Section 115BBC is silent unlike section 68 which casts obligation on assessee to explain amount credited to the satisfaction of AO

Section 115BBC is silent unlike section 68 which casts obligation on assessee to explain amount credited to the satisfaction of Assessing Officer.

ABCAUS Case Law Citation
ABCAUS 3495 (2021) (04) ITAT

Important case law relied referred:
CIT vs. Shree Shiv Vankeshwar Educational & Social Welfare Trust
ITO (Exemption) vs.  Shri Narain Educational & Welfare Trust,
ACIT vs. Sahyog Jan Kalyan Samiti
ITO vs. Saraswati Educational Charitable Trust
ITO (Exemption) vs. Satyug Darshan Trust 
Patanjali Yogpeeth (Nyas) vs. ADIT (Exemptions)

The appellant was an educational society established with the object for imparting education and it is registered u/s 12A of the Income Tax Act, 1961 (the Act).

For the year under consideration, the assessee filed its return of income declaring NIL income.

During the year under consideration, it had received corpus as well as non-corpus donations both from students as well as from donors.

While making the assessment. the AO treated donations received from students/parents of the students as anonymous donations u/s 115BBC of the Act on the basis that notices sent u/s 133(6) had returned back as unserved.

The CIT(A) on the basis of a remand report received from AO deleted the donations received from students who had filed confirmations and also deleted donations from students to whom notices were not issued. 

However, he upheld the addition in respect of three persons from whom the confirmations were not received/notice came back unserved.

The Tribunal observed that per the definition of the Anonymous donation u/s 115BBC, the person receiving the donations has to maintain the record of the identity indicating the name and addresses of the persons making such donations

The Tribunal stated that to stay out of the definition of anonymous donation, the only requisite condition is that names and addresses from whom donation has been received has to be maintained.

The Tribunal opined that section u/s 115BBC is silent thereafter unlike Section 68 which casts an obligation on the assessee to explain the amount credited in the books along with the explanation to the satisfaction of AO.  

The Tribunal stated that the moment the person receiving the donations provides the record containing the names and addresses of the persons from whom the donation has been received such donation comes out of the definition of anonymous donations.

In the instant case, the Tribunal noted that it was undisputed fact that assessee had maintained complete record regarding identity and PAN of donors along with their addresses.

In view of the above the Tribunal held that donations received by the society could not be termed as anonymous donations and hence cannot taxed u/s. 115BBC of the Act.

Accordingly, the appeal was allowed in favour of the assessee.

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