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TMI Blog2014 (4) TMI 523X X X X Extracts X X X X X X X X Extracts X X X X ..... dav and Mr. T S Kapoor For the Appellant : Shri Rakesh Gupta, Adv. For the Respondent : Smt N Srivastava, Sr DR JUDGEMENT ORDER Per: Rajpal Yadav: The assessee is in appeal before us against the order of Learned CIT(Appeals) dated 31.3.2011 passed for assessment year 2007-08. Originally, the assessee has taken six grounds of appeal but vide letter dated 14.3.2012, it has filed an application along with modified grounds of appeal wherein, it has raised nine grounds of appeal. The grounds of appeal are not in consonance with Rule 8 of the ITAT's Rules, they are descriptive and argumentative in nature. In brief, its grievance revolves around a single issue which contains three sub-issues. The grievance is that assessee had received voluntarily donation amounting to Rs.192,35,000. According to the Assessing Officer, these are anonymous donations and, therefore, assessable as an income of the assessee as per section 115 BBC read with section 68/69 of the Income-tax Act, 1961. Apart from this main issue, the assessee has contended that in respect of two amounts from Bharat Ekta Andolan and Nisadh Investments and Finance amounting to Rs. 20 lacs and Rs. 10 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ir donations, however, in some cases, the letters were returned unserved. It also emerges out that there are 419 donors, out of which 128 donors have donated less than Rs.20,000 and the total collection from these persons is of Rs.25,46,000. Ld Assessing Officer did not make inquiry about these donations. He has devoted his energy towards the persons who have donated Rs.50,000 and above. According to the Assessing Officer, the information was called for from 61 donors under sec. 133(6) of the Act. Twenty one Letter returned unserved. Ld Assessing Officer has noticed the details of these persons on page Nos. 2 and 3 of the assessment order. He, thereafter, observed that since the letters sent have been returned unserved, the existence of these donors had not been established and the confirmations filed by the assessee are not genuine. With regard to 26 donors, learned Assessing Officer observed that though notices were served but no information or reply was received. He confronted the assessee as to why the donations should not be treated as anonymous donations and the amount received by the assessee should not be added as its income. 4. In response to the query of the Assessing ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ons apparently were held to be but not the real one. A society receiving donation to the tune of Rs. 3.52 crores and above could not produce the donors and the donations at such larger quantum of that person who has meager income shows beyond the test of human probabilities. Therefore, the above transaction is held as fictitious/anonymous and unexplained cash credit and added In assessee's total income in view of the provisions of 115BBC 68 of the IT Act. The benefit of application of provisions of sec. 11 12 of IT Act, cannot be given because the donation is neither genuine nor voluntarily from any angle and neither synonymous u/s. 115BBC. Therefore, the reliance of case of DIT(Exem.) vs. Keshav Social and Charitable Trust reported in 278 ITR 152 (Del.) is not application in this case. Penalty proceedings u/s. 271(1)(c) is initiated separately for furnishing inaccurate particulars of its income. The total additions as discussed in above paras amounting to Rs.1,96,85,000 is added as per provisions of Sec. 115BBC of the IT Act, treating it anonymous donations. Total Addition: 1,96,85,000/- 6. Learned CIT(Appeals) has partly allowed the appeal of the assessee. 7 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... i.e. to establish the identity of donor, genuineness of the donation, and creditworthiness of the donor. I do not agree with A.O's view of treating these donations as 'Anonymous', and to that extent, I agree with assessee's arguments. But, even if donations are not coverable u/s. 115BBC; still the appellant cannot get away from purview of sec. 68/69/69C. If borrowings/donations/investments are unproved, they may well be treated as income unaccounted and brought to tax u/s. 11(4) r.w.s. 68/69/69C. 9. According to the learned counsel for the assessee, Learned CIT(Appeals) failed to note that registration granted under sec. 12AA of the Act is in tact. The exemption granted under sec. 80-G is still available to the assessee. The moment it is held that the donations are identifiable and assessee has maintained the details of donors as required under sec. 1I5BBC of the Act, it is to be considered that voluntary donations received by the assessee are its income. The moment it is held that these receipts are the income of the assessee then, its computation would be as per sec. 11 and 12 because it is enjoying the registration under sec. 12AA. He pointed