Vishranthi Trust Vs ITO (ITAT Bangalore)
Donor Names Alone Will Not Do: ITAT Sends ₹48.94 Lakh Anonymous Donation Addition Back for Verification
A charitable trust may know who gave it money, but can it establish that a donation is not anonymous without maintaining the donor’s address? The Bengaluru ITAT considered this question in Vishranthi Trust v. ITO (Exemptions), where the Assessing Officer (AO) had initially treated more than ₹1.60 crore of receipts as anonymous donations under section 115BBC.
The first appellate authority reduced the disputed amount to ₹48,93,933. Before the ITAT, the trust sought another opportunity to produce supporting records. The Tribunal granted that opportunity by sending the remaining addition back to the AO for verification. It made clear, however, that the burden of furnishing the donors’ names and addresses rests with the trust. The addition will be deleted only if the AO finds that section 115BBC has been complied with.
How the dispute began
Vishranthi Trust filed its return for assessment year 2017–18 declaring nil income after claiming exemption under sections 11 and 12. During scrutiny, the AO sought details of receipts shown as donations, totalling approximately ₹2 crore. The trust was asked to provide particulars of corpus and non-corpus donors, including names, addresses, contact numbers, PANs and modes of receipt.
According to the assessment order, the trust furnished donor details supporting only ₹39,97,551. The AO treated the balance of ₹1,60,33,161 as anonymous donations and added it to the trust’s income under section 115BBC.
The trust challenged that treatment in appeal. It argued that the AO had treated different kinds of receipts as donations without properly examining their character. Its explanation included amounts received for a building fund, contributions from identified companies and payments by senior residents towards food, hospitalisation, medicines and maintenance. It maintained that the actual donations requiring donor-wise support were substantially lower than the figure adopted in the assessment.
What happened before the CIT(A)?
The Commissioner of Income Tax (Appeals) partly accepted the trust’s position, leaving ₹48,93,933 in dispute. During the appeal, the trust also furnished a donor list covering part of the outstanding amount. The CIT(A), however, declined to admit that material because the trust had not filed an application under Rule 46A for admission of additional evidence.
The trust argued before the ITAT that it had not been given adequate time during assessment to compile the records. Its grounds also referred to a change of accountant and the advanced age of its managing trustee. It contended that the CIT(A) should have examined the evidence or called for verification instead of rejecting it on procedural grounds.
The department supported the earlier orders, pointing out that the trust had failed to provide the details required to establish that the donations were not anonymous.
What section 115BBC required
The ITAT emphasised the record-keeping requirement in section 115BBC(3). A trust receiving voluntary contributions must maintain a record of the donor’s name and address, along with any other prescribed particulars, to establish that a contribution is not anonymous. Merely placing a name on a chart does not satisfy that requirement if the address needed to identify the donor is missing.
The Tribunal observed that the trust had produced charts showing receipts from various persons and entities, including building fund contributions and company donations. It had also explained other receipts as payments connected with services to senior residents. Even so, the Tribunal found that the names and addresses of the donors relevant to the remaining disputed amount had not been fully established.
The ITAT did not accept the trust’s criticism of the CIT(A)’s procedural ruling. It held that, in the absence of the required application for admitting additional evidence, the CIT(A) was legally justified in refusing to admit it. That finding is an important part of the order: the remand was not based on a conclusion that the CIT(A) had to overlook Rule 46A.
Why the matter was sent back
Despite upholding the CIT(A)’s refusal to admit the additional evidence, the Tribunal noted that donation receipts included in the trust’s paper book required verification. It therefore restored the issue of ₹48,93,933 to the AO.
The direction was specific. The AO must verify the names and addresses of the donors relating to that amount. The trust must furnish those details and establish compliance with section 115BBC. If the AO is satisfied that the statutory requirement has been met, the addition is to be deleted.
The ITAT thus did not find that all the disputed receipts were genuine identified donations. Nor did it finally uphold the ₹48.94 lakh addition. It allowed the trust’s appeal for statistical purposes, leaving the tax result to the AO’s verification.
Author’s comment
This decision carries two practical lessons for charitable trusts. First, a donor’s name by itself may not be enough to defend an anonymous donation addition. The records must contain the identifying particulars required by section 115BBC, particularly the address, and they must be available when called for in assessment.
Second, where important documents are produced for the first time in appeal, the procedure for admitting additional evidence matters. The ITAT expressly upheld the CIT(A)’s refusal to admit evidence without a Rule 46A application, even while granting the trust a further opportunity through remand.
The trust has therefore secured a chance to prove its case, not a deletion of the addition. The decisive question before the AO will be whether it can connect the remaining ₹48,93,933 to records identifying the relevant donors in the manner the Act requires.
Cases Discussed
- CIT Vs Manish Buildwell (P.) Ltd. (Delhi High Court), decision dated 15.11.2011 — relied upon by the CIT(A) while applying the procedural requirements governing admission of additional evidence under Rule 46A.
