TaxTMI 
TaxTMI 
2021 (11) TMI 319
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....out 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 in allowing relief to the assessee regarding the addition of Rs. 60,03,0....
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....als 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 purpose of adjudicating the common issue relating to addition for Anonymous donation u/s 115BBC(3) of the Act we will take....
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....ed 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 the provisions of section 115BBC(3) of the Act. 7. Ld. Assessing Officer also observed that the assessee has disclosed t....
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....ollege. 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 for examination during the assessment proceedings. 0 law of the land requires that assessee should be called for before conducting any ....
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....geable 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 reading of section 115BBC, the salient features of section noticed are as under (1) Total income of an assessee, being a person in receipt of income on behalf of:- (i) any university or other educational institution existi....
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....eable 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 record of the identity indicating the name and address of person making such contribution and such other particulars as may be prescribed. (6) This provision of anonymous donation shall not apply to following :- (i) any trust or institution created or established wholly for religious purpose; (ii) a....
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....on. 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 to cast of doubt about the genuineness of the such records, name of donors, donations etc." (Emphasis Supplied) 4.37 The Hon'ble income Tax Appellate Tribunal, Mumbai Bench in its recent judgment in case of Madhavi Raksha Sankalp Nirmal Niketan v. Deputy Director of Income Tax (Exemption) reported in [2017] 83 taxmann.com 316 (Mumbai-....
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.... 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 in turn is again utilised for charitable purpose. A group of people who are devoted to the concept propagated by the trust join together and out of that someone contributes land another contributes seeds another contributes irrigation and another contributes labour and so on and cultivate the land jointly to produce wealth out of which part is utilised for charitable purpose at the village level and part ....
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....lish 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 the donors being not verifiable as genuineness of the transaction remained unproved, and hence the furnished for verification by the AD. Considering the factual matrix of the case, keeping in oietu the provisions of Section 115BBC of 1961 Act and in the interest of justice and fair play, we are of considered view that this matter needs to be set aside and restored to the file of the A.D for necessary enquiry and verification of....
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....tion 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 l1(l)(d) of the Act is not allowable otherwise also. 4.42 In view of all the above facts and circumstances of the case, discussion made above in detail, evidences gathered and judicial pronouncements discussed in. preceding paragraphs, it is found that the assessee has failed to maintain the records of identity of claimed donors in case of all donations received during the year amounting to Rs. 21,58,85,000/- (Corpus donation of Rs. 17,23,85,000/- and ....
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....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 the appeal order passed by the learned Commissioner of Income Tax (Appeal), the department has filed an appeal before the Honorable Bench, Income Tax Appellate Tribunal, Indore Bench, Indore. This is departmental appeal before the honorable bench. That during the course of assessment proceedings the appellant cooperated fully and furnished all the details asked for and the learned Assessing Officer accepted the nature of activities having carried on by the society. That, the said fact is evident from the assessment order ....
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....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. That tax can be levied only if the donation are received from anonymous sources. In the present case a complete list was available in the hard disc of the computer. This point has nowhere been mentioned by the Assessing Officer. The assessee took time only for taking hard copies numbering more than 27000 persons. The Learned Commissioner of Income Tax (Appeals) rightly deleted the addition so made by the Assessing Officer. That, from a perusal of the certificates as enclosed at page no. 382A to 382E of the paper book it shall be seen that these were issued by the Sarpanc....
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....t, 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 did not consider a glaring fact, that the hospital being run by the society is a 1200 bed facility which itself requires a huge expenditure. That, the AO's observation that the letters/certificates were typed and the name etc were written by pen later is of no significance. Firstly because the complete list giving names and address had been filed before the AO, and secondly the certificates were furnished on the direction of the AO himself. That, there is no discrepancy when the donors have certified by either signing or by putting their thumb impression. That, as stated above the cost of treatment is very high vis a vis the amount of donation received and therefore the assumption ....
