GAYATRI PARIVAR RACHNATMAK TRUST,VADODARA V. THE ITO, WARD (EXEMPTION), VADODARA

ITA 1480/AHD/2024

AI Insights

The case involves Gayatri Parivar Rachnatmak Trust, which appealed against the order of the National Faceless Appeal Centre (NFAC), Delhi, for the Assessment Year 2022-23. The trust, which operates a Gausala, declared nil income in its return but was scrutinized under CASS, leading to the discovery of cash donations totaling Rs. 6,20,000, which were treated as anonymous donations by the AO and taxed under Section 115BBC of the Income Tax Act. The trust contested this decision, arguing that the donations were from identifiable sources and not anonymous. The Tribunal found that the AO had not properly examined the nature of the cash donations and directed a re-examination.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 473678 (ITAT-AHMEDABAD)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-01-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2022-2023
• Other Referred Cases: DCIT vs. All India Pingalwara Charitable Society
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: BHAVNA GUPTA SINGH
• Assessee Lawyers: TEJ SHAH
• Keywords: Set aside; Maximum Marginal Rate

Judgement Text

" IN THE INCOME TAX APPELLATE TRIBUNAL “SMC” BENCH, AHMEDABAD BEFORE Ms. SUCHITRA KAMBLE, JUDICIAL MEMBER & SHRI NARENDRA PRASAD SINHA, ACCOUNTANT MEMBER आयकर अपील सं./I.T.A. No. 1480/Ahd/2024 (Ǔनधा[रण वष[ / Assessment Year : 2022-23) Gayatri Parivar Rachnatmak Trust At-Po. Masar Road, Padra, Vadodara, Gujarat - 391421 बनाम/ Vs. Income Tax Officer Ward (Exemption), Vadodara èथायी लेखा सं./जीआइआर सं./PAN/GIR No. : AAATG4837F (Appellant) .. (Respondent) अपीलाथȸ ओर से /Appellant by : Shri Tej Shah, A.R. Ĥ×यथȸ कȧ ओर से/Respondent by : Smt. Bhavna Gupta Singh, Sr. DR Date of Hearing 28/01/2025 Date of Pronouncement 30/01/2025 O R D E R PER SHRI NARENDRA PRASAD SINHA, AM: This appeal is filed by the assessee against the order of the National Faceless Appeal Centre (NFAC), Delhi, (in short ‘the CIT(A)’), dated 23.07.2024 for the Assessment Year 2022-23. 2. The brief facts of the case are that the assessee is a trust and filed its return for A.Y. 2022-23 on 19.10.2022 declaring Nil income. The case was selected for scrutiny under CASS. In the course of assessment, the AO required the assessee to furnish details of donations received by it. From the copy of bank statement of the assessee filed in the course of assessment proceeding, the AO found that donation aggregating to ITA No. 1480/Ahd/2024 [Gayatri Parivar Rachnatmak Trust vs. ITO] A.Y. 2022-23 - 2 – Rs.6,20,000/- was received in cash. The AO treated the entire cash donation of Rs.6,20,000/- as ‘anonymous donation’, which was treated as liable to be taxed u/s. 115BBC of the Act. After allowing deduction of Rs.1 Lac, the balance ‘anonymous donation’ of Rs.5,20,000/- was treated as income of the assessee. Accordingly, the assessment was completed u/s.143(3) r.w.s. 144B of the Income Tax Act, 1961 (in short ‘the Act’) on 27.02.2024 at total income of Rs.5,20,000/-. 3. Aggrieved with the order of the AO, the assessee had filed an appeal before the First Appellate Authority, which was decided vide the impugned order and the appeal of the assessee was dismissed. 4. Now, the assessee is in second appeal before us. The following grounds have been taken in this appeal: “1. The CIT(A) erred in law and in the facts of the case in confirming the order of the AO in denying exemption making addition of Rs. 5,20,000/- u/s 115BBC of the act. 2. The CIT(A) erred in law and in the facts of the case in confirming the order of the AO in charging tax at maximum marginal rate.” 5. Shri Tej Shah, the Ld. AR appearing for the assessee explained that the assessee is a trust and is running a Gausala. The books of accounts of the assessee were duly audited and that the donations were received by way of cheque as well as in cash. However, the Auditor had not pointed out any contravention of provision of section 115BBC of the Act. The Ld.AR submitted that the assessee had maintained complete details of all the cash donations, the details of which were filed before the lower authorities. According to the Ld. Counsel, the AO was not ITA No. 1480/Ahd/2024 [Gayatri Parivar Rachnatmak Trust vs. ITO] A.Y. 2022-23 - 3 – correct in treating the entire cash deposits as appearing in the bank statement as anonymous donations. He explained that the cash donations were received in very small denominations and such cash donations were only periodically deposited in the bank account. According to the Ld. AR, the AO had treated the cash deposit in the bank account on a particular date as a single cash donation, which was not correct. He explained that each cash deposit in the bank account was accumulation of various small cash donations received by the assessee. He further submitted that the assessee had duly maintained the name and address of all the person from whom the cash donations were received and, therefore, the AO was not correct in treating the same as anonymous donation. 