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TMI Blog2016 (7) TMI 1675X X X X Extracts X X X X X X X X Extracts X X X X ..... e ld. counsel for the assessee has contended that in order to establish the identity of the person from whom donations were received, the assessee has filed their PAN and addresses, details, etc. Therefore, no addition under section 68 of the Act is permissible in the case of charitable society where donation was taken as income in its account. 4. Being aggrieved by this order, an appeal was filed before the CIT(A) who has followed the order of the ITAT Lucknow Bench in the case of ITO Vs. M/s Saraswati Educational Charitable Trust in ITA No. 776/Lkw/2014 wherein it has been held as under : "Having carefully examined the orders of the lower authorities in the light of the rival submissions, we find that undisputedly the assessee has received donation from various persons which was examined by the Assessing Officer. Being not convinced with the creditworthiness, the Assessing Officer has made the addition under 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of donors was not filed or that the donors were not produced, did not necessarily lead to the inference that the assessee was trying to introduce unaccounted money by way of donation receipts. That was more particularly so in the facts of the case where admittedly, more than 75 per cent of the donations were applied for charitable purposes. [Para 10] Further section 68 had no application to the facts of the instant case because the assessee had in fact disclosed the donations as its income and it could not be disputed that all receipts, other than corpus donations, would be income in the hands of the assessee. There was, therefore, full disclosure of income by the assessee and also application of the donations for charitable purposes. It was not in dispute that the objects and activities of the assessee were charitable in nature, since it was duly registered under the provisions of section 12A. [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 th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... evidence in a Court of law, but the ITO is not entitled to make a pure guess and make an assessment without reference to any evidence or any material at all. There must be something more than bare suspicion to support the assessment. In view of the above it is held that the addition of Rs. 1,66,30,000/- as unexplained cash credit has been made by the AO without any material or evidence which cannot be sustained. 4.2 During the appellate proceedings it was also submitted that the provisions of section 115 BBC of the Act were not violated by the appellant trust and the donations received from the nine donors cannot be categorized as anonymous donations. Section 115BBC reads as under: "Anonymous donations to be taxed in certain case 115BBC. (1) Where the total income of an assessee, being a person in receipt of income on behalf of any university or other educational institution 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... income-tax .under sections 11 and 12, subject to the fulfilment, inter alia, of certain conditions of application of income and investment in specified modes. Similarly, income of any university or other educational institution referred to in sub-clause (iiiad) or sub-clause (via) or any hospital or other medical institution referred to in sub-clause (iiiae) orsub- clause (via) or any fund or institution referred to in subclause (iv) or any trust or institution referred to in sub-clause (v) of clause (23C) of section 10, is exempt from income-tax subject to the fulfilment of conditions specified in the said clause. 25.2 With a view to prevent channelisation of unaccounted money to these institutions by way of anonymous donations, a new section 115BBC has been inserted to provide that any income of a wholly charitable trust or institution 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 ins ..... X X X X Extracts X X X X X X X X Extracts X X X X
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