ITO Vs Aishwarya Foundation (ITAT Patna)
ITAT Patna held that as assessee duly complied with the requirement of maintaining the records of the donors in the form of their names and addresses the same cannot be held as anonymous donations and accordingly provisions of section 115BBC of the Income Tax Act are not attracted.
Facts- The assessee trust is a charitable organization registered u/s. 12AA of the Act. It filed its return of income for the year under consideration declaring total income at ‘Nil’. Case of the assessee was selected for scrutiny through CASS followed by the issuance of notice u/s. 143(2) & 142(1) of the Act. During the course of assessment proceedings, AO noted from the income & expenditure account that the assessee had shown income at Rs.2,61,72,000/- which was received as a donation and incurred expenses to the tune of Rs.2,22,47,910/- which resulted in income over expenditure at Rs.39,25,443/-.
AO asked the assessee to submit relevant details in respect of the genuineness of the donations, to which compliance was made by the assessee and a list containing name of 1371 persons was furnished who had made the donations. AO noticed that none of the donations exceeded Rs.20,000.
AO issued letters/summons to 109 persons seeking confirmation of donation to the assessee, however, the same remained unserved or persons denied to have known or given donation to the assessee. Resultantly, AO held the claim of the assessee of having received the amount of Rs.2,61,72,000/- as donation, as baseless and bogus and treated the same as anonymous donation u/s. 115BBC of the Act and assessed the income of the assessee at Rs.2,87,88,843/-
Aggrieved the assessee carried the matter in appeal before the ld. First Appellate Authority, who granted relief by deleting the addition made by the Assessing Officer u/s 115BC of the Act.
Aggrieved, the revenue is in appeal before this Tribunal.
Conclusion- We find that sub-Section (3) to Section 115BBC of the Act specifically defines an “anonymous donation” as 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. Further it is pertinent to mention that no other particulars have been prescribed under this proviso.
Held that the assessee in the present case has duly complied with the requisites by maintaining the records of the donors in the form of their names and addresses thereby not making them anonymous donations and resultantly not attracting the rigours of the Section 115BBC of the Act. AO had conducted due verifications and enquiry at his end but has failed to point out anything constructive leading to the conclusion that the donations in question were anonymous.
FULL TEXT OF THE ORDER OF ITAT PATNA
The present appeal is directed at the instance of the revenue against the order of the Learned Commissioner of Income Tax (Appeals) – 1, Patna, (hereinafter the “ld. CIT(A)”) dt. 10/09/2020, passed u/s 250 of the Income Tax Act, 1961 (“the Act”) for the Assessment Year 2014-15.
2. The sole issue raised by the department before us in the instant lisrelates to the deletion of addition of Rs.2,61,72,000/- by the ld. CIT(A) made by the Assessing Officer in the assessment framed u/s 143(3) of the Act on 30/12/2016 on account of alleged anonymous donations made u/s 115BBC of the Act.
3. Brief facts of the case are that the assessee trust is a charitable organization registered u/s 12AA of Act. It filed its return of income for the year under consideration on 24/06/2015 declaring total income at ‘Nil’. Case of assessee was selected for scrutiny through CASS followed by issuance of notice u/s 143(2) & 142(1) of the Act. During the course of assessment proceedings, the Assessing Officer noted from the income & expenditure account that the assessee had shown income at Rs.2,61,72,000/- which was received as donation and incurred expenses to the tune of Rs.2,22,47,910/- which resulted in income over expenditure at Rs.39,25,443/-. The Assessing Officer asked the assessee to submit relevant details in respect of the genuineness of the donations, to which compliance was made by the assessee and a list containing names of 1371 persons was furnished who had made the donations. The Assessing Officer noticed that none of the donations exceeded Rs.20,000/-. For further verification, out of the 1371 persons whose names were provided by the assessee, the Assessing Officer issued letters/summons to 109 persons seeking confirmation of donation to the assessee, however, the same remained unserved or persons denied to have known or given donation to the assessee. Resultantly, the Assessing Officer held the claim of the assessee of having received the amount of Rs.2,61,72,000/- as donation, as baseless and bogus and treated the same as anonymous donation under section 115BBC of the Act and assessed the income of the assessee at Rs.2,87,88,843/- as per the following computation:-
