2021 (11) TMI 319 - AT - Income Tax

Assessment of trust - Anonymous donation addition u/s 115BBC(3) - assessee society was established on 12.04.1996 as granted registration u/s 12AA(1)(B)(i) AND also granted approval u/s 80G(5)(vi) - HELD THAT - Assessee had provided complete details of name and address of the donors giving alleged donation and complete detail of all such donation are entered in the regular books of accounts which have been audited, the book results have not been disputed by the Revenue Authorities except for the alleged donation and further where the assessee had provided identity proof of most of persons which were summoned by the ld. AO and have also filed the confirmation letters from such donors and the assessee society being undisputedly carrying out the charitable and educational activities, applying the funds received through voluntary contribution for achieving the object of the society and also providing free medical facility from its 1200 bed facility hospital running consistently in the Rural area, near Indore, find no infirmity in the finding of Ld. CIT(A) appreciating the fact of the case, details of name and address of 27746 donors from A.Y. 2013-14 38625 donors for A.Y. 2015-16 alleged to have given donation of ₹ 14,06,75,754/- for A.Y. 2013-14 and ₹ 17,23,85,000/- for A.Y. 2015-16 and also rightly holding that the assessee has provided the details of donation of ₹ 4,35,00,000/- received from other persons giving their name address and Permanent Account No.. Therefore, the alleged sum undisputed before us by the revenue for A.Y. 2013-14 2015-16 cannot be held to be anonymous donation . Difference in interest income as per the form 26AS and offered to tax - HELD THAT - Under the given circumstances wherein there are different claim by both the sides on the same issue i.e. 26AS form available on the wave site of the Income Tax Department then in such situation Ld. CIT(A) has rightly restored the matter to the Ld. Assessing Officer to carry out necessary reconciliation with the help of the documents to be placed by the assessee society before Ld. AO and the documents relied on by the ld. Assessing Officer to make the impugned addition. Thus, no interference is called for in the finding of Ld. CIT(A) as the ld. Assessing Officer can decide accordingly on the basis of 26AS statement for A.Y. 2013-14 available on the wavesite of the Income Tax and the explanation/reconciliation given by the assessee with respect to the interest on Bank FDR.

Summary

Issues Involved:
1. Addition of anonymous donations under section 115BBC of the Income Tax Act.
2. Suppression of interest receipts by the assessee.
3. Opportunity for the Assessing Officer to examine the issue.

Issue-wise Detailed Analysis:

1. Addition of Anonymous Donations under Section 115BBC:
The primary issue pertains to the addition made by the Assessing Officer (AO) under section 115BBC of the Income Tax Act, treating donations received by the assessee as anonymous donations and thereby taxable. The AO raised concerns about the genuineness of the donations, citing incomplete addresses, invalid PANs, and unserved summons. The assessee, a society engaged in charitable activities, provided a list of donors including names, addresses, and other details. The AO was not satisfied and treated the donations as anonymous.

The Tribunal examined whether the assessee maintained records of the identity of donors as required under section 115BBC(3). It was found that the assessee provided comprehensive details of donors, including names, addresses, and other relevant information. The Tribunal noted that in small villages, addresses often lack detailed street information but are still considered complete. The Tribunal emphasized that the AO should have considered the totality of facts, including the charitable nature of the assessee's activities and the voluntary nature of donations.

The Tribunal referred to several judicial precedents, including the decisions of the Delhi High Court in CIT(E) vs. Bhagwan Shri Laxmi Naraindham Trust and the ITAT in various cases, which supported the assessee's position. It was concluded that the donations could not be treated as anonymous under section 115BBC(3) as the assessee maintained adequate records of donor identities.

2. Suppression of Interest Receipts:
For the Assessment Year (AY) 2013-14, the AO made an addition of ?60,03,055/- based on a discrepancy between the interest income reported by the assessee and the interest income reflected in Form 26AS. The assessee contended that the interest income was accurately reported based on the 26AS statement available at the time of filing the return.

The Tribunal found that there were conflicting claims regarding the interest income reflected in different versions of Form 26AS. The CIT(A) directed the AO to reconcile the interest income based on the latest 26AS statement and the assessee's records. The Tribunal upheld this direction, allowing the AO to verify and reconcile the interest income accordingly.

3. Opportunity for the Assessing Officer to Examine the Issue:
The Revenue argued that the CIT(A) failed to provide the AO with an opportunity to examine the issue, especially when the assessee claimed to have filed detailed submissions. The Tribunal noted that the CIT(A) has co-terminus powers with the AO and can independently examine the evidence and make a decision. The Tribunal did not find merit in the Revenue's argument, emphasizing that the CIT(A) had adequately considered the evidence and submissions before making a decision.

Conclusion:
The Tribunal dismissed the Revenue's appeals for AY 2013-14 and 2015-16 regarding the addition of anonymous donations, upholding the CIT(A)'s decision to delete the additions. The Tribunal allowed the AO to reconcile the interest income for AY 2013-14 based on the latest 26AS statement. The Tribunal confirmed that the CIT(A) had the authority to examine the evidence and make decisions independently, rejecting the Revenue's argument about the lack of opportunity for the AO to examine the issue.