RAJARSHI SHAHU SHIKSHAN SANSTHA INAM DHAMANI,SANGLI vs. ITO EXEMPTION, KOLHAPUR

IN THE INCOME TAX APPELLATE TRIBUNAL
PUNE BENCHES “B”, PUNE

BEFORE DR.MANISH BORAD, ACCOUNTANT MEMBER
AND SHRI VINAY BHAMORE, JUDICIAL MEMBER

आयकर अपील सं. / ITA Nos.1121 to 1126/PUN/2024
Assessment Years : 2012-13 to 2017-18

Rajarshi Shahu Shikshan Sanstha,
A/P. Inam Dhamani,
Tal. Miraj, Dist Sangli – 416416
Maharashtra
PAN : AAATR8726J
Vs.
Income Tax Officer
(Exemption),
Kolhapur
Appellant

Respondent

आदेश / ORDER

PER DR. MANISH BORAD, ACCOUNTANT MEMBER :

The captioned appeals at the instance of assessee pertaining to A.Ys. 2012-13 to 2017-18 are directed against the separate orders dated 20.03.2024 framed by ld.CIT(A),
Pune-11 emanating out of respective Assessment Orders dated
24.12.2019 passed u/s.143(3) r.w.s.147 of the Income Tax
Act, 1961 (in short ‘the Act’).

Appellant by :
Shri Kishor B Phadke
Respondent by :
Shri Amit Bobde &
Shri Shashank Ojha
Date of hearing
:
09.10.2025
Date of pronouncement
:
18.12.2025

ITA Nos.1121 to 1126/PUN/2024
Rajarshi Shahu Shikshan Sanstha

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3. We will first espouse ITA No.1121/PUN/2024 for A.Y.
2012-13 as the lead case. In the instant appeal, assessee has raised following grounds of appeal :

“Grounds of appeal [WITHOUT PREJUDICE TO EACH OTHER]

Α.Υ.12-13

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verification and A.O. has conducted the verification on the test check basis and this fact proved beyond doubt that the appellant trust has maintained all the details of the donors as required by section 115BBC and thus claim of the department that, the appellant has not maintained particulars of donor is incorrect and preserve being contrary to the facts and therefore the addition made on such incorrect finding is patently illegal and deserve to be deleted.

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“11. Without prejudice to other Grounds of appeal, Appellant contends that income from alleged "Anonymous Donations", taxable u/s 115BBC, can't exceed "Total Income" of the Appellant, considering the mechanism emerging from section 115BBC read in tandem and in comparison, with various other sections of Chapter-
XII of ITA, 1961. 12. Appellant also contends that income taxable u/s 115BBC ought not to exceed 'Real Income' of the Appellant. Appellant contends that in absence of any contrary provisions (such as under section 115BBE(2)/115BBH(2), etc.), section 115BBC simply splits the "Total Income" of any assessee into two sub-sets; and; does not further increase the "quantum" of "Taxable Income" as so envisaged under other sections of the said
Chapter-XII
(i.e.
section 115BBE(2)/115BBH(2), etc.).”

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evidences ld. AO has observed that assessee has not maintained books of account for F.Y.2017-18 and F.Y. 2018-
19, assessee has not maintained any detail of the list of donors giving donation during F.Y. 2012-13, no donation receipt books maintained for any of the period starting from F.Y.
2011-12 to F.Y. 2018-19. It is further observed that some of the donors have denied to have given any donation to the assessee, therefore, the donations needs to be taxed u/s.68 of the Act as the assessee has not been able to explain satisfactorily the nature and source of the sum credited in the books. Ld. AO recorded the reasons for reopening to which objections were filed by the assessee. Thereafter, ld. AO after disposing of the objections has concluded the re-assessment proceedings making addition u/s.115BBC of the Act for Anonymous donations at ₹1,36,50,000/- and assessed income at the same amount.