FULL TEXT OF THE ORDER OF ITAT BANGALORE
1. ITA No. 2495/Bangalore/2025 has been filed by Vishranthi Trust, the assessee-appellant trust against the appellate order dated 6 August 2025 passed by the National Faceless Appeal Centre (NFAC), Delhi [the learned CIT(A)], for Assessment Year 2017–18. By that order, the learned CIT(A) partly allowed the assessee’s appeal against the assessment order dated 30 December 2019 passed under section 143(3) of the Act by the Income Tax Officer, Exemptions-3, Bangalore (the learned Assessing Officer). The issue involved in this appeal is the taxation of the anonymous donation under the provisions of section 115BBC of the income tax act.
2. The Assessee has raised the following grounds of appeal:
3. That in any case and in view of the matter, the action of the Learned Assessing Officer in framing the impugned Assessment Order is bad in law and is opposed to the facts and circumstances of the case and thus liable to be set aside.
4. That the Learned CIT(A) has failed to appreciate that the Learned Assessing Officer had denied the Appellant, adequate opportunity and reasonable time, to produce the relevant documents and confirmations of donors during the assessment proceedings, which amounted to violation of the principles of natural justice, despite seeking additional time to produce the said documents by the Appellant by taking adjournment.
5. That the Learned CIT(A) had erred both in law and on facts in confirming the addition of Rs. 48,93,933/- received as donations by the Appellant, without properly appreciating the bonafide reasons for non-submission of supporting documents before the Learned Assessing Officer during the assessment proceedings.
6. That the Learned CIT(A) had grossly failed to exercise the discretionary power under Section 250(4) of the Income Tax Act, 1961 to call for necessary evidence or remand the matter to the Learned Assessing Officer for verification, which could have enabled just and fair disposal of the Appeal.
7. That the Learned CIT(A) had mechanically rejected the additional evidences solely for want of a formal application under Rule 46A, without appreciating the bona fide charitable nature and intent of the Appellant, governed by Sections 11 to 13 of the Act. The Learned CIT(A) failed to provide a reasoned discussion on the evidences and submissions placed on record and by adhering to procedural rigidity has defeated the spirit of natural justice. Denying admission of vital evidences on mere technical grounds amounts to a procedural lapse that undermines substantive justice and equity.
8. That the Learned CIT(A) has grossly erred in rejecting the additional evidences filed by the Appellant, under Rule 46A of the Income-tax Rules, 1962, without appreciating that sufficient and reasonable cause was duly demonstrated i.e. due to change in the accountant and advanced age of the Managing Trustee(senior citizen), which prevented timely compilation and her ability to furnish such documents before the Learned Assessing Officer.
9. That the Learned CIT(A) had failed to appreciate that the power of the CIT(A) is co-terminus with that of the Learned Assessing Officer, and that he ought to have exercised his Appellate jurisdiction to admit and examine the additional evidences which were crucial for determination of the correct income of the Appellant, instead of rejecting them on mere technical grounds.
10. That the Learned CIT(A) ought to have passed an Order u/s 250 of the Act after due consideration of the submissions and evidence furnished by the Appellant.
11. That the rejection of the Appellant’s plea and evidences on mere technical grounds, without considering the substance and genuineness of the donations, is contrary to the settled principles laid down by the Hon’ble Courts that procedural lapses should not defeat substantive justice.
10.That the Learned CIT(A) had failed to appreciate that the donations in question were genuine voluntary contributions received through proper banking channels and that the documentary evidences now placed on record clearly substantiate the same.
11.That the Appellant denies liability to pay interest u/s 234B of the Act as the same has been levied erroneously and is required to be deleted.
12.That in view of the facts and circumstances of the case, the order of the Learned CIT(A) is arbitrary, unjustified and bad in law, and the same deserves to be set aside.
13.The Appellant craves leave to add, alter, modify, amend substitute or delete all or any of the above Grounds of Appeal.
The Appellant humbly prays that, in view of the above, the ITAT may kindly set aside the summary dismissal and restore the appeal to be adjudicated on merits, after granting a reasonable opportunity to present evidence and arguments.
03.Briefly, the assessee is a charitable trust based in Bengaluru. It filed its return of income on 31 October 2017, declaring nil income after claiming exemption under sections 11 and 12 of the Income-tax Act, 1961 (the Act). The return was selected for scrutiny, and a notice under section 143(2) of the Act was issued on 10 August 2018.
04.During the assessment proceedings, the learned Assessing Officer sought details relating to the return, including donations of ₹20,030,712 received by the assessee. These comprised general donations of ₹14,864,254, donations of ₹684,000 under the Foreign Contribution Regulation Act, and building fund donations of ₹4,482,488. The assessee was specifically directed to furnish lists of corpus and non-corpus donors, including their names, addresses, contact numbers, Permanent Account Numbers, and the modes by which the donations were received.
