2015 (9) TMI 1563 - AT - Income Tax

Application under section 80G(5)(vi) rejected - the assessee has received anonymous donations - whether Commissioner of Income Tax (Exemption) cannot refuse to grant registration under section 80G of the Act only on the pretext that the particulars of the donors are not provided by it? - Held that - While granting the approval under section 80G, the only provision as per these rules is that the rejection can only be made if one or more conditions as laid down in clauses (i) to (v) of sub-section (5) of section 80G of the Act are not fulfilled. It is quite clear that the rules have given the instances of rejection of the said application in the form of non-compliance of provision of section 80G(5) clauses (i) to (v). Coming to the provision of section 80G(5) we see on reading of clauses (i) to (v), there is no clause which says that the said approval be rejected if any institution or fund accepts anonymous donation. In the present case, this was the only reason given by the learned Commissioner of Income Tax for rejection of said registration. The provisions of section 115BBC of the Act are not relevant for granting approval under section 80G of the Act. There is no mention of this section 115BBC or even of anonymous donation in any of the provision of section 80G of the Act or rules made for the purposes of this section. The taxability of anonymous donations under section 115BBC of the Act can always be taken care at the time of assessment by the Assessing Officer and are not relevant for granting registration under section 80G of the Act. Thus e direct the learned Commissioner of Income Tax to grant registration to the society under section 80G of the Act. - Decided in favour of assessee.

Summary

Issues:
Application rejection under section 80G(5)(vi) of the Income Tax Act, 1961 based on anonymous donations.

Analysis:
The appeal challenged the rejection of the application under section 80G(5)(vi) of the Income Tax Act by the Commissioner of Income Tax (Exemption). The rejection was primarily due to the society's alleged receipt of anonymous donations and lack of income from the sale of milk despite housing a large number of cows in a Gaushala. The Commissioner cited section 115BBC as anonymous donations were deemed taxable under it. The society contended that being registered under section 12A should suffice for approval under section 80G. The ITAT analyzed the relevant provisions and rules, emphasizing that rejection under section 80G(5) should only occur if conditions from clauses (i) to (v) are not met. Notably, there was no clause mandating rejection for accepting anonymous donations under section 80G. The ITAT referenced a Lucknow Bench ITAT judgment supporting this stance, highlighting that anonymous donations' taxability under section 115BBC should be addressed during assessment and not impact section 80G approval. Consequently, the ITAT directed the Commissioner to grant registration under section 80G to the society, allowing the appeal.

This detailed analysis underscores the critical legal interpretation and application of provisions related to the rejection of an application under section 80G(5)(vi) of the Income Tax Act based on anonymous donations, culminating in the ITAT's decision to overturn the Commissioner's order and grant registration to the society.