TMI Blog2022 (3) TMI 424X X X X Extracts X X X X X X X X Extracts X X X X ..... gious community or caste. If the purpose of the assessee trust is not indicative of wholly religious purpose but collectively indicate both charitable and religious purpose then it has to be treated cumulative and would be outside the purview of section 13(1)(b). AO justification invoking the provisions of section 115BBC - Only those anonymous donations are to be disallowed subject to a specific direction if it is for any university, educational institution or medical institution run by such institution which is not the case here. Here it is not the case that any anonymous donation made is with a specific direction that such donation is for any university or other educational institution or any hospital or other medical institution run by such trust or institution. In fact nowhere there is any finding or it is a matter of fact that assessee is running any such educational or medical institution. Accordingly, we do not find any infirmity in the order of the ld. CIT (A). We are also unable to appreciate the arguments of the ld. CIT DR that, since assessee had been granted certificate u/s 80G which cannot be granted if the trust/institution is wholly and substantially for reli ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... st the separate or independent provisions of Section 11, 12, 12A, 12AA 13 and these provisions are independent code in itself in Chapter III of the Income Tax Act, 1961 and claim of depreciation u/s 32 comes under Chapter IV of the Act under the head D Profit and Gains of Business or Profession and depreciation is allowed when capital assets are used for the purpose of business? 5. Whether ld. CIT (A) has erred in allowing the appeal of the assessee by ignoring the facts that the assessee is not eligible for any type of deprecation as the entire expenditure for the purpose of capital assets is allowed as a deduction and the same is treated as application of income u/s 11(1) and claiming depreciation on the same capital assets is a double deduction and is not as per law as these capital assets are not used for the purpose of business or profession as provided u/s 32(1)? 3. Facts in brief are that, assessee society was granted registration u/s 12A vide certificate dated 24.02.2000, looking to its aims and objects which were charitable in nature as defined u/s 2(15) of the Act. The main aims and objects of the assessee society were to provide relief and medical help ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iable donors as per 133(6) 19,72,000 As mentioned in above para Donors below ₹ 10,000/- no details provided 7,96,52,529 As mentioned in above para Total 8,79,20,100 5. Thus, AO held that assessee could not substantiate the corpus donation of ₹ 8,79,20,100/-. He again called for the details of voluntary donation amounting to ₹ 11,99,62,848/- and found that there are donations less than ₹ 1,000/- for more than ₹ 10 crores and more than ₹ 1,000/- was ₹ 1.13 crores. However, no details of general donation of less than ₹ 1,000/- was given by the assessee. Accordingly, he disallowed voluntary donation of ₹ 10,97,53,280/-in the following manner :- After consideration of the details filed, the following general donations have remained unverifiable due to incomplete addresses, non-confirmation by the respective donor s and non-submission of details by the assessee itself. Particulars Amount (Rs.) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ble trust/ institution. 4.1.4 From a plain reading of the provisions of section 115BBC and also Circular No. 14/2006 dated 28.12.2006 it is clear that these provisions will not apply in a case where anonymous donations are received by a trust institution created for religious purposes. In case of partially religious and partially charitable organizations, anonymous donations received shall be subjected to tax it the donations have been received with the specific direction that such donation is for a university, education situation or hospital or medical institution run by such trusts or institutions. 4.1.5 Looking to the case of the assessee, some of the objectives of the assessee trust as per the trust deed, a copy of which was filed during the appellate proceedings, are as follows: 1. To create of sense of brotherhood, communal social harmony, cooperation, love and affection amongst general public at large through spiritual advancement for the attainment of national unity and global peace. 2. To organize/arrange spiritual discourses, sadhna camps, meditation camps/centres and also to establish or open/run and manage yoga, Meditation centre and sp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (Delhi) and decision of Hon ble Delhi High Court affirming the said decision and looking to the aims objects of the assessee, ld. CIT (A) held that assessee is engaged in religious and charitable activities which are in the nature of socialspiritual in nature. He also observed that in subsequent assessment year 2013-14 and 2014-15, Department itself has held that the assessee is carrying out socio-spiritual in nature and enormous donations have been accepted. Accordingly, Ld. CIT(A) held that assessee s activities being spiritual in nature is religious in nature and also charitable in nature and would be qualified under the exception of section 115BBC(2)(b), therefore, AO was not justified in invoking the provisions of section 115BBC. 9. As regards disallowance of depreciation as application of income, he relied upon the decision of Hon ble Delhi High Court in the case of DIT (E) vs. Indraprastha Cancer Society (2015) 53 taxmann.com 463 (Delhi) wherein the assessee has been held to be allowed for depreciation for religious institution also. He further noted that this issue has been led at rest by the Finance Act, 2014 w.e.f. assessment year 2015-16 and subsequent years. Th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... various courts. 11. Ld. counsel for the assessee strongly relied upon the order of the ld. CIT (A) and also submitted that assessee s case has been under scrutiny for various past and subsequent years u/s 143(3) wherein not only the assessee has been accepted religious and charitable institution but also carrying out social activities and all petty small donations have been allowed. In support, he also filed copies of various assessment orders. 12. We have carefully considered the submissions and gone through the impugned order as well as material placed on record. The case of the AO was that though assessee is a charitable institution carrying out the charitable activities, however has disallowed donations made for the corpus fund and voluntary donation on the ground that the same could not be verified by the assessee and accordingly he has taxed the donations under the provisions of section 115BBC(1)(i). First of all, from the perusal of the aims objects as incorporated by the ld CIT (A) in para 4.1.5 as incorporated (supra), we find that the assessee s activities are mixed of religious, charitable and social activities. The religious activities have to be given a wide tr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or any anonymous donations received by any trust of institution created or formed for religious purpose or created for charitable purpose, therefore, in assessee s case this exception is not available as assessee is carrying out activities which are mainly socio-economic activities. Sub-section (2) of section 115BBC reads as under :- (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 other than any anonymous donation made with a specific direction that such donation is for any university or other educational institution or any hospital or other medical institution run by such trust or institution. 15. Thus, section 115BBC does not apply to any institution or trust created or established wholly for religious purposes. CBDT vide its Circular No.14/2006 dated 28.12.2006 has categorically clarified that anonymous donations made to wholly charitable and religious institutions, i.e. mixed purpose institution, shall be taxed only if it is hav ..... X X X X Extracts X X X X X X X X Extracts X X X X
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