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issues can be raised at any stage. Submissions of ld. Counsel for the assessee with regard to the legal issue raised in Ground
No.1 reads as under :

“Background

A.Y.
Net Surplus/
deficit (in Rs.)
Date of Order
Donation
(in Rs.)
2012-13
20,785
24-12-2019
1,36,50,000
2013-14
82,774
24-12-2019
1,94,03,000
2014-15
1,92,197
24-12-2019
2,00,50,000
2015-16
72,591
24-12-2019
2,51,96,000
2016-17
16,254
24-12-2019
2,34,00,000
2017-18
-20,60,094
24-12-2019
78,00,000

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Rajarshi Shahu Shikshan Sanstha

Page-11+12-Para 6(d)

Since most of the donors have denied having made any donations to the assessee trust, the claim of donations made in the books of accounts from FY 2011-12 to FY 2016-17 are not genuine. Therefore the claimed donations need to be taxed u/s 68 of the I.T Act as the assessee has not been able to explain satisfactorily the nature and source of the sums credited in the books of account.

Page-12-Para 6(g)... last 3 lines...

...substantiate any of the sources of the claimed donations during any of the above financial years...
The assessee…………………………………………………………………………
………………………………………………………………………………………
…………………………………………………… Thus the assessee could not prove the source of the claimed donations credited in the books of account.

Page-12-Para-8... (last 3 lines)

..........................The assessee could not prove the sources of the donations received during the year......................................................

.....You are required to produced these persons on 4/11/2019. If you fail to prove claim of donation received by you in cash amt to Rs.
1.39 CR will be treated as sums credited from unexplained sources and will be taxed u/s 68 of the Income-tax Act.

At Page-39, final show-cause notice was issued, wherein, vide Para-
6.6 (last 2 line), following observations are made.

....as sums credited to the books of account from unexplained sources and taxed u/s 68 of the Income Tax act.

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belief of the learned AO was, to tax the donations of Rs. 1.39 CR as 'unexplained cash credit u/s 68 of the ITA, 1961. 11. Final assessment u/s 115BBC-As against the firm belief till
29/11/2019, the learned AO, vide 147 order dated 24/12/2019, has taxed the donations of Rs. 1.39 CR as 'Anonymous donations'
u/s 115BBC of the ITA, 1961. Ground of Appeal No. 1 & 2

Appellant submits that, there the above two sections orient and aim to tax, two completely different streams of income. Here are the key differences - a. Income of different assesses Vide S. 68, what is taxed is, an Assessee's own income, which such assessee portrays through some credit entries in his books. As against, vide S.
115BBC, what is sought to be taxed is unaccounted money of the donors (and not that of any assessee per se). Explanatory
Memorandum relating to taxation of Anonymous donations, and speech of Honourable Finance Minister is enclosed herewith and marked as Annexure-2. b. Compliances Further, level of compliances u/s 68 is quite tough (i.e. substantiate source, AND, even source of source, in some cases). As against, compliance requirement u/s 115BBC is limited to possession of details of names and addresses of donors.

c. Onus - In Section 68, entire onus to substantiate the genuineness of the sources behind credit entries and other required details is on the Appellant. In Section 115BBC, no onus to substantiate authenticity is casted on Assesseee.

d. Penalty Further, S. 68 additions are lead to penal proceedings which trigger penalty u/s 271(1)(c)/270A, etc. As against, no any Penalty per se, is applicable for taxation u/s 115BBC

As such, forming 'reasons' for one phenomenon, and taxing the same for some different phenomenon, is completely conflicting. Learned AO is incorrect is starting the 147
proceedings for S. 68, continuing the same for S. 68; and concluding the matter for S. 115BBC. As a sequel, it follows, the taxation thrusted u/s 147 w.r.t. S. 115BBC is without any appropriate procedure and such taxation ought not to sustain.

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Another issue is, the roles performed by these two sections. S.
68 converts a non-income credit entry item in books/accounts into, 'income' per se. In other words, S. 68 deems some non- income item into income item, e.g. LOANS / SHARE CAPITAL
/GIFTS, etc. etc. As against, S. 115BBC simply segregates available Total Income into two parts, i.e.

