2023 (8) TMI 337 - HC - Income Tax

Revision u/s 263 - anonymous donation receipts - as given in section 2(24)(iia) and submits, sub-section (3) in section 115-BBC requires the assessee to maintain record of identity indicating name and address of the donors and such other particulars as may be prescribed - HELD THAT - We did not find a dispute regarding disclosure of identity of donors, their addresses and the amount of donations they had made to the assessee. This fact is sufficient for compliance of requirement u/s 115-BBC(3), in claiming exemption of the donations from being chargeable to income tax. Facts found by the Commissioner and the Tribunal clearly show that the assessee had furnished record of the identities indicating name and address of persons making the contributions. Revenue has not been able to demonstrate further requirement by prescribed particulars, as mentioned under sub-section (3) in section 115-BBC. As such, we answer the question in the negative and in favour of assessee.

Summary

Issues involved: Appeal against order by Income Tax Appellate Tribunal for assessment year 2016-17; Revision order under section 263 in Income Tax Act, 1961; Verification of anonymous donations and compliance with section 115-BBC.

Summary:
1. The appellant (assessee) sought to appeal against the order made by the Income Tax Appellate Tribunal for the assessment year 2016-17. The Commissioner interfered with the assessment under section 263, alleging erroneous assessment. The appellant argued that the Assessing Officer did verify the donations and complied with the requirements of section 115-BBC.

2. The respondent (revenue) relied on the revision order which noted that the Assessing Officer had not verified the relationship between donors and the trust, creditworthiness of donors, and other details of the donations. The Commissioner held that the donations should be treated as anonymous and taxable under section 115BBC, also citing section 13(7) to deny deductions under sections 11 and 12.

3. The High Court admitted the appeal on the substantial question of law regarding the verification of donations and whether the assessment was prejudicial to the revenue's interest. The court noted that there was no further prescription regarding maintaining records beyond what is required under section 115-BBC.

4. Upon reviewing the assessment order, the court found that the Assessing Officer had examined the relevant documents and accepted the total income of the assessee trust as declared. The court also noted that the assessee had provided a detailed list of donors with complete addresses and donation amounts, which was considered by the Commissioner.

5. The court concluded that the assessee had complied with the requirements of section 115-BBC by disclosing the identities of donors and their contributions. As the revenue failed to demonstrate any further prescribed particulars, the court ruled in favor of the appellant, setting aside the orders of the Tribunal and the Commissioner. The appeal was allowed.