from bank accounts, and transfers from sister concerns and group trusts including Meenakshi Ammal Trust and Meenakshi Medical College & Research Institute.
Significantly, the AO has not disputed the genuineness of tuition fees, OP collections, and other regular institutional receipts. Once the primary receipts forming part of the cash flow are accepted as genuine and recorded in the regular books of account, the consequential deposit of such cash into bank accounts cannot be treated as unexplained or anonymous merely because it is deposited in lump sums. It is a well-settled principle that once the source of cash is explained, its subsequent banking cannot give rise to a separate addition.
With regard to Meenakshi Medical College & Research Institute, the assessee demonstrated that the opening cash balance as on 01.04.2013 stood at Rs.6,93,56,867/-, duly tallying with the closing cash balance of the immediately preceding financial year. The AO rejected this opening balance on the premise that it was “nominal” owing to regrouping of accounting heads during the year. We find this reasoning to be wholly untenable. Reclassification or regrouping of ledger heads is purely an accounting exercise and does not impact the actual availability of physical cash. Once the opening balance stands reconciled with prior year records, the same cannot be brushed aside on mere surmise. Accordingly, we hold that the opening cash balance is genuine and available for utilisation and deposits during the year.
Further, in respect of hospital donations, it is an admitted position that the AO has already made a separate addition of Rs.9,05,74,600/- treating such donations as anonymous at the stage of receipt. Out of the cash deposited during April to July 2013, a sum of Rs.4,98,26,200/- represents redeposit of such hospital donations. Taxing the same amount once again merely because
:-13-: ITA. No:1664/Chny/2025 it is deposited into the bank account constitutes clear double addition, which is impermissible in law. It is trite that the same income cannot be subjected to tax twice under different guises.
We also note that inter-institutional transfers and receipts from Meenakshi Ammal Trust and other group entities are duly reflected in the respective books of account of both transferor and transferee. No defect has been pointed out in these records, nor has any adverse inference been drawn regarding their genuineness. The AO has neither conducted independent enquiries nor brought any adverse material to controvert these explanations.
Importantly, no evidence has been unearthed during search or assessment proceedings to establish that any portion of the impugned deposits represents unaccounted money introduced in the garb of institutional receipts. The addition has thus been made purely on presumption that cash deposits must necessarily be anonymous donations, which approach is legally unsustainable.
It is a settled legal position that additions cannot be made on conjectures or suspicion, howsoever strong. The Revenue must bring positive material on record to justify invocation of section 115BBC of the Act. In the present case, the AO has failed to discharge this burden. The seized loose sheets merely reflect bank deposits; they do not evidence anonymous donations. When the assessee has explained the sources through books of account and supporting documents, and when the AO has not rejected such books nor pointed out any specific discrepancies, the impugned addition cannot survive.
Considering the totality of facts and circumstances, we hold that the assessee has satisfactorily explained the nature and source of the cash deposits in the bank accounts of all the institutions. The Revenue has failed to establish that these receipts fall within the ambit of anonymous donations under :-14-: ITA. No:1664/Chny/2025 section 115BBC of the Act. Accordingly, we are of the considered opinion that the AO erred in making an addition treating the cash deposits in the bank accounts as anonymous donations u/s.115BBC of the Act.
We find that the Ld.CIT(A) after an elaborate examination of the cash books, bank statements, cash inflow statements and supporting documents, has recorded a categorical finding that the cash deposits were sourced from legitimate receipts such as tuition fees, hostel fees, examination fees, transport fees, hospital collections, voluntary donations and inter-institutional transfers within related trusts. The assessee also demonstrated that certain deposits represented re-deposit of earlier bank withdrawals, which were duly reflected in the cash books and bank statements. These factual findings remain uncontroverted by the Revenue.
We further observe that the assessee furnished detailed cash books of all institutions, explaining each source of cash inflow, and also substantiated donations received from related trusts with ledger accounts and confirmations. The Ld.CIT(A) has rightly noted that the opening cash balances were duly carried forward from earlier years and stood explained. Importantly, no incriminating material was found during the course of search to suggest that the cash deposits were from undisclosed or non-genuine sources. Mere existence of cash deposits in bank accounts, in the absence of any adverse material, cannot ipso facto lead to the conclusion that such receipts are anonymous donations.
