ACIT(EXEMPTION), CIRCLE-2, AHMEDABAD, AHMEDABAD vs. SHREE RAMKRISHNA SEVA MANDAL ANAND , ANAND

1. Expense in respect of 829597.00 property

2. Misc. Expense of trust 987079.00

3. Expenses for the object of trust 303127966.00 304944642.00 Capital Expenditure 92002482.00 Total Expenditure 396947124.00 Details of expenditure of each unit and details for payment of salary on test check basis was provided to the AO during the assessment proceedings. It is to be noted that out of total expenditure of Rs. 39,69,47,124/-, there was capital expenditure of Rs. 9,20,02,482/-, leaving behind balance expenditure of Rs.30,49,44,642/-, out of which (Exemption) vs. Shree Ramkrishna Seva Mandal Anand] A.Y. 2023-24 - 3 – expenditure in the form of salary to teaching and non-teaching staff of all the units amounted to Rs. 23,59,03,194/-, for which copy of ledger of various units were enclosed in support of its claim. It is evident that such expenditure was done for the object of the Trust and no lapses therein have been pointed out by the AO at all. It is further claimed by the appellant that with regard to capital expenditure of Rs.9,20,02,482/-, the AO no has made detailed enquires during the assessment proceedings and adverse inference was drawn with regard to the same vide para 4.5.2 of the Order. The appellant contends that the AO without considering the documents submitted by it during the course of assessment proceedings for his perusal, had proceeded to disallow 10% of total expenses claimed by it without recording any adverse finding and making lump- sum disallowance, which is bad in law. 5.1.2 The facts of the case, contentions of the appellant and submissions filed by it have been duly taken into consideration. It is found that out of total expenditure of Rs. 39,69,47,124/-, there was capital expenditure of Rs. 9,20,02,482/- with regard to which no adverse inference was drawn by the AO vide para 4.5.2 of his Order. Further, out of balance expenditure of Rs. 30,49,44,642/-, expenditure in the form of salary to teaching and non-teaching staff of all the units amounted to Rs.23,59,03,194/-, for which the appellant has submitted unit-wise break- up as under:

It has also filed details of its entire educational expenses of all the units which included salary expenses in it. For ready reference such details for few of its units are reproduced hereunder:

It has provided its salary sheet on test check basis which is reproduced hereunder:

It has also copy provided of copies of various ledgers concerning salary payments, copy of cash book and copy of its bank book evidencing payments of salaries as well as other expenditure incurred by it. The appellant also has brought on record the evidences about grants-in-aid received by it and utilized towards salary payments. One such evidence in this regard is reproduced hereunder:

(Exemption) vs. Shree Ramkrishna Seva Mandal Anand] A.Y. 2023-24 - 7 – The appellant has also submitted various other expenditure ledgers such as electricity expenses, campus development expenses, advance salary grants account etc. It has also provided audited copies of Income and Expenditure Accounts of all its units separately. One such Income and Expenditure Account is reproduced hereunder:

(Exemption) vs. Shree Ramkrishna Seva Mandal Anand] A.Y. 2023-24 - 8 – In the documentary evidences filed by the appellant to substantiate its claim of application of income, instead he has proceeded to disallow 10% of total expenses on adhoc basis without specifying any particular reason for the same. It is felt that with the details filed by the appellant before the AO during the course of assessment proceedings, the initial onus which was casted upon it to substantiate its claim of application of income was duly discharged and the onus, then, shifted to the AO to point out any specific defect in the claim of expenditure made by the appellant. However, the same was found wanting in the Order of the AO. Therefore, I do not find any merits in the addition made by him to the Total Income of the appellant and consequently the grounds of appeal raised by it are allowed.”

5. A perusal of the above reveals that the assessee is a trust involved in major educational activities and managing various education entities from pre-primary to post-graduate levels. Institutes managed by it are affiliated with GSEV, Sardar Patel University and AICTE. There are 35 Institutes which are under its management. Income of all the 35 education institutes were consolidately disclosed in the return of income filed by the assessee along with the expenditure consolidately incurred in all the units. The AO noted that the assessee did not submit the details as required about the nature and purpose of application of its income to the tune of Rs.39,69,47,124/-, as also mode of payment of such payment, whether electronic or non-electronic. He, therefore, held that it cannot be verified whether the assessee’s claim of having applied its income for charitable purposes was true or not. The AO, therefore, disallowed 10% of the expenses claimed by the assessee and treated the said amount as income liable to tax, resulting in addition of Rs.3,96,94,712/- being made to the income of the assessee.

(Exemption) vs. Shree Ramkrishna Seva Mandal Anand] A.Y. 2023-24 - 9 – 6. The order of the Ld. CIT(A) reveals that he found the contention of the AO to the effect that no evidences and explanation were filed by the assessee regarding its claim having made application of its income to the tune of Rs.39.69 Crores towards charitable activity to be incorrect. He noted that out of total expenditure of Rs.39.69 Crores claimed by the assessee, there was capital expenditure of Rs.9.20 Crores with regard to which, he noted no adverse inference .Of the remaining Rs.30.49 Crores, he found the same to include salary paid to teaching and non-teaching staffs of all the 35 Institutes amounting to Rs.23.59 Cores for which he noted the appellant to have submitted; (i) Unit-wise break up, (ii) Salary sheet on test check basis, (iii) copies of various ledgers of concerned salary payment & (iv) copy of cash book and bank book evidencing payment of salary. He further noted the assessee to have submitted details, unit-wise of expenditure incurred therein and ledgers of various expenditure accounts, such as, electricity expenses, development expenses, salary grant account etc. He noted the assessee to have been provided copies of audited income and expenditure account. Noting the voluminous evidences produced by the assessee as above with respect to its claim of expenses, the Ld. CIT(A) further noted that the AO had not brought on record any lapses or lacunae in the evidences filed by the assessee. He noted the AO to have disallowed 10% of the total expenses on ad hoc basis without specifying any particular reason for the same. The Ld. CIT(A), thereafter, went on to hold that the assessee discharged its onus of proving its claim of expenses by filing all documentary evidences [ACIT (Exemption) vs. Shree Ramkrishna Seva Mandal Anand] A.Y. 2023-24 - 10 – and onus, therefore, shifted on the AO to point any specific defects therein before proceeding to make any disallowance of the expenses. And in the absence of any defect noted by the AO in the claim of the assessee, he, therefore, held the disallowance of 10% of the expenses to be without any merits.

This Order pronounced on 20/01/2026 Sd/- Sd/- (T.R. SENTHIL KUMAR) (ANNAPURNA GUPTA) JUDICIAL MEMBER ACCOUNTANT MEMBER Ahmedabad; Dated 20/01/2026 S. K. SINHA True Copy आदेश क� �ितिल�प अ�े�षत/Copy of the Order forwarded to : 1. अपीलाथ� / The Appellant ��यथ� / The Respondent. 2. 3. संबंिधत आयकर आयु� / Concerned CIT आयकर आयु�(अपील) / The CIT(A)- 4. �वभागीय �ितिनिध, आयकर अपीलीय अिधकरण, अहमदाबाद / DR, ITAT, Ahmedabad 5. गाड� फाईल / Guard file. 6. आदेशानुसार/ BY ORDER,