Trust fails to prove identity of 7,145 cash donors, anonymous donation tax under section 115BBC upheld

The HC dismissed an appeal challenging ITAT's decision regarding anonymous cash donations under section 115BBC. The trust claimed exemption under section 11 but failed to substantiate the identity of 7,145 cash donors totaling substantial amounts. Revenue's verification efforts under section 133(6) failed as notices were returned unserved with remarks like "address not found" and "insufficient address." Eight contacted donors denied making donations. The trust initially filed incorrect donor lists, then submitted revised lists which still couldn't be verified. HC held the trust failed to discharge its burden under section 68 read with rule 46A to prove donations weren't anonymous, upholding the assessment officer's decision to treat them as anonymous donations under section 115BBC.

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Issues Involved:
The appeal under section 260A of the Income Tax Act, 1961 against the order of the Income Tax Appellate Tribunal (ITAT) regarding anonymous cash donations received by a trust primarily engaged in running educational institutions.

Issue 1:
The appellant challenged the order of the Income Tax Appellate Tribunal (ITAT) regarding the classification of cash donations as anonymous under section 115 BBC of the Income Tax Act.

The appellant failed to file returns initially, leading to a notice under section 142(1) of the Act. The assessment officer concluded that the cash donations were anonymous under section 115 BBC, but the first appellate authority disagreed, stating only a portion was anonymous. The ITAT allowed the revenue's appeal and refused to consider the appellant's appeal on merits due to a cross-appeal filed beyond the limitation period.

Issue 2:
The appellant raised substantial questions of law challenging the assessment officer's decision on the donations and the ITAT's confirmation of the assessment order.

The appellant argued that it had complied with the law by maintaining donor names and addresses, thus donations should not be considered anonymous under section 115 BBC. The appellant questioned the justification for treating the donations as anonymous, especially when the society was registered under Section 12 AA and enjoyed exemption under Section 11 of the Act.

Issue 3:
The burden of proof regarding the genuineness of donations and the appellant's failure to discharge this burden were key points of contention.

The assessment officer conducted a sample check, but the appellant could not substantiate the authenticity of the donations. Verification attempts with donors were mostly unsuccessful, with some denying making any donations. The ITAT upheld the assessment officer's decision, citing insufficient evidence to prove the donations were not anonymous.

Conclusion:
The High Court upheld the ITAT's decision, stating that the appellant failed to discharge the burden of proving the donations' genuineness. Despite attempts to verify donors, the lack of confirmation and incomplete/vague addresses led to the donations being classified as anonymous. The Court found no error or substantial question of law, dismissing the appeal and disposing of the pending civil application.

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