The Mumbai Bench of Income Tax Appellate Tribunal (ITAT) remanded the matter to the Assessing Officer (AO) for verification of cash deposits as trust income.
Bhiwandi Nizampur Nagarpalika College,appellant-assessee, an ‘Association of Person’ (AOP), did not file its return of income for the year under consideration. The case was reopened under section 148 of the Act due to substantial cash deposits totaling Rs. 1,63,75,639/- in two bank accounts. Despite non-compliance during the assessment proceedings, the AO passed an order under section 147, 144, and 144B, determining total income at Rs. 13,10,051/- based on a net profit rate of 8% on the deposits.
The Commissioner of Income Tax(Appelas)[CIT(A)] dismissed the appeal on the grounds of non-filing of the return and advance tax, as well as the failure to request an exemption under section 249(4)(b) of the Act. The assessee then appealed before the tribunal.
The assessee’s counsel argued that the revenue had accepted the non-entitlement to file returns for AY 2016-17 and 2019-20, as reflected in the assessment orders dated 28.02.2024. The counsel requested no addition for the current year, citing consistency in facts and circumstances.
The revenue counsel disagreed, highlighting the assessee’s non-compliance and lack of documentary evidence. The counsel urged upholding the addition, referencing the lower authorities’ orders.
The two member bench comprising Kavitha Rajagopal(Judicial Member) and Om Prakash Kant(Accountant Member) after reviewing the materials and rival contentions, noted that the college was affiliated with the University of Mumbai and managed by Padmashri Annasaheb Jadhav Bhartiya Samaj Unnati Mandal. The trust filed consolidated returns for all its schools and colleges, including the college’s bank accounts. The college argued that the cash deposits were from student fees.
For AY 2016-17 and 2019-20, the AO accepted the college’s submission and made no additions. However, for the impugned year, the college did not comply with assessment proceedings, and it was unclear if the necessary documents were filed.
The tribunal remanded the matter to the AO to verify the documents and check if the income from fees had already been included in the parent trust’s return, instructing the officer to decide the issue based on merit.
In short,the appeal filed by the assessee was allowed for statistical purposes.
Subscribe Taxscan Premium to view the JudgmentSupport our journalism by subscribing to Taxscanpremium. Follow us on Telegram for quick updates