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....st 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 donors along with their addresses were furnished before the Investigation Wing of the Department and were also recorded in the books produced by the assessee before the AOHence, such donations cannot be classified as "anonymous donations" as per the provisions of s.115BBC(3)-Only requirement under s. 115BBC (3) is that the names and addresses of the donors are to be recorded-CIT(A) has wrongly applied the provisions of s.68 in the case of the assessee by stating that the recipient society should also be in a position to identity the donors and establish the capacity to give a donation of the amount mentioned against their names Conclusion: Assessee having furnished the names and addresses of donors to the Investigation Wing of the Department w....
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....ve 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 has been made. We further draw your honours attention to an article by noted author N. Jain published in All India Federation of tax practitioners Journal at page 44 para 2.22 wherein the following is stated :- "In case of an educational institution exempt i/s 10(22) [now 10(23C)], the Assessing Officer noticed some credits, which he sought to treat as deemed income u/s 68 of the Income-tax Act, 1961 and brought to tax, but denied exemption for such amount. It was argued on behalf of the assessee that the income which is exempt has to be understood in a wide sense. The High Court in Director of Income Tax (Exemption) v. (Del) found that the income cannot be given a restricted meaning following the decision of the Supreme Court in different context in P.R. Prabhakar v. CIT [2006] 284 ITR 548 (SC). It also referred to a dec....
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....nstruction 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 commenced its activity of imparting education nor any reason was offered by society regarding alleged donation received from various persons - AO, accordingly treated entire corpus donation as anonymous donations u/s 115BBC-CIT(A) had affirmed addition made by AO holding that mere submission of names and addresses of alleged donors was not enough to satisfy requirement of Section 115BBC and that principles applied in case of unexplained cash credits shall also apply in case of anonymous donations u/s. 115BBC - Held, names of donors along with their addresses were furnished before Investigation Wing of department and were also recorded in books produced by assessee before AO - Hence such donations cannot be classified as "anonymous donations" as per s. 115BBC(3)-Only requirement u/s. 115BBC(3) was that names and addresses of the donors was to be recorded - CIT(A) has wrongly applied pr....
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....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 shall form part of the corpus of the trust or institution: Such voluntary contributions received by the trust are fully exempt under section 11 and the condition that at least 85 % of the income should be applied during the previous year in which it is earned is not applicable in this case. The question, whether a particular contribution has been towards corpus or otherwise would depend upon the facts of the case. Where the contribution is made for a specific purpose and not for general purpose, it can be understood that the donation is towards corpus. [ CIT v Shri Plot Swetamber Murti Pujak Jain Mandal (1995) 211 ITR 293 (Guj.)]. Where the amount was given with specific direction for construction of Wadi, it shall be treated as having been for corpus. [CIT v Sthanakvasi Vardhman Vanik Jain Sangh (2003) 260 ITR 366 (Guj.)]. Treatment of corpus donations: Corpus donations cannot be treated as income in view of the exception under section 12, so that su....
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.... 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 same would have been exempt income for the reason, that the object of the trust was running a charitable institution and the same was complied with. The learned Assessing Officer too has not found any thing contrary and accepted the charitable activities by the Trust. From the above your honors will find that the addition made by the learned Assessing Officer under section 115BBC is not based on the facts of the case and was rightly deleted by the learned Commissioner of Income Tax (Appeals). 12. It is also submitted that the provisions of section 115BBC of the Act are not applicable to the assessee society because case of the assessee does not fall in subsection (3) of u/s 115BBC of the Act as the assessee has maintained complete record of the identity of the donors including their name gender, age, husband/father name and address of the persons. Reliance was placed on the following decisions:- S.No. Particulars Page Nos. 1. Shanti Niketan Trust ,M/s P.k Singhal & Co. v Additional Commissioner....
