Shree Jain Swethambar Murti Pujak Sangh Vs ITO (ITAT Chennai)
The assessee, Shree Jain Swethambar Murti Pujak Sangh, a religious trust, filed its return for the Assessment Year (AY) 2019-20. During the scrutiny assessment, the AO noted that the trust failed to provide complete details of its donors when requested. Consequently, the AO treated of the total donations received as anonymous donations and made an addition to the trust’s income, taxable under Section 115BBC.
The addition was subsequently confirmed by the Commissioner of Income Tax (Appeals) [CIT(A)] / National Faceless Appeal Centre (NFAC). The CIT(A) upheld the AO’s action, noting that while the assessee claimed the donor details were recorded in its books, it failed to produce certified copies during assessment. Furthermore, during the appellate stage, the assessee only provided an uncertified printout listing the names and addresses of the donors, which the CIT(A) found insufficient and non-genuine.
Legal Requirements and Judicial Precedents
The dispute centers on the compliance requirements for charitable or religious trusts to prevent donations from being treated as “anonymous” under the Act, which are subject to a maximum marginal rate of tax under Section 115BBC.
The CIT(A)’s order specifically cited Rule 17AA of the Income Tax Rules, which was introduced via CBDT Notification No. 30/2009. Rule 17AA mandates that trusts must maintain a record of the name, address, PAN or other identification of the donor, and the mode of receipt for all donations.
