The Income Tax Appellate Tribunal (ITAT), Panaji has held that the provisions of taxation of the anonymous donations are not applicable in case of Religious Trust.
The main object of the assessee, a religious Trust is to perform pooja, Viniyoga, worshiping a deity, distributing annaprasadam (i.e., serving free meals) to devotees who visit Sonda Math and also providing medical help to needy persons, conducting seminars in Sanskrit subject, etc. The assessee filed its return of income for the relevant assessment year declaring NIL income as the same was claimed as exempt.
The Assessing Officer, while completing assessment proceedings, noted that the assessee has credited a sum of Rs.33.59.836/- as voluntary contributions (donations) during the previous relevant to the assessment year 2010-2011. The assessee was asked to produce complete details of such contributions. The assessee produced the relevant ledger accounts containing details of contributions.
The assessee claimed that though this is an anonymous collection yet the same are brought on record and spent on the objects of the Trust. It was claimed that such contributions are not taxable as per provisions of section 115BBC of the Act.
The AO opined that the assessee is not covered under the provisions sub-section (2) of section 115BBC. He treated the amount as anonymous donations as per Section 115BBC of the Act.
On appeal, the first appellate authority granted relief to the assessee.
On departmental appeal, the Tribunal held that “The ld. CIT(A) in his order has noted that the Trust is a totally religious charitable trust, hence, the provision of section 115BBC(1) shall not apply. Still, he has proceeded to invoke the provision of section 115BBC(1). We find that this is quite contradictory when the ld. CIT(A) has found that the assessee is falling under section 115BBC(2), then the provision of section 115BBC(1) is not applicable. Hence, the impugned amount cannot be subject to tax u/s. 115BBC.”To Read the full text of the Order CLICK HERE