2023 (5) TMI 273 - AT - Income Tax

Assessment of trust - anonymous donations made u/s 115BBC - assessee trust is a charitable organization registered u/s 12AA - HELD THAT - We find that sub-Section (3) to Section 115BBC of the Act specifically defines an anonymous donation as any voluntary contribution referred to in sub-clause (iia) of clause (24) of section 2, where a person receiving such contribution does not maintain a record of the identity indicating the name and address of the person making such contribution and such other particulars as may be prescrible - no other particulars have been prescribed under this proviso. The assessee in the present case has duly complied with the requisites by maintaining the records of the donors in the form of their names and addresses thereby not making them anonymous donations and resultantly not attracting the rigours of the Section 115BBC - AO had conducted due verifications and enquiry at his end but has failed to point out anything constructive leading to the conclusion that the donations in question were anonymous. CIT(A) has passed a reasoned order after considering all the elements and ingredients involved in the present case and hence no reason to interfere with the observation and findings of the CIT(A) and uphold the same. Accordingly, the sole ground of appeal raised by the revenue is dismissed.

Summary

Issues Involved:
1. Deletion of addition of Rs.2,61,72,000/- as anonymous donations under Section 115BBC of the Income Tax Act, 1961.

Summary:

Issue: Deletion of Addition of Rs.2,61,72,000/- as Anonymous Donations under Section 115BBC of the Income Tax Act, 1961

The revenue appealed against the order of the Learned Commissioner of Income Tax (Appeals) - 1, Patna, which deleted the addition of Rs.2,61,72,000/- made by the Assessing Officer (AO) under Section 115BBC of the Income Tax Act, 1961. The AO had treated the donations received by the assessee trust as anonymous donations, leading to an assessment of income at Rs.2,87,88,843/-.

The assessee trust, a charitable organization registered under Section 12AA, had filed its return declaring total income at 'Nil'. During scrutiny, the AO found that the trust received donations amounting to Rs.2,61,72,000/- from 1371 persons, none exceeding Rs.20,000/-. The AO issued letters/summons to 109 donors, but many remained unserved or denied making donations, leading the AO to consider the donations as anonymous under Section 115BBC.

The First Appellate Authority deleted the addition, stating that the assessee had provided names and addresses of all donors, fulfilling the requirements of Section 115BBC(3). The AO's adverse inference was based on incomplete verification due to time constraints. The CIT(A) found that the assessee maintained proper records of donor identities, and subsequent verifications confirmed the donations.

The Tribunal upheld the CIT(A)'s decision, emphasizing that the assessee complied with Section 115BBC(3) by maintaining donor identities, thereby not attracting the section's provisions. The AO's failure to conclusively prove the donations as anonymous led to the dismissal of the revenue's appeal.

Conclusion:
The appeal by the revenue was dismissed, and the order of the CIT(A) was upheld, confirming that the donations were not anonymous under Section 115BBC of the Income Tax Act, 1961.