TaxTMI 
TaxTMI 
2018 (3) TMI 2056
X X X X Extracts X X X X
X X X X Extracts X X X X
....pecifically marked for any specific purposes by the donor being a mandatory condition for corpus as per provisions of section 11(1)(d) of the Act. 2. The Ld. CIT(Appeals) has erred in law and on facts in deleting the addition by ignoring the fact that the donation boxes were marked during the course of assessment proceedings/enquiries by conducted Investigation Wing, Agra and the assessee could not produce photographs or video recording or any other concrete evidences of the donation boxes which were fitted during the period from 01.04.2006 to even till 31.03.2011. 3. The Ld. CIT(Appeals) has erred in law and on facts in deleting the addition by ignoring the remand report of the AO . 4. The Ld. CIT(Appeals) has erred in law and on facts in deleting the addition by ignoring the fact that during the course of assessment proceedings or even at the time of enquiries conducted by the JDIT(lnv), Agra, the assessee could not prove that the donations/funds received through donation boxes were utilized for construction of the temple. " 3. The facts as per the record are that the assessee is a trust registered u/s 12A of the Act. The assessee trust is managing a Dhanghati temple at Go....
X X X X Extracts X X X X
X X X X Extracts X X X X
....nv), Agra, the assessee could not prove that the donations/funds received through donation boxes were utilized for construction of the temple. 6. Strong reliance has been placed on the AO's order. 7. Per contra, the ld. Counsel for the assessee has relied on the order under appeals. 8. We have heard the parties and have perused the material on record. The undisputed facts are that the assessee is receiving donations from the pilgrimage visiting the temple through the boxes fitted in the temple, some of which having marked "corpus fund". The donation received through these boxes duly mentioned "corpus fund" were the corpus donations and were for the specific purposes. The AO had no material in his possession to hold that the corpus donations are liable to be treated as voluntary donations. The ld. CIT(A) called for Remand Report from the AO in view of the submission made by the appellant. The AO vide his Report dated 19.09.2016 stated that no new comments are to be offered as the issue has been discussed in depth in assessment order. In the Remand Report again the AO had referred to the so called detailed enquiry report of the Investigation Wing, but again the content of Repo....
X X X X Extracts X X X X
X X X X Extracts X X X X
....om the assessee to keep the year wise photos, particularly when it is not the mandate of the law. I find force in the contentions of the ld. AR for the assessee that as per definitions the primary condition to qualify the exemption under section 11(1)(d) and 12(1) of the Act, the trust must satisfy the following conditions :- i) "The receipt must be voluntary in nature. ii) It must be towards the corpus of the trust. iii) It must be made with the specific direction, that is to say, form pan of the corpus of the trust. 14. As regards the facts of the assessee's case, we find on identical facts, the ITAT, Chandigarh in the case of 'Shree Mahadevi Tirath Sharda Ma Seva Sang vs. ITO', (2010) 133 TTJ 57, the ITAT decided the issue in favour of the assessee after observing as under :- "We have carefully considered the pleas set up by the assessee. It is an undisputed position that the assessee is managing a temple and there is also no dispute that the institution is being maintained mainly by way of public donations. During the year under consideration, the appellant institution received donations of Rs. 19,53,094/-, bank interest Rs.4,17,366/- and proceeds from sale....
X X X X Extracts X X X X
X X X X Extracts X X X X
....n to the case of the appellant except that in that case a banner was put at the side of boxes mentioning that donation in the boxes will be used for construction of temple. In my opinion the AO has not travelled in right direction. Method of demarcation can be different but the purpose for which donations have been received should be accepted in right manner. When the boxes are market as "corpus donation", the only thing left that how the donations received from such boxes were used. There is no finding of the AO in the assessment order that such donations were used for any other purposes. Thus the basis on which the AO made the disallowance that the assessee could not produce any photograph of any other evidence of the period under reference is not on sound footing. The AO has not dissented from the fact if such photographs could have been produced, the donation received through boxes would be corpus donation. It is expected from the appellant that it procures the year wise photographs duly marked the year and keep them intact, particularly when it was not the mandate of law. When the department itself started proceedings after six year, it can very well be presumed that the prese....
X X X X Extracts X X X X
X X X X Extracts X X X X
....of this section, "anonymous donation" 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." 22. This section was inserted in the Income Tax Act by Finance Act, 2006 and sub clauses (i) & (ii) of sub-section (1) were substituted w.e.f. 01.04.2010. The object of bringing this law in the Statute Book w.e.f. 01.04.2006 is well explained in the Memorandum explaining the provisions of the Finance Bill, 2006, reported in 281 ITR (St.) Page 148 and (St.) Page 185. For sake of convenience, it is reproduced as under: "Income of wholly charitable or religious trusts or institutions or partly charitable or religious trusts or institutions is exempt under the Income-tax Act subject to fulfillment of certain conditions. In order to tax unaccounted money being contributed to these institutions by way of religious trusts or institutions is exempt under the Income Tax Act subject to fulfillment of certain conditions. In order to tax unaccounted money bei....
X X X X Extracts X X X X
X X X X Extracts X X X X
....olly religious trusts or institutions will not be taxed. 25.3 Anonymous donation has been defined in the new section to mean any voluntary contribution referred to in section 2(24)( iia) of the Act, 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 maybe prescribed. 25.4 Consequential amendments have been made in section 10(23C) and section 13 to provide that any income by way of any anonymous donation which is taxable under section 115BBC, shall be included in the total income of the assessee." 18. Section 115 of the IT Act has also been considered while deciding the issue in favour of the assessee by the Amritsar Bench of the Tribunal in its order (APB 15-33) in 'DCIT vs. All India Pingalwara Charitable Society', 67 Taxman.com 338 (Amritsar-Trib). 19. Then, in 'CIT vs. Bhartiya Samskriti Vidyapith Trust', 43 Taxman.com 295 (Kar), it was held that voluntary contributions made by the public to a trust with a specific direction to use the same for building purpose would form a part of the corpus of the trust and the trust is e....
X X X X Extracts X X X X
X X X X Extracts X X X X
....donor was not willing to give the donation for construction of the building, he may refuse to give that amount. Learned CIT(Appeals) has further observed that section 115(BBC) has been brought on the statute book w.e.f. 01.04.2007. This section deals with taxation of anonymous donation. But this provision has been brought on the statute book w.e.f. assessment year 2007-08. It is not applicable in these two assessment years. Learned First Appellate Authority has considered the judgement of Hon'ble Gujarat High Court in the case of Sthanakvasi Vardhman Vanik Jain sangh [2003] 131 Taxman 270 (Guj.). Taking into consideration the order of the Learned CIT(Appeals), we do not find any error in it. Accordingly, the appeals of revenue as well as cross-objections of the assessee are dismissed. 22. All these case laws have rightly been relied on by the assessee. 23. In 'CIT vs. Shri Ram Memorial Foundation', 269 ITR 35 (Del), their Lordships agreed with 'CIT vs. Sarladevi Sarabhai Trust', (No.2). 172 ITR 698 (Gujarat), wherein, it was held that when a donor trust which is itself a charitable and religious trust donates its income to another trust, the provisions of Sect....