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....of medical college, running a hospital approx. 30 km from Indore in rural area where the villagers and people at large are provided free medical facilities and free medicines. The Activities of the assesse society being carried out for charitable purpose u/s 2(15) and Educational purpose u/s 10(23C)(vi) of the Act have not been disputed by the Ld. Assessing Officer at any stage. The bone of contention only relates to the donation received towards corpus funds at Rs. 14,06,75,754/- received during the A.Y. 2013-14 and similar type of addition made by the ld. Assessing Officer for A.Y. 2015-16 at Rs. 20,50,90,750/-. Though the assessee provided the complete list of 27746 persons for A.Y. 2013-14 who have given cash donation of Rs. 14,06,75,754/- and list of 38625 contributors to donation of Rs. 17,23,85,000/- and list with PAN provided for donation of Rs. 4, 35,00,000/- containing details of the name and address of the person, age, gender and father/husband names, the ld. Assessing Officer, however, was not satisfied with these details and questioned, the genuineness of such donation because they did not contained the PAN No. in most of the case or wrong/invalid PAN, incomplete/wron....
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....table activities were lauded. It has been claimed by the appellant that the Assessing Officer accepted the nature of work being done by the aforesaid trust which was evident from the assessment order itself regarding the bonafides of the work being carried on had been made anywhere in the body of the order u] s 143(3) / 115BBC. 3.6 During the course of assessment proceeding, the AO directed the appellant to furnish the names and address of the donors totalling 27746 persons on 09.03.2016. 3.7 The appellant has stated that the list containing the serial number, date, name along with the name of the father or spouse, age, sex, place and amount was duly submitted to the AO and the same was also produced during the appeal proceedings. The appellant claimed that from a perusal of the certificates as enclosed with the assessment order it can be seen that the donors have mentioned the name of the villages. This claim of the appellant has been found to be correct on examination of the assessment order. 3.8 It is well settled that though the larger cities or towns do have a reasonable good postal service and that the houses etc. are properly numbered along with the colonies etc. the s....
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....nt has claimed that the AR of the appellant carried other information personally on 26th March but the same was not accepted. The 24th and 25th March were holidays on account of Holi and Good Friday respectively. Thus, it has been claimed by the appellant that being left with no choice, a detailed submission was sent by speed post on 26th March, but the same was not considered by the learned Assessing Officer, and the order was passed on 28.03.2016 and was received by the appellant on 31.03.2016. 3.16 The AR of the appellant has further stated that the order u/s 115BBC was passed without proper appreciation of the facts. The Ld. Assessing Officer made the addition for the reason that the letter were typed and later the names etc. were mentioned. The appellant has mentioned that the addition has been made by the AO out understanding that the donations were being received towards construction of new buildings and therefore there were computerized letter for the sake of convenience on which the donations were received. 3.17 Thus the appellant has argued that the point to be noted is that a very short time was provided and therefore it was only feasible to get the certificates on c....
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....e AO's observation that the letters certificates were typed and the names etc. were written by pen later is of no significance. Firstly, because the complete list giving names and address had been filed before the AO, and secondly the certificates were furnished on the direction of the AO himself. The appellant further stated that the cost of treatment was very high vis a vis the amount of donation received and therefore the assumption of donations being payment of free treatment is ill conceived. 3.24 It was also submitted by the appellant that the Assessing Officer further erred in stating that because the letters were typed and later the names etc. were mentioned, without understanding that the donation were being received towards construction of new buildings and therefore there were computerized letter for the sake of convenience on which the donations were received. 3.25 The appellant relied on the following case laws :_ 1. "Commissioner of Income-tax (Exemption) vs. Bhagwan Shree Laxmi 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 s....
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.... 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 commenced its activity of imparting education nor any reason was offered by society regarding alleged donation received form various persons - AO, accordingly treated entire corpus donation as anonymous donations u/ s 115BBCCIT( A) had affirmed addition made by AO holding that mere submission of names and addresses of alleged donors was not enough to satisfy requirement of Section 115BBC and that principles applied in case of unexplained cash credits shall also apply in case of anonymous donations u/ s. 115BBC....
