Delhi ITAT: Section 115BBC Applies Only if Donor Denies Donation

DCIT Vs Gian Sagar Educational & Charitable Trust (ITAT Delhi)

Delhi ITAT: Donations Are Not Anonymous Merely Because Creditworthiness Is Unproved; Only Donor Denial Can Attract Section 115BBC

The Delhi ITAT upheld the CIT(A)’s finding that section 115BBC applies only to anonymous donations and not to cases where the assessee has maintained the identity of the donors but is unable to establish their creditworthiness. The Tribunal observed that where the trust has maintained the name and address of donors, the donations cannot be treated as anonymous merely because notices issued under section 133(6) remained unserved or unanswered, or the donors’ creditworthiness was doubted. Such issues may be relevant under section 68, but not for invoking section 115BBC. Accordingly, the Revenue’s appeal challenging the deletion of additions in respect of such donations was dismissed.

However, in respect of a donation of ₹1.46 crore from M/s Adivasi Mahila Vikas Samiti, the Tribunal found that the assessee had produced pay orders and confirmation letters from the donor, whereas the lower authorities had proceeded on the basis that the donor had denied making the donation. Since these documents had not been properly verified by the Assessing Officer through appropriate enquiries, such as issuance of summons under section 131 or verification with the bank, the Tribunal restored the matter to the Assessing Officer for fresh examination after giving the assessee adequate opportunity to substantiate the claim.

FULL TEXT OF THE ORDER OF ITAT DELHI

The above cross-appeals are preferred by the Revenue and Assessee-Trust against the Order of the Ld. CIT(A)-30, New Delhi, dated 24.03.2015 in Appeal No.400/ 13-14/1551, relating to the A.Y. 2008-2009.