Part-1 -Anonymous donation

Part-2 -Non-Anonymous donation

Section 115BBC further provides for taxation of Part-1 at 30%
rate and Part-2 at normal rates. Hence, it transpires, processes of both these sections are also different. If these tests are applied to the present subject matter, the 'reasons'
recorded for issuance of 148 notice and 'income' sought to be taxed vide 148 notice, appears to be glossed over, and left at that at the point of framing the 147 order. On the contrary, a complete different taxation scheme is triggered. Such a process has been disapproved by the Honourable Bombay
High Court vide decision in case of CIT v. Jet Airways (I) Pvt
Ltd -331 ITR 236. Copy of the said decision is enclosed herewith and marked as Annexure-3. Courts have been disapproving attempts of I-T authorities to assessee/reassessee, (say), to change stand taken at the stage of 148 notice, and stand taken by AO at 147 order stage. Reliance is placed on the following decisions - a) Lark Chemicals P. Ltd. Vs ACIT 99 taxmann.com 312
(SC) (Annexure-4) b) Dhurv Patel v. ACIT-45 taxmann.com 20 (Guj)
(Annexure-5)

In other words, the 'reasons' recorded in the present facts, suffer from handicap of appropriate sub-clause/limb. 'Reason recorded'
and 'Reason' finally deployed are totally different from each other. It is a settled law that, when it comes to reassessment u/s 147, the 'reason' has to be specific and the same can't be extended /
enhanced /supplemented, etc. This ratio emerges from the celebrated decision in the case of Hindustan Lever v. R B Wadkar-
268 ITR 332 (Bom)... (copy enclosed and marked as Annexure-6.)

As per facts, the learned AO, vide Para-7 of the 'reasons' reproduced at Page-12 of the 147 order, appears to have proceeded on the analogy that, some taxable income has escaped assessment. As against, vide Section 115BBC, mere rate of tax is differentiated from normal income. As stated earlier, entire charge of the learned AO at the stage of formation of belief of 'escapement of income' by resorting

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to Section 68 of the ITA, 1961. Had the learned AO proceeded on this analogy, the end-result would have been a NULLITY. Assuming that, the learned AO would have finally concluded that, there is 'escapement' of income by applying section 68, even then, for AY
2012-13, the 'Total Income' would have remained the same. As per facts, the said amt of Rs. 1.36 CR was anyway credited to P & L/1
& E account as 'income' only'. Categorising Appellant's 'donations'
claim, as Section 68 specified 'income' would not have made any change in assessment. The Special Scheme of Taxation of Section 68
income u/s 115BBE at a Special Rate was introduced only from AY
2017-18 and onwards.. Even the negative condition of denial of set- off of any other LOSS was also introduced from AY 2017-18 only. As such, for all years till AY 2016-17, the 'reasons' formed for the belief of 'escapement of income' were specious and leading to a NULLITY.
Appellant relies on CBDT Circular No. 11/2019 dated 19/6/2019
clarifying the scheme of Section 115BBE in this regard (copy enclosed and marked as Annexure-7). Appellant also relied upon the decision in case of PKM Advisory Services P Ltd v. ITO-339 ITR 585
(Guj) in this regard, a copy of which is enclosed and marked as Annexure-8. 15. Contention-4-Approval:

As per facts, the approval availed by learned AO was for proposed taxation of donations u/s 68 of the ITA, 1961. As against, the final taxation is u/s 115BBC. Per se, no approval is sought for taxation u/s 148 for the said Section 115BBC. As an effect, it transpires that, the entire taxation made by learned AO u/s 115BBC is without sanction of higher authorities. Appellant relies on the following decisions in this regard.

Learned AO, vide Para-9.1 of his 147 order, has given an apt TABLE of various notices. Last of such notice is dated 26/11/2019 and contents of the same are stated at Page-45, para 8.2. Till this point of time, there is no any whisper of the issue of 'anonymous donations' in the 147 order. The reproduction of S. 115BBC in Para
9.1 appears to be some sudden development/ new thinking of the learned AO considering objections filed by Appellant till then. Be that, as it may, the issue remains that, for the proposed taxation u/s 115BBC, there was no any Show Cause Notice issued by learned
AO. Which means, per se, Appellant has not been provided opportunity of being heard. Principle of natural justice is vitiated.

“Sub: Written submission/counter arguments on the grounds of appeal raised by the assessee appellant in the above mentioned case -reg.

GROUND NO. 1

In this regard, it is submitted that the validity of reassessment proceedings is to be examined with reference to the existence of a reason to believe that income has escaped assessment and not with reference to the ultimate section under which such income is finally assessed. It is well settled in law that once the AO has validly assumed juri iction u/s. 147 of the Act on the basis of a bona fide belief that income has escaped assessment, any variation in the section or head of income under which the escaped income is ultimately taxed does not invalidate the reassessment proceedings.

