TaxTMI 
TaxTMI 
2026 (8) TMI 463
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....ee stating that the same is filed beyond the due date and hence is to be considered as non-est. The assessee furnished the income and expenditure account before the A.O and based on the same the AO treated the entire income to the tune of Rs. 3,02,11,210/- as taxable in the hands of the assessee. The A.O also treated the difference between the cash deposited into the bank account and the fees received as reflected in the income and expenditure account amounting to Rs. 73,77,414/- as unexplained income in the hands of the assessee. Before the CIT(A), the assessee furnished various details pertaining to the impugned additions. The CIT(A) after considering the submissions of the assessee gave relief to the assessee by holding that: "c) Alognwith above submission, the appellant has furnished that the appellant is wholly or substantially financed by the Government and exists solely for educational purposes without the motive of profit. Accordingly, its income is exempt under section 10(23C)(iiiab). The appellant has furnished the copy of Government orders sanctioning grants and audited accounts which have been duly verified. Further, the appellant has submitted that the provisi....
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.... "5. The assessee uploaded the details on 25/02/2022. As regards the cash deposits in the Bank it has been explained that major part of cash deposits it made on fees received and receivable from students. Substantially documentary evidence is also enclosed. However, as per information available with the Department the cash deposit in Bank amounted to Rs. 1,76,64,950/-. Whereas, the fees received from the students is shown as per Income & expenditure account at Rs. 99,39,184. Even after considering the fees receivables of Rs. 3,48,352/-, there is a difference of an amount of Rs. 73,77,414/-, Since there is no explanation for the difference, the same is added back to the total income. Penalty proceedings u/s 271(1)(c) of the I.T.Act, 1961 is initiated separately for concealment of income." g) It would be pertinent to mention here that the AO has relied on the information available on the AIMS module. There seems no verification done with the banks concerned u/s 133(6) of the Act. On the other hand, the appellant claims that it maintains regular books of accounts and every deposit (whether cash or otherwise) in the bank account has been duly reflected in the day book....
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....ed by the assessee in the Return of Income or during assessment proceedings. Further the return of income filed by the assessee was declared as non-est due to expiration of the time limitation. iii) Whether the CIT(A) is justified in granting relief to the assessee by relying on the fresh evidences submitted by the assessee in the form of Government Grant Sanction Orders and Books of Accounts without factchecking whether the government grants exceed the prescribed percentage of total receipts or not. The government grant orders and the books of accounts submitted by the assessee during appellate stage ought to have been remanded to the AO for verifying the authenticity of the grant orders and to correctly compute the ratio of grants to total receipts for claiming eligibility u/s 10(23C) (iiiab) of the Act. iv) The CIT(A) has erred in law by misapplying the proviso to Section 12A(2) of the Act. As per the provision to section 12A(2), a trust granted registration in a later year may claim Section 11 benefits for earlier AYs provided that assessments for such year were pending as on date of grant of registration and the objects and activities of the trust in the earl....
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....ssessee is a Government funded school where the grants received is more than 50% of the income of the assessee and as per Rule 2BBB of the Rules, the assessee is entitled for exemption u/s. 10(23C)(iiiab) of the Act. With regard to the contention that the exemption is claimed for the first time, the ld AR submitted that assessee has filed the return declaring loss and hence the exemption could not have been claimed. On the issue of cash deposit, the Ld. AR has submitted the assessee has provided the following breakup explaining the source and that the CIT(A) has rightly considered the same for giving relief to the assessee: S. No. Particulars Amount 1. Sales Receipts 19,29,415 2. Fees Received from Students 99,39,185 3. Previous Year Fees Receivables - Received 13,30,750 4. Loan Received from S.B.K.KS.S. Thiyagarajan School 05.54,000 5. Cash Withdrawn from Bank & Other Deposits and advances during the Financial Year 40,57,050 Total 1,78,10,400 Cash Deposit during the financial Year 1,76,64,950 6. We have carefully considered the rival submissions and perused the ma....
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....d upon by the CIT(A) was called for in exercise of the powers vested in him under section 250(4) of the Act for the purpose of effective adjudication of the appeal and this is substantiated from the perusal of the notice issued by the CIT(A). Such material cannot be equated with additional evidence voluntarily produced by the assessee so as to invoke Rule 46A. The Revenue has also not demonstrated that any prejudice has been caused by the exercise of such statutory power. We are, therefore, unable to accept the contention that the impugned order suffers from any infirmity on this count. Accordingly, the ground raised by the Revenue in this regard is rejected. 8. Now we will consider the contentions of the revenue with regard to the issue as to whether the assessee is entitled to exemption under section 10(23C)(iiiab) of the Act. We notice that section 10(23C)(iiiab), as applicable to the assessment year under consideration, exempts the income of any university or other educational institution existing solely for educational purposes and not for purposes of profit, which is wholly or substantially financed by the Government. Thus, the statutory requirements are twofold, namely, t....
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....exceeded fifty per cent of its total receipts, thereby satisfying the test of substantial Government financing as contemplated under Rule 2BBB. The Revenue has not brought any material on record to dislodge these findings. In these circumstances, we are of the considered view that the assessee fulfils the conditions prescribed under section 10(23C)(iiiab) of the Act. We, therefore, find no infirmity in the order of the ld. CIT(A) in granting exemption under the said provision. Accordingly, the grounds raised by the Revenue on this issue stand dismissed. 10. The next issue pertain to the addition made towards cash deposit. In this regard we notice that the A.O. made the impugned addition on the premise that the aggregate cash deposits in the bank accounts exceeded the fee receipts reflected in the Income and Expenditure Account and that the assessee had failed to satisfactorily explain the difference. On the other hand, the assessee contended before the ld. CIT(A) that the cash deposits represented not only the fees collected from the students but also arrears of fees, other receipts, cash withdrawals re-deposited and amounts received towards school development. It was further co....