2021 (2) TMI 545 - AT - Income Tax

Assessment of trust - Anonymous donations u/s. 115BBC - failure on the part of the donors to file confirmation; in response to the notice issued u/s.133(6) - HELD THAT - To come out of the definition of anonymous donation, the only requisite condition is that names and addresses from whom the donation has been received has to be maintained. The section is silent thereafter unlike Section 68 which casts an obligation on the assessee to explain the amount credited in the books along with the explanation to the satisfaction of AO. The moment the person receiving the donations provides the record containing the names and addresses of the persons from whom the donation has been received such donation comes out of the definition of anonymous donations. In the present case, it is undisputed fact that assessee had maintained complete record regarding identity of donors along with their addresses. Such information has been filed before us also in the form of paper book. This list of donors other then students contains PAN numbers also. Therefore, these donations cannot be termed as anonymous donations and hence cannot taxed u/s. 115BBC of the Act. - Decided in favour of assessee.

Issues Involved:
1. Treatment of donations as anonymous under Section 115BBC of the Income Tax Act, 1961.
2. Verification and confirmation of donations received.
3. Applicability of judicial precedents on the treatment of anonymous donations.

Detailed Analysis:

1. Treatment of Donations as Anonymous under Section 115BBC:

The primary issue revolves around whether the donations received by the assessee should be treated as anonymous donations under Section 115BBC of the Income Tax Act, 1961. The assessee argued that complete details of the donors, including names, addresses, and PAN numbers, were maintained and furnished. According to Section 115BBC(3), anonymous donations are defined as those where the recipient does not maintain a record of the identity indicating the name and address of the donor. The Tribunal found that the assessee had indeed maintained such records, thereby excluding these donations from being classified as anonymous under Section 115BBC.

2. Verification and Confirmation of Donations Received:

The Assessing Officer (AO) had issued notices under Section 133(6) to verify the donations. Out of the notices sent, confirmations were received from 19 donors, while two notices returned unserved. The AO treated these unconfirmed donations as anonymous. However, the CIT(A) provided relief for donations from 19 students who had submitted confirmations and for students to whom notices were not issued, but upheld the addition for donations from three individuals whose confirmations were not received. The Tribunal emphasized that as long as the name and address of the donors were maintained, the donations could not be treated as anonymous, irrespective of whether confirmations were received or not.

3. Applicability of Judicial Precedents:

The Tribunal relied on several judicial precedents to support its decision. Key cases cited include:
- ACIT vs. Shree Shiv Vankeshwar Educational & Social Welfare Trust: The Tribunal held that maintaining the name and address of donors suffices to exclude donations from being classified as anonymous under Section 115BBC.
- ITO (Exemption) vs. Shri Narain Educational & Welfare Trust: It was held that if the assessee maintains complete details of donors, such donations cannot be termed as anonymous.
- Patanjali Yogpeeth (Nyas) vs. ADIT (Exemptions): Similar views were expressed, emphasizing the maintenance of donor details to avoid classification as anonymous donations.

The Tribunal concluded that the assessee had fulfilled the requirements of Section 115BBC by maintaining complete records of donor identities and addresses. Consequently, the appeal filed by the assessee was allowed, and the appeal by the Revenue was dismissed.

Conclusion:

The Tribunal's decision underscores the importance of maintaining detailed records of donor identities to avoid the classification of donations as anonymous under Section 115BBC. The judicial precedents consistently support the view that maintaining names and addresses of donors is sufficient to comply with the requirements of the said section. The appeals were decided in favor of the assessee based on these principles.

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