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TMI Blog2024 (7) TMI 836X X X X Extracts X X X X X X X X Extracts X X X X ..... fore the AO and stated that they had paid the donations. Some of them had filed confirmation stating that they paid donation to the assessee trust. A few of them did not appear before the AO. AO without giving opportunity to the assessee to produce the donors before the Assessing Officer, simply doubted the entire donation received by the assessee as not genuine. In our opinion, the AO was not correct in doubting the entire donations as not genuine. Anonymous donations - Assessee maintained the record of the identity and address of the persons who are making contribution and other particulars and, therefore, provisions of section 115BBC of the Act are not applicable. In the present case, the assessee has maintained identity of the donors i.e., complete details such as name, address, PAN card details, Aadhar details and, hence, provisions of section 115BBC of the Act are not applicable to the assessee Trust. We find that the assessee has given all the details of the donors including names, address, PAN card details, Aadhar details, etc. Thus, the assessee discharged onus casted upon it by producing all the details before the Assessing Officer. AO without following the procedure and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... provide training in various sports and games, to organize tournaments. iii) To provide education to the blind, handicapped, dumb and deaf and abnormal children. Also to provide professional education to them. iv) To provide facilities by establishing Balak Ashram, Orphanages and Old Age Homes. v) To provide self-employment to women, by providing training in Child Welfare Centres, Day care Centres, Sewing Classes, Mehndi Classes, Embroidery Classes, Cottage Industries, etc. vi) Various projects conducted by Social Welfare Department, Rural development programmes, Khadi Gramodyog, Central Government and State Government for the development of villages will be run by the Trust. vii) To organize street plays, camps, to run Rehabilitation Centres, to stop drug addiction, superstition, enforce prohibition, to fight against the dowry system. viii) To organize camps, symposiums, discussions, lecture series for the development of youths, to conduct mass marriages of the poor. ix) To establish and Rural Health Centres, Vipassana Centres. 4. For the year under consideration, the assessee filed its return of income on 27/06/2015, declaring total loss at ₹ ( )2,16,087. In the assessment ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cord of identity of donor indicating the name and address of the person making such contribution, The same have been forwarded to this office for verification and Remand Report in this context, vide this office letter dated 09/03/2017, the assessee was asked to produce documents in respect of donors such as proof of identification, copy of return of income computation of income and copy of bank account statement of the donors. The assessee submitted his reply on 20/03/2017 enclosing photocopy of PAN Card/Aadhar card of the donors. However, the assessee failed to provide the return of income, computation of income and bank account statement in respect of donors as required by the letter dated 09/03/2017. 4. It is seen from the record submitted by the assessee before the CIT(A) that there are as many as 23136 donor entries in which some names have been found to Be repeated. In order to verify the genuineness of the same, summons were issued by way of speed post to 205 randomly selected persons out of these 23136 donor entries. The position which emerged from the enquiries is as under: (i) Out of 205 persons, 89 persons attended this office and their statement was also recorded, 76 pe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... even after providing repeated opportunity, the Authorised Representative did not furnish the list of donors who contributed towards Building fund. The Assessing Officer has further noted that a letter dated 15.12.2016 was also issued to the assessee to show cause as why the corpus and non-corpus donations should not be viewed as anonymous donations attracting section 115BBC of Income Tax Act. In response to the said show cause letter, the Authorised Representative merely attended without making any submission or furnishing the details sought. The Assessing Officer was thus left with no other choice other than treating the anonymous donation taxable as per the provision of sec 115BBC of I.T. Act. 6. It is requested that the submissions now being made by the assessee Trust may kindly be examined in the backdrop of the above factual position. The documents submitted by the assessee Trust (in 10 volumes) are returned herewith. 6. The learned CIT(A), on receipt of remand report, forwarded the same to the assessee and the assessee also made a detailed submissions before the learned CIT(A) which are reproduced below: The assessee has received the corpus donation towards building fund at ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng such contribution and such other particulars as may be prescribed the same were also submitted before the CIT(a) the CIT(A) also called remand report the said report also support the case of the assessee in following points : a. The Asstt. Commissioner of Income Tax accepted in the remand proceeding in the remand report all the confirmation of donors/affidavit/identity of donors. b. In the remand proceedings in the remand report the Asstt. Commissioner of Income Tax stated that proof of identification of donor were also submitted. c. In the remand proceedings in the remand report, The Asstt Commissioner of Income Tax also sent summons to various donors on test check basis and most of them confirmed that they have given donation to the trust. d. In the remand proceedings in the remand report, The Asstt Commissioner of Income Tax stated that donors to whom summons were issued, most of them have given sufficient documents with respect to genuineness of transaction their confirmation. On the abovementioned preposition assessee placed reliance on 1. Judgment of Hon ble Income Tax Appellate Tribunal, Lucknow Bench A , Lucknow dated 11/06/2015 Vide ITA No. 776/LKW/2014 in case of Incom ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ducational 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 referred to in section 11, includes any income by way of any anonymous donation, the income tax payable shall be the aggregate of (i) The amount of income tax calculated at the rate of thirty per cent on the aggregate of anonymous donations received in excess of the higher of the following namely (A) five per cent of the total donations received by the assessee; or (B) One lakh rupees, and . . . . . . . . . . . . . . . . . . . . . . . . (3) For the purposes of this section, anonymous donation means any voluntary contribution referred to in sub-section(iia) of clauses(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 prescribed. 