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TMI Blog2024 (1) TMI 350X X X X Extracts X X X X X X X X Extracts X X X X ..... peals) erred on facts and in law in disregarding the confirmation(s) furnished by the appellant during the course of assessment/appellate proceedings. 4. That the Commissioner of Income-tax (Appeals) failed to appreciate that there was no requirement under the provisions of section 115-BBC of the Act to prove the 'genuineness' of voluntary contributions received by the appellant-trust. 5. That the Commissioner of Income-tax (Appeals) failed to appreciate that mere non-receipt of response to notice issued under section 133(6) of the Act would not ipso-facto mean that the voluntary contributions received were non-genuine. 6. That the Commissioner of Income-tax (Appeals) erred on facts and in law in not following the binding decision of the CIT(A) in the appellant's own case for the earlier assessment year 2011-12, in gross violation of principles of judicial discipline. 7. That the Commissioner of Income Tax (Appeals) erred in confirming levy of interest under sections 234B of the Act." 3. The ld counsel of the assessee submitted that the ld CIT(A) has erred in affirming the action of the Assessing Officer in treating the voluntary donations to the extent of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... counsel also briefly reiterated the assessee's written submissions and submitted that it is settled law that wherein, assessee who was entitled to exemption u/s 115BBC of the Act and can claim benefit thereof for the purpose of income deem to chargeable to tax u/s 68 of the Act as per judgment of Hon'ble jurisdictional High Court in the case of DIT Vs. Hans Raj Samarak Society (2013) 35 taxmann.com 642 (Delhi). Further, placing reliance on the judgment of DCIT(E) Vs. Raunaq Educational Foundation 294 ITR 76 HC (Delhi), the ld counsel submitted that it is now well settled principle of law that although the exemption provisions are to be construed strictly as regards to applicability to the case of the assessee once it is found that the same is taxable, the same are required to be interpreted liberally. Ld counsel of assessee also placed reliance on the judgment of Hon'ble Supreme Court in the case of DCIT vs. Maharaja Agrasen Technical Education Society in ITA No. 5245/D/2015 for Assessment Year 2011-12 S.RM.M.CT.M. Tiruppani Trust v. Commissioner of Income-tax [1998], 230 ITR 636 (SC) Commissioner of Income Tax v. M/s Muslim Educational Society ITA. No. 1711 of 2009 HC (Kerala ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... has failed to substantiate that the voluntary donation was received by obtaining credible and verifiable evidence in terms of complete names and addresses of the donors and purpose of donations then the AO is right in invoking provision of section 13(7) read with section 115BBC of the Act and the ld CIT(A) is also quite correct and justified in upholding the part addition made by the AO by taking balanced appropriate judicial approach. Finally, the ld DR submitted that the appeal of the assessee may kindly be dismissed being devoid of merits. 9. On careful consideration of the above rival submissions from the assessment order we note that the AO invoked provision of section 115BBC of the Act with following observations are and findings:- "8. Before proceedings further, some provisions of the Income Tax Act, 1961 regarding receipts of donations and credits in the books are discussed as under:- (a) As per the provisions of section 11(1)(d)) of the Income Tax Act, which reads as under;- "Subject to the provisions of section 60 to 63, the following income shall not be included in the total income of the previous year of the person in receipt of the income- (d) income in the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he trust property. In absence of the confirmations as well as other evidence of identity and genuineness of transaction, it cannot be established that the donation are voluntary. Therefore, the receipts of donation by the assessee are to be examined as per the criteria of section 68 of the Income Tax Act. 12. The assessee provided only confirmation letters of donors in some cases. The confirmation letter inspire no confidence on the claim of assessee that the donation are genuine and voluntarily but casts serious doubts about the genuineness there of. Most of the confirmation letter submitted by assessee are made on computer with change of font or colours. Majority of letter head do not contain any phone number of the donors mentioned therein. Merely providing a name, address and PAN numbers of the donor, the assessee could not escape from its obligation which has been caste by law on it. The assessee has failed to furnish by way of evidence the ITR returns, financial statements including balance sheet, copies of bank statements, memorandum and articles of association of the donor companies. Further, in many cases letters u/s 133(6) of the Act so called donors / contributors has ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... edings, the A.O. issued notices u/s 133(6) of the Act, where notices were not complied in 37 cases, as against the total notices issued in 49 and the A.O. has stated as under: * No reply received in 22 cases, * In 11 cases, postal authority gave remark as "Not Known", and * In 4 cases, postal authority gave remark as "Left". However, the appellant has submitted that the A.O. has wrongly considered the donations in 37 cases as non-genuine and further, the A.O. has not given the benefit of set off of application of income against the receipt of the assessee trust. (ii) The appellant has submitted that in A.Y. 2008-09, the A.O. has made the addition of Rs. 22,53,53.785/-, in the assessment order u/s 143(3) dated 30.12.2010. by holding anonymous donations and as such there is no applicability of section 115BBC/13(7) of the Act and the total income was determined at Rs. 16,30,38,330/- This assessment order u/s 143(3) was rectified vide order u/s 154 dated 27.5.2011, allowing the set off assets purchased during previous year minus depreciation claimed, which is amounting to Rs. 61.91,04,926/- and determined the taxable income at NIL (net loss of Rs. 45,60,66,470/-). Agains ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t to them on any account. As the alleged donor M's Adivasi Mahila Vikas Samiti, has not confirmed the donation to the appellant, to this extent the name or address of the donor is incorrectly maintained by the appellant & therefore, onus on the appellant to the extent of this donation to maintain identity of donor is not fulfilled. As the meaning of maintaining identity of donors means name & address should be correct. If the name of the person with address maintained by assessee denies to have paid donation, it means such details are not correctly maintained & therefore, not maintained. Neither during the present impugned assessment proceeding nor during the present appellate proceedings, the appellant has produced or contradicted this findings. Considering these above Rs. 1.46 Crores allegedly received from M's Adivasi Mahila Vikas Samiti is treated as anonymous donation and is taxable u/s 115 BBC of LT. Act & no deduction is allowable on account of application of income under subsection (7) of section 13 of IT Act, 1961. As far as the balance donations are concerned, the enquiry conducted during the original assessment proceedings revealed that the enquiry letters ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... onfirm anonymous donation to the extent of Rs. 1.46 Crores u/s 115 BBC and balance donation is not treated as anonymous donation within the provision of section 115 BBC and application of income of income is allowed for balance addition, Accordingly these grounds of appeal are partly allowed. " (iii) During the appellate proceedings, the donation in the name of 5 persons were also verified by the A.O. and in the remand report, same has been found in order, as reply has been received. The details of these 5 donors, are as under- S. No. Name Amount (in Rs.) 1. M/s. Hicon Gensets Pvt. Ltd. 2,000,000 2. M/s. Blue View Tic Up Project 10,000,000 3. M/s. Janhit Seva Trust 20,000,000 4. M/s. BSL Engineering Services Ltd. 2,000,000 5. M/s. BSL. Scaffolding Ltd. 6,000,000 Total 40,000,000 (iv) In the rejoinder submitted by the appellant vide letter date 23.3.2016. has raised the objections that the A.O. in the remand proceedings, has not given opportunity to the parties/donors, who have not given the information or from whom no reply has been received. During the assessment proceedings, the assessee was required to prove the genuineness of the transactions re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s. 15,60.77,000/-. From the above, it is clear that donations to the extent of Rs. 4.00,00,000/-, are not considered as anonymous and remaining amount of donation of Rs. 11,60,77,000/-, is considered as anonymous. Accordingly, the A.O. is directed to allow the application of income to the extent of Rs. 4,00,00,000/- only. Accordingly, ground no. 2, is hereby partly allowed." 11. On careful consideration of the above noted rival submissions and perusal of the paper book filed by the assessee spread over 150 pages at the outset we note that in addition to the said paper book the assessee has also filed copy of order of Tribunal for AY 2008-09 in assessee's own case dated 21.10.2022 in ITA No. 4775/Del./2015 wherein the appeal of the Revenue have been dismissed upholding the order of ld. CIT(A) by which the claim of assessee regarding voluntary donation has been approved by the Tribunal. We also not that at pages 22-24EE of paper book the assessee has filed copy of order of ld. CIT(A) for AY 2008-09 in assessee's own first appeal wherein relief has been granted by the ld. First Appellate Authority to the assessee on the identical ground under similar facts and circumstances. In t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sessee was trying to introduce unaccounted money by way of donation receipts. 15. On careful consideration of the above rival submissions, first of all we note that on being asked by the bench the ld CIT(DR) did not dispute the factual position that the facts and circumstances pertaining to the present appeal for AY 2012-13 are identical to the facts and circumstance of earlier AYs 2008-09 wherein, the ld First Appellate Authority on the identical issue granted relief to the assessee with following observations and findings:- 16. Furthermore, it is also relevant to note that the order of the ld CIT(A) for AY 2008-09 (supra) has been upheld by the coordinate bench of Tribunal vide order dated 21.10.2022 in ITA No. 4775/Del/2015 (supra). We find necessary and proper to reproduce the relevant part of the said order of the coordinate bench of Tribunal for AY 2008-09 (supra) wherein, identical issue has been decided in favour of the assessee demising the ground of revenue with following observations and findings:- "5. First we proceed to decide the Revenue's appeal as under. 5.1. The brief facts emanating to the grounds raised by the Revenue in it's appeal are that in the origina ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of Section 115BBC of the I.T. Act, 1961. He further held that requirement of Section 115BBC is not at with onus on the assessee-trust casted under section 68 of the I.T. Act, 1961 i.e., to prove creditworthiness of the donors. He has given a finding that since the assessee-trust has maintained and disclosed name and address of the donors during the assessment proceedings and which were accepted by the A.O. in the original assessment order, therefore, the provisions of Section 115BBC would not be applicable to the facts of the case. He has further noted that details of the names and addresses of the donors has not been proved to be wrong or those persons have not donated to the assessee-trust. He, therefore, held that for these reasons also the donation received by the assessee-trust cannot be considered to be anonymous donation by virtue of sub-section (3) of Section 115BBC of the I.T. Act, 1961. Before us, no fallacy in the findings of the Ld. CIT(A) has been pointed out by the Revenue. In such a situation, we find no reason to interfere with the order of the Ld. CIT(A) and thus, the grounds raised by the Revenue are dismissed. 10. In the result, appeal of the Revenue is dismi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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