TaxTMI 
TaxTMI 
2016 (5) TMI 1034
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....eived by the appellant trust by way of pooja and hundi collections. 2. The learned CIT(A) erred in holding that assessee trust falls in the exceptional categories under clause (b) of subsection (2) of section 115BBC 3. The learned CIT(A) erred in holding that the assessee is a public charitable trust and amended section 11 5BBC is not applicable 4. The learned CIT(A) failed to hold that granting of recognition u/s 80G(5)(vi) will be applicable only to charitable institutions and not for religious institutions 5. The learned CIT(A) failed to hold that the assessee trust is having registration u/s 12AA and also recognition u/s 80G(5)(vi), Section 115BBC is attracted. 3. Briefly, facts of the case are that the respondent-assessee....
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....f section 115BBC, which is reproduced here under for ready reference: "(2) The provisions of sub-section (1) shall not apply to any anonymous donation received by:- a) any trust or institution created or established wholly for religious purposes: b) any trust or institution created or established wholly for religious and charitable purposes other than any anonymous donation made with a specific direction that such donation is for any university or other educational institution or any hospital or other medical institution run by such trust or institution." 10.2 A plain reading of clause (a) of sub-section (2) reproduced above, clearly shows that in case of the trust or institution with wholly religious purpose, person can receive....
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....the intent of legislation. Such unreasonable and illogical interpretation deserves to be rejected. 10.4 The legislative intent of the provisions of section 115BBC to tax anonymous donations by charitable trust has been explained in CBDT circular no. 14/2006 dated 28/12/06. Relevant paragraph of the memorandum explaining the amendments brought in by Finance Act 2006 is reproduced below: "25. Taxation of anonymous donations received by wholly charitable trusts or institutions including nonprofit educational or medical institutions. 25.1 Income of wholly charitable or religious trusts or institutions as well as partly charitable or religious trusts or institutions is exempt from income-tax under sections 11 and 12, subject to the fulf....
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....direction, that such donation is for any University or other educational institution or medical institution run by the appellant trust. In fact, during the relevant year the appellant trust did not run any educational institution or hospital or medical institution, and no such facts have been recorded by the Assessing Officer. 11. In view of the above discussion, it is held that section 115BBC is not attracted to the amounts received by the appellant trust by way of puja collections and hundi collections in the Sai Baba Temple, as the assessee falls in the exceptional categories under clause (b) of sub-section (2) of section 115BBC. The appellant society has mix of religious and charitable purpose and the pooja donations or donations int....
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....gregate of- (i) the amount of income-tax calculated at the rate of thirty per cent on the aggregate of anonymous donations received in excess of the higher of the following, namely:- (A) five per cent of the total donations received by the assessee; or (B) one lakh rupees, and (ii) the amount of income-tax with which the assessee would have been chargeable had his total income been reduced by the aggregate of anonymous donations received.] (2) The provisions of sub-section (1) shall not apply to any anonymous donation received by- (a) any trust or institution created or established wholly for religious purposes; (b) any trust or institution created or established wholly for religious and charitable purposes other than a....
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....rom income-tax subject to the fulfilment of conditions specified in the said clause. 25.2 With a view to prevent channelisation of unaccounted money to these institutions by way of anonymous donations, a new section 115BBC has been inserted to provide that any income of a wholly charitable trust or institution by way of anonymous donation shall be included in its total income and taxed at the rate of 30 per cent. Anonymous donation made to wholly charitable and religious trusts or institutions, i.e. mixed purpose trusts or institutions shall be taxed only if it is for any university or other educational institution or any hospital or other medical institution run by them. Anonymous donation to wholly religious trusts or institutions will....