Income Tax Appellate Tribunal - Chennai
United Educational ... vs Cit Appeals, Chennai on 30 January, 2026
आयकर अपील य अ धकरण, 'ए' यायपीठ, चे नई
IN THE INCOME TAX APPELLATE TRIBUNAL
'A' BENCH, CHENNAI
ी जॉज जॉज के, उपा य एवं ी एस.आर.रघुनाथा, लेखा सद य के सम
BEFORE SHRI GEORGE GEORGE K, VICE PRESIDENT AND
SHRI S.R. RAGHUNATHA, ACCOUNTANT MEMBER
आयकर अपील सं./ITA Nos.: 1492, 1493 & 1494/CHNY/2025
िनधारण वष/Assessment Years: 2016-17, 2017-18 & 2018-19
M/s. United Educational The DCIT(Exemption),
Foundation, Vs. Chennai Circle,
MAC/ICH Building, VCH Campus, Chennai
T.T.T.I Post,
Adyar S.O,
Chennai - 600 113.
PAN: AAATU 3411D
(अपीलाथ /Appellant) ( यथ /Respondent)
अपीलाथ क ओर से/Appellant by : Shri R. Vijayaraghavan, Advocate
(Through Virtual Mode)
यथ क ओर से/Respondent by : Dr. R. Mohan Reddy, CIT
सुनवाई क तारीख/Date of Hearing : 29.01.2026
घोषणा क तारीख/Date of Pronouncement : 30.01.2026
आदेश/ O R D E R
PER GEORGE GEORGE K, VICE PRESIDENT:
These appeals filed by the assessee are directed against
three orders of Commissioner of Income Tax (Appeals), Chennai-20,
all dated 25.03.2026 passed under section 250 of the Income Tax
Act, 1961 (hereinafter called 'the Act'). The relevant Assessment
Years are 2016-17, 2017-18 & 2018-19.
:- 2 -: ITA Nos.1492 to 1494 /Chny/2025
2. Common issues are raised in these appeals. Hence, they were
heard together and are disposed off by this consolidated order. The
issue raised is whether the CIT(A) is justified in upholding the denial
of exemption u/s.11 of the Act for the relevant assessment years.
3. Brief facts of the case are as follows: The assessee is a
charitable trust registered u/s.12A of the Act. For the assessment
years 2016-17 to 2018-19, assessee trust has received donations
from various individuals. It is claimed by the assessee that at the
time of making donations, each of the donor furnished a certificate
stating that the contribution was a voluntary donation made to the
assessee. It was also stated that assessee had applied these
donations to charitable purpose including donations to other
charitable trust which are duly registered u/s.12A of the Act.
4. For the earlier assessment years 2011-12 to 2014-15, assessee
trust had received similar donations from various individuals. It is
submitted that all of these donors have certified that their
contributions were voluntary in nature. It is stated that for the
assessment years 2011-12 to 2014-15, the AO examined few of the
donors and based on the statement alleged to have been made by
few of the donors that donations were connected with obtaining
:- 3 -: ITA Nos.1492 to 1494 /Chny/2025
admission in Sri Venkateswara College of Engineering, the AO
extrapolated such statement to all donors and treated the entire
donations as capitation fees. Accordingly, the claim of exemption
u/s.11 of the Act was denied and same was brought to tax. On
appeal for assessment years 2011-12 to 2014-15, the Tribunal held
that it is not proved that donations were made for the purpose of
obtaining admission in Sri Venkateswara College of Engineering and
accordingly, deleted the additions. On further appeal, the Hon'ble
High Court of Madras reversed the Tribunal order and held that
donations were in the nature of capitation fees thereby restored the
order of the AO. Aggrieved by the judgment of Hon'ble Madras High
Court, assessee trust filed SLP before the Hon'ble Apex Court. The
Hon'ble Supreme Court admitted the SLP vide SLP No.22024-
22026/2022 and stayed the operation of the Hon'ble Madras High
Court judgment for the assessment years 2011-12 to 2014-15. The
copy of judgment of the Hon'ble Supreme Court is placed on record.
5. For the present assessment years in appeals namely 2016-17 to
2018-19, the AO called for the details of donors. It is stated before
the Tribunal that due to constraint of manpower, assessee trust was
unable to furnish the complete details within the initially prescribed
time period. However before the completion of assessment, in
:- 4 -: ITA Nos.1492 to 1494 /Chny/2025
response to show-cause notice, the assessee trust collected and
furnished the names and details of all the donors. The AO concluded
the assessment by observing that there was insufficient time to
examine the donors and treated the entire donations as capitation
fees and brought the same to tax (as done in the earlier assessment
years 2011-12 to 2024-15).
6. Aggrieved, assessee filed appeals before the CIT(A) for the
assessment years 2016-17 to 2018-19. The assessee also brought
to the notice of the CIT(A), the judgment of the Hon'ble
Jurisdictional High Court has been stayed by the Hon'ble Apex Court.
The CIT(A) however, rejected the appeals of the assessee for the
assessment years 2016-17 to 2018-19. The CIT(A) held that when
information is called for by the AO, the same was filed belatedly at
the fag end of the assessment and AO did not have the time to
examine the list of donors. Further, it was held that donations that
are received in the relevant assessment years are similar to the
donations that was received by the assessee trust for earlier
assessment years 2011-12 to 2014-15. Therefore, the CIT(A)
following the judgment of the Hon'ble Jurisdictional High Court
decided the issue against the assessee.
