The Assessing Officer has taxed all our donations under s.115BBC because some donors did not turn up when summoned. What does the section actually require us to keep?
A record of the identity of the donor showing name and address, and such other particulars as may be prescribed. The Nagpur Tribunal held that a trust which maintains names, addresses, PAN and Aadhaar details of its donors has discharged its burden, and that s.115BBC cannot be invoked merely because the Assessing Officer doubts the donors. Where summonses went unanswered or came back unserved, it was for the Assessing Officer to ask the trust to produce those donors before treating the whole of the donations as anonymous.
Decided by the ITAT (V. Durga Rao, Judicial Member and K.M. Roy, Accountant Member) on 2024-07-11, reported as ITA No. 2/Nag./2018 (ITAT Nagpur Bench), assessment year 2014-15; date of hearing 28 May 2024. It bears on section 115BBC, section 11, section 12A of the Income Tax Act 1961, in Charitable Trusts & Exemption matters.
Section 115BBC turns on a record, not on the outcome of the Assessing Officer's verification exercise. Once the record exists the section is simply out of the way, and doubt about genuineness has to be pursued through some other provision and on evidence. This decision draws that line and shows how far a sampling exercise can and cannot be pushed.
Binding on the AO and CIT(A) within the Tribunal's jurisdiction. Persuasive elsewhere.
Read aloud by your device. Press again to stop.
The trust, registered under s.12A, received donations of Rs 13,32,51,100 in the year — corpus donations towards its building fund of Rs 4,36,30,500 and non-corpus donations of Rs 8,96,20,600. The Assessing Officer treated Rs 12,63,03,550 of that as anonymous donations under s.115BBC (the order gives the figure as Rs 12,63,03,545 in one place and Rs 12,63,03,550 in another). Before the CIT (Appeals) the trust produced details of 23,136 donors including names, addresses, PAN and Aadhaar. The Assessing Officer then sampled 205 donors: 89 appeared and their statements were recorded, of whom 87 confirmed the donation and 2 denied it; 76 filed written replies without appearing, of whom 75 confirmed and 1 denied; 28 neither appeared nor filed confirmations; and summonses to 12 came back unserved. The CIT (Appeals) deleted the addition and the Revenue appealed.
The Revenue's appeal was dismissed. Where the trust maintains the record of the identity and address of the persons making contributions and other particulars, s.115BBC does not apply; here the trust had names, addresses, PAN and Aadhaar for all the donors, so the section was not attracted (para 19). The Assessing Officer had invoked s.115BBC only because he doubted the genuineness of the donors, and having received the details it was for him to bring evidence on record that the donations were not genuine (para 18). The order of the CIT (Appeals) deleting the addition disclosed no infirmity (para 19).
The Tribunal dealt separately with the two groups of donors who caused the difficulty. As to the 28 who neither attended nor confirmed, the Assessing Officer ought to have asked the trust to produce them rather than simply doubting the donations (para 16). As to the 12 whose summonses were returned unserved, the Tribunal reasoned that donors may move or change address, that a trust cannot be expected to keep watch on the whereabouts of its donors, who are not under its control, and that the Assessing Officer should have called on the trust to produce them (para 17). It then held that the section had been invoked for no reason other than doubt, that the trust had discharged the onus on it, and that the Assessing Officer could not doubt the donors once all details had been filed and enquiry made (para 18). Turning to the section itself, it set out the definition of anonymous donation and applied it: the record of identity and address having been maintained, s.115BBC had no application (para 19).
In the present case, the assessee has maintained identity of the donors i.e., complete details such as name, address, PAN card details, Aadhar details and, hence, provisions of section 115BBC of the Act are not applicable to the assessee Trust.
Upload it and we will read it, work out your deadline and draft the reply. A CA reviews before anything is filed.
