2017 (7) TMI 138 - HC - Income Tax

Addition on anonymous donations under Section 115 BBC - Held that - We do not hold that the remand report once called would be binding on the Appellate Commissioner. The remand report would be in the nature of fact finding commission, which the Assessing Officer would present before the Appellate Commissioner in view of additional documents or evidence produced by the assessee or the department, as the case may be. However, in the present case, the Commissioner (Appeals) did not cite sufficient or appropriate reasons to discard such report of the Assessing Officer and proceeded to confirm the addition ignoring the additional information supplied by the assessee before him. This order was rectified by the Tribunal. Addition made on account of admission fees - treated as an income in the hands of the assessee - Held that - The Tribunal as noticed that said sum of ₹ 67.80 Lacs was by way of receipt from admission fees. The trust had passed a resolution receiving admission fees separately from the students with specific stipulation that the same would be used for educational purposes. That being the position, no question of law arises.

Summary

Issues:
1. Anonymous donations under Section 115BBC of the Income Tax Act
2. Addition made on account of admission fees treated as income in the hands of the assessee

Issue 1: Anonymous Donations
The case involved donations received by a trust during the relevant assessment year. The Assessing Officer treated certain donations as anonymous under Section 115BBC due to incomplete donor details provided by the assessee. The Appellate Commissioner called for a remand report, where the Assessing Officer confirmed the donations after inquiries with donors. Despite this, the Appellate Commissioner rejected the appeal, citing lack of details during the original assessment and insufficient verification in the remand report. The Tribunal overturned this decision, stating that the Commissioner's findings lacked support from the evidence. The High Court noted that the remand report should serve as a fact-finding commission based on additional evidence, and the Commissioner failed to provide valid reasons for disregarding the report. Consequently, the Tribunal's rectification was upheld, and no legal question arose.

Issue 2: Addition on Account of Admission Fees
The second issue concerned donations that the revenue claimed were not designated for a specific purpose. The Tribunal found that the amount in question was actually received as admission fees, with a resolution specifying its use for educational purposes. As such, the Tribunal concluded that no legal question arose in this regard. Therefore, the High Court dismissed the Tax Appeals related to this issue.