ou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er, it was received in violation of the Prohibition of Capitation Fees Act, 1984. A sum of Rs.14,36,500 was received towards corpus donation. The ITAT has held that once assessee has treated the donation as its income and it has utilized for charitable purpose then the said amount would be eligible for exemption under sec. 11 (1)(d) of the Act. Hon'ble High Court has upheld the order of the ITAT. The learned counsel for the assessee further relied upon the order of the ITAT, Jodhpur in the case of ACIT vs. Geetanjali Education reported in 114 TTJ page 697. He also relied upon the decision of Hon'ble Delhi High Court in the case of DIT (E) vs. Friend Kalyan Parthisthan reported in 257 ITR 609 and in the case of DIT vs. Raunaq Education Foundation reported in 294 ITR 76 (Del.). The learned counsel for the assessee further submitted that the order of the ITAT in the case of Hansraj Smarak Society (supra) has been upheld by the Hon'ble Delhi High Court in ITA No. 534 of 2012. 10. Learned DR on the other hand relied upon the order of the Learned CIT(Appeals).She took us through the observations of the Learned First Appellate Authority available on page 78 of the impugned ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... m contributions.- (1) Any voluntary contributions received by a trust created wholly for charitable or religious purposes or by an institution established wholly for such purposes (not being contributions made with a specific direction that they shall form part of the corpus of the trust or institution) shall for the purposes of section 11 be deemed to be income derived from property held under trust wholly for charitable or religious purposes and the provisions of that section and section 13 shall apply accordingly. (2) The value of any services, being medical or educational services, made available by any charitable or religious trust running a hospital or medical institution or an educational institution, to any person referred to in clause (a) or clause (b) or clause (c) or clause (cc) or clause (d) of sub-section (3) of section 13, shall be deemed to be income of such trust or institution derived from property held under trust wholly for charitable or religious purposes during the previous year in which such services are so provided and shall be chargeable to income-tax notwithstanding the provisions of sub-section (1) of section 11. Explanation.-For the purposes ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ficer on page 5. 13. In the judgment referred by the assessee, a similar issue was involved. The ITAT in the case of St. Vivekanand Education Welfare Society has considered this aspect. The discussion made by the ITAT reads as under: 7. Having gone through the decisions relied upon by the Ld. A.R., we find that in the case of DIT(E) Vs Keshav Social Charitable Foundation (supra), before the Hon'ble Delhi High Court, the charitable institution made disclosure of donations along with list of donors. There was no dispute that more than 75% of the donations were applied for charitable purposes. It was held that the facts that complete list of donors was not filed or that the donors were not produced, does not necessarily lead to the inference that the assessee was trying to introduce unaccounted money by way of donation receipts and Section 68 has no application to the facts of the case as the assessee had in fact disclosed the donations as income. The Hon'ble Delhi High Curt approved the decision of the Tribunal that addition uls 68 was not correct and exemption u/s 11 cannot be denied. 8. Again, in the case of DIT(E) VS Motibagh Mutual Aid Ed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... unted money by way of donation receipts. The Tribunal respectfully followed the above ratio laid down by the Hon 'ble Delhi High Court in the case of Keshav Social and Charitable Foundation (supra) declined to interfere with the first appellate order on the issue. 10. In view of the ratio laid down in the above cited decisions of Hon'ble Delhi High Court when we examined the orders of authorities below, we do not find justification in the action in sustaining the addition of Rs.140 lacs u/s 68 of the Act, only because members of the donors could not be verified when there is no dispute that the assessee had made disclosure of donations along with list of donors, amounts were paid through banking channels and due to this non-availability / non existence on their given addresses the amounts so received in donations were applied for charitable purposes. It is pertinent to mention over here that during the year, the assessee had received corpus donations of Rs.1,99,86,101/- and it had collected RS.3,51,76,220/- as per income and expenditure account, thus the total amount available with the assessee from these two accounts was Rs.5,51,62,321/- against which it had spent R ..... X X X X Extracts X X X X X X X X Extracts X X X X
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