IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCH A', HYDERABAD BEFORE SHRI P.M.JAGTAP, ACCOUNTANT MEMBER AND SMT.ASHA VIJAYARAGHAVAN, JUDICIAL MEMBER ITA NO.1177/HYD/14 : ASSESSMENT YEAR 2008 - 09 ITA NO.1178/HYD/14 : ASSESSMENT YEAR 2009 - 10 VINAYAKA EDUCATIONAL SOCIETY, KUNTRAPAKKAM VILLAGE & POST, TIRUPATI RURAL (PAN AABTV 1399 J) V/S. DY. COMMISSIONER OF INCOME - TAX CENTRAL CIRCLE, TIRUPATI (APPELLANT) (RESPONDENT) APPELLANT BY : S HRI K.A.SAIPRA SAD & SHRI Y.R.RAO RESPONDENT BY : SHRI RAMAKRISHNA BANDI DR DATE OF HEARING 26.2.2015 DATE OF PRONOUNCEMENT 04.03.2015 O R D E R PER P.M.JAGTAP, ACCOUNTANT MEMBER : TH ESE TWO APPEALS FILED BY THE ASSESSEE ARE DIRECTED AGAINST A COMMON ORDER OF THE LEARNED COMMISSIONER OF INCOME - TAX (APPEALS), GUNTUR DATED 24.2.2014, WHEREBY HE C ONFI R MED THE ADDITIONS OF R S .19 , 65,000 AND RS.52,33,730 MADE BY THE ASSESSING OFFICER TO THE TOTAL INCOME FOR ASSESSMENT YEARS 2008 - 09 AND 2009 - 10 RESPECTIVELY, TREATIN G THE DONATIONS RECEIVED AS ANONYMOUS DONATION S COVER E D UN DE R S.115BBC OF THE ACT. 2. THE ASSESSEE IN TH E PR E SEN T CA S E IS A N EDU C A T IONAL SOCIETY. A SEARCH AND SEIZURE ACTION UN D ER S.1 3 2 WAS CONDUCTED IN THE RESIDENCE OF ITS PRESIDENT, D R.K.RAMACHANDRA ON 12.2.2009. DURIN G TH E COU R SE OF THE SAID SEARCH, CERTAIN DO C UM E N T S BELONGING TO THE ASSESSEE SOCIETY WERE FOUND AND SEIZED. CON S EQUENTLY, I TA NO. 1177 & 1178 /H YD/20 14 VINAYAKA EDUCATIONAL SOCIETY, KUNTRAPAKKAM VILLAGE & POST, TIRUPATI RURAL 2 NO TI CE UN D ER S.153C WAS ISSUED BY THE ASSESSING OFFICER IN RESPONSE TO WHICH RETURN OF IN C OM E FOR THE ASSESSMENT YEAR 2008 - 09 W A S FIL E D BY THE ASSESSEE ON 1.10.2010 DECLARING TOTAL INCOM E AT NIL. A REGULAR RETURN OF INCOME FO R ASSESSMENT YEAR 2009 - 10 WAS ALSO FIL E D BY THE ASSESSEE ON 26.1 1.2010 DECL A RING TOTAL INCOME AT NIL . THE ENTRIES F OUN D RECORDED IN THE RELEVANT SEIZED DOCUMENTS REVEAL E D THAT THE ASSESSEE SOCIETY DURING BOTH THE YE A RS UN D ER CONSIDERATION HAD RECEIVED CERTAIN DONATION S IN CASH. THESE CASH RECEIPTS W E RE SHOWN AGAINST D R .M.M. (SMT.B.MANOHARAMMA WIFE OF DR.K.RAMACHANDRA) , SVS (SHRI S.V.SUBBAIAH, SE CRETARY OF THE ASSESSEE S OCIETY) AND K.VIKRAM, KLN MURTHY , PRASAD AND RAJESWARAMMA, OTHER MEMBERS OF THE SOCIETY. WHEN IT W A S STATED BY DR.K.RAMACHANDRA THAT SHRI S.V.SUBBAIAH , SECRETARY O F THE SOCIETY WAS KNOWING THE ENTIRE TR A NSAC T IONS AND HAD WRITTEN THE RELEVANT DO C UMENTS FOUND DURIN G TH E COU R SE OF SEARCH, SHRI S.V.SUBBAIAH WAS EXAMINED BY THE ASSESSING OFFICER, AND HIS STATEMENT ON OATH WAS RECORDED. I N TH E SAID STATEMENT , SHRI S.V.SUBBAIAH DEPOSED THAT THE PRINCIPAL MEMBERS OF THE SOCIETY HAD RECEIVED THE FUNDS ON BEHALF OF THE ASSESSEE SO C I E TY FROM THE DONORS AND AC C OR D INGLY, THE DONATION S WERE BROUGHT INTO THE BOOKS O F AC C OUN T OF THE SOCIETY. BAS E D ON THE STATEMENT GIVEN BY SHRI S.V.SUBBAIAH AS