DY. COMMISSIONER OF INCOME TAX CENTRAL CIRCLE-1(4), KOLKATA, KOLKATA vs. UTTARAYAN TRUST FOR EDUCATION SOCIAL WELFARE, KOLKATA

At the outset, we note that there is a delay of 5 days in filing the appeal.

After hearing the rival contentions and perusing the material on record including the condonation petition filed by the Department, we are quite convinced with the reasons for delay in filing the appeal which we consider to be bonafide, genuine and sufficient and accordingly, the delay is condoned.

Facts in brief are that the assessee is a trust and is engaged in educational activities. The trust is registered u/s 12AA of the Act vide registration certificate dated 26.02.2019. The assessee filed return of income for the instant assessment year on 12.02.2021 declaring total income at nil which was processed u/s 143(1) of the Act. Pertinent to note that the survey operation u/s 133A was carried out in the case of assessee trust on 18.07.2019 at the assessee’s premises. During the course of survey proceeding, the document bearing ID mark from UT/01 to UT/21 were impounded. Thereafter the assessee was issued statutory notice along with questionnaires. The assessee replied the same on 16.02.2022 but according to AO, the assessee did not furnish evidences as called for and since the assessment was getting time barred a show cause notice was issued to the assessee on 07.02.2022 asking to explaining the receipt in the books of account with documentary evidences. The AO on the basis of documents found bearing no. UT/21 during the course of survey observed that the assessee has received donations Rs. 1,24,42,294/- during the impugned assessment year for which the AO called for the postal addresses, e-mails and PANs etc. The AO finally treated the said amount as unexplained cash credit u/s 68 of the Act and added the same to income to the assessee besides making the additions towards cash and capital investments thereby assessing the income at Rs. 1,79,39,440/- in the assessment framed u/s 143(3) of the Act dated 23.03.2022.

During the appellate proceedings, the appeal was allowed by the Ld. CIT(A) by directing the AO to delete all the additions. The revenue has challenged only the deletion of addition of Rs. 1,24,43,494/- which was made by the AO towards unexplained donations u/s 68 by observing and holding as under:

The Ld. A.R. submitted before us that during the year, the assessee has not received any donations from anybody and whatever was received that was on account of fees received from the students studying in the various colleges being run and operated by the assessee trust. The AR produced before the Bench a detailed paper book comprising all the details. The Ld. A.R while referring to page no. 122 to 149 submitted that the money was received by way of fee and the detailed statement from 01.04.2019 to 31.03.2020 is attached stating name of the student ,registration no. course and amount of fee.The Ld. A.R also stated that the AO has wrongly given this observation in the assessment order that the assessee has received donation but as a matter of fact the trust has not received any single donation but received by way of fee for various courses. The Ld. A.R has submitted that in the assessment order the AO has mentioned status of the assessee as company whereas as a matter of fact the assessee is a charitable trust duly registered u/s 12AA of the Act which means that there was a complete non-application of mind by AO. The Ld. A.R therefore prayed that the appeal of the revenue may kindly be dismissed as upholding the order of Ld. CIT(A).

The Ld. D.R on the other hand relied on the authorities below.

After hearing the rival contentions and perusing the material available on record, we find that the assessee is a registered trust u/s 12AA of the Act and is engaged in running various educational institutions of B.Ed and law etc. A survey action u/s 133A was conducted on the assessee during the year and the case of the assessee was fixed for scrutiny, The statutory notices were issued along with questionnaire to the assessee, however necessary details were not furnished before the AO and consequently he treated the entire receipt as shown in the ITR as unexplained cash credit u/s 68 of the Act and added the same to the income of the assessee besides making any other additions in respect of cash and addition to fixed asset. The Ld. CIT(A) deleted all the addition by passing a detailed and reasoned order. We note that allegation of AO was that the assessee has received cash donations whereas as a matter of fact there was no cash donation received by the assessee during the year but whatever received was on account of fee and tuition fee etc. The assessee has filed a details of tuition and other fee which is attached at page 122 to 149 of PB which has been examined by the Ld. CIT(A) while allowing the appeal of the assessee. Considering all these facts and findings by the ld CIT(A) , we do not find any defect or deficiency in the order of Ld. CIT(A) and accordingly upheld the same by dismissing the appeal of the revenue.

In the result, the appeal of the revenue is dismissed. Order is pronounced in the open court on 5th December, 2024