In this case, the AO initially believed that the income was taxable u/s 68 of the Act but upon examination during reassessment, determined that it properly falls within the ambit of section 115BBC of the Act. Both provisions address unexplained or unverified receipts as section 68 of the Act dealing with unexplained cash

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credits and section 115BBC of the Act with anonymous donations received by charitable or religious institutions. Thus, the underlying facts and source of escapement remain the same and only the legal characterization has been corrected. Therefore, the reassessment proceedings are validly initiated and completed. The mere change in the section under which the income is ultimately brought to tax does not render the reassessment invalid or without juri iction.

In support of the above contention, the following decisions are relied

(a) CIT v. Sun Engineering Works (P) Ltd. (1992) 198 ITR 297 (SC)

The Hon'ble Supreme Court held that the scope of reassessment is to assess or reassess income which has escaped assessment, and the AO is not confined to the exact items mentioned in the reasons recorded, provided the escapement arises from the same set of facts.

(b) Raymond Woollen Mills Ltd. v. ITO (1999) 236 ITR 34 (SC)

The Supreme Court held that at the stage of reopening, the AO only needs to form a prima facie belief that income has escaped assessment. The sufficiency or correctness of reasons or the specific section is not to be judged at that stage.

In view of the above facts and the decisions relied upon, the ground raised by the appellant may be rejected.

GROUND NO.2

In this regard, the contention of the assessee that no addition has been made on the basis of the reasons recorded for which approval was obtained is factually incorrect. In the present case, the Assessing Officer has made the addition on the very same issue for which the assessment was reopened. The only variation is the section under which the addition has been made, and such a change in the section does not invalidate the reassessment proceedings.

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additions on other issues and the reassessment itself would be bad in law.

However, the decision in Lark Chemicals Pvt. Ltd. is not applicable to the facts of the present case, since the Assessing Officer has made an addition on the very issue for which the assessment was reopened. Furthermore, as per Explanation 3 to Section 147 of the Act (inserted by the Finance (No. 2) Act, 2009 with retrospective effect from 1st April 1989), once an assessment is validly reopened, the Assessing Officer is empowered to assess or reassess the income in respect of any issue, even though such issue was not included in the reasons recorded for reopening. In other words, once juri iction is validly assumed, the A.O. may examine and make additions on all other issues that come to notice during reassessment.

Accordingly, it was held that the Assessing
Officer may independently assess any other income, even if the original reason for reopening does not survive. The Hon'ble Court further explained that an "Explanation" clarifies the scope of the main provision, whereas a "Proviso" restricts it. Therefore, Explanation 3 to Section 147 supports and supplements the main provision, and must be read in conjunction with it. The purpose of an explanation is to elucidate the legislative intent and thereby becomes an integral part of the enactment.

Explanation 3, with retrospective effect from 1st April 1989, thus enables the Assessing Officer to assess, reassess or recompute any source of income other than that referred to in the recorded reasons.
This position has been affirmed by the Hon'ble Punjab & Haryana
High Court in Manjinder Singh Kang v. CIT [2012] 344 ITR 358
(P&H), wherein it was held that reassessment proceedings can validly cover additional issues even if the original reason for reopening does not survive. The same principle was reiterated in CIT v. MehakFinvest (P) Ltd. [2014] 367 ITR 769 (P&H), where the Hon'ble Court held that even if no addition is made on the issue forming the basis of reopening, the Assessing Officer is empowered to make additions on other issues that come to notice during the reassessment.

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Accordingly, in light of the above judicial precedents and the legislative intent of Explanation 3 to Section 147, the contention of the appellant that the reassessment is invalid merely because no addition was made on the original reason is devoid of merit.
Therefore, this ground of appeal may be rejected.”

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2012-13 which already stood scrutinised u/s.143(3) of the Act and the relevant part of the reasons recorded which is related to the issue under consideration reads as under :

“Reasons for reopening the assessment in the case of Rajshri Shahu
Shikshan Sanstha for A.Y. 2012-13 u/s.147 of the Act.

Shri Prakash G. Bhandare (Head Master of Chandrabai Bhauso
Patil Madhyamik Vidyalaya) in his statement stated that he has never collected donations for the trust ever since he has been working for the school beginning from 2004. Similarly Shri Vijay
Patil stated that he has never collected donations for the trust from any villagers.

