ASHA MEMORIAL TRUST,BHUBANESWAR vs. A.C.I.T (EXEMTION CIRCLE), BHUBANESWAR, BHUBANESWAR

It was submitted by the ld. AR that the assessee is a charitable trust having registration u/s.12A of the Act. It was the submission that the assessee is running an educational institution under the name and style as “Kalinga Bharati Residential College”. It was the submission that the return filed by the assessee came to be processed and an addition of Rs.53 lakhs was made alleging the same to be anonymous donations. It was submitted before the AO that the donations had been brought by the Chairman of the assessee trust; the source from which the Chairman brought the funds was not known to the assessee. The donation was recorded in the name of the Chairman in the books of the assessee trust. The Chairman of the assessee trust had committed suicide on 17.05.2017. It was the submission that the donations having been received from the Chairman, just because the source of the funds from which the Chairman had brought the funds was not known to the assessee, the same would not be anonymous donations in the hands of the assessee. The ld. AR has placed before us the copy of ledger account in the case of Janaki Ballava Padhi (deceased Chairman), wherein the receipts are shown to have been through bank account of Punjab National Bank and the receipts have been issued in the name of the deceased Chairman itself. The ld. AR has also placed before us the copy of the schedule forming the part of the income and expenditure accounts wherein under the head “other incomes”, the donations of Rs.53 lakhs had been specifically shown. This amount has been applied for the activities of the trust and the income and expenditure accounts shows excess of expenditure over income to an extent of Rs.4,01,32,246/-. The AO has not doubted the application shown by the assessee trust. It was the submission that the addition has been made and the same has been brought to tax by applying the provisions of Section 115BBC of the Act as anonymous donations, when the donation itself was nor an anonymous donation, since the same was clearly from the deceased Chairman and also recorded in his name.

In reply, ld. Sr. DR submitted that the amount of Rs.53 lakhs was anonymous donations, insofar as the source of the donations in the hands of the Chairman of the assessee trust was not available. It was the submission that the order of the ld. CIT(A) and that of the ld. AO deserves to be upheld.

We have considered the rival submissions. A perusal of the ledger account clearly shows that the amount of Rs.53 lakhs has been received from the Chairman of the assessee trust. If at all the addition could have been made on account of non-availability of source, it could have been done only in the hands of the Chairman. As far as the assessee trust is concerned, the money has been received from the Chairman(now deceased), the same would not constitute anonymous donation within the provisions of Section 115BBC of the Act. This being so, as the donee to the assessee trust is categorically identified as the deceased Chairman and the receipts have been issued in the name of the Chairman, the amount of Rs.53 lakhs does not constitute anonymous funds and consequently the addition made by the AO and confirmed by the ld. CIT(A) stands deleted. 5. In the result, appeal of the assessee is allowed. Order dictated and pronounced in the open court on 05/08/2024.