WELL AS THE ENTRIES APPEARING IN THE RELEVANT SEIZED DOCUM E N T S, THE ASSESSEE SOCIETY WAS CALLED UPON BY THE ASSESSING OFFICER TO EXPLAIN WHY THE ENTIRE AMOUNT REFLECTED IN THE SEIZED DOCUMEN T S SHOULD NOT BE TR E ATED AS ANONYMOU S DONATIONS UNDER S.115BBC OF THE A CT . I N REPLY, DETAILED SUBMISSION WAS MADE BY THE ASSESSEE BEFORE THE ASSESSING OFFICER, WHICH MAINLY COMPRISED OF THE FOLLOWING CONTENTION S - 1) THE AMOUNTS WRITTEN IN THE SEIZED DOCUMENT ARE NOT ANONYMOUS DONATIONS. T HEY ARE MENTIONED AGAINST THE NAMES OF I TA NO. 1177 & 1178 /H YD/20 14 VINAYAKA EDUCATIONAL SOCIETY, KUNTRAPAKKAM VILLAGE & POST, TIRUPATI RURAL 3 SMT.B.MANOHARAMMA, SRI S.V.SUBBAIAH, SRI VIKRAM, SRI KLN MURTHY, AND SRI PRASAD, ONLY BECAUSE THE AMOUNTS ARE ROUTED THROUGH THEM. ALL THE DONORS ARE FULLY IDENTIFIABLE AND THE DONATIONS ARE RECORDED IN THEIR NAMES O NLY. 2) THE DETAILS INCLUDING THE OFFICE COPIES OF THE RECEIPTS FOR MEMBERSHIP FEE AND DONATIONS WERE FURNISHED BEFORE ADIT(INV), TIRUPATI. CONFIRMATION LETTERS F R OM THESE DONORS MOST OF WHOM WARE ALSO MEMBERS OF SOCIETY WERE ALSO FURNISHED TO THE ADIT(IN V). 3) IT MAY BE POINTED OUT THAT THE ADIT(INV) HAS SUMMONED ONE OF THE DONORS FROM THE ABOVE LIST. SRI S.C. CHENGAL RAJU, WHO GAVE THE DONATION OF RS.4,25,000/ - AND EXAMINED HIM ON 28.04.2009. HE HAS CONFIRMED THE FACT OF GIVING THE DONATION. 4) FURTHER, SRI S.V.SUBBAIAH, HAS STATED BEFORE THE ADIT()INV) THAT THE MEMBERS CONTRIBUTION ONLY WAS KEPT IN HIS POSSESSION AND INTRODUCED INTO THE BOOKS OF SOCIETY. ON THE B A SIS OF THE ABOVE SUBMIS S ION S , I T WAS ARGUED ON BEHALF O F THE ASSESSEE SOCI E TY TH AT THE AMOUNTS IN QUESTION COULD NOT BE TR E AT E D AS ANONYMOUS DON A TIONS, AS ENVISAGED UN D ER S.115B B C OF THE ACT. 3. THE SUBMISSIONS MADE BY THE ASSESSEE WERE NO T FOUND ACCEPTABLE BY THE ASSESSING OFFICER FOR THE FOLLO W IN G REASONS - ( I ) AT THE TIME OF SEARCH & SEIZURE OPERATION, CARRIED OUT IN THE RESIDENCE OF DR.K.RAMACHANDRA, WHO IS THE PRESIDENT OF THE SOCIETY, CERTAIN INCRIMINATING EVIDENCES BELONGING TO THE ASSESSEE SOCIETY WERE FOUND AND SEIZED. THE SEIZED DOCUMENT PLACED AT PP 1 - 3 OF A/RAM/RES/1 REVEALE D THAT FIVE PERSONS, NAMELY, DR.B.MANOHARAMMA, S.V.SUBBAIAH, SRI K.VIKRAM, SRI KLN MURTHY AND SRI PRASD HAVE I TA NO. 1177 & 1178 /H YD/20 14 VINAYAKA EDUCATIONAL SOCIETY, KUNTRAPAKKAM VILLAGE & POST, TIRUPATI RURAL 4 BROUGHT AND INTRODUCED THE CASH ON DIFFERENT DATES INTO THE BOOKS OF THE ASSESSEE SOCIETY. ( II ) THE SUBSEQUENT PAGES FROM 4 TO 46 OF THIS BUNCH ARE THE DETAILS OF EXPENDITURE MADE DURING THE PERIOD FROM 26.1.2008TO 12.1.2009 TOWARDS CONSTRUCTION OF COLLEGE. ( III ) HOWEVER SRI S.V.SUBBAIAH HAD STATED THAT THESE PRINCIPAL MEMBERS HAD RECEIVED FUNDS ON BEHALF OF THE SOCIETY FROM THE DONORS AND THROUGH THEM TH E MONEY WAS BROUGHT IN. HENCE, THEIR NAMES APPEAR IN THESE BOOKS OF ACCOUNTS. ( IV ) THE SAME CONTENTION WAS ALSO TAKEN BEFORE