SOCIETY FOR EMPOWERMENT OF WOMEN YOUTH AND CHILDREN FOR ACTION,,KANPUR vs. THE INCOME TAX OFFICER (EXEMPTION), KANPUR

PER ANADEE NATH MISSHRA, A.M.: (A) The present appeal has been filed by the assessee against the order passed by the Ld. Addl/Joint Commissioner of Income Tax (Appeals) [hereinafter “the Ld. Addl/JCIT(A)”]- Madurai, dated 21.01.2026 for the assessment year 2017-18.

(B) In this case, assessment order dated 07.12.2019 was passed by the Assessing Officer under section 143(3) of Income Tax Act, 1961 (“Act”, for short). In the aforesaid assessment order, an addition of Rs.28,28,543/- was made on account of anonymous donation received by assessee. Further, an addition of Rs.8,84,420/- was also made on the ground that the assessee had not furnished evidence of obligation of income claim to have been utilized. The assessee’s appeal against the assessment order was dismissed by the Ld. CIT(A) vide impugned appellate order dated 21.01.2026. The relevant portion of the impugned order of the Ld. CIT(A) is reproduced as under: -

ITA No.166/LKW/2026 Page 2 of 8 “6. Decision: The assessee society was registered with Registrar of Society U.P under Societies Act. The assessee society was engaged in social work. The assessee society had claimed exemption u/s 11 of I.T. Act on the basis of exemption granted U/s 12A of I.T. Act by the competent Authority. The appellant in the grounds 1 to 3 has opposed against the addition of Rs. 28,28,543/- as anonymous donation u/s 115BBC made by the AO in the assessment order. On perusal of the impugned assessment order, it is seen that the AO noticed in the assessee’s ITR that the society had received voluntary contribution of Rs. 54,24,655/- - during the year under consideration which included Rs. 30,90,775/- from sister contribution and foreign contribution of Rs. 19,27,909/- and in this regard, the assessee had furnished Form No. FC-4 before the AO wherein, the AO found that found the name of donors of foreign contributions were mentioned and no details regarding the name, address of donors from whom voluntary donations received had not been furnished. As per provisions of section 115BBC, anonymous donations means any voluntary contribution referred to in sub-clause (iia) of clause (24) of section 2, 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 may be prescribed. In the assessee’s case, the AO observed that the assessee had failed to discharge the onus as well as burden of proof which was entirely on the assessee to provide the donor’s name, address, etc. to substantiate the claim of genuine voluntary donation and therefore, the claim of voluntary donation amounting to Rs. 30,90,775/- was held by the AO to be as anonymous donation as per provisions of section 115BBC of I.T. Act. The AO further noted that the entire anonymous donation would be charged at the rate of 30% on the aggregate of anonymous donations received in excess of the five percent of total donations received by the assessee or one lakh rupees whichever is higher, The 5% of Rs. 54,24,655/- comes to Rs. 2,71,232/-is higher than Rs. 1,00,000/- and hence, the benefit of e exemption/deduction of Rs. 2,71,232/- was allowed by the AO b the assessee and the balance amount of anonymous donations of Rs. 28,28,543/- (30,90,775-2,71,232) was liable to be charged to tax at the rate of 30% as per provisions of section M5BBC of I.T. Act. Aggrieved by the above addition, the appellant during the acpellate proceedings has filed written submission. The reevant portion of the appellant’s submission is as under: During the year the assessee Society received donation of Rs. 19,27,909 from foreign entities and Rs.30,90,778/- from local entities aggregating to Rs.54,26,655/- in all. The Society credited the entire amount of the donations received to its Income & Expenditure Account. The details and break-up of the same were furnished. An explanation was also filed. The AO has held that since the details of donations received from local entities amounting to Rs.30,90,778/- as sought for have not been provided, the said donations are treated as anonymous donations. It is submitted that the donations received from the local entities are fully verifiable and complete details are available. The entire donations have been received through banking channels. The provisions of section 115BBC are not applicable, because complete record, such as identity indicating the name and address of the person making such contribution / donations as received have been maintained.

