Sai Man Education Society Vs ITO (ITAT Delhi)
Corpus Donation Not Income– Trust Proved Donor Identity & Genuineness+ ITAT Delhi Deletes ₹26 Lakh Corpus Donation Addition
Facts:
- Assessee: The Sai Man Education Society, a trust registered u/s 10(23C)(iiiad), engaged in educational activities.
- Received voluntary corpus donation of ₹26.25 lakh from M/s PR Systems through banking channels (Nov 2016).
- Amount shown in financials as corpus fund.
- Submitted receipts, donor’s PAN, KYC docs, certificate declaring donation as “corpus”, & donor confirmation.
- AO’s Action: Rejected claim; treated donation as unexplained cash credit u/s 68.-Added ₹26.25 lakh & taxed @60% u/s 115BBE with 25% surcharge.
- CIT(A)/NFAC: Confirmed addition, holding explicit directions for corpus not produced during assessment.
Tribunal’s Findings
1. Evidence for Corpus Donation
- Paper book showed:
- Receipts acknowledging donation (₹20 lakh + ₹6.25 lakh).
- Donor’s KYC (PAN, passport, voter ID, bank statement, telephone bills).
- Certificate by donor confirming “corpus donation”.
- Balance sheet & receipt-payment account reflecting corpus.
- Tribunal: Sufficient to prove identity, genuineness & creditworthiness.
2. Treatment u/s 68
- Once assessee furnished confirmations & donor details, onus discharged.
- AO failed to rebut evidence with contrary material.
- Addition u/s 68 unsustainable.
3. Taxation u/s 115BBE
- Tribunal cited Madras HC in SMILE Microfinance Ltd. (2024):
- Enhanced rate of 60% u/s 115BBE applies prospectively from AY 2017-18 onwards.
- Thus department’s stand unsustainable.
Decision
- Addition of ₹26.25 lakh deleted.
- Taxation u/s 115BBE at higher rate not applicable.
- Appeal of assessee allowed in full
FULL TEXT OF THE ORDER OF ITAT DELHI
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