Assessment of trust donations: recorded donor identity precludes characterization as anonymous under Section 115BBC, preserving tax benefits

Operative treatment of cash donations considers statutory definition of anonymous donation to require disclosure of donor identity only; consequently a trust need not establish source, genuineness, or donor capacity for such donations where records show donor names and addresses. The rigor of proving source under section 68 is inapplicable to trusts, so documented donations cannot be treated as anonymous under section 115BBC(3) read with related provisions, resulting in their exclusion from anonymous donation classification when identity records are maintained.

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Issues: Whether the CIT(A) was justified in confirming the Assessing Officer's addition of Rs. 1,43,61,000 as anonymous donations (enormous donations) for AY 2018-19.

Analysis: The statutory definition of "anonymous donation" in Section 115BBC(3) of the Income-tax Act, 1961 requires that a person receiving a voluntary contribution does not maintain a record indicating the name and address of the donor. Section 13(7) provides that anonymous donations referred to in Section 115BBC are not excluded from total income for purposes of sections 11 and 12. The records produced by the trust included individual trainee files containing name, address, cell number and photographs, and the trust furnished a list of donors with addresses and contact details to the tax authorities. The tribunal followed authority establishing that where records indicate the name and address of donors, donations are not "anonymous" under Section 115BBC(3). The tribunal also treated inapplicable the strict application of Section 68 to trusts where donor identity and disclosure have been provided.

Conclusion: The addition of Rs. 1,43,61,000 on account of anonymous donations is deleted and the appeal is allowed in favour of the assessee.

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