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Facts
The Revenue appealed against the Ld. CIT(A)'s order which deleted an addition made by the AO on account of anonymous donations received by Vishwatmak Janglimaharaj Ashram Trust for AY 2017-18. The trust, registered under Section 12A, received significant 'Box Donations' and other donations, a portion of which the AO had treated as anonymous and taxed under Section 115BBC(1). The assessee contended it was a charitable and religious trust entitled to exclusion under Section 115BBC(2)(b).
Held
The ITAT, adhering to the principle of judicial propriety, followed its own previous decision in the assessee's identical case for AY 2015-16. It held that the assessee trust was indeed eligible for the exclusion provided under Section 115BBC(2)(b) of the Act. Consequently, charging the anonymous donation under Section 115BBC(1) was deemed unwarranted.
Key Issues
Whether anonymous donations received by a charitable and religious trust registered under Section 12A are exempt from tax under Section 115BBC(2)(b) or taxable under Section 115BBC(1) of the Income Tax Act, 1961.
Sections Cited
250, 115BBC, 11, 13, 12A, 147, 148, 143(3)
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, PUNE BENCHES “B” :: PUNE
Before: DR.DIPAK P. RIPOTE & SHRI VINAY BHAMORE
Assessment Year: 2017-18 Deputy Commissioner of V Vishwatmak Janglimaharaj Income Tax, s Ashram Trust, Aurangabad. At Kokamthan, PO. Jeur Kumbhari, Kopargaon, Ahmednagar – 423601. Maharashtra. PAN: AAATV1688B Appellant/ Revenue Respondent / Assessee Assessee by Shri Abhay A Shastri –AR Revenue by Shri Arvind Desai – Addl.CIT(DR) Date of hearing 12/03/2025 Date of pronouncement 24/03/2025 आदेश/ ORDER
PER DR. DIPAK P. RIPOTE, AM:
This appeal filed by the Revenue is against the order of ld.Commissioner of Income Tax(Appeals)[NFAC] passed under section 250 of the Income Tax Act, 1961; dated 13.11.2024 for Assessment Year 2017-18. The Revenue has raised the following grounds of appeal :
“1. On the facts and circumstances of the case, the Ld. CIT(A) erred in holding that the AO was not justified in holding that the assessee was benefited from exclusion provided u/s 115BBC(2)(B) of the Act and that the anonymous donation was not eligible to charging u/s 115BBC(1) of the Act, without appreciating the fact that the assessee trust is registered by both the charity commissioner under the BPT Act, 1950 and Commissioner of Income Tax, Nashik under the Income Tax Act, 1961 as a 'Charitable Trust' and not as 'Religious-cum-Charitable Trust', which is basic requirement to claim benefit of exemption u/s 11 to 13 of the IT. Act, 1961? 2. On the facts and circumstances of the case, the Ld. CIT(A) erred in holding that the AO was not justified in holding that the assessee was benefited from exclusion provided u/s 115BBC(2)(B) of the Act and that the anonymous donation was not eligible to charging u/s 115BBC(1) of the Act by relying upon the decisions of the Hon'ble Delhi High court in Bhagwan Shri Laxmi Narayan Dham Trust, and Hon'ble supreme Court in Ratilal Panachand Gandhi Vs The State of Bombay (1954) AIR 388 (SC) without appreciating the fact that the facts of the cases relied upon are distinguishable from the instant case.? 3. On the facts and circumstances of the case, the Ld. CIT(A) erred in holding that the AO was not justified in holding that the anonymous donation was not eligible to charging u/s 115BBC(1) of the Act, without appreciating the fact that the assessee trust had been involved mainly in charitable activity during the relevant A.Y. 2017-18 and, therefore, the assessing Officer had been correct in charging the anonymous donation u/s 115BBC(1) of the Act.
On the facts & circumstances of the case, the Ld. CIT(A) erred in appreciating the fact that in most of the donation receipts, the assessee has failed to furnish complete address & identity of donors in respect of other donation of Rs. 2,29,90,160/- because of which 50% of other donation receipt of Rs.2,29,90,160/- which comes to Rs.1,14,95,080/- was treated as anonymous donations.
5. The appellant craves leave to add, alter, amend or omit any or all the grounds of appeal
.” Submission of ld.DR :
2. Ld.DR for the Revenue submitted that during the year, assessee has received amount of Rs.2,61,41,656/- as donations called as “Box Donations”. It has been submitted by the assessee during the assessment proceedings that Name, Address and PAN of the Donors are not available. Therefore, the AO invoked Section 115BBC(3) of the Act. Ld.DR strongly relied on the assessment order. However, ld.DR admitted that on identical facts for A.Y.2015-16, Hon’ble ITAT has allowed assessee’s appeal. Ld.DR further submitted that this fact is mentioned in para 6 and 7 of the ld.CIT(A)’s order. Ld.DR admitted that ld.CIT(A) has allowed assessee’s appeal following the decision of Hon’ble ITAT Pune Bench for A.Y.2015-16.
