ITAT deletes Rs. Addendum 52.25 lakhs

Future Education & Research Trust v. DCIT (ITAT Kolkata)

ITAT Kolkata ruled in favor of Future Education & Research Trust deleting the additional amount of Rs 52.25 lakh made under Section 69A of the Income Tax Act, 1961. A trust registered under sections 12A and 10(23C)(vi) has undergone a thorough examination. for alleged unaccounted fees charged from students admitted under management quota during the assessment year 2013-14. The Assessing Officer (AO) stated that the amount was not reflected in the Income and Expenditure Account of the trust, treating it as cash without explanation. The Commissioner of Income-tax (Appeals) (CIT(A)) upheld the decision of the AO, dismissing the trust’s appeal for insufficiency of evidence.

At the hearing, the trust provided detailed records, including bank statements and documentation of management quota fees, which confirmed that the disputed amount had been properly accounted for through banking channels. Even though the AO and the CIT(A) did not consider these submissions, the ITAT found this evidence to be substantial. The tribunal drew attention to procedural violations, including failure to consider relevant submissions and documents by lower authorities. It was concluded that the addition of Rs 52.25 lakh was not justified as the trust had adequately demonstrated compliance with accounting practices.

The ITAT judgment emphasizes the importance of careful examination of evidence before finalizing tax disputes. By setting aside the order of the CIT(A) and issuing a supplement, the tribunal reinforced the principle of fairness in assessment of taxes. An appeal filed by the Future Education & Research Trust was allowed, resolving the dispute in its favour.

FULL TEXT OF ITAT KOLKATA ORDER

This appeal filed by the assessee is against the order of the Ld. CIT(A), NFAC, Delhi dated 12.10.2023 for AY 2013-14 arising from the assessment order passed u/s. 143(3) of the Income-tax Act, 1961 (hereinafter referred to as “the Act”) by DCIT (Exemption), Circle-1, Kolkata on 22.02.2016.

2. The only issue raised in the various grounds of appeal relates to the confirmation of the addition of Rs.5225000 by the Ld. CIT(A) as done by the AO u/s. 69A read with section 115BBE of the Act

3. In brief, the assessee is a registered trust. 12A, as well as u/s. 10(23C)(vi) of the Act, the primary purpose of the trust is to provide education. During the year, the assessee filed the return of income on 24.09.2013 declaring the total income as nil. The attestation subject’s case was selected for careful consideration, and the relevant notices were duly issued and served on the attestation subject. During the evaluation procedure, the AO asked for information about the students admitted under the management quota. In response, Shri Seelajit Ghosh, Chairman of the Foundation, provided a list of the additional fees charged for each stream and pointed out that such fees are within the purview of the order issued by the Department of Higher Education, Government of West Bengal. However, the Ld. The CIT(A) came to the conclusion that such higher commission of Rs.52,25,000/- was not shown in the Income and Expenditure Account and therefore added the same u/s. 69A of the Act in the assessment made u/s. 143(3) dated 22.02.2016 by ignoring the stated facts.

4. Appeal filed before Ld. CIT(A) was also dismissed on the ground that the assessee did not provide any particulars/information to rebut the finding given by the AO who framed the assessment as ex parte and dismissed.

5. After hearing the opposite contentions and perusing the material on record, we find that the assessee engaged in the business of imparting higher education is approved. 12A, as well as u/s. 10(23C)(vi) of the Act. During the course of assessment proceedings, the AO observed that the assessee received additional fees amounting to Rs.52,25,000/- which were not reflected in the books of account and units were added accordingly. 69A of the Law, obtained from accounting books. l.d. The CIT(A) dismissed the appeal without considering the materials uploaded by the assessee on the Internet, details and copies of which were placed before the Court during the hearing. We note that the assessee furnished the details/information to the Ld. CIT(A) 21.03.2022, 24.08.2023 and 09.10.2023 as the fee added by the AO. The assessee has also submitted information regarding management quota charge which is available at page 93 of the paper book. Further, the assessee has provided details of cash deposits amounting to Rs.52,74,800/- on various dates in the assessee’s bank account along with the amount, statement and copies of which are available at pages 35 to 83 of the paper book for proof The fact that the money received by the assessee is in trust through banking channel. In view of these facts, we find that the order passed by the Ld. CIT(A) is wrong and contrary to the facts on record. Even the submissions of the convict along with the evidence were not considered at all. Similarly, the submission of the assessee also escaped the attention of the AO. From the records we find that the fees of Rs.52,25,000/- have been properly accounted for by the assessee. In view of these facts, we are inclined to set aside the order of the Ld. CIT(A) and direct the AO to delete the addition of Rs.52,25,000.

6. As a result, the assessee’s appeal is allowed.

The decision is announced in an open court session on the 18th^thousand November 2024