TaxTMI 
TaxTMI 
2021 (11) TMI 319
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....ymous donations under section 115BBC of the Act without considering the various discrepancies in the list of donors and the receipts as pointed out by the Assessing Officer in the assessment order? 2. Whether on the facts and in the circumstances of the case, the Ld. CITCA) was justified in arriving at the conclusion in respect of aforesaid addition of Rs. 14,06,75,754/- that the name and the addresses of the donors were furnished by the assessee when the complete name an postal addresses/PIN Code was not furnished by the assessee before the Assessing Officer an whether the name of cities/districts such as Harda, Indore, Shajapur, Devas, Sonkachchh, Ujjain etc can be accepted as complete address of the donors? 3. Whether on the facts and in the circumstances of the case, the Ld. CITCA) was justified in deleting the aforesaid addition of Rs. 14,06,75,754/- without giving opportunity to the Assessing Officer to examine the issue, especially when the assessee took a plea that it had filed detailed submission/information, which was not examined by the Assessing Officer? 4. Whether on the facts and in the circumstances of the case, the Ld. CITCA) was justified....
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....ed detailed submission, which was not examined by the Assessing Officer? 2.As the issues raised in these appeals are common and relate to same assessee, at the request of all the parties both the appeals were heard together and are being disposed of by this common order for sake of convenience and brevity. 3. From perusal of the various grounds of appeal raised by the revenue we find that the common issues relates to addition made by the Ld. Assessing Officer u/s 115BBC(3) of the Act on account of 'Anonymous donation' at Rs. 14,06,75,754/- and Rs. 20,50,90,750/- for A.Y. 2013-14 & 2015-16 respectively which has been deleted by Ld. CIT(A) and against the finding of ld. CIT(A) revenue is in appeal before this Tribunal. Revenue has also taken a ground that ld. CIT(A) failed to provide opportunity to the ld. Assessing Officer to examine the issue specially when the assessee took a plea that it had filed detailed submission/ information. Second issue only relates to A.Y. 2013-14 regarding the addition of Rs. 60,03,055/- on account of suppression of interest receipts by the assessee which subsequently was deleted by the Ld. CIT(A). 4. As agreed by both the parties for the purpos....
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.... receipt of donation, name, father/husband name, age, gender, address and amount. Ld. Assessing Officer, however, insisted for complete address as in case of various donors only the name of village was mentioned and also issued summons to some donors on text check basis. The assessee filed the confirmation of various donors who accepted to have given donation to the assessee along with their identity proof. This, fact was also brought in notice before Ld. Assessing Officer that the various donors are scattered across many villages who have utilized the free facility of hospital situated around 30 km from Indore and surrounded by various small villages providing free medical facilities and free medicines are provided to the people at large. It was also submitted before Ld. Assessing Officer that most of the alleged donation were given by the family of patients getting medicated free of cost from this hospital and at the time of getting discharged they on their own will use to donate the amount to the hospital. Ld. Assessing Officer however was not satisfied and he treated the donation of Rs. 14,06,75,754/- given towards a corpus funds as Anonymous donation liable to be taxed under t....
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....donations to the assessee. In fact, they all have categorically denied having given any donation to the assessee or it' s Medical College. This in itself shows that the list of donors prepared subsequently: and ' submitted during the assessment proceedings is bogus and not-genuine. As found from enquiries which is also evident from the statements recorded, many names appearing in the lise are non-existent. It is further found from the enquiries conducted and, statements recorded during the assessment proceedings that the assessee has merely borrowed some names of the patients, employees, students etc available with it and ' has claimed bogus donations in their names to channelize its unaccounted money -. ' The assessee in response to the specific show cause in this regard has argued that the, statements have been recorded behind the assessee and no cross enquiry was given to the assessee. Such submissions have been duly considered but not found acceptable. The assessee despite repeated requested failed to furnish complete details of identity, intention letters, receipt books etc. for verification before the undersigned. The assessee has failed to produce the donors ....
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.... 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 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. (3) far the purposes of this section, "anonymous donation II means any voluntary contribution referred to in sub-clause (iia) of clause (24) of section 2, where a person receiving such contribution does not maintain a record of the identity indicating the name and address of the person making such contribution and such other particulars as may be prescribed.]" 12. On a plain readi....