6.2 It is evident that provisions of section 115BBC are applicable ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ned have categorically accepted of giving donation. Those very few, in fact only three, who have denied, have not been allowed to be cross examined in violation of principles of natural justice. AO has also mentioned the fact of relation/connection of donors with the appellant s society in view of same typewritten confirmation, as submitted in remand proceedings. This fact is also not found to be entirely correct as only 16 such persons, out of 76, have submitted before AO that either they or their family member is/was employed in the institutions run by the society or that their wards/relatives re studying therein. However, this fact, by no stretch of imagination, can make the donation given, and as confirmed by them, to be anonymous donation without any adverse corroborative evidence on records. AO is found to have drawn adverse conclusion more on suspicion alone. Many of the donors have also submitted copy of their bank account statement and returns. All the donors have submitted their name and address alongwith PAN/Aadhar Number. Moreover, AO has added corpus donations too as anonymous donations. It is not understood if a donation has been received with specific direction/infor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Raj Samarak Society Vs. ADIT (Exemption), Trust Circle-II (2016 16 Taxmann.com 103 that the expression of a valid voluntary contribution has been defined in an exhaustive manner and, therefore, no other word can be read in section 115 BBC(3) other than the words finding place therein. Thus the society has the obligation to maintain the identity indicating the name and address only and nothing more. In that case, AO had taxed the amount by mentioning that confirmation letters from the donors have not been filed. As per Hon ble ITAT, Delhi, such confirmations are not required to be filed for coming to the conclusion as to whether the donation was anonymous or not. Anonymous donation is different from unaccounted donation. In case of anonymous donation, the donations are on record but the trace of donors is not available. This is not found the case in the instant appeal of the society. It is also seen that on similar facts, AO himself has accepted similar donation of Rs. 8,27,30,000/- for AY 2013-14 u/s. 143(1) and Rs. 8,21,45,000/- for A.Y. 2012-13 vide order dated 23.03.2015 passed u/s. 143(3) of the Act. 6.4 After perusal of entire material on records, action of the AO in making th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Assessing Officer has not issued any notices to the assessee to produce these 25 persons before the Assessing Officer. Even in case of 12 persons, summons were returned back, but the Assessing Officer has not asked the assessee to produce those donors before him. Therefore, the assessee has made available all the details with regard to the donors and, therefore, the assessee has discharged the onus and submitted that the learned CIT(A) has rightly deleted the addition. 12. The learned Counsel further submitted that the assessee is maintaining the details of donations received, names and address of the donors and other details, therefore, provisions of section 115BBC of the Act is not applicable to the present case. The assessee Trust is running with the help of Government grant as per the objectives of the assessee Trust. There is no violation in the activities of the assessee in respect of donations received. The Assessing Officer has wrongly invoked the provisions of section 115BBC of the Act. 13. We have heard the rival arguments, perused the material available on record and gone through the orders of the authorities below. The assessee is a Public Charitable Trust registered u ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... has doubted the entire donations. Insofar as these 2 persons are concerned, who denied having paid donation to the assessee, we find that the assessee has submitted all the details in respect of these 2 persons namely Shri Pankaj Parasram Nandeshwar and Shri Sudhir Mahadeo Kathane. The Assessing Officer ought to have forwarded the statements of these 2 persons who denied payment of donations to the assessee and opportunity should have been given to cross examine these two donors. Simply believing the statement of the donors, the Assessing Officer was not correct to doubt the entire donations paid to the assessee. 15. Insofar as 76 donors are concerned, these donors have confirmed having paid the donations to the assessee Trust. If the Assessing Officer has any doubt regarding payment of donations, he should have been called further details to substantiate the same. Without doing so, the Assessing Officer has doubted the statements of 76 donors on the ground that all the 76 donors are closely connected to the assessee Trust, but these donors are living in different places. In this regard, we find that there is nothing on record to show that these 76 donors, who made payment of dona ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sessing Officer invoked the provisions of section 115BBC of the Act for the only reason of doubting the genuineness of the donors. The assessee has discharged the onus casted upon it and, therefore, if at all the Assessing Officer is having any doubt, he should have been brought the evidence on record that the donations are not genuine. Once the assessee has filed all the details of the donors and enquiry made by the Assessing Officer, the Assessing Officer cannot doubt the donors. We also find that some of the donors appeared before the Assessing Officer and stated that they had paid the donations. Some of them had filed confirmation stating that they paid donation to the assessee trust. A few of them did not appear before the Assessing Officer. The Assessing Officer without giving opportunity to the assessee to produce the donors before the Assessing Officer, simply doubted the entire donation received by the assessee as not genuine. In our opinion, the Assessing Officer was not correct in doubting the entire donations as not genuine. Insofar as application of provisions of section 115BBC of the Act is concerned, the same is reproduced below: Anonymous donations to be taxed in ce ..... X X X X Extracts X X X X X X X X Extracts X X X X
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