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

ITA 1915/KOL/2024

AI Insights

The case involves the Uttarayan Trust for Education Social Welfare, which faced an addition of Rs. 1,24,43,494/- to its income under section 68 of the Income Tax Act, 1961, by the Assessing Officer (AO) due to alleged bogus donations. The trust, registered under section 12AA, appealed against this addition. The Ld. CIT(A) allowed the appeal, leading to the revenue's challenge in the tribunal. The tribunal examined the evidence presented, including detailed records of fees collected from students, and found that the trust did not receive any donations but only collected fees for educational services. Consequently, the tribunal upheld the Ld. CIT(A)'s decision and dismissed the revenue's appeal.

• Counselvise Citation: [2024] 140 COUNSELVISE.COM (IT) 472678 (ITAT-KOLKATA)
• Duration Of Justice: 2 month(s) 24 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 05-12-2024
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: C
• Assessment Year: 2020-2021
• Appeal Filed On: 11-09-2024
• Laws Referred To: Income Tax Act
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Unexplained cash credit; Charitable institution; Bogus
• Section: 143(3); 143(1); 11; 12AA; 68; 12; 133A

Judgement Text

" आयकर अपीलȣय अͬधकरण, कोलकाता पीठ ‘‘सी’’, कोलकाता IN THE INCOME TAX APPELLATE TRIBUNAL “C” BENCH: KOLKATA Įी संजय गग[, ÛयाǓयक सदèय एवं Įी राजेश क ुमार, लेखा सदèय क े सम¢ [Before Shri Sanjay Garg, Judicial Member & Shri Rajesh Kumar, Accountant Member] I.T.A. No. 1915/Kol/2024 Assessment Year: 2020-21 DCIT, Central Circle-1(4), Kolkata Vs. Uttarayan Trust for Education Social Welfare (PAN: AAATU 6023 D) Appellant / (अपीलाथȸ) Respondent / (Ĥ×यथȸ) Date of Hearing / सुनवाई कȧ Ǔतͬथ 25.11.2024 Date of Pronouncement/ आदेश उɮघोषणा कȧ Ǔतͬथ 05.12.2024 For the Appellant/ Ǔनधा[ǐरती कȧ ओर से Shri Subhro Das, Addl. CIT Sr. D.R For the Respondent/ राजèव कȧ ओर से Shri S.R. Nag. CA ORDER / आदेश Per Rajesh Kumar, AM: This is the appeal preferred by the revenue against the order of ld. Commissioner of Income Tax(Appeals)-20, Kolkata (hereinafter referred to as the Ld. CIT(A)”] dated 04.06.2024 for the AY 2020-21. 2. The only issue raised by the revenue is against the deletion of addition of Rs. 1,24,43,494/- as made by the AO u/s 68 of the Act on account of bogus donation received by the assessee. 2 I.T.A. No.1915/Kol/2024 Assessment Year: 2020-21 Uttarayan Trust for Education Social Welfare 3. At the outset, we note that there is a delay of 5 days in filing the appeal. 4. 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. 5. 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. 6. 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 3 I.T.A. No.1915/Kol/2024 Assessment Year: 2020-21 Uttarayan Trust for Education Social Welfare 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: “5.5 Decision: I have considered the merit in the submission of the appellant vis-à-vis the facts of the case that the appellant has not received any donation in the year under consideration from any sources. Rather, the entire receipts of the appellant are in the nature of fees and fines from the student of its Educational Institution. Further, these incomes are duly utilized for the educational purposes/charitable purposes. Therefore, the appellant can not be deprived from the benefit of section 11 & 12 of the I.T. Act when it has registration under section 12AA of the Act for the year under consideration. Furthermore, it is also not a case of the A.O. where the appellant trust has been found violating any provision of the I.T. Act. Therefore, the addition made by the A.O. of Rs.1,24,43,494/- under the misconception that the same are the bogus donation received by the appellant from the dubious sources is found without merit. Hence, addition of Rs.1,24,43,494/- u/s.68 of the I.T. Act, is deleted.” 7. 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). 8. The Ld. D.R on the other hand relied on the authorities below. 9. 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 4 I.T.A. No.1915/Kol/2024 Assessment Year: 2020-21 Uttarayan Trust for Education Social Welfare 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. 10. In the result, the appeal of the revenue is dismissed. Order is pronounced in the open court on 5th December, 2024 Sd/- Sd/- (Sanjay Garg /संजय गग[) (Rajesh Kumar/राजेश क ुमार) Judicial Member/ÛयाǓयक सदèय Accountant Member/लेखा सदèय Dated: 5th December, 2024 SM, Sr. PS 5 I.T.A. No.1915/Kol/2024 Assessment Year: 2020-21 Uttarayan Trust for Education Social Welfare Copy of the order forwarded to: 1. Appellant- DCIT, Central Circle-1(4), Kolkata 2. Respondent – Uttarayan Trust for Education Social Welfare, C/o, Dipankar Banik Nripendra Narayan Road, Cooch Behar-736101. 3. Ld. CIT(A)- 20, Kolkata 4. Ld. PCIT- , Kolkata 5. DR, Kolkata Benches, Kolkata (sent through e-mail) True Copy By Order Assistant Registrar ITAT, Kolkata Benches, Kolkata "