THE ASSESSING OFFICER DURING THE COURSE OF ASSESSMENT PROCEEDINGS, HOWEVER, NO ATTEMPT WAS MADE BY THE SOCIETY TO PRODUCE THOSE ALLEGE D DONORS WHO HAVE MADE SUBSTANTIAL CONTRIBUTION TO THE SOCIETY WITHOUT ANY CONSIDERATION. ( V ) THE S O - CALLED CASH BOOK WAS NEITHER FOUND DURING THE COURSE OF SEARCH NOR PRODUCED BEFORE THE ADIT(INV). IT WAS PRODUCED ON 07.11.2010. ( VI ) THE NAMES APPEARING IN THE SEIZED DOCUMENT ARE DIFFERENT TO THE NAMES SHOWN IN THE CASH BOOK. ( VII ) IT IS LEARNT THAT THE ASSESSEE - SOCIETY IS CONSTRUCTING A COLLEGE BUILDING AT KUNTRAPAKAM VILLAGE, TIRUPATI RURAL, FOR WHICH HUG E AMOUNTS OF FUNDS WERE BROUGHT AND INTRODUCED INTO THE SOCIETY UNDER THE COLOUR OF CORPUS DONATION. IT IS A GENERAL PRACTICE THAT A DONATION MAY BE GIVEN TO THE INSTITUTION BY THE PARENTS WHO WANT TO SECURE ADMISSION IN THE COLLEGE. I N THE PRESENT CASE, THE SOCIETY WAS REGISTERED AND STARTED CONSTRUCTING THE C OLLEGE WHERE EVEN THE ADMISSION OF STUDENTS WAS NOT YET STARTED AT THE TIME OF SEARCH. HENCE, THE SO - CALLED CORPUS DONATION BROUGHT AND INTRODUCED FROM DIFFERENT PERSONS HAS TO BE TREATED AS ANONYMOUS DONATION U/S 115BBC ONLY . ( VIII ) THE ASSESSEE - SOCIETY HAS CLAIMED THAT THE DONATIONS WERE CONTRIBUTED FROM THE MEMBERS, HOWEVER, THE NAMES APPEARING IN THE CASH BOOK ARE NOT TALLIED WITH THE MEMBERS' LIST OF THE SOCIETY. I TA NO. 1177 & 1178 /H YD/20 14 VINAYAKA EDUCATIONAL SOCIETY, KUNTRAPAKKAM VILLAGE & POST, TIRUPATI RURAL 5 ( IX ) THE ASSESSEE - SOCIETY HAS RECEIVED THE ENTIRE AMOUNT IN CASH AND NOT ROUTED THROUGH THE BANKING CHANNEL. ( X ) THE SEARCH & SEIZURE OPERATION WAS CARRIED OUT ON 12.02.2009. AFTER THREE MONTHS, I.E. IN THE MONTH OF MAY, 2009, SRI S.V.SUBBAIAH, HAS APPEARED BEFORE THE ADIT(INV) AND GAVE DIFFERENT STATEMENT ON 06.05.2009 STATIN G THAT THE PRINCIPAL MEMBERS HAD RECEIVED FUNDS ON BEHALF OF SOCIETY FROM SEVERAL DONORS AND THROUGH THEM THE MONEY WAS BROUGHT IN. IT IS AN AFTERTHOUGHT. ( XI ) SRI. S.V. SUBBAIAH HAS AGAIN APPEARED BEFORE THE ADIT(LNV) ON 12.05.2009 AND OFFERED A SUM OF RS.3 5 LAKH ADDITIONAL INCOME IN THE HANDS OF FIVE PERSONS, WHO ARE CLAIMED TO BE THE ACTIVE MEMBERS OF THE SOCIETY. THE DETAILS OF THE MEMBERS AND ADDITIONAL AMOUNT ADMITTED IN THEIR HANDS ARE AS UNDER: SRI SV. SUBBAIAH RS.7,00,000 SRI KV .P. SANDEEP KUAMR RS.7,00,000 SRI K. RAMAIAH RS.7,00,000 SMT R. BHARATHI RS.7,00,000 SRI V.K. DWARAKANATH RS.7,00,000 ( I ) THESE FIVE CASES WERE ALSO CENTRALIZED AND NOTICES U/S. 153C WERE ISSUED. IN RESPONSE TO THE NOTICES THEY HAVE FILED RETURN OF INCOME AND ADMITTED THE ABOVE SUM AS INCOME FROM OTHER SOURCES FOR THE ASSESSMENT YEAR 2008 - 09. ( II ) IT IS PERTINENT TO MENTION HERE THAT THOUGH SRI S.V.SUBBAIAH HAS GIVEN THE NAME OF SRI K.RAMAIAH AS ONE OF THE CONTRIBUTORS BUT HE DID NOT FILE ANY RETURN OF INCOME. IT IS INFORMED THAT HE HAS EXPIRED SUBSEQUENTLY. HENCE, IT WAS DECIDED BETWEEN THE MEMBERS TO ADMIT MORE