Subject: Shri Shiv Venkateswara Education and Social Welfare Trust at Meerut .
Referred Sections:
Section 115BBC of the Income Tax Act
Section 11,12 and 13 of the I.T. Act 1961
Section 12 double a of the income tax act.
Section 12A of the Act.’
Section 68
Section 10(23C)(iiiad) and (vi) ;
Section 2(24)(iia),
Referred Cases / Judgments
ACIT Vs Shree Shiv Vankeshawar Educational & Social Welfare Trust,
CIT Vs. Ashok Timber Industries (Cal) 125 ITR 336
Basantipur Tea Co. (P) Ltd. Vs. CIT (Cal) 180 ITR 261
CIT v/s Korlay Trading Co. Ltd. (Cal.) 232 ITR 820.
“Krishan Kumar Jhanb v/s ITO and Anr (Punjab & Haryana) 17DTR 249”
M/s Sejai International Ltd v/s CIT Meerut (All.) Appeal No.306 of 2010.
CIT Vs Durga Prasad More, 82 ITR 540(SC)
CIT Vs P. Mohnakala, 291 ITR 278 (SC)
CIT Vs Sumati Dayal, 214, ITR 801 (SC)
ITO Vs Diza Holdings Pvt. Ltd. 255 ITR 573 (Kerla)
INCOME TAX APPELLATE TRIBUNAL
DELHI BENCH "G": NEW DELHI
BEFORE SHRI PRASHANT MAHARISHI, ACCOUNTANT MEMBER
AND
SHRI K.N.CHARY, JUDICIAL MEMBER
ITA No. 4623/Del/2012
(Assessment Year: 2009-10)
ACIT, Vs. Shree Shiv Vankeshawar
Circle-2, Educational & Social
Meerut Welfare Trust,
A-217, Defence Colony,
Meerut
PAN: AAHTS6246H
(Appellant) (Respondent)
Revenue by : Shri S. S. Rana, CIT DR
Assessee by: Shri K. Sampath, Adv
Shri V Rajkumar, Adv
Date of Hearing 26/02/2019
Date of pronouncement 16/05/2019
ORDER
PER PRASHANT MAHARISHI, A. M.
1. This appeal is filed by the learned Assistant Commissioner Of Income Tax,
Circle 2, Meerut against the order of the learned Commissioner Of Income
Tax (Appeals), Meerut dated 04/06/2012 for Assessment Year 2009-10
wherein the addition made by the learned assessing officer of INR
16265000/ made u/s 68 read with Section 115BBC of the Income Tax Act
is deleted.
2. The learned AO has raised the following grounds of appeal:-
"1. Whether in the facts and circumstances of the case the Ld. CIT (A) has
erred in law in deleting the addition of Rs. 1,62,65,000/- made by the
A.O. u/s 68 read, with section 115BBC of the IT Act, 1961 ignoring the
following facts and law in particular: -
(a) That the signatures on the confirmations and affidavits of the
donors filed during the course of assessment proceedings were
forged.
(b) That the handwriting expert engaged by the AO in the course of
assessment proceedings opined that the signatures of the donors
on the confirmations did not tally with the signatures on the
affidavits.
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ACIT Vs Shree Shiv Vankeshawar Educational & Social Welfare Trust,
ITA No. 4623/Del/2012
(Assessment Year: 2009-10)
(c) That assessee also failed to prove the genuineness of the
transactions and creditworthiness of the donors and assessee
did not discharge the onus cast on it u/s 68 of IT Act, 1961.
Reliance is placed on the following case laws:-
I. CIT Vs. Ashok Timber Industries (Cal) 125 ITR 336
II. Basantipur Tea Co. (P) Ltd. Vs. CIT (Cal) 180 ITR 261
III. CIT v/s Korlay Trading Co. Ltd. (Cal.) 232 ITR 820.
IV. "Krishan Kumar Jhanb v/s ITO and Anr (Punjab & Haryana) 17
DTR 249"
V. M/s Sejai International Ltd v/s CIT Meerut (All.) Appeal No.306
of 2010.
VI. CIT Vs Durga Prasad More, 82 ITR 540(SC)
VII. CIT Vs P. Mohnakala, 291 ITR 278 (SC)
VIII. CIT Vs Sumati Dayal, 214, ITR 801 (SC)
IX. ITO Vs Diza Holdings Pvt. Ltd. 255 ITR 573 (Kerla)
2. Whether in the facts and circumstances of the case the Ld. CIT (A) has
erred in law in holding that the section 115 BBC of the I.T. Act 1961
inserted by the Finance Act 2006 w.e.f. 01/04/2007 was not
applicable to the case despite clear mandatory provisions contained
therein to tax entire such amount under the pretext that the donations
were declared in terms of section 11,12 and 13 of the I.T. Act 1961
3. In the facts and circumstances of the case the order of the
Commissioner of Income-tax (Appeals) may be set aside and that of the
AO restored."
