Krishna Janmashtmi Mahotsav Samiti Vs ITO (ITAT Delhi)
Delhi ITAT “A” Bench in held that donations received during religious functions like Janmashtami Mahotsav cannot be treated as business or advertisement income merely because donors’ names were displayed.
The Assessee, a registered public charitable & religious trust u/s 12A and 80G, had declared NIL income claiming exemption u/ss 11 & 12. AO treated donations of ₹50.54 lakh as business income u/s 11(4A) on the ground that some donors, in replies u/s 133(6), indicated publicity/advertisement elements. NFAC upheld the addition alleging contradictions in Assessee’s stand.
ITAT observed that the objects of the trust are purely religious & cultural, not falling under “general public utility”, hence proviso to s.2(15) itself was inapplicable. Even otherwise, alleged advertisement receipts were well below 20% threshold. Tribunal held that mere acknowledgement of donors through banners, posters or display of names does not convert voluntary donations into commercial consideration, particularly when funds were used for religious events, bhandaras, discourses & construction of dharamshala in furtherance of trust objects.
ITAT further held that there was no profit motive, donor benefit was only incidental, and CIT(A) erred in treating explanatory submissions as contradictions. Accordingly, addition of ₹50,00,000 was deleted & appeal allowed, restoring exemption u/s 11.
FULL TEXT OF THE ORDER OF ITAT DELHI
