The Delhi bench of the ITAT has held that a normal or corpus donation cannot be treated as an anonymous donation under the Income Tax Act, 1961.
The assessee- society is running an educational Institution under the name and style of Shri Shiv Venkateswara Education and Social Welfare Trust at Meerut. While completing the assessment proceedings, the Assessing Officer asked the assessee to prove the identity, creditworthiness, genuineness of the donors.
The assessee submitted that most of the donors are villagers from the neighbouring periphery of the Institution ranging from INR 1000 – 18,000 and is received in cash. The assessee submitted the identity proof of voter ID cards, the copy of concerned company in the respective confirmation of these donors. AO further noted that it is out of the imagination that when the assessee was having bank accounts then why the assessee would retain this amount as cash in hand as on the close of the year. Therefore, he held that the so-called donation is for assessee‟s undisclosed money. Based on this the learned AO held that deposits by way of donation are nothing but the unexplained cash credit in terms of the provisions of section 68 read with the provisions of section 115BBC of the Income Tax Act and accordingly they are rendered to the income of the assessee under the head income from other sources.
After analyzing the relevant provisions, the Tribunal said that even if the nation is credited to income and expenditure account of the assessee, whether a normal donation or a corpus donation, cannot be termed as anonymous donation u/s 115BBC of the income tax act.
“The anonymous donations will not be covered if donations received by any trust or institution created or established wholly for religious purposes or donations received by any trust or institution created or established for both religious as well as charitable purposes other than an 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. Sub-section (3) defines “anonymous donation” to mean any voluntary contribution referred to in section 2(24)(iia), where a person receiving such contribution does not maintain a record consisting of the identity of the person making such contribution indicating the name and address of the person and such other particulars as may be prescribed. We asked whether the central board of direct tax as prescribed any particulars which is required to be maintained by the assessee trust, the answer was no. We also did not find any such prescription about what kind of particulars the assessee-trust is required to maintain. Therefore, it is apparent that at present the simple requirement is maintaining the name and address of the donors. In the present case, the assessee has already given much more detail than the name and address of the donors. Therefore, with respect to the donation from 1038 persons, the assessee has shown their name and address along with other particulars. It is not the case of the revenue that assessee has not maintained and provided these details to the assessing officer. In view of this we do not find that the donation received by the assessee falls into the definition of anonymous donation,” the Tribunal said.
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