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TMI Blog2014 (4) TMI 784X X X X Extracts X X X X X X X X Extracts X X X X ..... the authorities below. 4. The relevant facts of the case are that the assessee society was granted registration u/s 12AA of the Act with effect from 10.09.2004 and exemption u/s 80G of the Act for the period from 10.09.2004 to 31.03.2008. As per memorandum of the association the main objectives of the society are to establish, maintain and support schools, colleges, technical school, medical colleges and other educational institution and research centre for carrying out research in various branches of education including technical subject and to associate with educational research institutions. The society is also engaged in the activity providing technical education in the form of engineering, management courses at different places. The assessee was subjected to survey u/s 133A of the I. T. Act, 1961 and during the course of survey a huge investment in purchase of land and construction of college buildings was notices. The receipt of donations towards corpus funds was also noticed during the course of assessment proceedings. Necessary confirmations along with copy of bank statement and PAN Nos. were received from the donors in the assessment year 2006-07. The donor M/s USha (Ind ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e trust as per sec. 12 of the Act. This fact has been reversed by the Learned CIT(Appeals) in the findings extracted supra. Learned CIT(Appeals) has held that sec. 115BBC is applied to anonymous donations. He did not agree with the Assessing Officer's view of treating these donations as anonymous to that extent he agreed with the assessee's arguments. This finding of fact has not been challenged before us by the revenue. The order of the Learned CIT(Appeals) is dated 31.3.2011. The appeal of the assessee was listed on six occasions, but no steps were shown by the revenue that it is going to challenge the findings of Learned CIT(Appeals) extracted supra. Thus, we have to proceed from the point that assessee has been maintaining complete details of the donors as required under sec. 115BBC. The donations are not by anonymous donors. If these are not anonymous then let us see how the income would be computed. Section 12 of the Act has a direct bearing in the controversy in hand, therefore, it is imperative upon us to take note of this section as under: "12. Income of trusts or institutions from contributions.- (1) Any voluntary contributions received by a trust created wholly for char ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... om property held under the Trust wholly for charitable or religious purpose. It has not been specifically demonstrated before us that these donations were towards the corpus. The learned counsel for the assessee submitted that once the donations are held by the Learned CIT(Appeals) as synonymous and assessee is able to demonstrate the maintenance of the complete record then sec. 115BBC of the Act would not be applicable. The receipts are to be governed by sec. 11 and 12 of the Act. The moment assessee has treated the donations as its income and it is deemed to be an income derived from the property held under the trust as per sec. 12(1) then, the only aspect remained is to verify whether such amounts have been applied for the objects of the society to the extent of 85% or not? According to the assessee, it has applied Rs.533,22,266 as expenditure towards fulfillment of assessee's objections and it has an income of only Rs.90,79,412. This fact was brought to the notice of the Assessing Officer in the reply dated 21.12.2009 which has been reproduced by the Assessing Officer on page 5. 13. In the judgment referred by the assessee, a similar issue was involved. The ITAT in the case of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Delhi High Court. 9. In the case of DCIT(E) VS New Anand Education Society (supra) before Delhi Bench of the Tribunal, the dispute was raised against the donation receipt of RS.7,65,467/-. The assessee trust duly registered u/s 12A(a) of the Act had furnished details of donations received. The A.O. held that these were only accommodation entries as per the report of the Investigation Wing. He accordingly subjected the said donation receipts for charge of tax at maximum marginal rate. Ld CIT(A) deleted the same. The Tribunal upheld the first appellate order on the issue with this finding that to obtain benefit of exemption u/s 11, the assessee is required to show that the donations were voluntary. It was observed that the assessee had not only disclosed the donations but had also submitted list of donors. It was held further that the fact that complete list of donors were not filed and the donors were not produced, does not necessarily lead to the inference that the assessee was trying to introduce unaccounted money by way of donation receipts. The Tribunal respectfully followed the above ratio laid down by the Hon'ble Delhi High Court in the case of Keshav Social and Charitable Fo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... isputedly payments have been through banking channels. The ground Nos.1-10 invoking the issue are thus allowed in favour of the assessee". 14. The issue in all other judgments referred by the assessee is similar. The orders of the ITAT, Delhi are basically based upon the judgment of Hon'ble Delhi High Court in the case of Keshav Trust. The order in the case of Hansraj Smarak Society has also been upheld by the Hon'ble Delhi High Court. Respectfully following the judgment of the Hon'ble Delhi High Court and orders of the Co-ordinate Bench, we are of the view that benefit of sections 11 & 12 in computing the income received on account of donations from identified donors cannot be denied. Consequently, we allow the appeal of assessee and direct the Assessing Officer to verify the facts that assessee has applied 85% of its income during the year including these donations on its objects. If the claim of the assessee that it has incurred an expenditure of Rs.533,22,266 towards fulfillment of its object during the year then its income would be assessable at nil because the incurrence of this expenditure would take care the additions of Rs.192,35,000, Rs. 30,00,000 and Rs.11,0 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... duly registered under the provisions of section 12AA of the Act. 9. We thus find that in the assessment year 2007-08, the Tribunal has deleted the addition of Rs.140 lacs received on account of donations on the basis of cited decisions before it that provisions of section 68 of the Act has no application when list of donors with supporting evidence was filed, amounts were paid through banking channel and there is 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 Act. 11. Regarding the applicability of the provisions u/s 115BBC of the Act, the Tribunal feels that the donations in question cannot be termed as anonymous since list of the donors were filed and payments have been made through banking channel. The Tribunal has held that the benefit of sections 11 & 12 in computing the income received on account of donations from identified donors cannot be denied. The appeal has thus been allowed by the Tribunal in the assessment year 2007-08, subject to verification by the Assessing Officer to the facts that assessee has applied 85% of its income during the year including the dona ..... X X X X Extracts X X X X X X X X Extracts X X X X
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