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Income Tax Appellate Tribunal, PUNE BENCHES “SMC”, PUNE
Before: DR.MANISH BORAD
आदेश / ORDER
PER DR. MANISH BORAD, ACCOUNTANT MEMBER :
This appeal filed by the assessee pertaining to the assessment year 2016-17 is directed against the order dated 14.06.2024 passed by National Faceless Appeal Centre, Delhi u/s.250 of the Income Tax Act, 1961 [in short ‘the Act’] which in turn is arising out of Assessment order passed u/s.143(3) of the Act, dated 21.12.2018.
Brief facts of the case are that the assessee is a Charitable Trust and registered u/s.12A of the Act. Return of income for the A.Y. 2016-17 furnished on 27.09.2016 declaring Nil income. After the case being selected for scrutiny through CASS followed by serving of valid notices u/s.143(2)/142(1) of the Act, ld. AO called for various details to examine the gross receipts as well as other items of Income and Expenditure account and Balance Sheet. Ld. AO considering the submission of assessee and the details furnished made certain additions assessing the income at Rs.23,79,260/-. The assessee carried the matter before the ld.CIT(A) and partly succeeded and now the assessee is in appeal before this Tribunal raising the following grounds of appeal :
“1. The learned CIT(A) NFAC erred in law and on facts in confirming the addition made by the Ld. Exemption Ward 1(1), Nashik (hereinafter referred as Learned AO)determining total income amounting to Rs. 12,00,000/-instead of Rs.Nil, as per filed return of income.
2. The learned CIT(A) NFAC erred in law and on facts in treating the voluntary contributions received by the appellant amounting to Rs.22,00,550/-, as anonymous donations, and erred in taxing the same u/s 115BBC of the IT Act, 1961.
The learned CIT(A) NFAC erred in law and on facts in making addition of Rs.12,00,000/- on account of alleged unexplained liabilities of advances and rent & other deposits and erred in treating the same as unexplained income.
Nasik Rotary Charitable Trust 4. The appellant craves leave to add, alter, clarify, explain, modify, or delete any of the grounds of appeal
, and to seek any just and fair relief.”
3. With regard to Ground No.2 where the ld.CIT(A) has sustained the addition for Anonymous donations of Rs.22,00,550, Ld. Counsel for the assessee submitted that the said addition was made for incomplete details furnished before the lower authorities. Now the assessee has complete details of the donations received which are mostly through banking channel and details of the persons giving donations along with their addresses are available and the same if deemed fit may be examined by the lower authorities. In support, request for acceptance of additional evidences has been filed today. Additional evidences has been furnished at pages 131 to 160 of the paper book.
As regards Ground of appeal No.1 is concerned, ld. Counsel for the assessee submitted that the same comprises of two amounts i.e. Rs.2.00 lakh and Rs.10.00 lakh. As regards Rs.2.00 lakhs, he submitted that the assessee trust received Rs.10.00 lakh from another branch of the Rotary Charitable trust and the same was repaid in two parts, Rs.8.00 lakh and Rs.2.00 lakh through banking channel. The ld.CIT(A)/NFAC has given relief for Rs.8.00 lakh on Nasik Rotary Charitable Trust observing the name of the sender trust in the bank statement but for the remaining Rs.2.00 lakh since the name of the sender trust was not appearing in the bank statement he sustained the addition. Ld. Counsel for the assessee referred to the bank statement of both the trust, i.e. assessee as well as the sender namely Rotary Club, Nashik and also referred to a letter of Rotary Club, Nashik to prove that Rs.2.00 lakh was also paid to the same club and therefore no addition for Rs.2.00 lakh is justified.
5. As regards the remaining Rs.10.00 lakh addition, he submitted that the basis of this addition was journal entry made in the voucher wherein donation paid was debited and donation payable was credited and this credit amount was appearing in the balance sheet and for lack of necessary explanation ld. AO as well as ld.CIT(A)/NFAC confirmed the same. He submitted that no actual transaction took place and it was merely a journal voucher and the matter may be restored to the file of AO for necessary verification.