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....Education Society vs. Deputy Commissioner of Income tax ITAT Hyderabad Tribunal (B) (2014) 41 CCH 0283 Hyd Trib that names of donors along with their addresses were furnished before Investigation Wing of department and were also recorded in book produced by assessee before AO -Hence such donations cannot l:l. 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. It was held in para 13 of the order as below: "Hence, we are of the opinion that the only requirement u/ s. 115BBC(3) is that the names and addresses of the donors are to be recorded. The learned CIT(A) has wrongly applied the provisions of section 68 in the case of the assessee by stating that the recipient society should also be in a position to identity the donors and establish the capacity to give a donation of the amount mentioned against their names. In this context, reliance is placed on the decision of the Delhi Bench of this Tribunal in the case of Hans raj Samarak Society (133 lTD 530) wherein it has been held as under: " '" 4.4 Sub-section (1) of the aforesaid provision provides that where the income of....
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....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." 4.1 Based on the submission of the appellant the AO is directed to reconcile the amount of interest to be taxed and accordingly relief may be allowed to the assessee on the basis of 26AS statement. This ground of appeal is allowed. CIT A.Y. 2015-16 Ground No.1 3.0 This ground of appeal is with regard to making addition of Rs. 21,58,85,000 vi] s 115BBC on account of unexplained donation. I have carefully gone through the assessment order and specifically the reasons for making such addition. I have also perused the....
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....returned unserved. 3.6 The reason given by the appellant for non-mentioning the details is that all these villages were small villages and the complete residential address were not necessarily available. Further, the appellant has submitted that even if the address were found, 0 summons might not have been accepted by semi illiterate villager because they did not understand the summon proceedings of the department. In their opinion, a summons for a villager would be thought of as if it were a court summons. The appellant has further stated that the AO had failed to appreciate this very important aspect. It has been also argued that the villagers with the guidance of the Sarpanch and after discussing amongst themselves voluntarily decided to donate almost similar amounts for the facility. The appellant had furnished the confirmation letter of the parties and of Sarpanch during the assessment proceedings. 3.7 It has been stated that the appellant was running a charitable institution and it was required to provide for treatment of a minimum of 1800 to 1900 patients per day as per the guidelines of the Medical Council of India. The appellant's hospital 2.S well as medical col....
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....- "Anonymous Donation- u/ s 115BBC of the Income Tax Act, 6- AO was found that some of the donors were not traceable and some of them denies having given such donation and therefore, proportionate corpus donation of Rs. 26.32 lacs has been tread as "anonymous donation"-CITA directed the AO to treat this donation as corpus donation-Held-AO did not properly interpret the provisions of section SBBC- section 115BBC[2} makes it clear that provisions of anonymous donations are not applicable to corpus donation-AO considered this as anonymous donation and even not allowed 5% of total donation is otherwise exempt u/ s 115BBC{l}{i} -of sampled amount of donation CII'[A] was fully justified in direction AO to treat this donation as corpus donation. " 3.13 The appellant has also relied on the following judicial decisions which are reproduced hereunder:- "5.Commissioner of Income-tax Vs. Dawoodi Bohra Jamat (2014) 364 ITR 31(SC) "Charitable purpose - Exemption - Exclusion from exemption where trust create for benefit of particular community or caste - General principles Objects of assessee-trust based on religious tenets - Activities of trust both charitable and religious - benefit....
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....held that Income-u/ s 2{24} of the Income Tax Act, 1961-Corpus donation - whether same is taxable-Held-Same is not taxable as same is a capital 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 sources. Further, the AO has not been able to prove or bring on record any particular or specific evidence that these were benami. Thus, I do not find merit in the addition made by the AO on mere assumptions and conjectures. It is also a fact that the undersigned had given his decision in favour of the appellant in the same case for A.Y. 2013-14. Thus, in view of the above facts, various case laws so discussed and especially the decision of the Jurisdictional bench of ITAT, Indore in the case of ITO Exemption vs Prasanti Educational and Welfare Society (Supra) which is binding on the un....