5. The assessee furnished donor details supporting donations of only ₹3,997,551 and failed to substantiate the remaining ₹16,033,161. Thus ld AO stated that It also failed to maintain records identifying the donors, including their names, addresses, and other prescribed particulars. Accordingly, by assessment order dated 30 December 2019, the learned Assessing Officer treated ₹16,033,161 as anonymous donations and added that amount to the assessee’s income under section 115BBC of the Income-tax Act.
6. Aggrieved by the assessment order, the assessee appealed to the learned CIT(A). It submitted a detailed breakdown of the reported receipts of ₹20,030,712, explaining that ₹4,482,458 was received for the building fund to construct a cowshed and four guest rooms; ₹684,000 was received from Indo US MIM Tack Private Limited to support the food and medical expenses of 15 children; ₹418,000 was received from Shriram Land Development for children; ₹10,455,228 comprised payments from senior residents for food, hospitalization, medicines, and maintenance; and ₹247,000 was received from Titan Company for vocational training in tailoring and sewing machines. The balance represented bank interest. Accordingly, the assessee contended that net donations were only ₹3,641,981, for which it had already furnished the donor list.
7. The learned CIT(A) examined the assessee’s claim and noted that, during the appellate proceedings, the assessee furnished a donor list covering ₹617,502 of the outstanding amount. However, the assessee did not apply for admission of this additional evidence under Rule 46A of the Income-tax Rules, 1962. Relying on the Delhi High Court’s decision in CIT v. Manish Buildwell (P.) Ltd., dated 15 November 2011, the learned CIT(A) declined to admit the evidence because of the applicable procedural requirements. Consequently, donor details totaling ₹4,893,933 remained unverified, either because they had not been furnished or because they were not admitted under Rule 46A. The learned CIT(A) therefore treated that amount as an anonymous donation and partly allowed the assessee’s appeal.
8. We heard Shri Kishor Prajapati, Chartered Accountant and authorised representative for the assessee. He filed a 183-page paper book and a chart detailing donations of ₹411,483. He submitted that the learned CIT(A) had declined to admit the assessee’s additional evidence on technical grounds and that, therefore, the assessee had received no anonymous donations taxable in its hands.
9. We also heard Shri N. T. Madhu, Joint Commissioner of Income Tax and learned Senior Departmental Representative. He supported the orders of the lower authorities, submitting that they contained no infirmity because the assessee had failed to furnish details of the anonymous donations.
10. We have carefully considered the rival submissions and reviewed the orders of the lower authorities. As a trust receiving donations, the assessee was required under section 115BBC(3) of the Income-tax Act to maintain records establishing each donor’s identity, including the donor’s name, address, and other prescribed particulars. Although the learned Assessing Officer called for these details, the assessee failed to furnish them for donations of ₹16,033,161. Even before the learned CIT(A), details relating to donations of ₹4,893,933 remained unsubstantiated. The learned CIT(A) therefore confirmed this amount as an anonymous donation, declining to admit the additional evidence because the assessee had not filed the mandatory application for its admission. In these circumstances, the learned CIT(A)’s refusal to admit the additional evidence was legally justified.
11. Turning to the facts, we note that the assessee submitted charts before both the learned CIT(A) and this Tribunal setting out donations received from various persons. The receipts included contributions toward the building fund, donations from certain companies, and payments from senior residents for food, hospitalisation, tailoring machines, and related purposes. Although the assessee furnished the donors’ names, it did not fully comply with section 115BBC by also providing their addresses and thereby establishing that the donations were not anonymous. The relevant list appears at page 5 of the learned CIT(A)’s order.
12. Under section 115BBC of the Income-tax Act, an assessee receiving voluntary contributions must establish that they are not anonymous by maintaining the donor’s name, address, and other prescribed particulars. If the assessee fails to do so, donations exceeding the prescribed threshold are taxable at 30%.
13. The donation receipts at pages 171–183 of the paper book require verification. The assessee was also unable to secure relief from the learned CIT(A) because it had not applied for admission of the additional evidence.
14. In view of these facts, we restore the matter to the learned Assessing Officer for verification of the names and addresses of donors relating to ₹4,893,933. The assessee shall bear the burden of furnishing those details. If, upon verification, the learned Assessing Officer finds that the assessee has complied with section 115BBC, the addition shall be deleted.
15. In the result ground No. 3 of the appeal of the assessee is allowed as indicated above.
16. Ground No. 1 is general in nature. Ground No. 2 concerns the alleged denial of adequate opportunity to the assessee. Ground No. 4 challenges the learned CIT(A)’s refusal to admit additional evidence in the absence of an application for its admission. Grounds Nos. 5–13 relate to the powers of the learned CIT(A), and some are consequential. As these issues have already been addressed above, all these grounds are dismissed.
17. In the result appeal filed by the assessee is allowed for statistical purposes.
Order pronounced in the open court on 24th September, 2026.