In view of these statements Shri Vitthal Patil was asked to submit his explanation. No satisfactory explanation has been given by him.
Further, no documentary evidences in respect of details received through Karyakartas was produced by the assessee trust.

g)
During the course of survey action the assessee trust was confronted with the replies given by 26 donors to whom notices U/s 133(6) were issued by the ITO (I & CI) Kolhapur. In these replied the claimed donors denied having made as donations to the assessee trust. The assessee could not provide any answer to the above query. No satisfactory explanation was given by the assessee.

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a)
The assessee has not maintained books of accounts for FY
2017-18 and F.Y. 2018-19. b)
The assessee has not maintained any details or the list of donors in respect o donations of Rs.1,94,03,000/- claimed to be received during FY 2012-13. c)
No donation receipts books have been maintained for any of the period starting from FY 2011-12 to FY 2018-19. d)
Since most of the donors have denied having made any donations to the assessee trust, the claim of donations made in the books of accounts from FY 2011-12 to FY 2016-17 are not genuine.
Therefore, the claimed donations need to be taxed u/s 68 of the IT Act as the assessee has not been able to explain satisfactorily the nature and source of the sums credited to the books of account.

e)
The total claimed donations received by the assessee trust for different financial years is as under :-

F Y
A Y
Donations claimed
2011-12
2012-13
13650000
2012-13
2013-14
19403000
2013-14
2014-15
20050000
2014-15
2015-16
25196000
2015-16
2016-17
23400000
2016-17
2017-18
7800000

Total
109499000

f)
The assessee has claimed that no donations has been received during FY 2017-18. However, it is seen from the bank account statement that cash deposits of Rs.10,93,516/- have been made during FY 2017-18. The assessee again explained the source of cash from donations. The contention of the assessee is not correct as no details of donations have been produced. Further, in reply to Q.No. 17 of the statement the assessee has claimed that no donations were received during the year. Thus, the sources of these cash deposits remain unexplained.

During the course of survey proceedings various statements of donors have been recorded wherein they have denied having paid any donations. Further, the claim of Karyakartas having collected donation on behalf of the trust has also been found incorrect. Thus the assessee has not been able to substantiate any of the sources of the claimed donations during any of the above financial years. The assessee could not even produce evidences of donations received during the current financial year. Thus the assessee could not prove the sources of the claimed donations credited to the books of account.

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Rajarshi Shahu Shikshan Sanstha

In view of the above para no.,3,4,5 and 6and information available on the record of this office, I have reason to believe that the income chargeable to tax to the extent of Rs. 1,36,50,000/- has escaped assessment. I am, therefore, satisfied that it is a fit case for initiating the Proceedings u/s 147 of IT Act, 1961 to assess Rs. 1,36,50,000/- and to assess any other income which may come to the notice during the Assessment Proceedings u/s 147 of IT Act, 1961. 08. As discussed above the assessee could not provide any documents regarding the name of the donors during the course of survey proceedings. Further no donation receipts issued to the claimed donors were provided during the course of survey proceedings since the assessee did not maintain any of them. The assessee also could not explain why the names of the donors appeared in the same order for different assessment years. The assessee could not explain the sources of the donations received during the year. Thus in view of the new facts discovered during the course of survey action it is evident that the assessee had not disclosed full and truly all material fact necessary for his assessment.

In view of the above facts, the provisions of clause (C) of explanation
2 to section 147 are applicable to facts of this case and the assessment year under consideration is deemed to be a case where income chargeable to tax has escaped assessment.

In this case more than four years have lapsed from the end of assessment year under consideration. Hence necessary sanction to issue to the notice u/s 148 has been obtained separately from The Commissioner of Income Tax as per the provision of section 151 of the Act.”

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therefore the additions needs to be taxed u/s.68 of the Act as the assessee has not been able to explain satisfactorily the nature and source of the sum credited in the books of account.

“Respected Sir,

Sub: Objections and submission s for reopening of the assessment for AY 2012-13. In this regard & in continuation of our earlier submission we further respectfully submit & explain as under.

i.
Affidavit of president of Assessee trust of Shri Vitthal
Bhauso Patil.

ii. Copy of Panchnama conducted by state Govt revenue authority i.e. Talathi at the entire premises of the trust on 13/08/2019 after flood.

iii. Damaged donation receipts due to flood as referred in the Panchnama of the Talathi, photo of the same.

