Income Tax Appellate Tribunal

ITO vs. Aishwarya Foundation, Patna

MANU/IQ/0017/2023

03.05.2023

Direct Taxation

Person receiving donation is under obligation to maintain the identity of donors indicating the name and address

The present appeal is directed at the instance of the revenue against the order of the Learned Commissioner of Income Tax (Appeals). The sole issue raised by the department in the instant lis relates to the deletion of addition of Rs.2,61,72,000 by the learned CIT(A) made by the Assessing Officer in the assessment framed under Section 143(3) of the Act on account of alleged anonymous donations made under Section 115BBC of the Income Tax Act, 1961 (IT Act).

Anonymous donation has been defined in the new section to mean any voluntary contribution referred to in Section 2(24) (iia) of the IT Act, 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 maybe prescribed."

To be excluded from the definition of expression "anonymous donation" the person receiving the voluntary contributions referred to in Section 2(24) (iia) of IT Act is required to maintain a record of identity indicating the name and address of the contributor and such other particulars as may be prescribed. Since no other particulars have been prescribed under the provisions, the person receiving the donation is under obligation to maintain the identity of donors indicating the name and address only.

In the instant case, the Appellant had provided the required details as called for by the A.O., to prove the identity of the donors and thereafter the A.O. has also conducted independent enquiry to verify these details. It is on record that most of the replies in affirmative were received although subsequent to the completion of assessment proceedings. Had the same been available to the A.O. then probably the inference drawn by him would have taken into consideration these confirmations.

In any case, since no other particulars have been prescribed under the provisions of the Act, the Appellant is under obligation to maintain records of only the identity of donors indicating the name and address and the same was provided to the AO.

The A.O. has drawn an erroneous conclusion by holding that the donations from 1371 persons are in the nature of anonymous donation and liable to be added under Section 115BBC of the Act. So far as applicability of provisions of Section 68 of the IT Act is concerned, it has been held by various Tribunals and High Courts that, once donation received was taken as income of the appellant which was applied for charitable purposes, provisions of Section 68 of the IT Act cannot be invoked.

The learned CIT(A) has passed a reasoned order after considering all the elements and ingredients involved in the present case and hence, there is no reason to interfere with the observation and findings of the learned CIT(A). Appeal of the revenue is dismissed.

Tags : Assessment Anonymous donations Deletion

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