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....of clause (23C) of section 10 or any trust or institution referred to in section 11, includes any income by way of any anonymous donation, the income-tax payable shall be the aggregate of- 36[(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.] The following clause (ii) shall be substituted for the existing clause (ii) of sub-section (1) of section 115BBC by the Finance (No. 2) Act, 2014, w.e.f. 1-4-2015: (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 in excess of the amount referred to in sub-clause (A) or sub-clause (B) of clause (i), as the case may be. (2) The provisions of sub-section (1) shall not apply to any anonymous donation received by- (a) any trust or institution cre....
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....udes providing the name, gender/father/husband name, address and the amounts received and the same are duly accounted for in books of accounts regularly maintained and audited. 20. Perusals of these details shows that donations have been received from thousands of persons residing in the villages. It is a well-known fact that if in the address name of village is mentioned it does not tantamount to show that the address is incomplete because in the small villages consisting of few 100 houses, the people are known by name. Normally the small villages they don't have the street no. or house no. Even some small villages do not have post office so there can be no Pin Code No. also. In such circumstances Ld. Assessing Officer ought to have taken positive view in totality of facts that the assessee society is running 1200 bed facility hospital which is providing free of cost treatment to hundreds and thousands of the villagers and also giving them free medicines. There are several small villages in the close vicinity of hospital and there are no other good hospitals or medical facilities providing such type of voluntary charitable services. When a person is given free of cost good treatm....
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....ned." 22. Coordinate Bench Agra in the case of ITO vs. Gaudiya Granth Anuved Trust (2014) 23 ITJ 141 (Trib-Agra) also held in favour of the assessee on the instant issue observing as follows: "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 record any particular or specific evidence that these were benami. Thus, 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." 23. Our view is further supported by the decision of Coordinate Bench Delhi in the case of ACIT v. Shri Shiv Vankeshawar Educational & Social Welfare Trust (2019) 106 Taxmann.com 249 (Delhi -Tribunal): 7. We have carefully considered the rival contention and perused the orders o....
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....me and expenditure account by the assessee trust then provisions of section 68 does not apply. Honourable High Court recognized that the situation may be different in case of corpus donation. As in the present case the amount of donation as held by the learned CIT - A is normal income already offered by the trust, these fact has never been controverted by the learned departmental representative, respectfully following the decision of the Hon_ble Delhi High Court, we uphold the decision of the learned CIT - A that the addition u/s 68 of the above donation cannot be made. 9. The 2nd issue that arises even if the nation is credited to income and expenditure account of the assessee, whether a normal donation or a corpus donation, cannot be termed as anonymous donation u/s 115BBC of the income tax act. In order to tax unaccounted money being contributed to wholly or partly charitable or religious trusts or institutions by way of anonymous donations, section 115BBC was inserted by the Finance Act, 2006, with effect from April 1, 2007, i.e., with effect from the assessment year 2007-08, to provide that any income by way of anonymous donations received by the following entities shall be ....
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.... learned CIT - A has correctly reached the conclusion that the donation received by the assessee is not an anonymous donation as provided under section 115BBC of the act. Therefore on this count also we uphold the order of the learned CIT - A. 24. Our view is also supported by the decision of Coordinate Bench Lucknow in the case of DCIT(E) vs. M/s Shri Ramswaroop Charitable Trust, in ITANo.557/LKW/2017 dated 08.03.2019. The relevant finding of the Tribunal is mentioned below: 20. Now in Ground No.3, we find that assessee in total had accepted donation of Rs. 16,18,36,650/-. During the assessment proceeding, the details including names and addresses of donation were filed before the Assessing Officer. A copy of which is placed at Paper Book Pages 45 to 134. The AO had not doubted the identity of the donor and genuineness of the transaction. As per sub Section (3) of 115BBC, 'anonymous donation' mean voluntary ITA No. 557/Lkw/2017 contribution where a person receiving such contribution does not maintain a record of identity indicating the name and address of the person making such contribution. In view of these facts, we find that only requirement u/s 115BBC of the Act is ....
