TMI Blog2015 (9) TMI 548X X X X Extracts X X X X X X X X Extracts X X X X ..... Decided against revenue. - ITA No. 776/LKW/2014 - - - Dated:- 17-6-2015 - Sunil Kumar Yadav, J And A. K. Garodia, AM, JJ. For the Petitioner : Shri Punit Kumar, DR For the Respondent : Shri K R Rastogi, CA ORDER Per : Sunil Kumar Yadav This appeal is preferred by the Revenue against the order of the ld. CIT(A), inter alia, on the following grounds:- 1.1. The Ld. CIT (A) has erred in deleting addition of ₹ 1,66,30,000/- on account of donations, not found explained by the Assessing Officer. 1.2) The Ld. CIT (A) has erred in law and on facts by ignoring the fact that anonymous donations are also unexplained cash credits as referred to in section 68 of the IT. Act even if they are applied for charitable purpose. Such anonymous-donations are liable to be taxed in the hands of the trust with a view to prevent channelization of unaccounted money into these institutions. (CBDT's circular No.-14 as referred to by CIT (A) in his order). In the same spirit AO taxed the donations since creditworthiness of the alleged donors and genuineness of transactions were not satisfactorily explained, even though the donations might have been applied for charitab ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nder section 68 of the Act, but the ld. CIT(A) has deleted the same having observed that once the receipt was taken to the income of the assessee and has applied for charitable purposes, no addition under section 68 of the Act is called for. While holding so, the ld. CIT(A) has also placed reliance upon the circulars and various judgments of the different High Courts including the jurisdictional High Court. The relevant observations of the ld. CIT(A) are extracted hereunder for the sake of reference:- 4. I have considered the matter/The appellant trust is registered u/s 12A of the Act. There is no dispute that the entire voluntary donations of ₹ 2,09,41,0007- has been disclosed by the appellant trust as income in the Income and Expenditure account of one of its divisions, Saraswati Aviation Academy (Aviation College Division) during the year under consideration. The income so disclosed has been applied for charitable purposes as provided u/s 11(1) of the Act and hence cannot be included in total income of the appellant trust. In my considered opinion adding part of the voluntary donations again as unexplained cash credits u/s 68 to the total income of the appellant amoun ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Para 11] For the aforesaid reasons, there was no merit in the appeal and no substantial question of law arose from order of the Tribunal. Therefore, the appeal was to be dismissed. [Para 12] The Hon'ble jurisdictional Allahabad High Court has concurred with the above judgment of the Hon'ble Delhi High Court in the case of CIT, Ghaziabad v. Uttaranchal Welfare Society, [2014] 42 taxmann.com 361 (All.) in which it has been held that the, Delhi High Court further held that Section 68 of the Act has no application in case where the assessee had disclosed donations as its income. It was also not disputed that all receipts, other than corpus donations, would be income in the hands of the assessee. If there is full disclosure of the donation for whatever purpose and that the registration under Section 12A is continuing and valid, exemptions cannot be denied. b. Director of Income Tax v. Hans Raj Samarak Society, [2013] 35 taxmann.com 642 (Delhi). Section 68, read with section 11, of the Income-tax Act, 1961 - Cash credits [In case of charitable trust] - Assessment year 2006-07 - assessment year disallowed deduction under section 11 on finding unaccounted money by way of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... itution referred to in sub-clause (iiiad) or sub-clause (vi) or any hospital or other institution referred to in sub-clause (iiiae) or subclause (via) or any fund or institution referred to in sub-clause (iv) or any trust or institution referred to in sub-clause (v) of clause (23 C) of section 10 or any trust or institution referred to in section 11, includes any income by way of any anonymous donation, the income-tax payable shall be the aggregate of- (i) the amount of income-tax calculated at the rate of thirty per cent on the aggregate of anonymous donations received in excess of the higher of the following, namely: - (A) five per cent of the total donations received by the assessee; or (B) one lakh rupees, and (ii) the amount of income-tax with which the assessee would have been chargeable had his total income been reduced by the aggregate of anonymous donations received. (2) The provisions of sub-section (1) shall not apply to any anonymous donation received by- (a) any trust or institution created or established wholly for religious purposes; (b) any trust or institution created or established wholly for religious and charitable purposes ot ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n by way of anonymous donation shall be included in its total income and taxed at the rate of 30 per cent. Anonymous donation made to wholly charitable and religious trusts or institutions, i.e. mixed purpose trusts or institutions shall be taxed only if it is for any university or other educational institution or any hospital or other medical institution run by them. Anonymous donation to wholly religious trusts or institutions will not be taxed. 25.3 Anonymous donation has been defined in the new section to mean any voluntary contribution referred to in section 2(24) (iia) of the 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. 25.3 Anonymous donation has been defined in the new section to mean any voluntary contribution referred to in section 2(24) (iia) of the 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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