Nir Ideal Home for Mentally Retarded And Associated Disability Vs ITO (ITAT Kolkata)
Dual-Nature Trust Entitled to Exemption – ITAT Kolkata Rules Anonymous Donations Not Taxable for Nir Ideal Home for Mentally Retarded Trust
ITAT Kolkata allowed the appeal of the assessee-trust, holding that it was eligible for exemption from taxation of anonymous donations u/s 115BBC, as the trust was established for both charitable & religious purposes.
Assessee, a registered society under the West Bengal Societies Registration Act, 1961, had declared nil income for AY 2022-23. AO brought to tax anonymous donations amounting to ₹17.65 lakh, holding that the trust carried on activities only for disabled persons-thus purely charitable & did not qualify for the exception under Section 115BBC(2)(b), which applies only to trusts created wholly for religious & charitable purposes. CIT(A), NFAC, upheld this addition.
Before the Tribunal, Assessee produced an amended Memorandum of Association dated 07.05.2014, which clarified that its objects included both charitable & religious purposes. It argued that the lower authorities had overlooked this amended deed.
The ITAT accepted the contention, observing that both the AO & CIT(A) had failed to consider the amended document establishing the dual nature of the trust. Accordingly, it held that Assessee qualified for the exception under Section 115BBC(2)(b) & directed that the anonymous donations should not be taxed.