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....ncludes any income by way of any anonymous donation. (3) Income tax payable shall be the aggregate of the amount of income tax calculation on the income by way of any anonymous donation @ 30 %. (4) Amount of income tax with which the assessee would have been chargeable had his total income been reduced by the amount of income charged to tax @ 30%. (5) Anonymous Donation - for the purpose of anonymous donation, following conditions must be satisfied:-- (i) Anonymous donation means voluntary contributions received by a trust created wholly or partly for charitable or religious purposes or by an institution established wholly or partly for such purposes or by an association or institution referred to in clause (21) or clause (23), or by a fund or trust or institution referred to in sub clause (iv) or sub-clause (v) [or by any university or other educational institution referred to in sub-clause (iiiad) or sub-clause (vi) or by any hospital or other institution referred to in sub-clause (iiiae) or sub-clause (via)] of clause (23C) of section 10 [or by an electoral trust]]. (ii) Where a person receiving such contribution does not maintain rec....
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....assessee were rightly brought to tax as 'anonymous donations' within meaning of section 115BBC. The relevant excerpt of the judgment is reproduced as under for ready reference:- 1/19. We find the above section is brought into statute with Finance Act 2002 w.ej 01.04.2003 and the same apply to the A. Y 2011-12 under consideration. According to the said provisions, the "Anonymous Donation" is defined in sub-section (3). According to the subsection (1), 30% of the aggregate of the Anonymous Donation received in excess of the higher of the specified amounts, constitutes tax in certain cases. The meaning given to the Anonymous Donations is exhaustive. The maintenance of record regarding the identity of the donors assumes significance in the definition. When the provision specify directing the assessee to maintain the record regarding the identity of such donation, it implies that record of that identity of the donor should stand the test of scrutiny by assessing authorities; Finally writing some names and their addresses, in our opinion, falls short of the legal requirement. Therefore, in our view, the names and addresses taken for verification on test check basis, goes....
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....s. 2,42,26,508/towards its corpus from about 6500 donors. All these donations were accompanied by letters of directions of the donors that the donations shall form part of corpus fund. The assessee enclosed direction letters from the donors. The assessee also drew the attention of the A.a. to the order u/s 264 dated 22.03.1996 passed by the then Director of Income tax (Exemptions) in assessee's own case for assessment year 1992-93, whereby the ld. DIT (Exemptions) had allowed the petition u/s 264 of the Act which was filed against the assessment order wherein Aa treated donation of Rs. 22,83,688/- as voluntary donations rather than corpus donations as claimed by the assessee trust by virtue of which it was deductible u/s l1(1)(d) of 1961 Act. The relevant para of the order u/e 264 is reproduced below:= "In order to understand the modalities of the donation in this case, the activity of the trust has to be seen. It is a unique way of creating impersonal wealth. In a village, like minded fanners get together and cultivate land and produce wealth in the service of God and such wealth is utilised for the upliftment of the village as well as for donation to the trust which ....
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.... Act and held that exemption u/s l1(1)(d) of the Act is not admissible to the assessee. The AO held that the receipts which were claimed to be treated as voluntary contribution are liable to be taxed u/s 115 BBC of 1961 Act as anonymous donations. The AO. after going through the object clauses of the assessee trust observed that the assessee trust is not a religious trust. The AO. held that the assessee failed to establish the identity and address of donors and the AO invoked provisions of section 115 BBC of the Act and denied exemption to the assessee u/s 11 of 1961 Act and taxed the same u/e 115BBC of 1961 Act. II Aggrieved by the assessment order dated 22-03-2013 passed by the DDIT (Exemption)-l(l) i.e. the AO, the assessee carried the matter in appeal before the ld. CIT (AJ who rejected the appeal of the assessee on the ground that the third party verification of donors was not possible by the AD. due to incomplete identity and address of the donors which was vague and general. The ld.CIT (A), therefore, held that the corpus donations of Rs. 2,42,26,508/- received by the assessee trust during the year was assessee I s income in the absence of identity and address of th....
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....eturn of income other than by filing a revised return of income. The Hon'ble Supreme court has been specific on this issue in the case of Goetze (India) Ltd. vs. CIT on 24.03.2006 reported in, 284 ITR 323 SC [2006]. The assessee has not shown any donation in part B-II of its return or in Schedule VC and it also doesn't claim any exemption of Corpus donation uls 11(1)(d) of the Act in the return of income. Thus, the claim of exemption uls 11(1)(d) of the Act is not admissible on this ground also. 4.41 Without any prejudice to above, it is further to mention that the assessee has not satisfied the pre-conditions for claiming exemption uls 11(1)(d) of the Act for corpus donations. For example, it has been categorically mentioned and also held-by several Courts that the assessee has to furnish the intention letter of donors given at the time of giving donation stating that the donation is made towards corpus. Further it has been held that. the Corpus is a permanent fund which has to be kept intact and only income generated out of corpus has to be utilised. It is found that the assessee has not- fulfilled such conditions and as such, the claimed exemption uls l....
