2023 (7) TMI 496 - AT - Income Tax

Addition of cash donations as Anonymous u/s 115BBC - onus to proof - whether anonymous donation by specific donors only verified on sample basis? - HELD THAT - The appellant has dejectedly failed to discharge the onus of rebuttal of the material with which it was confronted by the AO. These uncontroverted facts beyond any iota of smoke would shows that the transaction of the receipt of the donations is abnormal, fictitious and militates against the claim of appellant that the cash donations are genuine. It is settled position of law that the burden of proving the genuineness of transaction of receipt of donation is always on the assessee. This burden can be discharged by it adducing cogent and persuasive evidence. In the absence of any such positive evidences from the appellant assessee, AO was justified applying the test of human probabilities and drawing adverse inference in the light of judgements of CIT Vs Durga Prasad More 1968 (8) TMI 17 - SUPREME COURT , CIT Vs Daulat Ram Rawatmull 1972 (9) TMI 9 - SUPREME COURT , and CIT Vs P Mohanakala 2007 (5) TMI 192 - SUPREME COURT The plea of the appellant that the clerk in the first instance submitted the incorrect list as the original list was maintained in a language other than english hence certain errors were crept-in which has been rectified before the first appellate proceedings by bringing on record new list of correct donors failed to inspire any confidence to us, thus deserves to be rejected. The very conduct of the appellant made us to believe that the information filed during the original assessment proceedings is not correct or incomplete, thus failure to maintain the identity of the person indicating full name and full address. Thus all cash donation transactions are sham, a make believe story, a device adopted created to sleeve undisclosed income through anonymous donations - Decided against assessee.

Summary

Issues Involved:
1. Condonation of Delay in Filing Cross Appeal by the Assessee
2. Treatment of Anonymous Donations under Section 115BBC of the Income-tax Act, 1961

Summary:

1. Condonation of Delay in Filing Cross Appeal by the Assessee:
The assessee filed a cross appeal with a delay of 1796 days. The delay was attributed to unawareness of the Revenue's appeal for 930 days and the exclusion period ordered by the Supreme Court due to COVID-19. The Tribunal examined whether there was "sufficient cause" for condonation of the delay. The Tribunal referred to the principles laid down by the Supreme Court in "Collector, Land Acquisition, Anantnag and Anr. Vs Ms Katiji and Others" and "Esha Bhattacharjee Vs Managing committee of Raghunathpur Academy and Ors". It concluded that the assessee failed to show sufficient cause for the delay, noting that the application and affidavit were vague and unsupported by evidence. Consequently, the Tribunal dismissed the application for condonation of delay, finding the assessee's conduct casual and non-vigilant.

2. Treatment of Anonymous Donations under Section 115BBC of the Income-tax Act, 1961:
The assessee, a public trust, received cash donations totaling Rs. 2,89,20,955 from 7145 donors, each ranging from Rs. 3500 to Rs. 5000. The Assessing Officer (AO) treated the entire amount as anonymous donations under Section 115BBC due to the assessee's failure to prove the identity of the donors. The Commissioner of Income Tax (Appeals) [CIT(A)] restricted the anonymous donation to Rs. 82,600. The Tribunal noted several discrepancies, such as incomplete donor information, unserved notices, and unverifiable addresses. The Tribunal held that the assessee failed to discharge the burden of proving the genuineness of the donations. It found the transactions to be abnormal and fictitious, applying the test of human probabilities and referring to the judgments of the Supreme Court in "CIT Vs Durga Prasad More", "CIT Vs Daulat Ram Rawatmull", and "CIT Vs P Mohanakala". The Tribunal restored the AO's order, treating the entire donation amount as anonymous.

Conclusion:
The cross appeal by the assessee was dismissed due to failure to show sufficient cause for the delay. The Revenue's appeal was allowed, and the entire donation amount was treated as anonymous under Section 115BBC.