AMOUNTS IN THE HANDS OF SRI K.V.P.SANDEEP K UMAR AND SRI G.V.K. DWARAKANATH I.E. RS.10,50,000/ EACH. FOR THE REASONS GIVEN ABO V E, THE ASSESSING OFFICER H E LD THA T THE CASH BOOK PREPARED AND P R O D UCED BY THE ASSESSEE SUBSEQUENTLY COULD NO T B E RELIED UPON, AS THE SAME WAS PREPARED IN SUCH A I TA NO. 1177 & 1178 /H YD/20 14 VINAYAKA EDUCATIONAL SOCIETY, KUNTRAPAKKAM VILLAGE & POST, TIRUPATI RURAL 6 MANNER TO ACCOMMODATE THE AMOUNTS APPEARING IN T HE SEIZED MATERIAL ON DIFFE R ENT DATES AGAINST DIFFERENT PERSONS. HE ALSO NOTED THAT NONE O F THE DONORS HAD FIELD ANY RETURN OF IN C OM E FOR ANY OF TH E ASSESSMENT YEARS EXCEPTING FOUR DONORS, WHOSE CONTRIBUTION WAS RS. 3 5 LA K HS . H E HELD THAT THE IDENTITY AND CR E DITWOR T HINE S S OF THE REMAINING DONORS WAS NO T VERIFIABLE AND THE DONATIONS CLAIMED TO BE RE C EIVED BY TH E ASSESSEE F R OM TH E M AMOUNTING TO RS .19,65,000 FOR ASSESSMENT YEAR 2008 - 09 AND RS.52,00,000 FOR ASSESSMENT YEAR 2009 - 10 WE RE LIABL E TO BE ADDED TO THE INCOME O F TH E ASSESSEE AS ANONYMOUS DONATION S UN D ER S.115BBC OF THE ACT. ACCOR D INGLY, THE SAID AMOUNTS W E RE ADDED B Y HIM TO THE TOTAL I N C OM E O F TH E ASSESSEE, IN THE ASSESSMEN TS COMPL E TED , VIDE ORDERS DATED 22.12.2010 PASSED UNDER S.143 (3) READ WITH S.153C FOR T H E ASSESSMENT YEAR 2008 - 09 ; AND UN D ER S.143(3) OF THE ACT FOR ASSESSMENT YEAR 2009 - 10 . 4. AGGRIE V ED BY THE O R DERS OF THE ASSESSING OFFICER, PASSED FOR ASSESSMENT YEARS 2008 - 09 AND 20090 - 10, APPEALS W E RE PREFERRED BY THE ASSESS EE BEFORE THE LEARNED CIT(A), DISPUTING THE ADDITIONS MADE THEREIN ON ACCOUNT OF ALL E GED ANO N YMOUS DONATIONS UN D ER S.115BBC OF THE A CT . DU R IN G TH E COU RS E OF APPELLATE P R OCEE D INGS B E FORE THE LEARNED CIT(A), SUB MI SSION S MADE BEFORE THE ASSESSING OFFICER WERE REITER A TED ON BEHALF O F THE ASSESSEE IN SUPPO R T OF ITS STAND THAT THE ADDITIONS MA D E UN D E R S.115BBC IN BOTH THE YEARS UN D ER CONSIDERATION W E RE U NWARRANTED AND UNJUST. IT WAS CONTENDED THAT SINCE THE ASSESSING OFFICER HIMSELF HAD HELD THA T THE AMOUN T S IN QUESTION WERE INTRODUCED BY FIVE ACTIVE MEMBERS OF THE ASSESSEE SOCIETY, WHO WERE AS S E SSE D BY HIM, THE DON A TION S RECEIVED COULD NO T B E TR E ATED AS AN O NYMOUS. IT WAS ALSO CONTENDED THAT THE NAMES O F THE DONORS ALONGWITH TH E IR ADDRESSES IN ANY CA S E WERE RE C ORDED BY TH E ASSESSEE SOCIETY AND SIN C E TH E I TA NO. 1177 & 1178 /H YD/20 14 VINAYAKA EDUCATIONAL SOCIETY, KUNTRAPAKKAM VILLAGE & POST, TIRUPATI RURAL 7 SAME W E RE P R O D U C ED NOT ONLY BEFORE THE I N V E STIGATION W ING, BUT ALSO BEFORE THE ASSESSING OFFICER, THERE WAS NO JU S TIFIABLE REASON TO T REAT THE AMOUNTS IN QUESTION AS ANONYMOUS DONATIONS . RELIANCE IN SUPPORT OF THIS CON T ENTION WAS PL AC ED BY TH E ASSESSEE ON THE DECISION OF THE DELHI BENCH OF THE ITAT IN THE CASE OF HANS RAJ SMARAK SOCI E TY (133 ITD 530), WH E REIN IT WA S H E LD T HAT