3. The brief facts of the case shows that assessee is a society which was duly
registered under the societies registration act 1960 and also under section
12 double a of the income tax act. The trust was created registered on
18/10/2007 and is running in educational Inst under the name and style of
Shri Shiv Venkateswara Education and Social Welfare Trust at Meerut . It
filed its return of income on 30/9/2009 declaring nil income. During the
course of assessment proceedings the learned assessing officer asked the
assessee to prove the identity, creditworthiness, genuineness of the donors.
The assessee submitted that the most of the donors are villagers from the
neighboring periphery of the Institution ranging from INR 1000 18,000
and is received in cash. The assessee submitted the identity proof of voter
ID cards, the copy of concerned company in the respective confirmation of
these donors. Assessee also submitted that all the details except the copy of
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ACIT Vs Shree Shiv Vankeshawar Educational & Social Welfare Trust,
ITA No. 4623/Del/2012
(Assessment Year: 2009-10)
the bank accounts of these donors are submitted. The learned assessing
officer on examination of the detail found that assessee has received corpus
duration of INR 16265000/ during the year from 1038 donors. The
assessee has submitted the confirmation letters from some of the donors an
affidavit of the donors and identity of the donors. On the examination of the
above documents the learned assessing officer analyzed the details of 1038
donors. He noted that there are several discrepancies in the details filed by
the assessee. On the basis of the examination of the documents submitted
by the assessee the learned assessing officer noted that confirmation of USD
36 have been signed by only 3 persons and the signature of these persons
were sent to the handwriting expert who also confirmed the above fact.
Based on these facts the learned assessing officer noted that the assessee
has made above story and tried to explain the undisclosed credits by giving
the sake of donation from various donors. He further noted that the
confirmation furnished by the donors are also full of contradictions which is
est from the fact that the person whose name is given in the confirmation
has not signed the documents but some other person assigned 8. Further
in many of the confirmations the amount of donation differed from the
amount of confirmation and even from the affidavits filed by the donors. It
was further noted that the donors and stated to have donated the amount
on different dates but the total donations has been shown by the assessee
as cash in hand on 31/3/2009. The learned AO further noted that it is out
of the imagination that when the assessee was having bank accounts then
why the assessee would retain this amount as cash in hand as on the close
of the year. Therefore he held that the so-called donation is for assessees
undisclosed money. Based on this the learned AO held that deposits by way
of donation are nothing but the unexplained cash credit in terms of the
provisions of section 68 read with the provisions of section 115BBC of the
income tax act and accordingly they are rendered to the income of the
assessee under the head income from other sources. The learned assessing
officer further denied the benefit of section 11 and 12 of The Income Tax
Act. Consequently the assessment order u/s 143 (3) of The Income Tax Act
was passed on 30/12/2011.
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ACIT Vs Shree Shiv Vankeshawar Educational & Social Welfare Trust,
ITA No. 4623/Del/2012
(Assessment Year: 2009-10)
4. The assessee aggrieved with the order of the learned assessing officer
preferred an appeal before the learned CIT A. The learned CIT appeal
noted that assessee has placed an application under rule 46A of the income
tax act wherein they submitted the confirmation and the evidences received
from the donors. The assessing officer was also granted an opportunity to
make representation. The learned CIT A held that that these are not the
corpus donations but in fact the donation which are duly recorded and
assessee has shown as its income in the audit report. He therefore held
that the entire discrepancy noted by the learned assessing officer remains of
no consequences and the assessee has himself shown these items as
income in the income and expenditure account. He therefore held that
provisions of section 68 invoked by the learned AO are incorrect. He
otherwise held that even provisions of section 115BBC also cannot be
invoked treating the above donation as anonymous donation because
assessee has undoubtedly maintain the entire record of the donation
received. The learned CIT also relied upon the decision of the coordinate
bench 16 taxmann.com 103 and deleted the entire addition. He further
directed the learned AO to allow exemption u/s 11 as claimed by the
assessee since application of the income of more than 85% has also been
achieved by the assessee. Aggrieved by the order of the learned CIT A the
AO is in appeal before us.
5. The learned departmental representative vehemently supported the order of
the learned assessing officer and submitted that all the donations received
by the assessee are bogus. He further submitted that as assessee has failed
to maintain proper record with respect to the donations showing the names
and address of the donors, and voluntary contribution received by it it is
rightly chargeable to tax as anonymous donation within the meaning of
section 115BBC of the act. He relied on the decision of coordinate bench in
151 TTJ 260 (Agra) which has been affirmed by the honourable Allahbad
High Court in ITA number 31 of 2013.
6. The learned authorised representative vehemently supported the order of
the learned CIT A.
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ACIT Vs Shree Shiv Vankeshawar Educational & Social Welfare Trust,
ITA No. 4623/Del/2012
(Assessment Year: 2009-10)
7. We have carefully considered the rival contention and perused the orders of
the lower authorities. Admittedly the assessee has received a donation of
INR 16265000/ from 1038 individuals and ld CIT (A) has noted that
same is credited to the income and expenditure account of the assessee,
However ld AO has noted that same is credited as Corpus Donation.
