TMI Blog2014 (4) TMI 784X X X X Extracts X X X X X X X X Extracts X X X X ..... during the year including these donations on its objects – Decided in favour of Assessee. - I.T.A. No. 4058/Del/2013, I.T.A. No. 4059/Del/2013 - - - Dated:- 1-4-2014 - Shri G. D. Agrawal And Shri I. C. Sudhir,JJ. For the Appellant : Shri Ashwani Taneja, F.C.A For the Respondent : Smt. Renuka Jain Gupta, Sr. DR. ORDER Per I. C. Sudhir, Judicial Member In both the appeals preferred by the assessee, the action of the Ld. CIT (A) has been questioned in sustaining the addition made u/s 68 of the Act, by treating the donation as non genuine and thereby in not granting the benefit of exemption under sections 11 12 of the Act. Without appreciating that the society is duly registered u/s 12AA of the Act. 2. At the outset of hearing the Ld. AR pointed out that the issue raised in the grounds is fully covered by the decision of the Tribunal in the case of assessee itself for the assessment year 2007-08 in ITA No. 2428/Del/2011, order dated 06.12.2013. A copy of this order has been furnished by the Ld. AR. 3. The Ld. Departmental Representative, on the other hand, tried to justify orders of the authorities below. 4. The relevant facts of the case are t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ee itself for the assessment year 2007-08, the addition made u/s 68 read with section 115BBC of the Act at Rs.1,92,35,000/-, on account of non genuineness of the donations has ultimately been deleted by the Tribunal vide its order dated 06.12.2012 (Supra). Relevant para nos. 11 to 15 thereof are being reproduced hereunder: 11. We have duly considered the rival contentions and gone through the record carefully. There is no dispute between the parties that assessee is a registered society under Society Registration Act. 1862. It is also enjoying registration under sec. 12AA of the Act and it is also enjoying exemption under sec. 80G of the Act. All these registrations are in tact during the accounting year relevant to this assessment year. Assessing Officer has basically distinguished the facts of Hon'ble Delhi High Court s decision in the case of Keshav Charitable Trust, on the ground that sec. 115BBC has been introduced in the Act, it is applicable in this assessment year and if donations are to be treated as anonymous donations then, it would not be construed that such donations are deemed to be income derived from the trust as per sec. 12 of the Act. This fact has been re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... person referred to in clause (a) or clause (b) or clause (c) or clause (cc) or clause (d) of sub-section (3) of section 13. (3) Notwithstanding anything contained in section 11, any amount of donation received by the trust or institution in terms of clause (d) of sub-section (2) of section 80G in respect of which accounts of income and expenditure have not been rendered to the authority prescribed under clause (v) of subsection (5C) of that section, in the manner specified in that clause, or which has been utilised for purposes other than providing relief to the victims of earthquake in Gujarat or which remains unutilised in terms of sub-section (5C) of section 80G and not transferred to the Prime Minister s National Relief Fund on or before the 31st day of March, 2004 shall be deemed to be the income of the previous year and shall accordingly be charged to tax . 12. A bare perusal of sub-clause (i) of sec. 12 would indicate that if an assessee had received donations which were not with a specific directions that they shall form part of the corpus donation then, for the purpose of section 11 be deemed to be income derived from property held under the Trust wholly for charita ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... struction of school building. It was held that when there is no deviation of funds there are minor contradictions or deviation in the accounts, this by itself cannot substantiate the allegation that the assessee exists for profit motive, therefore, exemption u/s 10(22) of the Act cannot be denied to the assessee. It was held that the amount of guptdaan is a receipt and not an outflow from the corpus of the assessee. Therefore, the question in this regard is whether the amount was received by was of a loan or by way of guptdaan. In either case, it cannot be said that the amount was received with a profit motive, unless it was not meant for utilization for educational purpose for which there is no evidence on record. It was held further that even if donors were not produced, it was not necessarily lead to an inference that the assessee was trying to introduce unaccounted money by way of donation receipts. The donations were utilized for construction of school building, is clearly an educational /charitable purpose. But at no stretch of imagination it can be said that the donations were received with some profit motive as held by Hon ble Delhi High Court. 9. In the case of DCIT(E ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as applied for educational purposes, the fact that the donations remained unverifiable due to non availability of donors at the addresses given in their confirmations does not necessarily lead to the inference that the assessee was trying to introduce unaccounted money by way of donation receipts. We, therefore, respectfully following the decision of Hon ble Delhi High Court in the case of Keshav Social Charitable Foundation (supra), hold that the provision of Section 68 of the Act has no application to the facts of the present case when list of donors with supporting evidence was filed, amounts were paid through banking channels, there is also no dispute that the objects and activities of the assessee were charitable in nature and it was duly registered under the provisions of Section 12A of the I. T. Act, 1961. We thus direct the A.O. to delete the addition of Rs.140 lacs made u/s 68 of the Act in question. So far applicability of the provisions under section 115BBC are concerned, we do not find substance in the contention of the Ld. DR as the donations in question can not be turned as anonymous since list of the donors was filed and undisputedly payments have been through bank ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s corpus fund, out of which addition of Rs.63,52,600/- has been made u/s 68 read with section 115BBC of the Act, holding it as income from unexplained sources. During this year also the assessee had filed details of donations along with confirmations, copies of income tax returns and cheques. The addition in question has been made by the Assessing Officer, on the basis that confirmations were in a stereotyped format, copies of income tax returns in some cases were of two years old and were not related with current year and that in most of the cases notice issued u/s 133(6) of the Act were returned back with postal remark that no such person exist at the given address. The Assessing Officer also noted that no donors were produced and there were mis-match of signatures in the confirmation letter and income tax returns. Likewise in the assessment year 2007-08 decided by the Tribunal, during the assessment years under consideration the assessee had also furnished list of donors with supporting evidence, amount were paid through banking channels and there is no dispute that the objects and activities of the assessee were charitable in nature and it was duly registered under the provisio ..... X X X X Extracts X X X X X X X X Extracts X X X X
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