ITA No.166/LKW/2026 Page 3 of 8 The gross receipts of the Society are Rs.69,29,485/-including all donations and voluntary contributions inclusive of Rs.30,90,776/- from the local entities. The details and the break-up is as under:

in its income, then question of treating it as income again and making addition does not arise. The assessee has already added the aforesaid amount. As would be apparent from the Income & Expenditure account the amount of Rs.30,90,776/-forms part of the

ITA No.166/LKW/2026 Page 4 of 8 total income, computed by the assessee. Thus, on this ground alone no addition can be made by the AO treating the donation already included in its income as unexplained. Even if it is held that for some reason or the other the aforesaid donation to the extent of Rs.30,90,776/- are in the nature of anonymous donation inspite of the fact that the same has been considered by the assessee itself in the income & expenditure account, it is submitted that they are not "anonymous donation". The reason being that the assessee had maintained complete records as mandated by subsection (3) to Section 115BBC, in as much as, complete name and address of the persons as required were maintained and provided to the AO and also the donation received have been treated to be applied towards the objects as per section 11(1) and 11(2) of the Act 1961 as detailed in the Computation of Income aforesaid. The appellant's submission is duly considered. On verification of the same, it is seen that the appellant has contended that the appellant had maintained complete records such as the name and address of the persons as required by the AO and provided to the AO. The appellant's contention could not be acceptable for the reason that the appellant has not submitted the details of name of persons and their addresses from whom voluntary donation amounting to Rs. 30,90,775/- which was received either during the assessment proceedings or during the appellate proceedings. Hence, the AO's statement in the assessment order that the assessee society has been provided sufficient opportunity to furnish the name and addresses of the persons from whom donations were received but the assessee society has failed to provide the same, is found to be correct. In view of the above, I confirm the addition of Rs. 28,28,543/- as anonymous donation u/s 115BBC made by the AO in the impugned assessment order. Hence, the grounds nos. 1, 2 &3 are dismissed. Ground No.4 The AO has erred on facts in disallowing a sum of Rs. 8,84,420/- incurred towards capital expenditure, which is application of income. Decision: During the assessment proceedings, the AO observed that the assessee had not furnished the evidence for application of income claimed to have been utilised amounting to Rs. 8,85,212/- during the year except furnishing the form No.10 showing accumulation chart giving the figure of utilisation and remaining amount. In absence of any evidence/proof of capital expenditure incurred during the year out of accumulated income of earlier year, the entire amount of Rs. 8,84,420/- on account of capital expenditure was disallowed by the AO. In this regard, the appellant has filed its submission as under: The AO has disallowed Rs.8,84,420/- incurred towards capital expenditure out of accumulated income of earlier year. The details of the amount utilized is as per the Income & Expenditure Account. The sum of Rs.8,84,420/- has been utilized towards the objects for which the same was accumulated. A sum of Rs.8,50,230/- has been incurred for purchase of vehicle and Rs.34,190/- has been incurred for purchase of LCD. Even if it is not utilized for the purpose for which it was accumulated, it shall cease and would be treated as part of the income of the year. Such a proposition came up before the Calcutta High Court, in the case of CIT vs. 189 ITR 656 / 52 Natwarlal