Submission of ld.AR: 3. Ld.AR for the Assessee invited our attention to ITAT’s order in assessee’s own case in for A.Y.2015-16 and pleaded that the issue is settled in favour of assessee. Ld.AR further submitted that Department’s Appeal before Hon’ble Bombay High Court for A.Y.2015-16 was withdrawn due to Low Tax Effect. The ld.AR in the written submission submitted as under : “7. The Assessee Trust can be said to have carried out both religious and charitable activity from the below heads of expenses in appearing in the audited books of accounts:- Religious:-
1) Gurupournima Ustav Gurupornima utsav is a great religious function held at Kokamthan with around 3 to 4 lacs devotees, on this auspicious day philosophy of great Saint Janglimaharai are preached. 2) Chaudas Ustav Monthly this religious function is held on 14th day of Hindu calendar where many people learn and tame vow of devotion (Guru Mantra) and non-vegetarianism also they are asked to abstain from alcohol and tobacco products 3) Meditation Camp Meditation camp for around 3 day is held where devotees attend and learn various Ways to silent meditation. Around 7-10 thousand people attend such 4 camps are held per year in Kokamthon and in India. 4) Dhyan Shibir & Yoga Shibir Similarly, yoga camps are held by followers around India no charges are there for such camps. 5) Pilgrim Yatra Every year a pilgrimage yatra is held at subsidized rate all around India especially to Kedarnath, Badrinath and Tirupati Balaji, Rameshwaram and Kanyakumari. Charitable:- 1) Education at concessional and subsidised rate The Trust is running a school up to 12th Standard around 5500 students are learning, out of these 3500 are staying in Hostels. 2) Charity to poor and needy people. Every day annadan (free distribution of food) is conducted and around 900 to 1000 people are beneficiaries. Also free clothing is provided for needy people. 3) Medical facility to needy people.
Trust has 3 OPDs at Ashram where free checkups and medicines are provided. Beneficiaries are people around villages. II REGISTRATION UNDER FOREIGN CONTRIBUTION REGULATION ACT (By Ministry of Home Affairs (MHA)) 8. Even Registration of Foreign Contribution Registration Act FCRA (Ministry of Home Affairs) has granted approval under the category of charitable and religious. (Annexure-II) III PRINCIPLE OF CONSISTENCY RES JURIDCATA 9. While passing Assessment Order in the AY 11-12, it is stated that the Trust is Carrying on Charitable as well as Religious Activities. Thus, the fact is accepted by the department also. (Annexure III). Further while granting the Registration recently dated 28/05/2021 the Department again has accepted the application that the Trust is having Mixed purpose le. Charitable as well as Religious. (Annexure - I) Further, Hon'ble ITAT, Pune in for AY 2015-16 vide its order dated 31.07.2023 passed order in favour of assessee on the same facts. Copy of order is enclosed herewith as Annexure - IV Thus, the Revenue is in clearly violation of the principle of consistency by not treating trust as having mix purpose.” Findings &Analysis : 4. We have heard both the parties and perused the records. During the year, assessee has received Rs.2,61,41,656/- as Box Donations. Ld.CIT(A) has allowed assessee’s appeal. The relevant paragraph 5, 6 and part of para 7 are reproduced as under : “5.0 The assessee in its submission contended that the AO wrongly disallowed the box donations of Rs. 2,61,41,656/- and donations received from anonymous persons to the tune of Rs. 2,29,90,160/- The assessee submitted that it is a registered charitable trust u/s 12A of the Act. As per the submissions of the assessee, their trust is entirely working for religious purpose and charitable purpose. The assessee also submitted that their trust is benefited by the exclusion provided under clause (b) of subsection (2) of section 115BBC of the Act and therefore, the donations received by them cannot be treated as anonymous donation as per the provisions of sub-section (1) of section 115BBC of the Act. 6.0 I have perused the assessment order, submissions and appeal documents of the assessee. The AO made addition on the same grounds for A.Y. 2015-16 in assessee's own case wherein the assessee had received donation from anonymous persons and in hundi/box collection. The addition by the AO was deleted by the CIT(A) citing various judicial precedents in favor of the assessee. Afterwards, the revenue filed appeal in ITAT Pune and ITAT also upheld the view of CIT(A) and passed order in favor of the assessee on the same facts) ………………. The facts and circumstances of the case are same for the AY 2017-18 also. Respectfully following order of the Hon'ble ITAT Pune, the addition of Rs.3,51,80,145/- made by the AO is hereby deleted and grounds of appeal filed by the assessee are allowed.” 4.1 Ld.DR for the Revenue has accepted that facts for A.Y.2017- 18 and A.Y.2015-16 are identical. In these facts and circumstances of the case, judicial propriety demands that we must follow the ITAT Pune’s decision in assessee’s own case in for A.Y.2015-16, wherein the ITAT held as under : “………….. we note that the assessee is benefited from exclusion provided under clause (b) of sub-section (2) of section 115BBC of the Act and therefore, in our opinion, charging the anonymous donation under sub-section (1) of section 115BBC does not arrive at all.” 4.2 Therefore, respectfully following the ITAT Pune’s decision in assessee’s own case, we hold that assessee is benefited from exclusion provided under clause (b) of sub-section (2) of section 115BBC of the Act and therefore, in our opinion, charging the anonymous donation under sub-section (1) of section 115BBC does not arrive at all. Accordingly, grounds of appeal raised by the Revenue are dismissed.
In the result, appeal of the Revenue is dismissed. Order pronounced in the open Court on 24th March, 2025.