2009 (10) TMI 911 - AT - Income Tax

Appellate Tribunal affirms charitable trust's donation receipts, shifting burden of proof.

Dy. Director of Income-tax (E), Versus. New Anand Education Society

The Appellate Tribunal ITAT Delhi upheld the CIT(A)'s decision for the A.Y. 2003-04 regarding a charitable trust's donation receipts under the Income Tax ... - Issues involved: Interpretation of donation receipts u/s 68 of the Income Tax Act, 1961 for a charitable trust.Summary:The appeal before the Appellate Tribunal ITAT Delhi arose from an order of the CIT(Appeals) for the A.Y. 2003-04 concerning a trust registered u/s 12A(a) of the Income-tax Act, 1961. The Assessing Officer treated donations of &8377; 7,65,467/- as accommodation entries and subjected them to tax at the maximum marginal rate. However, the CIT(Appeals) disagreed, stating that the appellant had proved the genuineness of the donations and that the burden lay on the assessee to explain the credit entry. The CIT(Appeals) deleted the addition of &8377; 7,65,467/-, allowing the benefit of sections 11 & 12 of the Income Tax Act.The Departmental Representative (DR) supported the Assessing Officer's findings, while the assessee cited relevant case law. The Tribunal noted that to claim exemption u/s 11, the assessee must show that donations were voluntary. In this case, the assessee disclosed the donations and provided a list of donors. The Tribunal held that the absence of a complete list of donors did not imply an attempt to introduce unaccounted money, especially when a significant portion of the donations was used for charitable purposes. Citing a decision of the Delhi High Court, the Tribunal declined to interfere with the CIT(A)'s order.Ultimately, the revenue's appeal was dismissed, and the order was pronounced on 9-10-2009.