We find that the Ld.CIT(A) has also taken note of the fact that out of the total amount, a sum of Rs.1,34,71,001/- was voluntarily admitted by the assessee as anonymous donation during search proceedings, and relief has been granted only for the balance amount of Rs.33,99,68,999/-, which stands fully explained through documentary evidence.
:-15-: ITA. No:1664/Chny/2025 28. Before parting with the matter, it is pertinent to observe that the AO, in the assessment order, has extensively referred to various anomalies noticed during the course of search proceedings, allegedly indicating receipt of anonymous donations and accommodation entries, which were stated to have been routed through different heads in the books of account of the assessee. We further note that, in an apparent effort to regularize and neutralize the impact of such search findings, the assessee had suo motu made voluntary disclosures in A.Ys 2013-14 and 2014-15.
It is also a matter of record that certain additions made by the AO on account of anonymous donations and related issues were sustained by the Ld.CIT(A), and the assessee has not carried those confirmed additions in further appeal. The details of the voluntary disclosures and other additions sustained by the Ld.CIT(A) for the relevant assessment years are tabulated hereinbelow: (Amount in Rs.) S. No Particulars A.Y.2013-14 A.Y.2014-15 1 Voluntary cash donations treated as 3,24,98,860 - anonymous and admitted by the assessee 2 Accommodated receipts treated as 6,54,35,500 - anonymous donations and disclosed by the assessee vide letter dated 11.01.2016 during the course of assessment proceedings 3 Accommodated receipts treated as 9,73,81,500 - anonymous donation disclosed by the assessee vide letter dated 07.03.2016 during the course of assessment proceedings 4 Cash deposits treated as - 1,34,71,001 anonymous as sustained by the Ld.CIT(A) 5 Hospital donations treated as - 9,05,74,600 anonymous donations Total 19,53,15,860 10,40,45,601
:-16-: ITA. No:1664/Chny/2025 30. From the above tabulation, it emerges that the assessee has already offered to tax and discharged its tax liability on an aggregate amount of Rs.29,93,61,461/- for A.Ys 2013-14 and 2014-15.
Admittedly, the AO has not brought on record any independent incriminating material or cogent evidence to demonstrate that the actual undisclosed income of the assessee exceeds the aforesaid sum of Rs.29,93,61,461/-. In the absence of any such positive finding or fresh material, it cannot be presumed that the assessee had earned income over and above the amounts already disclosed and taxed.
In our considered view, the so-called search anomalies stood fully subsumed and embedded in the aggregate income of Rs.29,93,61,461/- voluntarily disclosed by the assessee and further augmented by additions sustained by the Ld. CIT(A). Once the Revenue has accepted these disclosures and sustained additions, any further attempt to treat the cash deposits of Rs.33,99,68,999/- in the bank accounts as separate anonymous donations would clearly amount to double taxation of the same income, which is impermissible in law.
In view of the above factual matrix, we find that the Ld.CIT(A) has passed a well-reasoned and speaking order after detailed verification of records. The Revenue has not brought any material before us to controvert the findings of the Ld.CIT(A) or to demonstrate that the cash deposits were, in fact, anonymous donations. The additions made by the AO are based on assumptions and lack evidentiary support. Accordingly, we see no infirmity in the order of the Ld.CIT(A) directing deletion of Rs.33,99,68,999/- and confirming only the amount admitted by the assessee. The same is upheld. Thus, the grounds of appeal raised by the Revenue are dismissed.
:-17-: ITA. No:1664/Chny/2025
In the result, the appeal of the Revenue stands dismissed.
Order pronounced in the court on 04th February, 2026 at Chennai.
Sd/- Sd/- (जॉज� जॉज� के) (एस. आर. रघुनाथा) (GEORGE GEORGE K) (S. R. RAGHUNATHA) उपा�य� /VICE PRESIDENT लेखा सद%य/ACCOUNTANT MEMBER