6. On the other hand, ld. Departmental Representative vehemently argued supporting the order of ld.CIT(A)/NFAC.
Nasik Rotary Charitable Trust 7. I have heard the rival contentions and perused the record. In Grounds of appeal No.2 where the assessee has challenged the finding of ld.CIT(A)/NFAC sustaining the addition of Rs.22,00,550/- on account of anonymous donation liable to be taxed u/s.115BBC of the Act, I notice that ld.CIT(A)/NFAC has stated that the assessee has received the alleged sum in cash for which no details were furnished. However, before me, ld. Counsel for the assessee referring to pages 131 to 160 of the paper book along with request for acceptance of additional evidence has demonstrated that the assessee trust has complete details of the donations received/including the Date, Mode of receipt, Receipt number, Name of Donor, Address of Donor and Amount and major portion of such amount has been received through Banking Channel and mostly used for giving donation to the victims of Nepal Earthquake. Details have also been furnished stating that out of the total sum of Rs.84,22,755/- Rs.23,55,705/- was received for Nepal Earthquake Donation of which only Rs.2,41,033/- was in cash and the other donation of Rs.10,67,050/- also includes Rs.5,05,600/- in cash. These details prove that facts placed before ld.CIT(A)/NFAC were incomplete and complete details of donations received through banking channel as well as Nasik Rotary Charitable Trust through cash were not placed before the lower authorities. Considering the fact that assessee is a Charitable trust and the details have been prepared, I in the interest of justice and being fair to both the parties, deem fit to accept the request for admission of additional evidence and remit the issue to the file of Jurisdictional Assessing Officer to examine the veracity of claim of the assessee wherein complete details of the donors have been furnished claiming that no anonymous donations have been received by the assessee. Ld. DR is fair enough not to oppose this request. I hereby restore this issue raised in Ground of appeal No.2 to the file of ld. AO for necessary verification and examination. Ground of appeal No.2 is allowed for statistical purposes.
Apropos Ground of appeal No.3 where the ld.CIT(A)/NFAC has confirmed the addition of Rs.12.00 lakh I find that the same comprises two amounts, i.e. Rs.2.00 and Rs.10.00 lakh. Rs.2.00 lakh addition is part of the transaction entered into between the assessee and Rotary Club, Nashik. Sum of Rs.10.00 lakh was received from Rotary Club, Nashik on 08.10.2015 through banking channel and the same was returned back to Rotary Club, Nasik Rotary Charitable Trust Nashik, in two parts, i.e. Rs.2.00 lakh on 20.05.2016 and Rs.8.00 lakh on 01.06.2016. Confirmation to this effect has been placed at page 161 of the paper book. Ld.CIT(A)/NFAC was satisfied with the explanation for repayment of Rs.8.00 lakh but for Rs.2.00 lakh ld.CIT(A)/NFAC was not satisfied because the name of the recipient was not appearing in the bank statement of the assessee. Before me, ld. Counsel for the assessee has placed the copy of bank statement of Rotary Club, Nashik as well as bank account of the assessee trust and I find that Rs.2.00 lakh which was withdrawn from the assessee’s bank account on 20.05.2016 vide Cheque No.6660 has been deposited in the account of Rotary Club on the very same day. Since this transaction has been verified, I am of the view that no addition of Rs.2.00 lakh is called for. Finding of ld.CIT(A)/NFAC is set aside to this effect and addition of Rs.2.00 lakh is deleted.
9. Now coming to remaining addition of Rs.10.00 lakh sustained by the ld.CIT(A)/NFAC the basis of this addition was liability standing the balance sheet at Rs.10.00 lakh which was not explained by the assessee before the lower authorities. Before me, Ld. Counsel for the assessee referred to page 166 of the paper book where journal Nasik Rotary Charitable Trust voucher dated 31.03.2016 is appearing containing the entry of debiting Rs.10.00 lakh in donation paid account and donation payable account is credited for the same amount. The narration of the journal entry is “being paid to Nepal Donation”. Since this journal voucher shows that assessee has booked the expenditure towards donation paid during the year but since the actual amount is not paid, the liability has been created in the books. Before me, Ld. Counsel for the assessee could not prove that the alleged sum of Rs.10.00 lakh has been paid subsequently for Nepal Earthquake victims. However, since all other necessary details to examine this transaction are not placed before me, I deem it fit to restore this issue also to the file of AO with a direction to examine this transaction and if it is found that the assessee has claimed Rs.10.00 lakh as an expenditure during the year and the liability so created as on 31.03.2016 has subsequently not been paid by way of giving donation to Nepal Earthquake victims, then the addition to the extent of disallowance of alleged expense/liability of Rs.10.00 lakh deserves to be made in the hands of assessee. The AO shall give necessary opportunity to the assessee trust to explain the said transaction to his satisfaction and file necessary details if needed. Considering the same, ld. AO shall decide
In the result, the appeal of the assessee is partly allowed for statistical purposes.
Order pronounced on this 24th day of December, 2024.