DCIT Vs Guru Gobind Singh Educational Charitable Trust (ITAT Delhi)
Section 68 Not Applicable to Identified Donations to Registered Trust: ITAT Delhi Upholds Deletion of ₹1.99 Crore Addition
The Delhi Bench of the ITAT dismissed the Revenue’s appeal and upheld the CIT(A)’s order deleting additions made u/s 68 & disallowance of fabrication charges in the case of a charitable trust registered under Sections 12A and 80G.
On the donations issue, the Tribunal held that voluntary and corpus donations amounting to ₹1.99 crore could not be treated as unexplained cash credits where the assessee had maintained complete particulars of donors, including names, addresses, PANs, copies of ITRs and confirmations. Merely because some donors did not respond to notices issued u/s 133(6), the donations could not be branded as unexplained or anonymous. Relying on the Delhi High Court decision in Keshav Social & Charitable Foundation, the ITAT affirmed that Section 68 cannot be invoked against a charitable trust when donor identity is available and the receipts are duly recorded; nor could Section 115BBC apply in the absence of anonymity.
On the fabrication charges, the Tribunal upheld deletion of ₹24.46 lakh, observing that the purchase of buses and payment for fabrication were never in doubt. The mismatch between the name on the TDS certificate and the trade name of the fabricator was satisfactorily explained by showing that the PAN holder was the proprietor of the concern. Bank statements, Form 16A and supporting documents substantiated the expenditure, and hence disallowance merely on technical mismatch was unwarranted.
Accordingly, the ITAT found no infirmity in the CIT(A)’s findings and dismissed the Revenue’s appeal in entirety.
FULL TEXT OF THE ORDER OF ITAT DELHI
This appeal by the Revenue is preferred against the order of the CIT(A)-40, Delhi dated 01.08.2019 pertaining to A.Y 2015-16.