:- 5 -: ITA Nos.1492 to 1494 /Chny/2025
7. Aggrieved by the orders of the CIT(A), assessee has filed the
present appeals before the Tribunal. The Ld.AR submitted that the
CIT(A) merely followed the judgment of the Hon'ble Jurisdictional
High Court for the assessment years 2011-12 to 2014-15 and
confirmed the order of the AO. It was submitted that there was no
independent examination for the years under consideration.
Therefore, the CIT(A) conclusion that donations received from
numerous persons were in the nature of capitation fees is not based
on supporting material. It was further submitted that the CIT(A) has
failed to consider the assessee's submission that operation of
judgment of the Hon'ble High Court has been stayed by the Hon'ble
Apex Court. It was contended by the Ld.AR that the judgment of the
Hon'ble High Court to the earlier assessment years was rendered on
the basis of facts specific for those years and cannot be mechanically
applied or extrapolated to present years without independent
enquiry / examination of the donors. It was stated that the CIT(A)
having acknowledged donors details were furnished before the AO,
ought to have called for a remand report from the AO and then
decided the appeals. It is submitted that the failure to do so vitiates
the appellate order. It was submitted by the Ld.AR that treating of
voluntary donations received by the assessee trust as capitation fees
for obtaining admission in Sri Venkateswara College of Engineering is
:- 6 -: ITA Nos.1492 to 1494 /Chny/2025
not based on any evidence on record and merely on surmises and
presumptions.
8. The Ld.DR on the other hand submitted that assessee was
directed to furnish the list / details of donors on or before
01.06.2018 but the same was furnished at the fag end of
assessment on 15.12.2018 (for assessment year 2016-17). The
Ld.DR stated that the details of donors were filed belatedly on
purpose to avoid the AO to examine the same. Further, the Ld.DR
submitted that donations collected for the impugned assessment
years are similar to the donations that are collected for assessment
years 2011-12 to 2014-15 and the modus operandi being the same,
addition of donations as capitation fee is in order in light of the
judgment of the Hon'ble Jurisdictional High Court in assessee's own
case.
9. We have heard rival submissions and perused the material on
record. For the assessment years 2011-12 to 2014-15, assessee
trust had received similar donations from various donors. For the
said assessment years, the AO during the course of assessment
proceedings had recorded statement from some of the donors. In
the said statement recorded, the donors had stated that these
:- 7 -: ITA Nos.1492 to 1494 /Chny/2025
donations are connected with obtaining admission in Sri
Venkateswara College of Engineering. The AO thereby treated the
entire donations as capitation fee and brought the same to tax. On
appeal by the Revenue, Tribunal held that it is not proved that
donations were made for the purpose of obtaining admission in Sri
Venkateswara College of Engineering and accordingly, dismissed the
appeals of the Revenue. However, the Hon'ble Jurisdictional High
Court reverses the Tribunal's order (case reported in 144
Taxmann.com 54) and allowed the appeals of the Revenue. The
assessee trust challenged the said judgment of the Hon'ble
Jurisdictional High Court before the Hon'ble Supreme Court vide SLP
No.22024 to 22026/2022. The following order has been passed by
the Hon'ble Apex Court on 04.12.2023:-
ORDER
Issue notice to the respondent(s).
Having regard to the order dated 24.11.2023 passed in SLP (C) Nos.22564-22567/2022 arising from the same batch of cases disposed of by the Madras High Court on 31.10.2022 and following the same, there shall be interim stay of further proceedings of the impugned judgment and order in these matters also.
10. In light of the aforesaid order of the Hon'ble Supreme Court, there is an interim stay of further proceedings of the Hon'ble High Court of Madras.
:- 8 -: ITA Nos.1492 to 1494 /Chny/2025
11. For the impugned assessment years 2016-17 to 2018-19, assessee had furnished details/list of donors though belatedly before the AO. The AO due to paucity of time passed the assessment orders for assessment years 2016-17 to 2018-19 by holding the entire donations as capitation fees and brought the same to tax. The CIT(A) followed the judgment of the Hon'ble Jurisdictional High Court and dismissed the appeals of the assessee trust.
12. On facts on record, it is clear for the impugned assessment years there has been no investigation or examination carried on by the AO regarding the payment of donations whether it is capitation fees or not. The CIT(A) after having acknowledged that donor details were furnished by the assessee trust before the AO though belatedly ought to have called for a remand report and provided an opportunity to the AO to examine whether donations received is in the nature of capitation fee or not. The assessee's contention before the Tribunal is limited. It is submitted that evidences/details of the donors may be examined by the AO and then come to a conclusion whether it is capitation fee or not. The contention of the Ld.AR is reasonable. Hence, we restore the issue raised in these appeals to the files of the AO. The AO is directed to examine the list of donors and take a decision whether donations whether is capitation fees or :- 9 -: ITA Nos.1492 to 1494 /Chny/2025 not. The assessee shall cooperate with the Revenue and shall furnish all the relevant details called for by the AO. The AO is directed to afford reasonable opportunity of hearing to the assessee and shall take a decision in accordance with law.
13. In the result, the appeals filed by the assessee are allowed for statistical purposes.
Order pronounced in the open court on 30th January, 2026 at Chennai.
Sd/- Sd/-
(एस.आर. रघुनाथा) (जॉज जॉज के)
(S.R. RAGHUNATHA) (GEORGE GEORGE K)
लेखा सद य/ACCOUNTANT MEMBER उपा य /VICE PRESIDENT
चे ई/Chennai,
दनांक/Dated, the 30th January, 2026
RSR
आदे श क त ल प अ े षत/Copy to:
1. अपीलाथ /Appellant
2. यथ /Respondent
3. आयकर आयु त /CIT, Chennai
4. वभागीय त न ध/DR
5. गाड फाईल/GF.