Timely return filing governs exemption claims, while cash deposit and profit additions required fresh verification of books and evidence.

Timely filing of the return was treated as a statutory condition for claiming exemption under section 10(23C)(iiiab), and the same filing requirement was applied to the section 11 claim; on the admitted facts, no return was filed, so both exemption claims were unavailable for the year. The proposed additions for cash deposits and estimated business profit were not finally upheld because the source of deposits, the assessee's books, and supporting evidence required proper verification. The income estimation issue was therefore sent back for fresh adjudication on the basis of the actual record.

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Issues: (i) Whether exemption under section 10(23C)(iiiab) of the Income-tax Act, 1961 could be denied for non-filing of the return of income. (ii) Whether the additions made on account of cash deposits and estimated business profit could be sustained without proper verification of the assessee's books and supporting evidence.

Issue (i): Whether exemption under section 10(23C)(iiiab) of the Income-tax Act, 1961 could be denied for non-filing of the return of income.

Analysis: The statutory requirement introduced from assessment year 2016-17 under section 139(4C) required filing of the return within the due date under section 139(1) for claiming exemption under section 10(23C)(iiiab). On the admitted facts, no return of income was filed for the relevant year. The same consequence was also applied to exemption under section 11, since section 139(4A) likewise required timely filing for such claim.

Conclusion: The exemption claim under section 10(23C)(iiiab) was not available for the year under consideration, and the claim under section 11 was also not available.

Issue (ii): Whether the additions made on account of cash deposits and estimated business profit could be sustained without proper verification of the assessee's books and supporting evidence.

Analysis: Although the assessee was to be assessed as an Association of Persons on commercial principles in the absence of a valid exemption claim, the source of cash deposits was stated to be student fee collections and additional evidence was produced. The estimation of profit at 8% and the separate treatment of cash deposits required examination of the actual books and documentary material. In the interests of fair adjudication, the matter required fresh consideration by the Assessing Officer.

Conclusion: The additions were not finally sustained and the assessment was remanded for denovo adjudication.

Final Conclusion: The appeal succeeded only to the extent of remand, with the assessee's exemption claim rejected for the relevant year but the quantum additions left open for fresh adjudication.

Ratio Decidendi: Where the statute makes timely filing of the return a condition for claiming exemption, non-filing within the prescribed time defeats the exemption claim, and any further estimation of income must be re-examined on the basis of the actual books and evidence before making additions.

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