TaxTMI 
TaxTMI 
2022 (12) TMI 751
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....o far as prejudicial to the interest of Revenue. (2) On the facts of the case and in law, the Ld. CIT(E) has erred in involving the jurisdiction in a very casual and mechanical manner. The Ld. CIT(E) has not applied his mind to the assessment records and proceeded to invoke his power under Section 263 of the Act, even though mandatory conditions for evoking power were not meet. (3) On the facts of the case and in law, the Ld. CIT(E) has erred in passing the Order under Section 263 of the Act in mechanical manner without considering and applying his mind to submission made by Appellant in protest of Notice under Section 263 of the Act. (4) On the facts of the case and in law, the Ld. CIT(E) has erred by holding that an "AOP" cannot claim loss or deficit if income is computed under the head Income from business and profession. (5) (a) On the facts of the case and in law, the Ld. CIT(E) has erred in holding that Appellant cannot get benefit of loss or deficit if wrong form of ITR is filed i.e. ITR Form No. 7 when no benefit under Sec. 11 or 10 (23C) is claimed. (b). The Ld. CIT(E) ought to have appreciated that wrong filing of ITR is defect....
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....m charity show therefore the donations are anonymous donations as the assessee could not furnish the name and address of the donors. Therefore, provisions of Section 115BBC applies. Reasons also states that the assessee runs educational institutes and is in practice of accepting capitation fees for securing admission and such fees collected are routed through in the garb of donations. The AO after going through the information passed was satisfied that assessee has received anonymous donation amounting to Rs. 5,52,04,903/-should be taxed u/s. 115BBC of the Act. AO further noted that, assessee has shown this cash receipts from the students, teachers and charity shows as voluntary contribution. However, assessee could not furnish names and address of the donor and therefore assessee has not full and truly disclosed material facts necessary for assessment. Therefore, the case of the assessee was reopened. 6. Assessee filed letter dated 27.04.2018 requesting to treat return filed originally as return u/s. 148 of the Act. Subsequently, assessment u/s. 143(3) r.w.s 147 of the Act was passed by the ld. Assessing Officer on 14.12.2018 wherein the addition of Rs. 05,52,04,903/- was made ....
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.... by assessee included receipts and Payment account, and Income & Expenditure Accounts and not the Profit & Loss Account. The AO did not look this aspect. (e) It is also seen that in the final computation of income AO has started it as deficit shown by assessee at - (Rs. 5.52 crores) as per statement of income filed. AO has then added the amount of Rs 5.52 crores u/s. 115BBC being anonymous donation received in cash, arriving at the total income of Rs. 21,82,230/-. However, as per section 115BBC anonymous donation should have been taxed at marginal rate without giving benefit of any deficit (excess of expenditure over income) shown in the accounts. This has resulted in allowing expense to the extent of Rs. 5.52 Crore, which should otherwise be taxed at marginal rate. The AO has passed order without the basic verification of the above facts stated above and therefore the order is prejudicial to the interest of revenue. 9. Show cause notice issued on 09.03.2021 , assessee submitted its reply on 18.03.2021 stating as under: i. The ld. Assessing Officer has completely examined the issue as per Paragraph No. 5-6 of the assessment order therefore, it is compl....
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....1 and treated itself as AOP. If that is the case, how could the assessee claim "deficit" under the head income from Business or Profession. The AO has failed to examine this aspect in the assessment proceedings. (3) Thought the AO has added the amount of Rs. 5.05 crores being anonymous donation received in cash under Section 115BBC of the Act, he has initiated the computation of income erroneously with deficit shown by the assessee at Rs. 5.30 crores, and giving the assessee an erroneous benefit. (4) The assessee has neither filed return Form 10B nor Audit Report in Form 3CD. The assessee in its return of income claims deficit as a charitable entity but does not file the mandated audit report in Form 10B. The assessee filed return of income in ITR 7 but states that it has submitted itself as AOP. If it is an AOP, the necessary Audit report in Form 3CD should have been filed. This aspect has not been verified, examined at all by the AO. (5) Further, if the assessee is an AOP, Profit & Loss Account should have been filed, On the contrary, Income & Expenditure Account and Receipts and Payments account has been filed as would be done by a charitable entity. T....
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....sed. In view of this, the order passed by the ld. PCIT is not sustainable in law. 12. The ld.CIT DR supported the order of the ld. PCIT. He submitted that, i. assessee has filed a wrong return in ITR-7 which is not meant for the assessee. Assessee is a non-registered trust. An incorrect form was filed by assessee and AO without looking into the implication of the same passed the assessment order. ii. The AO has also allowed the deficit claimed by the assessee without verifying that whether it is allowable to the trust or not. He therefore submitted that computation of income is also erroneous. iii. Assessee has not filed Form No. 10B or Form No. 3CD then how assessee can claimed the deficit by filing ITR 7 which it is not entitled to look into. Accordingly, the AO considering the wrong return and allowing the loss to the assessee has fallen into an error. Thus, the CIT is correct in invoking the provisions of section 263 of the Act. iv. He submitted that according to Section 115BBC, the amount of anonymous donation is required to be charged at the rate of 30% on the aggregate amount of anonymous donation received. The assessee is also not enti....
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....s 12 AA, corpus donation being building fund shown in the balance sheet received during the year amounting to Rs. 55,204,903/- is to be assessed as income of the assessee during the year. AO further noted that assessee has received the above sum from 7473 persons in the amount of varying from Rs. 3002 Rs. 4500 per person for which the assessee has issued receipts for the same. The assessee has also filed few letters of the donors, the AO was of the view that as the assessee could have filed very few letters looking to donation from 7473 persons, it does not give credence to the amount received. He further held that corpus donation is exempt u/s 11 (1) (d) of the act and assessee is not having registration u/s 12 AA, the provisions of Section 11 are not applicable. Therefore, the building fund must be treated as income of the assessee. He categorically mentioned t at page number 4 of 6. In paragraph number 6 (b) onwards as Under: - "(b) during the course of assessment proceedings, the assessee is having the huge number of receipt books for the sum of Rs. 3000/- and Rs. 4500/-. However, on going through the same, it is seen that the said receipts contain details such as name....
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....act. 17. The reason for reopening of the assessment is for verification of cash donation of Rs. 55,204,903/- and its taxability u/s 115BBC of the act as anonymous donation. The learned AO has made the addition of the above sum in the reopened assessment order. 18. Therefore, the filing of return of income in ITR - 7, claim of the deficit of Rs. 5,30,22,672, non-filing of audit report in form number 3 CD or form number 10 B as well as non-filing of profit and loss account are beyond the jurisdiction u/s 263 of the act because of the limitation prescribed u/s 263 (2) of the act. 19. The only issue that survive is the taxation of Rs. 5.52 crores being anonymous donation received in cash u/s 115BBC of the act. The learned AO categorically in the assessment order has stated that assessee has given names and address of all the persons from whom the donations have been received. According to the definition of an anonymous donation u/s 115BBC is to maintain a record of the identity, indicating the name and address of the persons making such contribution and such other particulars, as may be prescribed. The assessee has given the name and address of the persons making such contribu....