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....was granted to the society on 25.06.2009. That the Department of revenue, National Committee for Promotion of Social and Economic Welfare Ministry of Finance vide notification dated 04.10.2011 approved the application u/s 35AC of the Income Tax Act of the appellant society. That the return of income tax filed for the assessment year 2013-2014 was filed on 30.09.2013 . That return filed for the relevant assessment year was selected for scrutiny and the appellant society submitted the details as required from time to time during the assessment proceedings and assessment was completed under section143(3)/115BBC of the Income Tax Act after making addition of Rs. 14,06,75,754/- on account of donation considering the same as benami under section 115BBC and of Rs. 60,03,055/- on account of difference in interest income as per 26AS statement. That against the assessment order passed the assessee filed an appeal before the learned Commissioner of Income Tax (Appeal) . That the learned Commissioner of Income Tax (Appeal) partly allowed the appeal of the assessee and deleted addition made under section 115BBC by the Assessing Officer. That against ....
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....so far as stating that because some of the certificates bear thumb impression and that the assessee has taken an advantage of the illiterate persons. The AO has then come to the conclusion that all the certificates are false and have been prepared later. That, on the aforesaid ground the learned Assessing Officer in the assessment order assumed arbitrarily that provisions of section 115BBC were applicable and proceeded to make an addition of donation received amounting to Rs. 140675754/-. Attention is drawn to section 115BBC of the Income Tax Act and as per the heading itself, it is apparent, that tax is applicable only in certain cases t.e. anonymous donations. That coming back to the facts of the case as stated above, that assessee received donation from 27746 persons and to obtain certificates from all 27746 persons in only a few days was an impossible task, hence to doubt that the receipts were prepared at one go is an assumption. That point to be noted is that, the assessee filed the complete list giving the name, date, name of the father/spouse, age, sex, place and the amount, hence the donations received were not from anonymous sources. ....
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....e of the donors range from 0 years to 2 years and hence the amounts have been received towards medical charges. That the learned Assessing Officer totally failed to appreciate that no treatment for whatever the cause can be provided in Rs. 1700/- in the present situation. What the learned Assessing Officer has surmised any treatment and medication along with hospitalization is possible in a meager amount. That, the learned Assessing Officer failed to appreciate the explanation that the villagers with the guidance of the Sarpanch and after discussing amongst themselves voluntarily decided to donate almost similar amounts for the facility. That, it was a blessing in disguise for the people of that area for getting free medical facility who earlier had to travel to Indore earlier and pay exorbitant fees in the city. That, an important aspect to consider is that the Medical Council of India carriers out periodical inspection and renews the permission if only everything is found in order. That, it is beyond understanding, that how could the learned AO come to a conclusion that medical treatment could be so cheap or economical. That, the AO di....
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....l, that the question of receipt of anonymous donations could not be addressed within the narrow scope of the specific wording of some of the clause of the trust deed but in the overall context of the actual activities in which the trust was involved in including imparting spiritual education to persons of all castes and religions, organizing samagams, distribution of free medicines and clothes to the needy and destitute, provision of free ambulance service for needy and destitute patients and so on. The activities described by the assessee as having been undertaken by it during the assessment year in question could be included in the broad conspectus of Hindu religious activity when viewed in the context of the objects of the trust and its activities in general. Thus, the Tribunal was justified in coming to the conclusion that the assessee was entitled to the benefit of section 115BBC as far as the anonymous donations received by it were concerned." 2. Vaishnavi Educational Society Vs. Deputy Commissioner of Income Tax ITAT Hyderabad Tribunal (B) (2015) 167 TTJ 0774(Hyd) Charitable trust-Anonymous donations-Maintenance of record of identity of donors-Names of the ....
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....ural area. That the assessee is registered under section 12AA of the Income Tax Act vide dated 01.02.2008 and is also approved u/s 80G(5)(vi) vide order which was issued to the assessee on 13.05.2009. That approval u/s 10(23c)(vi) of the Income Tax Act was granted to the society on 25.06.2009 from the Chief Commissioner of Income Tax . Copy of registration under section 12A, 80G and 10(23C)(vi) are enclosed at page no. 931 to 934 of the paper book. That assessee has been granted approval under section 35AC of the Income Tax Act by the Department of revenue, National Committee for Promotion of Social and Economic Welfare Ministry of Finance vide notification dated 04.10.2011. Copy of approval under section 35AC is enclosed at page no. 584 to 592 of the paper book. That none of the above registration and / or approval are issued without proper inquiry by the respective department. That the Assessing Officer did not find anything wrong with the nature of work being done by the society which is evident from the assessment order itself because no adverse comment regarding the bona fides of the charitable work being carried on by the assessee ....
