Tribunal upholds CIT (A)'s deletion of addition under Section 68 for unexplained cash deposits in religious trust

The tribunal dismissed the appeal filed by the assessing officer, upholding the CIT (A)'s decision to delete the addition under Section 68 of the Income Tax Act for unexplained cash deposits in a religious trust. The tribunal also rejected the grounds related to the admission of revised grounds of appeal and the taxation of anonymous donations received by the trust, citing exemptions for anonymous donations to wholly religious trusts under Section 115BBC.

---

---

Issues:
1. Addition under Section 68 of The Income Tax Act, 1961 for unexplained cash deposits.
2. Admission of revised grounds of appeal during appellate proceedings without granting opportunity to AO.
3. Taxation of anonymous donations received by charitable trust under Section 115BBC of the Act.

Analysis:

Issue 1: Addition under Section 68 of The Income Tax Act
The appeal was filed by the Deputy Commissioner of Income Tax against the appellate order passed by the Commissioner of Income Tax (Appeals) for A.Y. 17-18. The Assessing Officer had made an addition of Rs. 22,925,500 under Section 68 of the Act as unexplained cash deposits. The trust in question is a religious trust registered under Section 12 AA of the Act. The trust received cash donations for the construction of a Jain temple. The Assessing Officer contended that the trust failed to explain the source of cash deposits. However, the CIT (A) deleted the addition citing provisions of Section 115BBC, which exempts anonymous donations received by charitable trusts for religious purposes from taxation.

Issue 2: Admission of Revised Grounds of Appeal
The Assessing Officer raised a ground of appeal regarding the admission of revised grounds during the appellate proceedings without granting an opportunity to the AO, contravening Rule 46A of the IT rules. However, the issue was dismissed as the departmental representative did not present any arguments on this matter.

Issue 3: Taxation of Anonymous Donations
The Assessing Officer contended that anonymous donations should be taxed at the maximum marginal rate under Section 115BBC. The CIT (A) relied on a Delhi High Court decision and circulars to support the exemption of anonymous donations to wholly religious trusts from taxation. The tribunal upheld the CIT (A)'s decision, stating that the trust had disclosed the donations as income and explained the purpose of the contributions, thus not warranting addition under Section 68 of the Act.

In conclusion, the tribunal dismissed the appeal filed by the assessing officer, upholding the CIT (A)'s decision to delete the addition under Section 68 of the Act. The tribunal also dismissed the grounds related to the admission of revised grounds of appeal and the taxation of anonymous donations received by the trust.

---