Handle my notice → Ask a CA on WhatsAppA record of the identity of the donor showing name and address, and such other particulars as may be prescribed. The Nagpur Tribunal held that a trust which maintains names, addresses, PAN and Aadhaar details of its donors has discharged its burden, and that s.115BBC cannot be invoked merely because the Assessing Officer doubts the donors. Where summonses went unanswered or came back unserved, it was for the Assessing Officer to ask the trust to produce those donors before treating the whole of the donations as anonymous. This was decided by the ITAT (V. Durga Rao, Judicial Member and K.M. Roy, Accountant Member) and bears on section 115BBC, section 11, section 12A of the Income Tax Act 1961. It is reported as ITA No. 2/Nag./2018 (ITAT Nagpur Bench), assessment year 2014-15; date of hearing 28 May 2024. Section 115BBC turns on a record, not on the outcome of the Assessing Officer's verification exercise. Once the record exists the section is simply out of the way, and doubt about genuineness has to be pursued through some other provision and on evidence. This decision draws that line and shows how far a sampling exercise can and cannot be pushed. If it applies to you, the first step is this: Maintain, for every donation, the donor's name and address at minimum, and keep PAN and Aadhaar where you can get them; that is what carried the day here.
The trust, registered under s.12A, received donations of Rs 13,32,51,100 in the year — corpus donations towards its building fund of Rs 4,36,30,500 and non-corpus donations of Rs 8,96,20,600. The Assessing Officer treated Rs 12,63,03,550 of that as anonymous donations under s.115BBC (the order gives the figure as Rs 12,63,03,545 in one place and Rs 12,63,03,550 in another). Before the CIT (Appeals) the trust produced details of 23,136 donors including names, addresses, PAN and Aadhaar. The Assessing Officer then sampled 205 donors: 89 appeared and their statements were recorded, of whom 87 confirmed the donation and 2 denied it; 76 filed written replies without appearing, of whom 75 confirmed and 1 denied; 28 neither appeared nor filed confirmations; and summonses to 12 came back unserved. The CIT (Appeals) deleted the addition and the Revenue appealed. The matter was decided on 2024-07-11 by the ITAT (V. Durga Rao, Judicial Member and K.M. Roy, Accountant Member). On those facts the ITAT held as follows. The Revenue's appeal was dismissed. Where the trust maintains the record of the identity and address of the persons making contributions and other particulars, s.115BBC does not apply; here the trust had names, addresses, PAN and Aadhaar for all the donors, so the section was not attracted (para 19). The Assessing Officer had invoked s.115BBC only because he doubted the genuineness of the donors, and having received the details it was for him to bring evidence on record that the donations were not genuine (para 18). The order of the CIT (Appeals) deleting the addition disclosed no infirmity (para 19).
The Tribunal dealt separately with the two groups of donors who caused the difficulty. As to the 28 who neither attended nor confirmed, the Assessing Officer ought to have asked the trust to produce them rather than simply doubting the donations (para 16). As to the 12 whose summonses were returned unserved, the Tribunal reasoned that donors may move or change address, that a trust cannot be expected to keep watch on the whereabouts of its donors, who are not under its control, and that the Assessing Officer should have called on the trust to produce them (para 17). It then held that the section had been invoked for no reason other than doubt, that the trust had discharged the onus on it, and that the Assessing Officer could not doubt the donors once all details had been filed and enquiry made (para 18). Turning to the section itself, it set out the definition of anonymous donation and applied it: the record of identity and address having been maintained, s.115BBC had no application (para 19). In the words reproduced by the source cited on this page: "In the present case, the assessee has maintained identity of the donors i.e., complete details such as name, address, PAN card details, Aadhar details and, hence, provisions of section 115BBC of the Act are not applicable to the assessee Trust."