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....pt u/s 115BBC(1)(i) - of sampled amount of donation - CIT (A) was fully justified in direction AO to treat this donation as corpus donation." 2.Vaishnavi Education Society vs. Deputy Commissioner of Income tax ITAT Hyderabad Tribunal (B) (2014) 41 CCH 0283HydTrib "Non Resident - Anonymous donations to be taxed in certain case - search and seizure was conducted at residence of 'D' on 12.2.2009, wherein certain documents belonging to assessee-society were seized- Pursuant to notices issued u/s. 153C, assessee filed its returns of income for A.Ys. 2007-08 and 2008-09 admitting nil income and for A.Y. 2009-10 assessee had admitted loss-Assessment order u/s. 143(3) r.w.s. 153C was passed adding certain amount being anonymous donations u/s. 115BBC-It was submitted that assessee society was formed on 30.01.2006, during A.Y. 2007-08 and thereafter the assessee started construction of a college for which Society was in receipt of unsecured loans, loan on FDR and also corpus donations - it was claimed that society had filed the names and addresses of the donors, the corpus donation shall not be added u/s 115BBC - AO rejected assessee's claim holding that neither it had comm....
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....oes not mean donations are unaccounted money - Addition of Donations as cash credit and denying benefit not justified - Income-tax Act, 1961, ss. 11, 12A, 68." CIT (E) v. Patanjali Yogpeeth (NYAS) (2018) 252 Taxman 317/300 CTR 266 (Delhi)(HC). Property held for charitable purposes- Propagation of yoga falls under category of 'Imparting of education'-Corpus donation to be excluded from total income-Higher membership fee is also donation hence cannot be assessed as income [Ss.2(15), 2(24(iia),4] Dismissing the appeal of the revenue the Court held that propagation of yoga by way of conducting yoga classes on a regular basis and in a systemized manner falls under category of 'Imparting of education'. Corpus donation was to be excluded from total income. Higher amount from certain subscribers/donors in yoga camps who were provided corresponding benefits as opposed to others, that by itself could not be basis for holding that membership fee was not a donation and had to be treated as income liable to tax. (AY 2009-10) Voluntary contribution: Voluntary contribution can be of two types: (a)Voluntary Contribution with specific direction that they....
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....t are maintained by such trust/institution in respect of such business, the exemption shall be available to trust in respect of income earned from such business activity. Consequent to substitution of sub section (4A), w.e.f. assessment year 1992-93, all that is required for business income of a trust or institution to be exempt is that business should be incidental to attainment of objectives of trust or institution.[Asst. CIT v Thanthi Trust (2001) 274 ITR 785 (SC). Thus, a business whose income is utilized by the trust or the institution for the purpose of achieving the objectives of the trust or the institution is surely, a business which is incidental to the attainment of the objectives of the trust. It is relevant to note that the provisions of section 11(4A) do not override the provisions of section 10 of the Income Tax Act, and as such, profits derived by any trust , institution, association etc. referred to in clauses (21), (23A), (23B), (23BB), (23C), etc. will continue to be exempted from income tax. Sir, even if it is assumed that the assessee trust had received the amounts towards medical treatment from some of the patients, even then the sam....
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....y gone through the submissions made by Ld. Counsel for the assessee and the decisions referred and relied by both sides. Common grievance raised by the Revenue for A.Y. 2013-14 & 2015-16 is that the ld. CIT(A) erred in deleting the addition for 'Anonymous donation' made by the Ld. Assessing Officer u/s 115BBC(3) of the Act. 14. We find that the assessee society was established on 12.04.1996. It was granted registration u/s 12AA(1)(B)(i) of the Act vide order dated 01.12.2008. It was also granted approval u/s 80G(5)(vi) of the Act on 13.09.2009. The assessee society is also running medical college and has been granted approval u/s 10(23C)(vi) of the Act vide order dated 25.06.2009. The assessee society has also been accorded approval u/s 35AC of the Act vide notification dated 04.10.2011 given by the Department of revenue, National committee for Promotion of Social and Economic Welfare Ministry of finance vide notification dated 04.10.2011 and the name of the assessee appears at Colum no. 17 of this notification. Activities of the assessee society includes running of medical college, running a hospital approx. 30 km from Indore in rural area where the villagers and people at larg....
