O R D E R

PER SIDDHARTHA NAUTIYAL, JM:

This appeal has been filed by the Assessee against the order passed by the Ld. Commissioner of Income Tax (Appeals), (in short “Ld. CIT(A)”), National Faceless Appeal Centre (in short “NFAC”), Delhi vide order dated

06.09.2024 passed for the Assessment Year 2022-23.

2. The assessee has raised the following grounds of appeal:-

“1. The Ld. CIT(A) has erred in law and on facts of the R case in confirming the addition of Rs. 9,60,00,000/- as an unexplained cash credit u/s. 68 of the Act.

2. In the facts and circumstances of the case, S. 68 of the Act has no application as the amounts have been received towards CSR which cannot be considered as unexplained.

3. Both the lower authorities have passed the orders without properly appreciating the facts and they further erred in grossly ignoring various submissions, explanations and information submitted by the appellant from time to time which ought to have been considered before passing the impugned order. The action of the lower authorities is in clear breach of law and Principles of Natural Justice and therefore deserves to be quashed.

4. The Ld. CIT(A) has erred in law and on facts of the case in confirming action of the Ld. AO in levying interest u/s. 234A/B/C/D of the Act.

5. The Ld. CIT(A) has erred in law and on facts of the case in confirming action of the Ld. AO in initiating penalty proceedings u/s. 271AAC of the Act.”

3. The brief facts of the case are that the assessee, a company, filed its return of income for the Assessment Year 2022-23, declaring a total income of "Nil". During the course of the assessment proceedings, the Assessing Officer noted that the assessee received a sum of Rs. 6,51,37,000 on March 29, 2022, and another sum of Rs. 3,08,63,000 on March 30, 2022, from Madhu Silica Pvt. Ltd. These amounts were supposedly received for the purpose of assessee's Corporate Social Responsibility (CSR) activities. The AO noticed that the assessee did not have its books of account audited and failed to furnish the required Audit Report and Form No. 10B for the Assessment Years 2020- 21 and 2021-22. Further, the assessee did not provide detailed information about the donations received and the expenditures incurred over the past three years. Moreover, the assessee did not have registration under Section 12AA of the Income Tax Act, nor did it provide any supporting documents concerning the utilization of the CSR funds. Given the assessee's failure to substantiate the genuineness of the transactions with documentary evidence, the AO treated the total amount of Rs. 9,60,00,000 received from Madhu Silica Pvt. Ltd. as unexplained cash credits under Section 68 of the Income Tax Act. The AO imposed tax on this amount at the rate of 60% as per Section

115BBE of the Income Tax Act.

4. In appeal, Ld. CIT(Appeals) observed that the assessee was incorporated only on October 25, 2021, and received large sums from Madhu Silica Pvt. Ltd. for CSR activities in March 2022, just a few months after its incorporation. The AO had highlighted in assessment order that the assessee was not registered under Section 12AA and had its application for approval under Section 80G had also been rejected. As a result, the AO had concluded that the assessee was not eligible to receive such large amounts under CSR and that these sums were not being utilized for the intended CSR purposes. Before Ld. CIT(Appeals), the assessee submitted that the assessee i.e. was Madhu Silica Foundation is an entity incorporated by Madhu Silica Pvt. Ltd. to act as the implementing agency for the CSR funds. The assessee submitted that as an implementing agency the assessee did not require registration under Section 80G or Section 12AA, and that it had obtained CSR-1 registration for this purpose. During the course of appeal, the assessee was requested to provide copies of bank account, financial statements, and evidence supporting the CSR expenditures incurred by the assessee. Upon reviewing the ban