It was decided by the ITAT on 2024-07-11 and is reported as ITA No. 2/Nag./2018 (ITAT Nagpur Bench), assessment year 2014-15; date of hearing 28 May 2024. Binding on the AO and CIT(A) within the Tribunal's jurisdiction. Persuasive elsewhere. A Tribunal decision binds the assessing officer and the Commissioner (Appeals) within that Tribunal's jurisdiction, and is persuasive before other benches. It is not binding on a High Court, and a contrary co-ordinate bench decision will be argued against you, so check whether the point has been taken the other way before you build a reply around it. On section 115BBC, section 11, section 12A, the practical question is whether the facts of your own notice match the facts of this case closely enough for the same rule to apply.
It helps the taxpayer. The Revenue's appeal was dismissed. Where the trust maintains the record of the identity and address of the persons making contributions and other particulars, s.115BBC does not apply; here the trust had names, addresses, PAN and Aadhaar for all the donors, so the section was not attracted (para 19). The Assessing Officer had invoked s.115BBC only because he doubted the genuineness of the donors, and having received the details it was for him to bring evidence on record that the donations were not genuine (para 18). The order of the CIT (Appeals) deleting the addition disclosed no infirmity (para 19). It arises in Charitable Trusts & Exemption matters, on section 115BBC, section 11, section 12A of the Income Tax Act 1961, and was decided by V. Durga Rao, Judicial Member and K.M. Roy, Accountant Member. Before relying on it, read the source linked on this page and check whether it has since been distinguished, overruled or overtaken by an amendment to the Income Tax Act. In practice the steps that follow from it are these. If the Assessing Officer proposes s.115BBC, meet it first as a records point: show the register and the details, and say in terms that the statutory condition is satisfied. Where summonses are issued and go unanswered or return unserved, ask in writing to be allowed to produce those donors. The failure to give that opportunity was central to the Tribunal's reasoning. Do not accept an inference drawn from a sample. Here 205 donors were sampled out of 23,136, and a handful of non-responses and three denials were used against the whole; the Tribunal held that impermissible. If the Assessing Officer's real case is that the donations are not genuine, press him to bring evidence of that on record rather than allowing s.115BBC to be used as a substitute.
Still good law. No later treatment was located. It is a Tribunal decision on assessment year 2014-15. Note that s.115BBC(2) exempts wholly religious trusts and, subject to the anonymous donation not being for a university, school, hospital or similar institution run by it, trusts created for both religious and charitable purposes; that exception was not in play here and is not decided by this order. No source could be cited for that finding. Checking whether an authority still stands matters as much as knowing what it held: a decision may be overruled on one point and survive on another, or the provision it interprets may have been amended since. Read the source and the editor's note on this page before relying on it in a reply to an Assessing Officer or in an appeal.
Paragraph 19 opens with the statutory text of s.115BBC reproduced from the Act before the Tribunal's own analysis; the quotation used here is from the analysis, not the statutory extract. The order is an appeal by the Revenue against a deletion by the CIT (Appeals). This library shows the verification state of every entry openly. This entry has not yet been read in full by a chartered accountant. The summary reflects the sources listed on this page. Read the source before you rely on it in a reply to an Assessing Officer or in an appeal before the Commissioner (Appeals) or the Income Tax Appellate Tribunal.
The Revenue's appeal was dismissed. Where the trust maintains the record of the identity and address of the persons making contributions and other particulars, s.115BBC does not apply; here the trust had names, addresses, PAN and Aadhaar for all the donors, so the section was not attracted (para 19). The Assessing Officer had invoked s.115BBC only because he doubted the genuineness of the donors, and having received the details it was for him to bring evidence on record that the donations were not genuine (para 18). The order of the CIT (Appeals) deleting the addition disclosed no infirmity (para 19).
Every entry in this library links to where it was found, so you can check it yourself rather than take our word for it.
We charge fees for our public utility work. Does that cost us charitable status under s.2(15)?
Our trust was formed weeks ago and has done nothing yet. Can registration be refused for that?
We treated a building's full cost as application of income. Can we also claim depreciation on it?
The department accepted your position for years and has now reversed it. Can it?