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....s Mayank Welfare Society was constituted on 12.04.1996 for the purpose of providing free Medical treatment to the poor residing in villages not accessible to the city of Indore. The registration ix] s 12AA(1)(B)(I) was granted by the Hon'ble Commissioner of Income tax, Indore on 01.12.2008. The certificate uls 80G(5)(vi) was issued b the Hon'ble Commissioner of Income tax vie order dated 13.05.2009 and exemption was allowed uls 10(23C)(vi) was allowed by the Hon'ble Chef Commissioner of Income tax Indore vide order dated 25.06.2009. 3.2 The appellant has submitted that with a view to provide free medical aid to the poor and down trodden, it had constructed a medical college and a large hospital on Nemawar Road approx 25 kilometres away from Indore. It was also submitted that the said hospital has been constructed in a totally rural area where basic amenities are scarce and is surrounded by hundreds of small villages. 3.3 The appellant had filed the details regarding the activities before the Assessing officer along with the newspaper clippings wherein the efforts of the charitable activities were lauded. It has been claimed by the appellant that the As....
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....s argued that the Ld. AO totally failed to appreciate that no treatment for whatever disease can provided in Rs. 1700 I-in the present situation. It was further argue that the learned Assessing Officer has assumed that any treatment and medication along with hospitalization was possible in such a meager amount. 3.12 The appellant has further stated that the learned Assessing Officer failed to appreciate the explanation that the villagers with the guidance of the Sarpanch and after discussing amongst themselves voluntarily decided to donate almost similar amounts for the facility. 3.13 The appellant considered it as a blessing in disguise for the people of that area who had to travel to Indore earlier and pay exorbitant fees in the city. 3.14 It was submitted by the appellant that an important aspect to consider was that the Medical Council of India carries out periodical inspection and renews the permission if only everything is found in order. 3.15 Further the appellant has argued that another issue that was important is that the learned Assessing Officer had asked for furnishing the receipts only on the date of last hearing. The appellant has c....
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.... AO on the basis of similar handwritings but no conclusive evidence have been brought on record by the AO in this respect. The AO has further stated that the donation should be voluntarily. There cannot be any doubt with respect to this statement. The donation would lose the character of donation if it is not voluntary. But, the AO has failed to give the specific reasons and basis on which he reached to the conclusion that the donations were not voluntary in this case. 3.21 Thus, the appellant has claimed that a very important aspect ignored by the learned AO were the certificates of the Gram Sarpanch stating the reason for making the donation. 3.22 The appellant has relied on the decision of the Hon'ble MP HC 144 ITR 877 in the case of R.J. Trivedi (HUF) vs. Commissioner of Income Tax, wherein it has been held "(i) that the accounts were properly maintained by the assessee and were checked by government authorities and there was no change of manipulation of accounts. Income-tax, wherein it has been held "(i) that the accounts were. properly maintained by the assessee and were checked governmental authorities and there was no chance of manipulation of accounts....
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....cash credit for A Y 2009-:; 0 _ on appeal to CIT (A), held that since Assessee society was not able to establish identity and capacity of donors, addition done by AO was sustained and appeal of assessee was dismissed - Held section 115BBC only mandates names and addresses of donors are to be recorded - CIT (A) wrongly applied section 68 on Assessee society, hence appeal allowed as CIT (A) erred in confirming the addition as anonymous donations u/ s 115BBC - hence ground taken by assessee was allowed for A Y 2007- 08, and for disallowance of expenditure u/ s 40(a)(ia), capital expenditure and addition of suppressed receipts for AY 2008-09 - Assessing Officer has to verify and examine and arrive at the amount, for AY 2009-10 - Assessee proved with enough proof and deleted addition answering in favour of Assessee - Appeals disposed of and statistically allowed by common order. " Copy of order is enclosed. 3. Vaishnavi Education Society vs. Deputy Commissioner of Income tax ITAT Hyderabad Tribunal (B) (2014) 41 CCH 0283HydTrib "Non Resident - Anonymous donations to be taxed in certain case - search and seizure was conducted at residence of 'D' on 12.2.2009, wh....
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....r religious community - trust not disqualified to claim exemption - Income-tax Act, 1961." That in respect of mismatch in interest income as per 26AS statement and in the books of accounts, it is submitted that the as per 26AS statement downloaded by the assessee from the income tax department site as on 19.09.2013, the interest income comes to Rs. 7601462/ - and accordingly the society claimed tds deducted thereon in the return of income. Copy of 26AS statement downloaded on 19.09.2013 is enclosed with paper book. From perusal of which your honor will find that the society rightly accounted for interest income and tds on the basis of 26AS dated 19.09.2013 available. Further it is submitted that the assessee has made FDR with various bank and the same are auto renewed by the bank and the interest on FDR is accounted for on the basis of the information available in the 26AS statement and the amount of interest of Rs. 7601462/ - was rightly accounted by the society." As decided in the cases of Vaishnavi Educational Society Vs. Deputy Commissioner of Income Tax ITAT Hyderabad Tribunal (B) (2015) 167 TTJ 0774(Hyd) that section 115BBC only mandates the names and addres....
