2018 (7) TMI 1464 - AT - Income Tax

Denial of benefit of sections 11 & 12 - anonymous donations receipts - Held that - The assessee stated to have maintained a complete list of the names and addresses of its contributors. The ld. CIT(A) does not dispute this. CIT(A), as available from the above-extracted relevant portion of his order, has treated contributions amounting to ₹ 9,53,600/- as anonymous donations, as voter IDs and PANs, etc., concerning the contributors of this amount were not available and the assessee had also not filed proper confirmations. CIT(A) has, while doing so, applied the provisions of section 115BBC of the Act. We are not in agreement with the CIT(A) s treatment of the amount of ₹ 9,53,600/- as anonymous donations. The assessee had, undisputedly, furnished the list (APB20-21) of the names and addresses of all the contributors, duly complying with the requirements of section 115BBC(3). There is no further requirement in the section. No other particulars have been shown to have been further prescribed. In Sri Girraj Education and Welfare Society vs. ITO 2012 (10) TMI 27 - ITAT, AGRA it has been held that section 115BBC(1) will not apply, if complete names and address of the donors are given. This decision was also relied on by the assessee before the ld. CIT(A). It stands noted at page 7 of the impugned order. It has not been dealt with by the ld. CIT(A). Before this Bench, no decision contrary to this decision has been cited. The grievance of the assessee is accepted as justified - Decided in favour of assessee.

Summary

Issues:
1. Legality of assessment order under section 143(3)
2. Treatment of donations as anonymous under section 115BBC
3. Applicability of provisions of section 115BBC on donations received

Analysis:

1. The appeal raised concerns regarding the legality of the assessment order under section 143(3) due to its timing before the final hearing date, alleging a violation of natural justice principles. The Tribunal considered this argument but focused on the substantive issues related to the treatment of donations under section 115BBC.

2. The primary contention revolved around the treatment of donations totaling ?9,53,600 as anonymous under section 115BBC. The Assessing Officer (AO) had categorized these donations as non-genuine and unexplained cash credits, disallowing benefits under sections 11 and 12. The Commissioner of Income Tax (Appeals) (CIT(A)) upheld this decision, imposing a 30% tax on the disputed donations.

3. The appellant, an educational institution, argued that it had maintained detailed records of donors, including complete names, addresses, and identity proofs like Voter ID and PAN cards. The appellant asserted that the donations in question were spent for the intended purpose, supported by proper documentation. The appellant cited precedents and provisions of section 115BBC(3) to emphasize that maintaining donor identity sufficed, and no additional confirmation filings were necessary.

4. The CIT(A) acknowledged the appellant's record-keeping but deemed donations amounting to ?9,53,600 as anonymous due to the absence of voter IDs and PANs for those specific contributors. However, the Tribunal disagreed with this characterization, emphasizing that the appellant had complied with section 115BBC(3) by providing names and addresses of all donors. The Tribunal cited a previous case and concluded that as long as complete donor details were available, section 115BBC(1) did not apply.

5. Ultimately, the Tribunal ruled in favor of the appellant, overturning the CIT(A)'s decision to treat the ?9,53,600 donations as anonymous. The Tribunal found the appellant's documentation sufficient to establish donor identities, thereby annulling the additional tax imposed under section 115BBC. The appeal was allowed, and the disputed addition was canceled.

This detailed analysis highlights the legal arguments, interpretations of relevant provisions, and the Tribunal's reasoning leading to the final judgment in the case.