6. Per contra, Smt. Bhavna Gupta Singh, Ld. Sr. DR supported the orders of the lower authorities. She submitted that the Ld. CIT(A) had examined the details of donations filed and given a finding that PAN, Address and other verifiable details were not appearing in respect of the cash donors. She, therefore, strongly supported the orders of the lower authorities. 7. We have carefully considered the rival submissions. It is found that the AO had treated the entire cash deposits appearing in the bank statement of the assessee as anonymous donation and taxed the same u/s.115BBC of the Act. As explained by the assessee, the cash deposits in the bank account comprised aggregate of the various small cash donations and this aspect was not examined by the AO at all. Therefore, the action of the AO in treating the entire cash deposit of Rs.6,20,000/- in the bank account of the assessee as anonymous donation cannot be held as ITA No. 1480/Ahd/2024 [Gayatri Parivar Rachnatmak Trust vs. ITO] A.Y. 2022-23 - 4 – correct. The Ld. CIT(A) too had brushed aside the evidences filed by the assessee in respect of individual cash deposits on the ground that PAN, address and other verifiable details were not appearing. 8. The assessee has filed a list of all the cash donations in the paper book. It is found there from that most of the cash deposits were in very small amounts. A copy of the receipt issued by the assessee has also been brought on record from which it is found that the name of the donor, village/city and mobile number was appearing therein. These evidences were not examined by the AO in the course of assessment proceeding. Merely because the PAN number of the donor and his complete address was not appearing in the receipts, the donation cannot be held as anonymous, as held by ld. CIT(A). A donor is eligible to claim deduction u/s.80G of the Act in respect of cash donation up to Rs.2,000/- only. As per provision of Section 80G(5) of the Act, in order to claim the deduction, the donation exceeding Rs.2000/- has to be made by any mode other than cash. Therefore, any donation of the amount up to Rs.2,000/- made in cash cannot be considered as anonymous if the name, place of residence of the donor and the mobile number of the donor is appearing in the receipt issued by the assessee. It is only in the donations exceeding Rs.2,000/-, the requirement of mentioning the complete address and PAN (if so mandated by law) would be deemed necessary. Since, this aspect was not examined by the AO, we deem it proper to set aside the matter to the file of the AO with a direction to examine the cash donations of amount exceeding Rs.2000/- vis- à-vis the complete address of the donor and other details as ITA No. 1480/Ahd/2024 [Gayatri Parivar Rachnatmak Trust vs. ITO] A.Y. 2022-23 - 5 – stipulated as per law and, thereafter, apply the provision of Section 115BBC of the Act only in those cases where the complete details are not available and donor can’t be identified. 9. The assessee has relied upon the decision of Co-ordinate Bench of Amritsar Tribunal in case of DCIT vs. All India Pingalwara Charitable Society, reported in [2016] 67 taxmann.com 338 (Amritsar – Trib.). It is found that the facts involved in that case was totally different as the anonymous donation was received by the assesse in charity boxes. Further, the year involved in that case was Assessment Year 2011-12, where the limit of cash donation was Rs.10,000/-. Since, the facts of that case are totally different, the ratio of the said decision cannot be applied to the facts of the present case. 10. In the result, the appeal filed by the assessee is allowed for statistical purposes. This Order pronounced on 30/01/2025 Sd/- Sd/- (SUCHITRA KAMBLE) (NARENDRA PRASAD SINHA) JUDICIAL MEMBER ACCOUNTANT MEMBER Ahmedabad; Dated 30/01/2025 S. K. SINHA True Copy आदेश कȧ ĤǓतͧलͪप अĒेͪषत/Copy of the Order forwarded to : 1. अपीलाथȸ / The Appellant 2. Ĥ×यथȸ / The Respondent. 3. संबंͬधत आयकर आयुÈत / Concerned CIT 4. आयकर आयुÈत(अपील) / The CIT(A)- 5. ͪवभागीय ĤǓतǓनͬध, आयकर अपीलȣय अͬधकरण, अहमदाबाद / DR, ITAT, Ahmedabad 6. गाड[ फाईल / Guard file. आदेशानुसार/ BY ORDER, उप/सहायक पंजीकार (Dy./Asstt. Registrar) आयकर अपीलȣय अͬधकरण, अहमदाबाद / ITAT, Ahmedabad "