In this regard, we would like to further explain and reiterate that the donations are collected by volunteers. This fact is In this regard we would like to further explain and reiterate proved beyond doubt from the statement of volunteers taken by survey team and also statement of Shri Sandip Gabale taken by survey team and also affidavit of volunteers and affidavit of Shri Sandip Gabale. Thus it is further proved that trust has not directly collected any donation.

In such scenario trust has to rely on name and amount of the donation given by the volunteers. The donation receipts mare prepared and issued on the basis of donation details given by volunteers. The lists of donation as and when asked by department are provided which were prepared by clerk who has tried to make list in alphabetical basis and while doing so has various mistake and result of this same name and amount are repeated in the list at same serial nos in different years.

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even during the course of survey All the amounts of the donations are properly accounted and recorded in the books of accounts. Thus the donations are fully disclosed in the return of income. The donations received are credited to income and expenditure account of the trust and hence it is already shown as skin income of the trust. Your proposed action will result into double taxation of same amount. Hence all the donations are out of ambit of the provisions of section 68. Hence we object for reopening of assessment for your proposed action of addition u/s. 68 of the donation amount.”

“The assessee has failed to substantiate its claim of donations being genuine and received from the donors whose names were provided by the assessee. The assessee could not produce any records of the genuineness of donors either during the survey proceedings or ITA Nos.1121 to 1126/PUN/2024
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during the course of assessment proceedings, In view of the above provisions of law, the claimed donations are anonymous donations and need to be taxed U/s 115BBC of the IT Act as the assessee has not been able to explain satisfactorily the sources of the donations received during the year in spite of number of opportunities given to the assessee during the course of assessment proceedings. The assessee has failed to prove the genuineness of donors and the source of claimed donations of Rs.1,36,50,000/- credited to the books of accounts. These sums are therefore treated as "Anonymous
Donations" and are hereby taxed u/s 115BBC of the Income Tax
Act. Penalty proceedings u/s 271(1)(C) for furnishing inaccurate particular of income are hereby initiated separately.

Returned Income
:
₹ Nil

Addition i.
As per para 7
:
Rs. 1,36,50,000/-
Assessed Income
:
Rs. 1,36,50,000/-

“Section 68 :
Cash credits.

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68. Where any sum is found credited in the books of an assessee maintained for any previous year, and the assessee offers no explanation about the nature and source thereof or the explanation offered by him is not, in the opinion of the Assessing Officer, satisfactory, the sum so credited may be charged to income-tax as the income of the assessee of that previous year :

Provided that where the sum so credited consists of loan or borrowing or any such amount, by whatever name called, any explanation offered by such assessee shall be deemed to be not satisfactory, unless,—

(a) the person in whose name such credit is recorded in the books of such assessee also offers an explanation about the nature and source of such sum so credited; and (b) such explanation in the opinion of the Assessing Officer aforesaid has been found to be satisfactory:

Provided further that where the assessee is a company (not being a company in which the public are substantially interested), and the sum so credited consists of share application money, share capital, share premium or any such amount by whatever name called, any explanation offered by such assessee-company shall be deemed to be not satisfactory, unless—

(a) the person, being a resident in whose name such credit is recorded in the books of such company also offers an explanation about the nature and source of such sum so credited; and (b such explanation in the opinion of the Assessing Officer aforesaid has been found to be satisfactory:
Provided also that nothing contained in the first proviso or second proviso shall apply if the person, in whose name the sum referred to therein is recorded, is a venture capital fund or a venture capital company as referred to in clause (23FB) of section 10.”

Section 115BBC :

Anonymous donations to be taxed in certain cases.
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 sub- clause (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 (23C) of section 10 or any trust or institution referred to in section 11, includes any income by way of any anonymous donation, the income-tax payable shall be the aggregate of—

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(i) the amount of income-tax calculated at the rate of thirty per cent on the aggregate of anonymous donations received in excess of the higher of the following, namely:—

(A) Five per cent of the total donations received by the assessee; or (B) One lakh rupees, and (ii) the amount of income-tax with which the assessee would have been chargeable had his total income been reduced by the aggregate of anonymous donations received in excess of the amount referred to in sub-clause (A) or sub-clause (B) of clause (i), as the case may be.

(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.
(3) For the purposes of this section, "anonymous donation" 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.”