AS P E R THE EXHAUSTIVE DEFINITION GIVEN IN SUB - SEC T ION (3)OF S.115BBC, THE EXPRESSION ANONYMOUS DONATIONS ME A NS A CA S E WH ER E THE INSTITUTION DOES NO T MAINTAIN RECORD OF THE IDENTITY INDICATIN G NAME AND ADDRESSES O F THE PERSON MAKING THE CONTRIBUTION. IT WAS S UBMI T TED THAT ALTHOUGH THE RECEIPT OF DONATION W AS INITIALLY NO T ED AGAINST THE NAME O F FIVE MEMBERS OF THE ASSESSEE SOCIETY FOR THE SAKE OF CONVENIENCE IN A ROUGH NOTE BOOK, WHICH WAS SEIZED DURING THE COU R SE OF SEARCH, THE REGULAR BOOKS O F ACCOUNT CONTAINED ALL THE DETAILS O F DON A TION S . IT WAS SUBMI TT ED THA T THE DETAILS O F DONORS, OFFICE COPIES OF RECEIPTS AS WELL AS CONFIRMATION LE T TERS FROM TH E D ONORS W E RE SUB M I T TED TO THE INV E STIGATION WING DURING THE COURSE OF POST - SEARCH INVESTIGATION AND IN THE EXAMINATION CONDUCTED BY THE INVESTIGATION WING IN THE CA S E OF ONE DONOR, NAMELY, SHRI S . C .CHENGAL RAJU THE FACT OF DONATION WAS CONFIRMED BY THE DONOR. IT WAS ALSO POINTED OUT THAT THE AMOUNT OF DONATION S OF RS.35 LAKHS ADMITTED BY FIVE ACTIVE MEMBERS OF THE ASSESSEE SOCIETY AS THEIR INCOME WAS NOT TREATED BY THE ASSESSING OFFICER HIMSELF AS ANONYMOUS DONATIONS AND ONLY THE BALANCE AMOUNT O F DONATIONS WAS ADDED BY HIM TR E ATING THE SAME AS AN O NYMOUS DON A TI ON S UN D ER S.115BBC OF THE ACT. 5. THE SUBMI S SION S MADE BY THE ASSESSEE SO C I E T Y WERE NO T FOUND ACCEPTABLE BY THE LEARNED CIT(A) FOR THE FOL L OW I N G REASONS GIVEN IN TH E IMPU G N E D ORDER - I TA NO. 1177 & 1178 /H YD/20 14 VINAYAKA EDUCATIONAL SOCIETY, KUNTRAPAKKAM VILLAGE & POST, TIRUPATI RURAL 8 4.9. SECTION 115BBC(1) STATES THAT WHERE THE TOTAL INCOME OF AN AS SESSEE BEING A PERSON IN RECEIPT OF INCOME ON BEHALF OF ANY UNIVERSITY OR OTHER EDUCATIONAL INSTITUTION OR ANY HOSPITAL OR OTHER INSTITUTION INCLUDES ANY INCOME BY WAY OF ANY ANONYMOUS DONATION, THE INCOME TAX PAYABLE SHALL BE AGGREGATE OF THE AMOUNT OF I NCOME TAX CALCULATED AT THE RATE OF THIRTY PER CENT ON THE AGGREGATE OF ANONYMOUS DONATIONS RECEIVED IN EXCESS OF THE HIGHER OF THE FOLLOWING, NAMELY (A)FIVE PERCENT OF THE TOTAL DONATIONS RECEIVED BY THE ASSESSEE; OR (B) ONE LAKH RUPEES:. THIS SECTION HA S BEEN BROUGHT INTO THE STATUTE BOOK BY THE FINANCE ACT, 2006 WITH A VIEW TO PREVENT CHANNELIZATION OF UNACCOUNTED MONEY TO TRUSTS AND OTHER INSTITUTIONS BY WAY OF ANONYMOUS DONATIONS. HENCE, THE TERM ANONYMOUS HAS TO BE READ IN A MANNER SO AS TO INCLUDE UNACCOUNTED MONEY. THE CONTENTION OF THE APPELLANT THAT MERE SUBMISSION OF NAMES AND ADDRESSES OF ALLEGED DONORS IS ENOUGH TO SATISFY THE REQUIREMENT OF SECTION 115BBC IS MISPLACED AND MISLEADING. THE PURPOSE BEHIND THE SECTION IS TO PREVENT UNACCOUNTED MO NEY BEING IN TRODUCED IN THE BOOKS OF TRUSTS AS TAX EXEMPT DONATIONS. HENCE, THE PRINCIPLES APPLIED IN THE CASE OF UNEXPLAINED CASH CREDITS SHALL ALSO APPLY IN THE CASE OF ANONYMOUS DONATIONS U/S.115BBC. THUS, THE BURDEN OF PROOF