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....ulars remained-to be maintained have been prescribed under this sub-section. /I . 3.28 In light of this and other decision cited above it is clear that the onus on the appellant was only to submit the names' and addresses of the donors and where such name and addresses have been submitted, the same cannot be held to be benami. In this particular case, the appellant had filed the complete list giving the name, date, name of the father/spouse, age, sex, place and the amount, hence the donations received cannot be said to be received from anonymous fir ' sources. Further, the AO has not been able to prove or bring on sources any particular or specific evidence that these were benami. us, I do not find merit in the addition made by the AO on mere assumptions and conjectures. Thus, I hereby delete the addition made u/s 115BBC by the AO. This ground of appeal is allowed. Ground No.2 4. This ground of appeal is with regard to addition of Rs. 60,03,055 [: on account of difference of interest received between income and expenditure account and 26AS. The appellant's submissions in this regard are reproduced as below "That in respect of mismatch....
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....idering the same as anonymous donations charged to tax under section 115BBC of the Income Tax Act, 1961. During the course of assessment proceedings, the appellant had cooperated fully and had furnished all the details asked for and the AO had accepted the nature of activities having carried on by the society. The appellant has argued that this fact was also clear from the AO order because no adverse comment was mentioned in the assessment order regarding the charitable working activities. 3.4 During the year under consideration, the appellant had received corpus donation of Rs. 172385000 during the relevant assessment year out. The AO had directed the appellant to furnish the complete list of the donors along with their address. In compliance to the said query, the appellant had submitted the details of donations on 29.08.2017 and as per the assessment order itself the list comprised of 38625 donors. The appellant has stated that the list was comprised of 38625 donors including the serial number, date, name, gender, location and the amount. The assessee has also submitted the confirmation letter and few receipts on sample basis. Further, the appellant has argued that this....
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.... b - cheques and hence could not be treated as anonymous and the appellant had submitted the voter ID on sample basis. The appellant has submitted that all such documents proved the identity and genuineness of the donations. 3.10 The appellant has also argued that out of 2000 summons sent, 1850 returned back which might be possible due to the fact that persons belonged to the small villages and when they came to know that the letter was from government department, they could have refused to take the notice. The appellant has argued that 150 summons had been served which further proved that identity and genuineness of the transactions. 3.11 The Hon'ble High Court of Madhya Pradesh in the case of Commissioner of Income Tax vs. Agrawal Warehousing & Leasing Ltd. reported in 70 CCH 0522 MPHC held as under:- "Precedent-Order of Tribunal-Binding nature-Orders passed by the Tribunal are binding on all Revenue authorities functioning under the jurisdiction of the Tribunal-CIT(A) not only committed judicial impropriety but also erred in law in refusing to follow the order of the Tribunal-Even if he had some reservations about the correctness of the decision of....
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....not mean donations are unaccounted money - Addition oj Donations as cash credit and denying benefit not justified - Income-tax Act, 1961, ss. 11, 12A, 68." 3.14 As decided in the cases of Vaishnavi Educations Society vs Deputy Commissioner of Income Tax ITAT Hyderabad Tribunal {B} {20l5} 167 TTJ 0774 {Hyd} that section 115BBC only mandates the names and address of the donors which has been duly met to the appellant. 3.15 Further, as mentioned above it was held in the case of Vaishnavi Educations Society vs Deputy Commissioner of Income Tax ITAT Hyderabad Tribunal {B} {2014} 41 CCH 0283 Hyd Trib that names of donors along with their address were furnished before Investigation wing of department and were also recorded in book produced by assessee before AO- Hence such donations cannot be classified as "anonymous donations" as per section 115BBC{3} -Only requirement u/ s 115BBC{3} was that names and addresses of the donors was to be recorded . 3.16 The Hon'ble Supreme Court in the case of CIT vs Dawoodi Bohra Jamat {2014} 364 ITR 31 where it was held that Charitable purpose-exemption -exclusion from exemption where trust create for benefit of particular ....
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....istration u/s 12AA of the Act, approval u/s 80G(5)(vi) & u/s 10(23C)(vi) of the Act is also approved u/s 35AC of the Act by National Committee for Promotion of Social and Economic Welfare Ministry of Finance and this approval is being renewed consistently. This renewal of approval u/s 35AC of the Act is granted only after necessary verification at the end of the committee working under the Central Government. Assesse has also filed the letters issued by Sarpanch, Gram Panchayat of neighbouring villages appreciating the voluntary charitable and hospitalisation service provided by the assessee society. The ld. Assessing Officer has not disputed any other part of the financial statement and has accepted the book results except the alleged donation towards corpus funds and the only issue relates to alleged anonymous donation for which the addition has been made by the Ld. Assessing Officer invoking the provisions of section 115BBC(3) of the Act. 17. We will first like to go through the provisions of section 115BBC of the Act which provides for taxing of 'anonymous donation' in certain cases and the same reads as follows:- [Anonymous donations to be taxed in certain cases. ....