ITA No.166/LKW/2026 Page 5 of 8 Chowdhury Charity Trust Taxman 330 (Cal), wherein it has been held as under: "Section 11 of the Income-tax Act, 1961 Charitable or religious trust - Exemption of income from property held under Assessment year 1978- 79 Assessee-trust accumulated certain amount during accounting years relevant to assessment years 1972-73 to 1976-77 During previous year relevant to assessment year 1978-79 accumulated income ceased to be invested in fixed deposit and assessee accumulated 25 per cent of this deemed entitled to income was Whether assessee 1978-79 accumulate 25 per cent of total income of previous year year relevant to assessment inclusive of deemed income and, therefore, ITO was wrong in assessing entire deemed income Held, yes The assessee-trust accumulated certain amount during the accounting years relevant to the assessment years 1973-74 to 1976-77. During the previous year relevant to the assessment year 1978-79, accumulated income ceased to be invested in fixed deposit with the bank and it was, therefore, deemed to be the income of the trust in the previous year in which it ceased to remain invested or deposited, in terms of clause (b) of sub-section (3) of section 11. The ITO held that the assessee was not entitled to accumulate 25 per cent of this deemed income because permitting it to do so would amount to double benefit to the assessee. He, therefore, assessed the entire deemed income. On appeal, the AAC held that the assessee was quite justified in law to accumulate 25 per cent of the total income of the relevant previous year inclusive of the deemed income under section 11(3) and, therefore, the entire deemed income could not be assessed. On second appeal, the Tribunal upheld the order of the AAC observing that as per law as stood from 1-4-1976 the charitable trusts were permitted to accumulate up to 25 per cent of their income without complying with any formalities or condition and such accumulation was not to be included in the total income. The assessee's right to accumulate 25 per cent of the total income of the previous year extended to the deemed income under section 11(3) added in the circumstances mentioned above. The order of the Tribunal was, therefore, upheld." In view of the above submissions, it is most respectfully prayed that the additions made may kindly be deleted and the appeal be allowed. The appellant's submission is duly considered and verified. From the appellant's submission, it is seen that the appellant has stated that the amount of Rs. 8,84,420/- had been utilized towards the objects for which the same was accumulated and a sum of Rs. 8,50,230/- had been incurred for purchase of vehicle and Rs. 34,190/- had been incurred for purchase of LCD. In this regard, the appellant has contended that even if the accumulation made in the previous year is not utilized for the purpose for which it was accumulated, it shall cease and would be treated as part of the income of the year. In support of its claim, the appellant has relied upon the case law of the Hon'ble Calcutta High Court in the case of CIT vs. Natwarlal Chowdhury Charity Trust - 189 ITR 656/52 Taxman 330 (Cal). The appellant's above argument shall not be acceptable because the appellant has not produced any evidences for the purchase of vehicle and LCD for the said amount of Rs.8,84,420/- was utilized for the

ITA No.166/LKW/2026 Page 6 of 8 purpose for which it was accumulated, Moreover, the case law referred by the appellant is not belonging to the jurisdictional High Court. Under these circumstances, I confirm the disallowance of capital expenditure of Rs. 8,84,420/- made by the AO in the impugned assessment order, which expenditure was incurred during the year out of accumulated income of earlier year, and the same has not been substantiated by the appellant with necessary evidences. Hence, ground no. 4 is dismissed. 7. In the result, the assessee's appeal is dismissed.” (B.1) The present appeal has been filed by the assessee against the aforesaid impugned appellate order of the Ld. CIT(A). In the course of appellate proceedings in Income Tax Appellate Tribunal (“ITAT”, for short), a paper book was filed containing the following particulars: -

(C) At the time of hearing, there was no representation from the assessee’s side. In the absence of any representation from the

ITA No.166/LKW/2026 Page 7 of 8 assessee’s side, the Ld. Departmental Representative was heard. He relied on the assessment order and the impugned appellate order of the Ld. CIT(A). He also contended that the contents of the aforesaid paper book [referred to in foregoing paragraph (B.1) of this order] and the claims made therein require verification at the end of the Assessing Officer. For this purpose, he submitted that the issue in dispute in the present appeal should be restored back to the file of the Assessing Officer for de novo order after due verification of the contents of the paper book, and the claims made by the assessee in the paper book. In view of the foregong, the impugned appellate order of Ld. CIT(A) is set aside; and the issues in dispute are restored back to the file of the Assessing Officer with the direction to pass de novo order in accordance with law, after providing reasonable opportunity to the assessee. All grounds of appeal are treated as disposed off in accordance with the aforesaid directions. (D) In the result, the appeal of the assessee is partly allowed for statistical purposes. Order pronounced in the open Court on 29/04/2026.

Sd/- [ANADEE NATH MISSHRA] ACCOUNTANT MEMBER DATED: 29/04/2026 Vijay Pal Singh, (Sr. PS)

ITA No.166/LKW/2026 Page 8 of 8 Copy forwarded to: 1. Appellant 2. Respondent 3. CIT 4. DR 5. Guard file By order //True Copy//