ON THE APPELLANT SOCIETY DO ES NOT SHIFT MERELY BY SUBMISSION O F THE NAMES AND ADDRESSES OF THE DONORS BUT THE RECIPIENT SOCIETY SHOULD ALSO BE IN A POSITION TO IDENTIFY THE DONOR, AND ESTABLISH HIS CAPACITY TO GIVE A DONATION OF THE AMOUNT MENTIONED A G A I NST HIS NAME. THE APPELLANT SOCIETY DID NOT MAINTAIN ANY RECORDS OF THE DONATIONS MADE AT THE TIME OF SEARCH AT THE RESIDENCE OF DR.K.RAMACHANDRA, PRESIDENT OF THE SOCIETY. THE ONLY RECORD WAS A ROUGH NOTEBOOK, IN WHICH THE AMOUNTS WERE RECORDED AS RECEIVED IN CASH AGAINST NAMES OF C ERTAIN ACTIVE MEMBERS OF THE SOCIE T Y. THE APPELLANT SOCIETY ITSELF HAS STATED THAT THESE ACTIVE MEMBERS ARE NOT THE DONORS BUT MERELY CONDUITS THROUGH WHOM MONEY WAS COLLECTED FROM A LARGER BODY OF DONORS, WHO HAD GIVEN THIS AMOUNT IN CASH. T HE NAMES AND ADDRESSES OF SUCH ALLEGED DONORS WAS NOT AVAILABLE AT THE TIME OF SEARCH AND HAVE BEEN INCORPORATED IN THE CASH BOOK PREPARED SUBSEQUENT TO THE SEARCH. MOREOVER, THE APPELLANT SOCIETY HAS ADMITTED THAT THE NAMES AGAINST WHOM CASH RECEIPTS ARE RECORDED ARE NOT THE ACTUAL DONORS, AND THUS IT CANNOT AT THE APPELLATE STAGE SUBMIT THAT THE 'ASSESSING OFFICER HAS HELD THAT THE FIVE ACTIVE MEMBERS ARE THE DONORS AND BY PLAIN DEDUCTION, THESE DONATIONS ARE NOT ANONYMOUS'. I TA NO. 1177 & 1178 /H YD/20 14 VINAYAKA EDUCATIONAL SOCIETY, KUNTRAPAKKAM VILLAGE & POST, TIRUPATI RURAL 9 SUBSEQUENTLY, FI VE OF THE ACTIVE MEMBERS, WHOSE NAMES APPEARED IN THE SEIZED DOCUMENTS ADMITTED R S .7 LAKHS EACH AS THEIR CONTRIBUTION TO THE CASH DONATIONS OUT OF UNACCOUNTED FUNDS. THUS, A SUBSTANTIAL P ART OF THE FUND WAS ADMITTED BY THE APPELLANT SOCIETY AS BEING UNACC OUNTED. AS CAN BE SEEN FROM THE ABOVE DISCUSSION, AT THE TIME OF SEARCH AT THE PREMISES OF THE PRESIDENT OF THE SOCIETY DR.K.RAMACHANDRA, THERE WAS NO RECORD OF THE NAMES AND ADDRESSES OF THE PERSONS FROM WHOM DONATIONS HAVE BEEN ALLEGEDLY RECEIVED. THE O NLY RECORD WAS REGARDING CASH DONATIONS RECEIVED FROM FIVE ACTIVE MEMBERS. THE SOCIETY ITSELF HAS DENIED THAT THESE MEMBERS CONTRIBUTED THE AMOUNTS REFLECTED IN THE SEIZED DOCUMENTS. IF, IN FACT, THEY HAD CONTRIBUTED THE AMOUNT, THEN THESE FIVE PERSONS WOU LD HAVE BEEN LIABLE TO EXPLAIN THE SOURCE OF ENTIRE AMOUNT. HOWEVER, ON A SUBSEQUENT DATE, A CASH BOOK WAS DRAWN UP AND DONATIONS WERE INTRODUCED IN C ASH IN THE NAMES OF A LARGE NUMBER OF INDIVIDUALS. EXCEPT FOR SRI V.K.DWARAKANATH AND SRI S.C.CHENGAL RAJU , ALL OTHER DONATIONS WERE OF SMALL AMOUNTS PAID IN CASH, WHICH DO NOT LEAVE A PAPER TRAIL AND ARE NOT AMENABLE TO ENQUIRY REGARDING SOURCE. ANY PERSON CAN BE PUT UP AS A DONOR AND IT SHALL BE IMPOSSIBLE TO HOLD THAT HE DID NOT HAVE AMOUNTS IN THE REGION O F RS. 15,000 TO RS.50,000/ - AVAILABLE WITH HI M FOR DONATION. THUS, THE REQUIREMENT IS THAT A COMPLETE RECORD OF THE DONOR, INCLUDING HIS NAME AND ADDRESS SHOULD BE AVAILABLE SIMULTANEOUSLY WITH THE RECEIPT OF T HE DONATION. IN THE