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Act. On the other hand, section 115BBC is applicable to Anonymous donations where the donations are already recorded in the books of account as income but in case where the persons receiving such contribution does not maintain record of the Identity indicating the name and address of the persons making such contribution and such other particulars as may be prescribed then such Anonymous donations are subject to income tax calculated @30% on the aggregate of the Anonymous donations received in excess of the higher @5% of the total donations or ₹1.00 lakh and the amount of income tax with which the assessee would have been chargeable had his total income being reduced by the aggregate of Anonymous donations received in excess of the amounts referred in sub- clause (a) and sub-clause (b) of section 115BBC(1)(i) of the Act.
It therefore shows that only for not maintaining proper record of the Identity indicating the name and address of the person to make such contribution and such other particulars as prescribed in section 115BBC of the Act is invoked. Whereas in case of section 68 of the Act if the assessee is unable to explain the nature and source and more particularly the Identity, creditworthiness of the cash creditor and the genuineness of the transaction, then such credits appearing in the books of account can be taxed as income u/s.68 of the Act. We further observe that the compliance level of section 68
is more hard and even in some cases source of source is also asked for by AO whereas the compliance requirement u/s.115BBC is limited to possession of details of names and addresses of donors.

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18. We further observe that the penalty provisions invoked in case of addition made u/s.68 of the Act are under section 271(1)(c)/270A of the Act whereas no penalty per se is applicable for income added u/s.115BBC of the Act. We also observe that section 68 converts any credit entry not shown as income in the books of account, into income. For example unsecured loan, share capital, other capital receipts, share premium, sundry creditors etc. whereas in case of section 115BBC of the Act the donations are already recorded in the books as income. The above discussion indicates that section 68/115BBC of the Act are applicable under different set of facts and works on different path and they cannot be substituted for one another.

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“14. Conention-3-Erroneous/Improper charge of escapement of income

As per facts, the learned AO, vide Para-7 of the 'reasons' reproduced at Page-12 of the 147 order, appears to have proceeded on the analogy that, some taxable income has escaped assessment. As against, vide Section 115BBC, mere rate of tax is differentiated from normal income. As stated earlier, entire charge of the learned AO at the stage of formation of belief of 'escapement of income' by resorting to Section 68 of the ITA, 1961. Had the learned AO proceeded on this analogy, the end-result would have been a NULLITY. Assuming that, the learned AO would have finally concluded that, there is 'escapement' of income by applying section 68, even then, for AY
2012-13, the 'Total Income' would have remained the same. As per facts, the said amt of Rs. 1.36 CR was anyway credited to P & L/I &
E account as 'income' only'. Categorising Appellant's 'donations'
claim, as Section 68 specified 'income' would not have made any change in assessment. The Special Scheme of Taxation of Section 68
income u/s 115BBE at a Special Rate was introduced only from AY
2017-18 and onwards. Even the negative condition of denial of set- off of any other LOSS was also introduced from AY 2017-18 only. As such, for all years till AY 2016-17, the 'reasons' formed for the belief of 'escapement of income' were specious and leading to a NULLITY.
Appellant relies on CBDT Circular No. 11/2019 dated 19/6/2019
clarifying the scheme of Section 115BBE in this regard (copy enclosed and marked as Annexure-7). Appellant also relied upon the decision in case of PKM Advisory Services P Ltd v. ITO-339 ITR 585
(Guj) in this regard, a copy of which is enclosed and marked as Annexure-8.”

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held against the Revenue and quashed the assessment order observing as follows :

“2. The petitioner as an individual, for the assessment year 2008-09
filed his return of income on 3.3.2009 showing total income of Rs.4,43,830/-. During the period relevant to the assessment year, the petitioner had sold a residential property and claimed exemption under section 54 of the Income-tax Act ("the Act" for short). Amount which remained unutilized was deposited by the petitioner with the State Bank of India as under:—
(a) SBI Capital Gains Savings Bank Account Rs.2,00,000/-
(b) SBI Capital Gains Deposit Scheme Rs . 37,00,000/-
3. Assessing officer undertook scrutiny of the return. During the course of assessment, various queries were raised by the Assessing
Officer and replied by the petitioner. Eventually, the Assessing
Officer passed an order of assessment dated 20.8.2010 making no additions to the total income of the assessee. In the body of the assessment order, he noted that the assessee had derived income from salary, from house property, profit from the firm as also capital gain. It is this scrutiny assessment the respondent desired to reopen for which impugned notice within the period of 4 years from the end of relevant assessment year came to be issued. The petitioner was supplied the reasons recorded by the assessing officer for issuing such notice with reasons read as under:—