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....be prescribed.] 18. We find that Ld. Assessing Officer has made the addition by invoking the provisions of sub-section (3) of section 115BBC of the Act as reproduced above, as per which any person as referred to in sub-section (1) of section 115BBC of the Act receives any voluntary contribution referred to in section 2(24)(iia) of the Act and does not maintain a record of the identity indicating the name and address of the person making such contribution and such other particulars as may be prescribed, than such voluntary contribution would be liable to tax as 'Anonymous Donation'. 19. As far as the words "such other particulars as may prescribed" is concerned as provided u/s 115BC(3) of the Act no such other particulars have been prescribed under the Act till date. So what remains is that if a person receiving a voluntary contribution maintains the records of the identity of donor indicating name and address of the person making such contribution, then such voluntary contribution cannot be treated as anonymous donation. In the instant case, the assessee has received the alleged donation from around 27746 persons during A.Y. 2013-14 and around 38625 persons during A.Y. 2015-1....
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....15BBC of the Act only requires that the assessee should maintain record of the identity of the donors indicating the name and address of such persons. The assessee's accounts are duly audited and details of name and address of each and every donors has been maintained and are produced before us. Confirmations of many donors have also been placed on record. Looking to the totality of facts, the alleged donation cannot be held to be an 'anonymous donation' as provided under the provisions of Sec. 115BBC(3) of the Act. Our this view is supported by various judicial pronouncements. 21. Hon'ble High Court of Delhi in the case of CIT(E) vs. Bhagwan Shri Laxim Naraindham Trust (2015) 378 ITR 222 (Delhi) "held, dismissing the appeal, that the question of receipt of anonymous donations could not be addressed within the narrow scope of the specific wording of some of the clause of the trust deed but in the overall context of the actual activities in which the trust was involved in including imparting spiritual education to persons of all castes and religions, organizing samagams, distribution of free medicines and clothes to the needy and destitute, provision of free ambulance service for....
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.... tax act and also applying the provisions of section 115BBC of the act. The learned CIT - A has categorically recorded a finding that above donation is normal donation which has been offered by the assessee as income. The claim of the AO is that same is a corpus donation. Corpus donation is never credited to the income and expenditure account of the trust whereas the normal donation is credited to the income and expenditure account as income. If a normal donation is doubted by the AO about its genuineness, and identity of the donors, the addition cannot be made u/s 68 of the income tax act in the case of the trust as it has already been offered as an income. The identical issue arose before the Hon_ble Delhi High Court in the director of income tax exemption vs Keshav social and charitable foundation 278 ITR 152 wherein the Hon_ble High Court held that "11. Section 68 of the Act has no application to the facts of the case because the assessee had in fact disclosed the donations of Rs. 18,24,200 as its income and it cannot be disputed that all receipts, other than corpus donations, would be income in the hands of the assessee. There was, therefore, full disclosure of income by the a....
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....d by any trust or institution created or established for both religious as well as charitable purposes other than any anonymous donation Page | 6 ACIT Vs Shree Shiv Vankeshawar Educational & Social Welfare Trust, ITA No. 4623/Del/2012 (Assessment Year: 2009-10) 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. Subsection (3) defines "anonymous donation" to mean any voluntary contribution referred to in section 2(24)(iia), where a person receiving such contribution does not maintain a record consisting of the identity of the person making such contribution indicating the name and address of the person and such other particulars as may be prescribed. We asked whether the central board of direct tax as prescribed any particulars which is required to be maintained by the assessee trust, the answer was no. We also did not find any such prescription about what kind of particulars the assessee trust is required to maintain. Therefore, it is apparent that at present the simple requirement is maintaining the name and address of the donors. In the present case....
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....erge. * During the year under consideration the appellant trust received donations of Rs. 16,18,36,650/-. * The AO allowed donations to the extent of Rs. 7,69,08,761/- and made addition of the balance donations of Rs. 8,49,27,592/- u/s 68 of the Act. * Donations were received through three modes namely Cheque/RTGS/Cash Books of accounts with supporting records were produced before the AO. * The AO has not doubted the identity of donor, the genuineness of transaction or the capacity of donor. However, an addition of Rs. 8,49,27,592/- was made U/s 68 of the Act. * These donations had already been shown as income of the appellant. * The appellant produced books of accounts like ledger accounts, bank statements etc to explain the details of donors. Anonymous donations are covered u/s 115BBC of the Act discussed in following paragraphs of this order. The AO has made addition u/s 68 of the Act. 6.1.3 In order to prevent channelization 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 ITA No. 557/Lkw/2017 charitable trust or institution by way ....