PRESENT CASE, IF SUCH A REC ORD OF THE ACTUAL DONORS WAS AVAILABLE AT THE TIME OF SEARCH, IT COULD, FOR ARGUMENT SAKE, BE CONSIDERED THAT THE APPELLANT SOCIETY HAS MAINTAINED A RECORD OF DONORS. HOWEVER, IN THE CASE OF THE APPELLANT SOCIETY, THIS DID NOT HAPPEN. IF THE SOCIETY IS ALL OWED TO PREPARE A LIST OF DONORS ON A SUBSEQUENT DATE, IT SHALL DEFEAT THE VERY PURPOSE OF SECTION 1158BC SINCE ANY SOCIETY IN THAT CASE CAN INTRODUCE A LARGE BODY OF INDIVIDUALS AS DONORS; E ACH CONTRIBUTING A SMALL AMOUNT IN CASH. IT IS IN THIS ASPECT THAT THE APPELLANT SOC I ET Y 'S CASE DIFFERS FROM THE HANS RAJ SAMARAK SOCIETY CASE RELIED UPON BY IT AND DISCUSSED EARLIER IN THIS ORDER. THE CRITICAL ASPECT IN THE APPELLANT SOCIETY'S CASE IS THAT AT THE TIME OF SEARCH, THE APPELLANT SOCIETY HAS NOT MAINTAI NED ANY, RECORD OF THE CASH DONATIONS RECEIVED, AND THE DOCUMENT SEIZED HAS BEEN SOUGHT TO BE EXPLAINED BY THE SOCIETY BY STATING THAT THE NAMES AGAINST WHOM CASH DONATIONS ARE RECORDED ARE NOT THE ACTUAL DONORS. I TA NO. 1177 & 1178 /H YD/20 14 VINAYAKA EDUCATIONAL SOCIETY, KUNTRAPAKKAM VILLAGE & POST, TIRUPATI RURAL 10 FOR THE REASONS G I V EN ABO V E, THE LEARNED CIT(A) HELD THAT THE ASSESSEE SO C I E TY WAS NO T ABL E TO ESTABLI S H THE IDENTITY AND C A PACITY O F THE CONCERNED DONORS AND THER E WAS THUS A FAILURE ON ITS PART TO DI S CHARGE THE BU R DEN TO PRO OF VESTED UPON IT BY THE P R O V I SI ON S OF S.115BBC. H E , THE RE FORE, CONFIRMED THE ADDITIONS M A DE BY THE ASSESSING OFFICER IN BOTH THE YE A RS UN DER CON S IDERATION ON ACCOUN T O F ALL E GED ANONYMOUS DON A TION S , TR E ATING THE SAME AS INCOM E O F T H E ASSESSEE BY INVOKIN G TH E PROVIS I ON S OF S. 115BBC. AGGRIE V ED BY THE O R DER OF THE LEAR NED CIT(A), THE ASSESSEE HAS PREFERRED THESE APPEALS BE FORE THE TRIBUNAL FOR THE YEARS UNDER CONSIDERATION. 6. WE HAVE HEARD THE ARGUMENTS OF BOTH THE SIDES AND ALSO PERUSED THE RELEVANT MATERIAL ON RECORD. THE LEARNED COUNSEL FOR THE ASSESSEE HAS SU BMITTED THAT TH E COMMON ISSUE INVOLVED IN TH E SE APPEALS O F THE ASSESSEE IS SQU A RELY COVERED IN F A VOU R OF THE ASSESSEE BY THE DECISION OF THE COORDINATE BENCH OF THIS TRIBUNAL IN T H E C A SE OF VAISHNAVI EDUCA T IONAL SO C I E TY REND E RED VIDE ITS ORDER DATED 7.11.1014 IN ITA NOS.1179 TO1181/HYD/2014 FOR ASSESSMENT YEAR S 2007 - 08 TO 2009 - 10. HE HAD ALSO PLACED ON RECORD A CO P Y OF THE SAID O R DER, A PERU S AL O F WHICH SHOWS THAT SIMILAR ADDITIONS MADE BY THE ASSESSING OFFICER ON ACCOUNT OF ALLEGED ANONYMOUS DON A TIO N S BY INVOKING THE P RO V I SION S OF S.115BBC WER E CONFIRMED BY THE LEARNED CIT(A) ON TH E G R OUN D THAT THE ASSESSEE SOCIETY WAS UNABLE TO ESTABLISH THE IDENTITY AND CAP A CITY O F THE DONORS AND THUS FAILED TO DISCHARGE THE BURDEN OF PROOF VESTED UPON IT BY THE PROVIS I ONS OF S.115BBC. WHEN TH E MAT T ER WAS CARRIED BY TH E ASSESSEE BEFORE T H E TRIBUNAL, THE TRIBUNAL FOUN D TH A T THE