No Addition towards Anonymous Deduction If Identity of Donors is established: ITAT [Read Order]

If identity of donors is established U/s115BBC money received cannot be considered as anonymous donations so was held by the Income Tax Appellate Tribunal (ITAT), Visakhapatnam.

The assessee, M/s. Siddhartha Academy of General & Technical Education is a Trust running educational institutions. The assessee filed its return of income for the Assessment Year 2016-17 admitting total income of Rs. NIL. The case wasselected for scrutiny and notice U/s143(2) and 142(1). The assessee’s representative submitted the details as required by the Assessing Officer (AO). The AO noted that the assessee has received a corpus donation of Rs. 23,89,57,793/- out of which the assessee could not file the confirmation letters for Rs. 15,44,89,693/- and hence AO treated Rs. 14,19,66,693/- as anonymous donation U/s. 115BBC. The AO also treated the amount of Rs. 82,52,086/- credited to the income and expenditure account as an anonymous donation U/s. 115BBC.

Aggrieved by the order of the AO, the assessee filed an appeal before the Commissioner of Income Tax (CIT). Before the CIT, the assessee’s representative filed letters from all donorsfor an amount of Rs. 23,89,57,793/-. The assessee’s representative also submitted before theCIT that these confirmation letters have been filed and available on the electronic portal of the department and also provided the acknowledgement number. Considering the submissions made before theCIT, the appeal was allowed. Aggrieved by the order of theCIT, the Revenue is in appeal before the Tribunal.

Duvvuru RL Reddy, Judicial Member and S Balakrishnan, Accountant Member observed that “We are of the considered view that the assessee has established the identity of the donors as provided U/s. 115BBC of the Act and hence the donations received by the assessee cannot be categorized asanonymous donations and cannot be subjected to tax as per the provisions of section 115BBC of the Act. We therefore, find no infirmity in the order of the CIT and no interference is required.”

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