"In this case, you have filed its return of income on 03.03.2009
declaring total income of Rs. 4,43,830/-. Further, assessment order u/s.143(3) of the Act was finalized in the case on 20.08.2010
determining total income at Rs. 4,43,810/-. Verification of case record of your revealed and your income from and capital gain and was allowed exemption of capital gain income under section 54E of the Act. For Rs.37,00,000/- invested in State Bank of India term deposit for 40 days up to 366 days i.e. for less than three years. As per provision quoted above you are not entitled to get exemption for investment less than three years."

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6. On the basis of documents on record and the submissions made before us following aspects emerge:

(1) Assessment previously framed after scrutiny is sought to be reopened within a period of four years from the end of relevant assessment year. There is nothing conclusive on record to suggest that the question of assessee's claim for exemption from capital gain under section 54 was examined by the Assessing Officer.
(2) Undisputedly, however, the claim of the assessee was under section 54 and not 54E of the Act.
(3) The Assessing Officer in the reasons recorded desired to disallow the claim on the ground that as required under section 54E of the Act, the assessee did not invest the surplus for a minimum period of 36 months.
(4) Though through the affidavit-in-reply it is now pointed out that reference to section 54E is mere typographical error and the intention was to refer to section 54 of the Act, we are of the opinion that such stand is wholly incorrect. Had this been a case of mere typographical error, we would have ignored the mistake and referred to the correct statutory provision. The fact that reference under section 54E was however, not an error is manifest from the reasons recorded. It referred to the requirement of investing the surplus fund for a minimum period of 36 months. Such requirement flows from section 54E of the Act and not section 54. Section 54 in fact requires the assessee to acquire a new unit within a year or build himself within three years. In the later case he has to invest the surplus in specified investments. This was thus not a mere typographical error but a conscious decision on the part of the Assessing
Officer to disallow the exemption claimed, for breach of the requirement of section 54E of the Act.
7. What thus emerges from the above discussion is that the reasons on which the notice for reopening is issued lacks validity. Section 54E of the Act was neither applicable nor sought to be applied by the assessee. The question of denying any such claim under the said provision for breach of condition therein therefore simply did not arise. It is well-settled that notice for reopening has to be sustained and supported only on the basis of reasons recorded by the Assessing Officer and not with the help of extraneous ground, material or possible improvement. Reference in this respect can be made to the decision of this Court in the case of Aayojan
Developers v. ITO [2011] 335 ITR 234/10 taxmann.com 226/201
Taxman 154 (Mag.) (Guj).

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21. We also take note of the judgment of Coordinate Bench,
Mumbai in the case of M/s. Lark Chemicals P. Ltd. Vs. ACIT –
ITA No.2636/M/2013, order dated 06.02.2015 where the Tribunal on finding that the reopening was on the suspicion of bogus billing but the same was proved to be wrong as the addition has been made in respect of share application money received and the assessment order has been quashed on this count by observing as follows :

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affirming the order of the Hon’ble High Court where it has been held that in the order passed consequent to initiation of re-assessment proceedings, had not confirmed addition attributable to reasonable belief of Assessing Officer while issuing reopening notice.

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21. Having recorded our finding that the impugned notice itself is beyond the period of four years from the end of the assessment year
1996-97 and does not comply with the requirements of proviso to section 147 of the Act, the assessing officer had no juri iction to reopen the assessment proceedings which were concluded on the basis of assessment under section 143(3) of the Act. On this short count alone the impugned notice is liable to be quashed and set aside.”

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given for A.Y. 2012-13 would apply mutatis mutandis to the remaining appeals for A.Yrs. 2013-14 to 2017-18. 26. Since assessee succeeds on the legal grounds, dealing with the remaining grounds/additional grounds raised by the assessee would be merely academic in nature and therefore held to be infructuous.

Order pronounced on this 18th day of December, 2025. (VINAY BHAMORE)
ACCOUNTANT MEMBER

पुणे / Pune;
दनांक / Dated : 18th December, 2025. Satish

आदेश क ितिलिप अ ेिषत / Copy of the Order forwarded to :

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