NA M ES OF TH E DONORS ALONG WITH TH E IR ADDR E SSES WERE FURNI S HED BY TH E ASSESSEE SOCIETY BEFORE THE INVESTIGATION WING OF THE DEPAR T MENT AND THE SAME WERE ALSO RECORDED IN TH E BOOK S O F A C C OUNT PRO D U C ED FOR VERIFI C A T ION B E FORE THE ASSESSING OFFICER. THE TRIBUNAL THEN I TA NO. 1177 & 1178 /H YD/20 14 VINAYAKA EDUCATIONAL SOCIETY, KUNTRAPAKKAM VILLAGE & POST, TIRUPATI RURAL 11 REFERRED T O THE P R OV I SION S OF S .115BBC(3) AND NO T ED THAT THE ONLY REQUIREMENT UNDER THE SAID PROVISION WAS THA T THE NAMES AND ADD RESSES O F THE DONORS SHOULD BE RECORDED. THE TRIBUNAL HELD T H A T THE LEARNED CIT(A) ERRED IN WRONGLY APPLYING THE P R OV I SION S O F S.68 IN SUCH CA S ES BY STATING THAT THE RECIPIENT SOCIETY SHOULD ALSO BE IN A PO SI TION TO PROVE IDENT IT Y O F DONORS AND ESTABLI SH T H E CAPACITY OF THE DONORS. R E LI A NCE IN THIS REGARD WAS PL A CED BY THE TRIBUNAL ON TH E DECISION OF ITS COORDIN A TE BENCH IN THE CASE OF H ANS RAJ SMARAK SOCIETY (SUPRA) , WH E REIN IT WAS HELD THAT SUB - SEC T ION (3 ) OF S.115BBC DEFINES THE EXPRESSION ANONYMOUS DONATION IN AN EXHAUSTIVE MANNER TO BE A CA S E WH E RE THE INSTITUTION ETC. DOES NOT MAINTAIN THE RECORD OF IDENTITY IN D I C ATING THE NAME AND ADDRESS OF THE PERSON MA K IN G THE CON T RIBU T ION. ACCOR D INGLY, KEEPING IN VIEW THE RELEVANT PROVIS I ON S OF S. 115BBC AND THE DECISION OF TH E COO R DIN A TE BENCH OF THE TRIBUNAL IN TH E C A S E OF H ANS RAJ SMARAK SOCIETY (SUPRA) IN THE LIGHT OF THE F ACTS OF THE CA S E, I T W A S HELD BY TH E TRIBUNAL IN TH E CASE OF VAISHNAVI EDU CA T I ONAL S O C I E TY (SUPRA) THAT TH E AMOUNTS IN QUEST ION COULD NOT B E TRE A TED AS AN ONYM OUS DONATION S UN D ER S.115BBC OF THE ACT. AS THE ISSUE INVOLVED IN TH E P RE SENT C ASE AS WELL AS ALL TH E M A TERIAL FACTS RELEVANT THE R ETO ARE SIMILAR TO THAT OF THE CA S E OF VAISHNAVI EDUCA T IONAL SO C I E TY (SUPRA), WE RESPECTFULLY FOLLOW TH E DECISION RENDERED BY THE COORDINATE BENCH IN THAT CASE AND DEL E TE T HE ADDITIONS MADE BY THE ASSESSING OFFICER AND CON F I R M E D BY THE LEARNED CIT(A) ON AC C OUN T OF ALL E GED AN ONYMOUS DONATIONS IN BOTH TH E Y EA RS UN D E R CONSIDERATION . 7. IN THE RESULT, BOTH THE APPEALS OF THE ASSESSEE ARE ALLOWED. I TA NO. 1177 & 1178 /H YD/20 14 VINAYAKA EDUCATIONAL SOCIETY, KUNTRAPAKKAM VILLAGE & POST, TIRUPATI RURAL 12 ORDER PRONOUNCED IN THE COURT ON 4 TH MARCH, 2015 SD/ - SD/ - ( ASHA VIJAYARAGHAVAN ) ( P.M.JAGTAP ) JUDICIAL MEMBER ACCOUNTANT MEMBER D T/ - 4 TH MARCH, 201 5 COPY FORWARDED TO: 1. VINAYAKA EDUCATIONAL SOCIETY, (KUNTRAPAKKAM V ILL & POST) M/S CH. PARTHASARATHY & CO., 1 - 1 - 298/2/B/3, 1 ST FLOOR, SOWBHAGYA AVENUE, ST. NO.1, ASHOK NAGAR, HYDERABAD. 2 . DY. COMMISSIONER OF INCOME - TAX CENTRAL CIRCLE, TIRUPATI 3. COMMISSIONER OF INCOME - TAX(APPEALS) GUNTUR 4. COMMISSIONER OF INCOME - TAX CENTRAL, HYDERABAD 5. DEPARTMENTAL REPRESENTATIVE, ITAT, HYDERABAD. B.V.S