DCIT CC-5(2) CENTRAL RANGE-5, MUMBAI vs. JAYANAND RELIGIOUS TRUST, MUMBAI

This appeal is filed by The Deputy Commissioner Of Income Tax – Central Circle 5 (2), Mumbai (The learned Assessing Officer) against the appellate order passed by the Commissioner Of Income Tax, (Appeals) – 53, Mumbai [The learned CIT (A)] for A.Y. 17-18 passed on 22nd April, 2022, by which the appeal filed by the assessee against the assessment order passed under Section 143 (3) read with Section 147 of The Income Tax Act, 1961 ( the Act) dated 17th March, 2022 by the learned Assessing Officer wherein addition of ₹22,925,500/– was made Under Section 68 of The Act as unexplained, unverifiable and unsubstantiated receipt, was deleted.

It has the object to erect, build, construct, reconstruct, repair, maintained and renovate, takeover and maintain Derasars , Upasharays , Paushad Shala , lecture halls, palkhis, Ardhana Bhavans , meant for stay of sadhus and Sadhvis of Swetambar Murtipujak Jain sangh along with other religious purposes. Assessee filed its return of income on 18th October, 2017 05. declaring total income of ₹2,23,790/–. This return was processed under Section 143 (1) 27th March, 2019. 06. Subsequently, survey under Section 133A of The Act was conducted on assessee’s premises on 29th March, 2017 by the Income Tax Officer (Exemption) – 1 (4), Mumbai. It was found that during the period assessee has deposited cash of ₹2,90,58,000/- in its bank accounts. During survey, the assessee neither established identity of the donors nor nature and source of cash deposited in the bank account. During the survey, assessee surrendered ₹6,132,500/- offering it under PMGKY.

When the assessee was questioned about the above deposit, assessee submitted a reply stating that cash is deposited in HDFC bank account in the month of November, 2016 as on 11th November, 2016 a sum of ₹148,58,000/- and on 19th November, 2016 a sum of ₹142 lakhs was deposited in the bank account. It was submitted that the above cash is received mainly for the construction of Jain temple at Lonavala. The trust received above voluntary contribution from followers of the religious head. Accordingly, above voluntary contributions are shown as income under Section 12 of The Act, as being income received from the property held under trust wholly for religious purposes. The learned Assessing Officer considered the submission of the assessee and held that assessee did not maintain any record of the identity indicating the name and address of the persons making above donations and further, the assessee has not provided details of the person depositing the above sum in the bank account. The learned AO considered the statement of the trustee recorded during the survey and held that cash donation received of ₹290,58,000/- received from unexplained sources and unidentifiable persons. Out of which assessee has already declared a sum of ₹6,132,500/- as undisclosed income and the balance sum of ₹2,29,25,500/- which is unexplained,

Aggrieved with the assessment order, assessee preferred appeal before the learned CIT (A). The learned CIT (A) deleted the above addition holding that as per the provisions of clause (2) of Section 115 BBC of the Act anonymous donation received by the charitable trust having object of religious trust are exempt from taxation. He following the decision of the honourable Delhi High Court in CIT (Exemption) versus other one Shri Lakshmi Narayan Dham trust 62 taxman.com 358 (Delhi) deleted the above addition.

The learned Assessing Officer aggrieved with the appellate order has preferred this appeal. The learned Departmental Representative vehemently supported assessment order. He referred to the provisions of Section 68 and 115BBC of the Act with respect to anonymous donations and submitted that same are required to be taxed at the maximum marginal rate and therefore, the learned CIT (A) is not correct in deleting the above addition.

The learned Authorized Representative submitted that taxation of anonymous donations received by wholly charitable trust or institution is introduced with effect from A.Y. 2007–08. He submitted that in anonymous donations made to a wholly charitable and religious trust or

We have carefully considered the rival contentions. Facts show that assessee is religious trust. In the case of the assessee trust, the addition was made under Section 68 of the Act of the sum, which is already disclosed as income by the assessee trust in the nature of donation. In this case, the survey was conducted by the income tax department. The donation received by the assessee religious trust from various donors is reflected in the donation receipts, which were impounded during survey proceedings. The amount of donation received is treated as receipts in the Income and Expenditure account as voluntary contribution. Hon'ble Delhi High Court in DIT Vs. Keshav Social and Charitable Foundation 278 ITR 152 has held that “11. Section 68 of The Act has no application to the facts of the case because the assessee had in fact disclosed the donations of Rs. 18,24,200 as its income and it cannot be disputed that all receipts, other than corpus donations, would be income in the hands of the assessee. There was, therefore,

However, provisions of Section 115BBC of the Act were enacted to tax such donations in hands of certain charitable trust and institutions at the rate of 30%.

Ground no. 2 is with respect to the entertainment of the revised grounds of appeal filed by assessee during the appellate proceedings without granting the opportunity to the AO and thereby provisions of rule 46A are contravened, the learned departmental representative did not advance any argument on the same, therefore, it is dismissed. 017. Ground no. 3 of the appeal is with respect to the same addition of ₹ 22,925,500/– under Section 68 of the Act. The learned Assessing Officer in grounds of appeal has referred to the decisions of the Hon'ble Supreme Court, however, on careful consideration of both these decisions of the Hon'ble Supreme Court, we find that those are not applicable to the facts of this case because, the decisions of the Hon'ble Supreme Court are respect to the assessee individuals whereas it is a case of a trust before asked which has already offered the above sum as income as

In the result, appeal filed by the assessing officer is dismissed