Hari Ram Shikshan Sansathan Vs ITO (ITAT Jodhpur)
The Income Tax Appellate Tribunal (ITAT), Jodhpur, addressed an appeal filed by Hari Ram Shikshan Sansathan (running ‘Diamond Academic’ school) against the CIT(A)’s order for Assessment Year 2017-18. The trust had claimed Nil income under Section 10(23C)(iiiad), reporting a turnover of ₹ 91,49,222.
The Assessing Officer (AO) made two additions:₹ 40,86,800 for a discrepancy in fees and ₹ 8,32,800 for unexplained cash deposits under Section 69A. By adding the ₹ 40.86 lakh fee receipt to the reported turnover, the AO increased the total receipt to ₹ 1,32,36,000 exceeding the ₹ 1 crore limit for exemption under Section 10(23C)(iiiad). Consequently, the assessee was treated as an Association of Persons (AOP), and both amounts were added to the total income. The CIT(A) upheld this order.
The assessee argued before the ITAT that the ₹ 40.86 lakh receipt was on an accrued basis while total receipts were maintained on a cash basis, requesting the doctrine of consistency be applied. The ITAT noted that the exact accounting system was not adequately demonstrated, and the AO’s verification was improper and incomplete.
Therefore, the ITAT restored the entire matter back to the AO for a de novo verification regarding both the ₹ 40,86,800 and ₹ 8,32,800 additions, with directions for the assessee to be diligent and cooperative, and for the AO to provide a reasonable opportunity of hearing. The appeal was allowed for statistical purpose.
