9911796707
TMI Blog2017 (4) TMI 1147X X X X Extracts X X X X X X X X Extracts X X X X ..... , the learned Commissioner of Income Tax(Appeals)-1, {CIT(Appeals)} erred in upholding the action of the Assessing Officer (AO) of disallowing the Appellant's claim of receipt of corpus donations of Rs. 2,42,26,508/- 2. On the facts and under the circumstances of the case and in law, the learned CIT(Appeals) erred in upholding the action of the AO of treating corpus donations Rs. 2,42,26,508/- as anonymous donations, taxable u/s 115BBC of I.T. Act. 3. On the facts and under the circumstances of the case and in law, the learned CIT(Appeals) erred in upholding the action of the AO of invoking the provisions of section 115BBC of I.T. Act, without appreciating the facts and circumstances of the case. 4. On the facts and under the circumstances of the case and in law, the learned CIT(Appeals) erred in upholding the action of the AO of not appreciating the facts and circumstances of the case and explanations offered in support of the Appellant's claim of corpus donations. 5. On the facts and under the circumstances of the case and in law, the learned CIT(Appeals) erred in upholding the order of the AO, of holding that the Option exercised in respect of unspent income of Rs. 1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ara of the order u/s 264 is reproduced below:- "In order to understand the modalities of the donation in this case, the activity of the trust has to be seen. It is a unique way of creating impersonal wealth. In a village, like minded farmers get together and cultivate land and produce wealth in the service of God and such wealth is utilised for the upliftment of the village as well as for donation to the trust which in turn is again utilised for charitable purpose. A group of people who are devoted to the concept propagated by the trust join together and out of that someone contributes land another contributes seeds another contributes irrigation and another contributes labour and so on and cultivate the land jointly to produce wealth out of which part is utilised for charitable purpose at the village level and part of which is donated to trust by way of corpus donation. Therefore individual shares in the produce is an unidentified even amongst themselves and therefore, the certificate of the representative of that group is sufficient enough and acceptable to treat it as corpus donation. These activities are taken turn by turn from one village to another in subsequent year and thi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was show caused and asked to explain as to why the exercise of said option u/s 11(1) of 1961 Act should not be treated as invalid as the assessee has not specified any 'reason' for exercise of this option, which is mandatory in law and in the absence of which benefit of this option is not available as per the AO. The assessee submitted that an unspent amount of Rs. 13570000/- will be spent during the next financial year relevant to the assessment year 2011-12 and also the assessee trust was actively considering launching of projects in conformity with the objects of the trust, which requires more planning , time and funds.It was submitted that the project could be launched once the plans are finalized and funds are available for utilization . The assessee submitted revised option letter containing specific reasons for exercising the option. The A.O. observed that as per explanation (2) to section 11(1) of 1961 Act, if in the previous year, the income applied to charitable or religious purposes falls short of 85% of the income derived during that year for two reasons namely (i) for the reason that the whole or any part of the income has not been received during the year , or (ii) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessee failed to specify the reasons for accumulation of income . The option given in the opinion of learned CIT(A) was general reasons and are not a specified reasons as plans of the proposed expenditure were not finalized and hence it is an unspecified accumulation for uncertain/contingent project which is not in fulfillment of notice in form no. 10 of the Act prescribed in this behalf. In nutshell, the ld. CIT(A) confirmed both the additions, vide appellate orders dated 10-02-2014 passed by learned CIT(A). 5. Aggrieved by the appellate order dated 10-02-2014 passed by the ld. CIT(A), the assessee filed an appeal before the Tribunal. 6. The ld. counsel for the assessee submitted that the donations were received by the assessee against the corpus fund and they are not anonymous donations. It is submitted that all the donations were accompanied by letters of directions of the donors that they shall form part of corpus fund. It was submitted that authorities below erred in rejecting the claim of the assessee and bringing to tax the said corpus donations as anonymous donations u/s 115BC of 1961 Act . The learned counsel submitted that identity , PAN and addresses of the donors w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... donation letter are also same being consolidated amount covered for the donation in the said letter as donated by 2-5 donors. We find that assessee is not a religious trust hence the amount is hit by provisions of Section 115 BBC of the Act and the onus is on the assessee to prove that it is covered by exceptions to chargeability to tax as is provided by provisions of Section 115BBC of 1961 Act, namely that the assessee maintained a record of the identity indicating the name and address of the person making such contribution and such other particulars as may be prescribed or else it is a religious trust. Section 115BBC of 1961 Act is reproduced hereunder: " [Anonymous donations to be taxed in certain cases. 115BBC. (1) Where the total income of an assessee, being a person in receipt of income on behalf of any university or other educational institution referred to in sub-clause (iiiad) or sub-clause (vi) or any hospital or other institution referred to in sub-clause (iiiae) or sub-clause (via) or any fund or institution referred to in sub-clause (iv) or any trust or institution referred to in sub-clause (v) of clause (23C) of section 10 or any trust or institution refer ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dering the factual matrix of the case , keeping in view the provisions of Section 115BBC of 1961 Act and in the interest of justice and fair play, we are of considered view that this matter needs to be set aside and restored to the file of the A.O for necessary enquiry and verification of the said donations so received by the assessee as to genuineness and also for verifying compliance of the relevant section 115BBC of 1961 Act. The onus as well burden of proof is entirely on the assessee to provide to the AO all relevant details as contemplated under section 115BBC of 1961 Act to the satisfaction of the AO as to compliance of Section 115BBC of 1961 Act and as to genuineness of the said donation. The assessee is directed to furnish PAN , addresses and all other relevant details of all the said donors before the AO to satisfy mandate of Section 115BBC of 1961 Act. The assessee is directed to produce before the AO donors , 25% in numbers for donation up-to Rs. 20,000/- and 10% in number for donations above Rs. 20,000/- to satisfy the AO about compliance of mandate of Section 115BBC of the Act and genuineness of the such donations. The selection of donors shall be on random basis at t ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
