2017 (9) TMI 1687 - HC - Income Tax

Anonymous donations - benefit of deduction in respect of the amount of donation denied - appellant received anonymous donations within the meaning of Sub-section (3) of Section 115-BBC - Held that - The Tribunal has recorded that the assessee had not maintained records of the identity indicating the names and addresses of the donors. Even on perusal of records the Tribunal found that the assessee was not maintaining records of the donors indicating their names and addresses. The Tribunal also held that mere filing of list of donors does not satisfy the condition laid down under Subsection (3) of Section 115-BBC of the Act and the donations which are alleged to have been received by the assessee were anonymous donations. Thus the authorities below were justified in holding that the contributions received by the assessee were anonymous donations within the meaning of Sub-section (3) of Section 115-BBC of the Act.

Summary

Issues:
Interpretation of Section 115-BBC of the Income Tax Act, 1961 regarding anonymous donations.

Detailed Analysis:
The High Court judgment pertains to an appeal against the order of the Income Tax Appellate Tribunal for the Assessment Year 2007-08. The Tribunal had ruled that the donations received by the appellant were anonymous donations, thereby denying the appellant the benefit of exemption. The appeal raised the substantial question of law whether the authorities were justified in treating the donations as anonymous under Section 115-BBC of the Act.

The crux of the matter lies in Section 115-BBC(3) of the Income Tax Act, which mandates the maintenance of records of the identity of donors, including their names and addresses. Failure to maintain such records leads to contributions being classified as "anonymous donations." The Assessing Authority found that the appellant had produced incomplete receipts during the proceedings, lacking the necessary details and signatures. The Tribunal concurred, noting the absence of records indicating the names and addresses of the donors.

Moreover, the Tribunal emphasized that merely filing a list of donors does not fulfill the requirements of Section 115-BBC(3) of the Act. Consequently, the donations received by the appellant were deemed anonymous donations. The High Court, after examining the facts and circumstances, upheld the lower authorities' decision, stating that no substantial question of law arose. Therefore, the appeal was dismissed on the grounds that the contributions were rightfully considered anonymous under Section 115-BBC of the Income Tax Act.