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....s required to maintain the record of identity indicating the name and address of contributor and such other particulars as may be prescribed. Since no other particulars have been prescribed under the provisions the person receiving the donation is under obligation to maintain the identity of donors indicating the name and address. On perusal of the details filed by appellant it is seen that the appellant has furnished the names and addresses of donors. In view of above it is held that appellant has established the identity of donors as provided u/s 115BBC of I.T. Act, 1963and the donations received by the appellant cannot be categorised as anonymous donations and cannot be subjected to tax as per provisions of sec 115BBC of IT. Act, 1961. The AO had not doubted the identity of the donor or genuineness of the transaction in the assessment order. However, an addition u/s 68 of the Act was made. 6.1.5 Reliance is also placed on decision of Hon'ble ITAT Bench A in ITO-2(3), Lucknow Vs. M/s Saraswati Educational Charitable Trust in ITA no 776/LKW/2014 Dated 17.06.2015 were in the facts on the issue of anonymous donations are similar to the appellant's case. Reliance was placed....
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....T, Act to the total income of the appellant amounted to double addition which is not permissible. Reliance is placed on the following judgements :- 1 [2013] 33 Taxmann.com 642 Section 68, read with section 11, of the (Delhi) High Court of Delhi in Income-tax Act, 1961-Cash'credits [In the case of Director of Income case of charitable trust] - Assessment Tax Vs. Hans Raj Samarak year 2006-07 - Assessing Officer Society. disallowed deduction under section 11 on finding unaccounted money by way of anonymous donation on purchase of capital assets - Tribunal observed that donation received by assessee was not anonymous donation because receipts were issued by assessee which were i^^ custody of Department - Whether Tribunal was justified in holding that section 68 could not be applied, as "donations had already been shown by assessee as income - Held, yes [Para 4] [In favour of assessee] ITA No. 557/Lkw/2017 2 Vaishnavi Educational Society Charitable Trust - Anonymous Vs. Deputy Commissioner of donations maintenance of record of Income Tax Reported in 114 identity of donors - names of the donors . DTR 224. along with their addresses were furnished before the Investigation Wing of....
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....e. During the and Charitable Foundation. relevant previous year, the assessee was asked to furnish the details of donations received by it. However, the Assessing Officer, on finding that the assessee was unable to satisfactorily explain the donations and the donors were fictitious persons, held that the assessee had tried to introduce unaccounted money in its books by way of donations and, therefore, the amount was to be treated as cash credit under section 68. On that basis, the benefit under section 11 was denied to the assessee. On appeal, the Commissioner (Appeals) held that treating donation as income under section 68 was not correct the assessee had disclosed the donations as its income and had spent 75 per cent of the amount for charitable purposes. On the revenue's appeal, the order of Commissioner (Appeals) was upheld by the Tribunal. On appeal : HELD To obtain the benefit of the exemption under section 11, an assessee is required to show that the donations were voluntary. In the instant case, the assessee had not only disclosed its donations, but had also submitted a list of donors. The fact that the complete list of donors was not filed or that the donors were....
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.... the addition of Rs. 8,57,31,152/- is hereby deleted. As a result the ground of appeal no. 3 and 4 are allowed. 21. In view of above facts, we do not find any infirmity in the order of the ld. CIT(A), Ground No.3 is dismissed. 25. As far as, the contention of the Ld. DR is concerned that the assessee society was subject to search on 23.03.2018 and has also filed an application before Settlement Commission and report u/s 245D(2B) of the Act has been called. We find that firstly the issue arising out of the proceedings under the search u/s 132 of the Act will not have any bearing on the instant appeals as both the proceeding are independent of each other and secondly the proceedings before Settlement Commission are still pending and whatever will be the outcome of such proceedings will follow the course of action as provided under the Income Tax Act. 26. We, therefore, respectfully following the various decisions the settled judicial proceedings referred hereinabove and specially the decision of Coordinate Bench Lucknow in the case of M/s Shri Ramswaroop Charitable Trust (supra) which is squarely applicable in favour of the assessee in the instant appeals, are of the considered....