During the course of assessment proceedings the assessee produced
multiple details with respect to the various donors which establish the
identity of those donors. The learned assessing officer on examination of
the various details with respect to these donors and stated that there are
several infirmities in the details furnished by the assessee, he made an
addition of the about some u/s 68 of the income tax act and also applying
the provisions of section 115BBC of the act. The learned CIT A has
categorically recorded a finding that above donation is normal donation
which has been offered by the assessee as income. The claim of the AO is
that same is a corpus donation. Corpus donation is never credited to the
income and expenditure account of the trust whereas the normal donation
is credited to the income and expenditure account as income. If a normal
donation is doubted by the AO about its genuineness, and identity of the
donors, the addition cannot be made u/s 68 of the income tax act in the
case of the trust as it has already been offered as an income. The identical
issue arose before the Honble Delhi High Court in the director of income tax
exemption vs Keshav social and charitable foundation 278 ITR 152 wherein
the Honble High Court held that
,,11. Section 68 of the Act has no application to the facts of the case
because the assessee had in fact disclosed the donations of Rs.
18,24,200 as its income and it cannot be disputed that all receipts,
other than corpus donations, would be income in the hands of the
assessee. There was, therefore, full disclosure of income by the
assessee and also application of the donations for charitable purposes.
It is not in dispute that the objects and activities of the assessee were
charitable in nature, since it was duly registered under the provisions
of section 12A of the Act.'
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ACIT Vs Shree Shiv Vankeshawar Educational & Social Welfare Trust,
ITA No. 4623/Del/2012
(Assessment Year: 2009-10)
8. Therefore on reading of the above decision of the honourable Delhi High
Court it is clear that when an income is credited to the income and
expenditure account by the assessee trust then provisions of section 68
does not apply. Honourable High Court recognized that the situation may
be different in case of corpus donation. As in the present case the amount
of donation as held by the learned CIT A is normal income already offered
by the trust, these fact has never been controverted by the learned
departmental representative, respectfully following the decision of the
Honble Delhi High Court, we uphold the decision of the learned CIT A that
the addition u/s 68 of the above donation cannot be made.
9. The 2nd issue that arises even if the nation is credited to income and
expenditure account of the assessee, whether a normal donation or a corpus
donation, cannot be termed as anonymous donation u/s 115BBC of the
income tax act. In order to tax unaccounted money being contributed to
wholly or partly charitable or religious trusts or institutions by way of
anonymous donations, section 115BBC was inserted by the Finance Act,
2006, with effect from April 1, 2007, i.e., with effect from the assessment
year 2007-08, to provide that any income by way of anonymous donations
received by the following entities shall be included in the total income and
taxed at the rate of 30 per cent. :
(i) any trust or institution referred to in section 11 ;
(ii) any university or other educational institution referred to in
section 10(23C)(iiiad) and (vi) ;
(iii) any hospital or other institution referred to in section
10(23C)(iiiae) and (via) ;
(iv) any fund or institution referred to in section 10(23C)(iv) ;
(v) any trust or institution referred to in section 10(23C)(v) ;
10. The anonymous donations will not be covered if donations received by any
trust or institution created or established wholly for religious purposes or
donations received by any trust or institution created or established for both
religious as well as charitable purposes other than any anonymous donation
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ACIT Vs Shree Shiv Vankeshawar Educational & Social Welfare Trust,
ITA No. 4623/Del/2012
(Assessment Year: 2009-10)
made with a specific direction that such donation is for any university or
other educational institution or any hospital or other medical institution
run by such trust or institution. Sub-section (3) defines "anonymous
donation" to mean any voluntary contribution referred to in section
2(24)(iia), where a person receiving such contribution does not maintain a
record consisting of the identity of the person making such contribution
indicating the name and address of the person and such other particulars
as may be prescribed. We asked whether the central board of direct tax as
prescribed any particulars which is required to be maintained by the
assessee trust, the answer was no. We also did not find any such
prescription about what kind of particulars the assessee trust is required to
maintain. Therefore, it is apparent that at present the simple requirement
is maintaining the name and address of the donors. In the present case, the
assessee has already given much more detail then the name and address of
the donors. Therefore with respect to the donation from 1038 persons the
assessee has shown their name and address along with other particulars. It
is not the case of the revenue that assessee has not maintained and
provided these details to the assessing officer. In view of this we do not find
that the donation received by the assessee falls into the definition of
anonymous donation. Hence on the applicability of the provisions of section
115BBC of the income tax act we find that the learned CIT A has correctly
reached the conclusion that the donation received by the assessee is not an
anonymous donation as provided under section 115BBC of the act.
Therefore on this count also we uphold the order of the learned CIT A.
11. In view of this appeal filed by the learned AO does not merit any
consideration and hence same is dismissed.
Order pronounced in the open court on 16/05/2019.
-Sd/- -Sd/-
(K.N.CHARY) (PRASHANT MAHARISHI)
JUDICIAL MEMBER ACCOUNTANT MEMBER
Dated:16/05/2019
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ACIT Vs Shree Shiv Vankeshawar Educational & Social Welfare Trust,
ITA No. 4623/Del/2012
(Assessment Year: 2009-10)
Copy forwarded to
1. Applicant
2. Respondent
3. CIT
4. CIT (A)
5. DR:ITAT
ASSISTANT REGISTRAR
ITAT, New Delhi
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