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....ciety{2013) 35 Taxman642(Delhi). 6.1.6 The registration u/s 12A of the Act of the Trust has been restored by the Hon'ble ITAT Lucknow Bench in I.T.A. No. 44 &45/LKW/2016 vide order dated 07.04.2017. There is no dispute that the appellant has shown entire donation of Rs. 84927592/- as ITA No. 557/Lkw/2017 income for educational purpose in the computation chart. The Income so disclosed has been applied for charitable purpose as per provisions of Section 11 of the Act. The appellant in the course of assessment proceeding has submitted the complete details of donors giving their name and address. The appellant trust has duly discharged its onus as cast upon it by furnishing the name and address of the donors. The A.0. has not doubted the identity of the donor and genuineness of the transaction. The Provisions of Section 115BBC with regard to anonymous donation are also not violated by the appellant trust as details of donors with their name and address were duly furnished before the Ld. A. 0. Anonymous Donation has been defined in Section 2(24)(iia) of the Act to mean any voluntary contribution where a person receiving such contribution does not maintain a record of the identity in....
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....of the amount mentioned against their names - Hans Raj Samarak Society Vs. Assistant Director of Income Tax (2012) 69 DTR (Del) 123 (c)2011)133 ITD 530(Del) relied on, 3 [2014] 42 Taxmann.com 361 Shri Nikhil Agarwal, appearing for the (Allahabad), High Court of respondent-assessee has relied on DIT Allahabad, in the case of (Exemption) v. Keshav Social & . Commissioner of Income Tax, Charitable Foundation [2005] 278 ITR Ghaziabad Vs. Uttaranchal 152/146 Taxman 569 (Delhi) in which Welfare Society. following S. RM. M. CT. M.Tiruppani Trust v. CIT [1998] 230 ITR 636/96 Taxman 635 (SC) it was held that under Section 11 (1) every charitable or religious trust is entitled to deduction of certain income from its total income of the previous year. The income so exempt is the income which is applied by the charitable or religious trust to its charitable or religious purposes in India. This is, of course, subject to accumulation up to a specified maximum which was 25 per cent. In that case it was found, as in the present case that the assessee had applied more than 75% of the donations for charitable purposes as per its objects. The Delhi High Court further held that Section 68 of ....
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....ll receipts, other than corpus donations, would be income in the hands of the assessee. There was, therefore, full disclosure of income by the assessee and also application of the donations for charitable purposes. It was not in dispute that the objects and activities of the assessee were charitable in nature, since it was duly registered under the provisions of section 12A. [Para 11] For the aforesaid reasons, there was no merit in the appeal and no substantial question of law arose from order of the /Tribunal. Therefore, the appeal was to be dismissed. [Para 12] Further Hon'ble I.T.A.T. Lucknow Bench in the appeal of Saraswati Educational Charitable Trust in I.T.A. No. 776/LKW/2014 has considered a similar issue and has held as under :- "6. Though the Revenue has taken a plea that for anonymous donation, provisions of section 115BBC of the Act can be invoked but in the instant case where the assessee has filed various documents to prove the identity of the donors, these donations cannot be called to be anonymous. So far as applicability of provisions of section 68 of the Act is concerned, it has been held by various High Courts including the jurisdictional High Court....
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....ve also filed the confirmation letters from such donors and the assessee society being undisputedly carrying out the charitable and educational activities, applying the funds received through voluntary contribution for achieving the object of the society and also providing free medical facility from its 1200 bed facility hospital running consistently in the Rural area, near Indore, find no infirmity in the finding of Ld. CIT(A) appreciating the fact of the case, details of name and address of 27746 donors from A.Y. 2013-14 & 38625 donors for A.Y. 2015-16 alleged to have given donation of Rs. 14,06,75,754/- for A.Y. 2013-14 and Rs. 17,23,85,000/- for A.Y. 2015-16 and also rightly holding that the assessee has provided the details of donation of Rs. 4,35,00,000/- received from other persons giving their name address and Permanent Account No.. Therefore, the alleged sum undisputed before us by the revenue for A.Y. 2013-14 & 2015-16 cannot be held to be "anonymous donation". We, accordingly, confirm the finding for Ld. CIT(A) and dismiss this common issue raised by the revenue in ground no.1, 2, 3 for A.Y. 2013-14 and ground No.1,2,3 & 4 for A.Y. 2015-16. 27. So far as the plea rais....