Section 115BBC

Section 115BBC — the law in short

What the courts have decided on section 115BBC, in one screen. Read this first; open an entry when you need the facts, the reasoning and the source.

• CIT (Exemptions) v Shree Sai Baba Sansthan Trust High CourtHelps taxpayer
  Our trust is religious and charitable and holds 80G approval. Can the officer tax our hundi collections under s.115BBC?
  No. Section 115BBC(2)(b) takes a trust created or established wholly for religious and charitable purposes out of the charge, except for a donation given with a specific direction that it is for a university or other educational institution or a hospital or other medical institution run by the trust. The Court held that whether the trust is religious and charitable is determined from the trust deed, and that s.80G registration is a separate and independent question which cannot be used to deny that character. Rs 159.12 crores of hundi collections out of Rs 228.25 crores of donations stayed outside s.115BBC(1).
• BK Educational and Welfare Society v ITO (Exemptions) ITATHelps taxpayer
  The Assessing Officer has added our cash donations under s.68 as unexplained credits. Is s.68 the right provision at all for a charitable trust's donations?
  Not where the donor is identified and confirms, and not under s.68 for the amount he cannot prove either. The Pune Tribunal deleted the addition for the donation whose donor had confirmed it on oath and stated his source, holding the burden had shifted to the Revenue. For the donation the trust could not prove, it did not sustain the s.68 addition; it treated the sum as an anonymous donation and applied s.115BBC, so that only the excess over the Rs 1 lakh limb of the threshold — Rs 10,000 out of Rs 1,10,000 — was taxable.
• ACIT v Shri Dadasaheb Gawai Charitable Trust ITATHelps taxpayer
  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.

Listed strongest first: Supreme Court, then High Court, then Tribunal, then CBDT. Nothing here has yet been read in full by a chartered accountant — open an entry to see where it came from.