Case Law Details
Shanti Niketan Trust Vs ACIT (ITAT Delhi)
In the present appeal, the assessee had not only disclosed its donations, but had also submitted a list of donors. The AO proceeded to treat the same as anonymous donations only for the reason that the notices u/s 133(6) of the Act were returned un-served and the assessee did not produce the donors when it was called upon to do so. However, since the donations were duly treated as income by the assessee, section 68 could not have been invoked in view of the judgment of the Hon’ble Delhi High Court in the case of DIT (Exemptions) vs. Keshav Social & Charitable Trust (supra). Further, the assessee’s case also does not fall in the mischief of section 1 15BBC because as per sub section (3), anonymous donations are those donations for which no details of the donors are maintained by the assessee. Thus, it follows that if the details are maintained, the donations cannot be called anonymous donation and provisions of section 1 15BBC cannot be invoked. In the instant appeal, undisputedly, the details were maintained by the assessee but the addition was made on account of non-furnishing of confirmation letters/non-production of the donors before the AO. We are of the considered view that since the assessee has maintained the details of donors, the donations cannot be called anonymous and provisions of section 115 BBC cannot be invoked in the given facts and circumstances of the case. If provision of section 11 5BBC cannot be invoked, the impugned addition cannot be sustained. Accordingly, we set aside the order of the Ld. CIT (A) on the issue and direct the AO to delete the addition.
FULL TEXT OF THE ITAT JUDGEMENT
This appeal is filed by the assessee against order dated 03.03.20 15 passed by the Ld. CIT (Appeals), Muzaffarnagar for assessment year 2010-11.
2. The brief facts of the case are that the assessee is a society which was granted registration u/s. 12AA of the Income Tax Act, 1961 (hereinafter called the Act) vide order dated 17.04.2009 with effect from 01.05.2008. The assessee society also enjoys recognition u/s 80G of the Act. As per the Memorandum, the assessee society has been established to run colleges with an object to enhance the standard of education. The return of income for the year under consideration was filed declaring nil income. Subsequently, the case was selected for compulsory scrutiny. During the course of assessment proceedings, the assessee was required to furnish information regarding donations received along with names, addresses, bank accounts and copy of confirmations from the donors. The assessee submitted details of the donors/ donations. However, as some details as desired by the Assessing Officer (AO) were not filed, the AO proceeded to issue notices u/s 133(6) of the Act to the various donors to confirm the donations. However, most of the notices were returned un-served. Thereafter, the assessee was asked to produce the donors but the assessee did not produce the donors. Accordingly, the AO concluded that the donations were neither genuine nor voluntary. The AO proceeded to hold the donations as being fictitious and unexplained cash credits and proceeded to add an amount of Rs. 99,50,000/- to the income of the assessee u/s 68 of the Act in view the deeming provisions of Section 115 BBC of the Act. In addition, the AO also made in addition of Rs. 45,44,814/- being depreciation said to be claimed by the assessee. The assessee’s appeal before the Ld. CIT (Appeals) was also dismissed. Now, the assessee is before the ITAT and has challenged the action of the lower authorities in treating the impugned donations as anonymous donation u/s 1 15BBC of the Act. The assessee is also challenging the action of the lower authorities in adding back the depreciation of Rs. 45,44,814/- to the income of the assessee.
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