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Judgment
PER MANISH AGARWAL, AM:
This appeal is filed by the assessee against the order of Ld. Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC), Delhi [‘CIT(A)’ in short] in Appeal No. NFAC/2017-18/10236151 dated 09.02.2026 passed u/s 250 of the Income Tax Act, 1961 (the Act, in short) arising out of the assessment order dated 14.03.2023 passed u/s 147 read with section 144 of the Act for Asst. Year 2018-19.
Briefly stated the facts of the case are that assessee is a society engaged in imparting education by running of the school. The case of the assessee was reopened by issuing of notice u/s 148 on 26.03.2022 after passing the order u/s 148A(d) of the Act on the same day wherein it was observed by the AO that the assessee has made cash deposit of Rs.75,15,600/- in the bank account with Central Bank of India and further the received Rs. 25,128/- as interest however, had not filed return of income. Before the AO, it was the claim of the assessee thar the said receipts were related to society namely Chaudhary Meer Singh Memorial Society, Delhi, who had duly incorporated the said receipts in its books of accounts as fee from student of the school run by the said society and since the gross receipts were less than the threshold limits provided in section 10(23C)(iiiad) of the Act, therefore no ITR was filed. However, the AO has not accepted the contention of the assessee and, made the addition of the said amount in the hands of the assessee and total income of the assessee was assessed at Rs.75,40,728/-.
Against the said order, an appeal filed by the assessee before the Ld. CIT(A) who in terms of the order dated 09.02.2026 has dismissed the appeal of the assessee.
Aggrieved by the said order, assessee is in appeal before the Tribunal by taking following grounds of appeal.
“1.On facts and circumstances of the case, the authorities below have erred in upholding the reassessment proceedings ignoring the fact that impugned assessment is invalid and without 1 jurisdiction as the said assessment is completed without complying with legal requirements of the provisions of section 147/148/151/1484/149 of the Income Tax Act therefore such assessment is void ab initio and liable to be quashed.
2.The Ld. CIT(A) has erred both in law and in circumstances of the case in upholding the addition of Rs.75,15,600/- u/s 69A rws 115BBE of IT Act on account of cash deposits ignoring the fact that the above receipts has been accounted by society i.e. Choudhary Meer Singh Memorial Society having PAN: AABAC1602] to which the trust belongs and therefore, addition made in hands of school is note tenable in law.
3.The Ld. CIT(A) has erred both in law and in circumstances of the case in upholding the addition of Rs.75,15,600/- u/s 69A rws 115BBE of IT Act on account of cash deposits ignoring the fact that the appellant is a charitable trust engaged in Educational activities and the source of above cash deposit is receipt from above activities eligible for exemption u/s 10(23C)(iiiad) of IT Act.
4.The Ld. CIT(A) has erred both in law and in circumstances of the case in upholding the addition of Rs. 75,15,600/- u/s 69A rws 115BBE of IT Act on account of cash deposits ignoring the fact that the above provision has no applicability in present case.
5.The Ld. CIT(A) has erred both in law and in circumstances of 5 the case in upholding the addition of Rs.25,128/- under the head other sources ignoring the submission of appellant.
6.The appellant craves leave to add, DLEETE, modify / amend 6 the above grounds of appeal with the permission of the Hon, ble appellate authority.”
The grounds of appeal Nos. 2 to 5 are against the additions of Rs. 75,15,600/-made u/s 69A r.w.s 115BBE of the Act by holding the cash deposited into bank as unexplained money and further of the additions of Rs. 25,128/- made towards the interest income, therefore, they are taken together for consideration.
Before us, Ld. AR of the assessee submits that since beginning of the proceedings, it was the claim of the assessee that the deposit in the bank account does not pertain to it and they were related to the society namely Chaudhary Meer Singh Memorial Society having PAN No. AABAC1602J and all the credits in the said account relates to the cash fee received from the students which are getting education in the School run by the said society. Ld. AR submits that bank deposit as well as interest was duly recorded in books of account of the above society and filed the copy of registration certificate along with approval by the state govt. for running of school and financial statements of the said society. The Ld. AR submits that since gross receipts of were less than Rs.1 Cr. i.e. the limits prescribed u/s 10(23C)(iiiad) of the Act and, therefore, the return was not filed by the said society, however both the lower authorities by observing that the no return was filed by the said society and confirmed the addition in the hands of the assessee. Ld. AR submits that when the assessee has duly discharged the burden casted upon it by filing all the necessary evidences that the said cash and bank interest was the receipts of Chaudhary Meer Singh Memorial Society who also accepted the same, therefore, there is no reason in holding that the same pertained to assessee. It is also stated by Ld. AR that in the case of Chaudhary Meer Singh Memorial Society, return of income for succeeding assessment years were filed wherein this bank account and the cash deposited therein was claimed as gross fee receipts of the society which fact was accepted by the Revenue and, therefore, as a principle of consistency also in this year no addition should be made in the hands of the assessee for the cash deposited in the same bank account. Ld. AR thus requested for the deletion of the additions made.
On the other hand, the Ld. Sr. DR vehemently supported the orders of the lower authorities submits that in para 5.3 of the order, the Ld. CIT(A) has elaborately discussed this issue and observed that this bank account has not been disclosed by the appellant society nor any documentary evidence were furnished from the students in support of the claim that the cash deposits were with respect to the tuition fee paid by the student of school run by the Choudhary Meer Singh Memorial Education Society, and, therefore, requested for the confirmation of the additions made.
Heard the parties and perused the materials available on record. The sole issue in the present appeal with respect to the taxation of the cash deposits in the bank account maintained with Central Bank of India which as per the AO was related to the assessee and since no return was filed by the assessee, therefore, it was held as the unexplained income of the assessee. It was the claim of the assessee that the same belonged to School being run by Choudhary Meer Singh Memorial Society and since all the receipts of the said society were less than the limits prescribed u/s 10(23C)(iiiad) of the Act, therefore, the society has not filed the return of income, however, the amount appearing in the bank account have duly been recorded in the books of account to the society. Considering the entirety of facts and circumstances of case and further considering the facts that the society Choudhary Meer Singh Memorial Educational Society filed its return of income for Assessment Year 2019-20 and onwards by incorporating the deposits in the same bank account which have been accepted by the Department, thus solely for the reason that in this year no return of income was filed, no addition could be made in the hands of the assessee and, accordingly, we hereby deleted the addition made. Accordingly, grounds of appeal Nos. 2 to 5 taken by the assessee are allowed.
Since we have deleted the additions made by allowing the grounds of appeal Nos. 2 to 5 of the assessee thus the legal issue raised in ground appeal No. 1 is not adjudicated.
In the result, the appeal of the appellant/assessee is allowed.