GURUDEV SIDDHA PEETH, THANE V. ITO WD 1(1), KALYAN

ITA 3466/MUM/2012

• Counselvise Citation: 346619914 RSA 2012
• Duration Of Justice: 3 year(s) 2 month(s) 6 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-07-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: G
• Next Hearing Date: 16-04-2015
• Assessment Year: 2007-2008
• Appeal Filed On: 16-05-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: VIJAY KUMAR BORA
• Assessee Lawyers: S N INAMDAR
• Keywords: Charitable institution
• Section: 10; 11

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, MUMBAI BENCH G , MUMBAI BEFORE SHRI R.C. SHARMA , ACCOUNTANT MEMBER AND SHRI SANJAY GARG , JUDICIAL MEMBER ITA NO. 3466 & 3467 /M/ 2012 ASSESSMENT YEAR: 2007 - 08 & 2008 - 09 GURUDEV SIDDHA PEETH, SHRISH THAKKAR, C/O. GUR UDEV SIDDHA PEETH, P.O. GANESHPUR DIST, THANE 401 206 PAN: AAATG 3200C VS. ITO, WARD - 1(1), KALYAN (APPELLANT) (RESPONDENT) PRESENT FOR: ASSESSEE BY : SHRI K. GOPAL, A.R. & SHRI S.N. INAMDAR, A.R . REVENUE BY : SHRI VIJAY KUMAR BORA, D.R. DATE OF HEARING : 16.04 .201 5 DATE OF PRONOUNCEMENT : 22.7. 2015 O R D E R PER SANJAY GARG, JUDICIAL MEMBER: THE ABOVE TITLED TWO APPEALS HA VE BEEN PREFERRED BY THE ASSESSE E AGAINST TWO ORDER S FOR THE A.Y.S 2007 - 08 & 2008 - 09 BOTH DATED 27.02.2012 OF THE COMMISSIONER OF INCOME TAX (APPEALS) [HEREINA FTER REFERRED TO AS THE CIT(A)]. SINCE THE FACTS AND THE ISSUE INVOLVED THEREIN ARE IDENTICAL IN NATURE, HENCE THE SAME ARE TAKEN TOGETHER FOR DISPOSAL BY TH IS COMMON ORDER. FOR THE SAKE OF CONVENIENCE THE FACTS HAVE BEEN TAKEN FROM THE ITA NO.3466/M/2012 FOR A.Y. 2007 - 0 8 . ITA NO.3466/M/2012 FOR A.Y. 2007 - 08 2. THE ASSESSEE HAS TAKEN THE FOLLOWING GROUNDS OF APPEAL: 1. THE LD. COMMISSIONER OF INCOME - TAX (A PPEALS) - I, THANE [HEREINAFTER REFERRED AS 'LD. CIT(A)'] ERRED IN CONFIRMING THE ACTION OF THE ITA NO.3466 & 3467 /M/2012 GURUDEV SIDDHA PE ETH 2 ASSESSING OFFICER IN TAXING THE AMOUNT OF R S. 28,25,536/ - BEING OFFERINGS AT THE SAMADHI SHRINE OF SWAMI MUKTANAND AND AT THE TEMPLE OF BHAGWAN NITYANAND INVOKING THE PROVISIONS OF SECTION 1 15BBC OF THE ACT WITHOUT APPRECIATING THE FACTS AND CIRCUMSTANCES OF THE CASE. 2. THE LD. CIT(A) FAILED TO APPRECIATE THAT THE OFFERINGS AT THE SAMADHI SHRINE OF SWAMI MUKTANAND AND AT THE TEMPLE OF BHAGWAN NITYANAND WERE FROM T HE DEVOTEES AS EXPRESSION OF GRATITUDE, RESPECT AND REVERENCE AND ARE NOT INCOME AT ALL AND ARE NOT IN THE NATURE OF 'VOLUNTARY CONTRIBUTIONS' OR ANONYMOUS DONATIONS AS CONTEMPLATED UNDER SECTION 1 15BBC. THE APPELLANT, THEREFORE, PRAYS THAT TAXING THE AMOU NT OF R S. 28,25,536/ - INVOKING THE PROVISIONS OF SECTION 1 15BBC IS NOT AT ALL JUSTIFIED AND HENCE, THE SAME MAY BE DELETED. 3. WITHOUT PREJUDICE TO THE ABOVE, THE LD. CIT(A) FAILED TO APPRECIATE THAT HAVING TAXED THE AMOUNT OF R S. 28,25,536/ - , THE AMOUNT RE QUIRED TO BE SPENT ON THE OBJECTS OF THE TRUST IN TERMS OF EXPLANATION 2 TO SECTION 11(1) IN THE SUBSEQUENT YEAR OUGHT TO BE RECOMPUTED. 4. THE LD. CIT(A) ERRED IN CONFIRMING THE LEVY OF INTEREST UNDER SECTION 234B, SECTION 234C AND SECTION 234D OF THE AC T IS NOT JUSTIFIED AS THE ASSESSEE DENIES THE SAME. 5. THE APPELLANT CRAVES LEAVE TO ADD, TO ALTER OR AMEND ANY OF THE GROUND BEFORE OR AT - THE TIME OF HEARING. 3. THE ASSESSEE IS AGGRIEVED BY THE ACTION OF THE LD. CIT(A) IN TAXING THE AMOUNT OF RS. 28,2 5,536/ - BEING OFFERINGS/HUNDIS IN DONATION BOXES AT THE SAMADHI SHRINE OF SWAMI MUKTANAND AND AT BHAGWAN NITYANAND TEMPLE AND PADUKA. A RECORD HAD BEEN MAINTAINED BY THE ASSESSEE IN RESPECT OF PADUKA OFFERINGS AT SIDDHA YOGA DHYAN KENTRAS IN DIFFERENT CO UNTRIES ALL OVER THE WORLD AMOUNTING TO RS.27,04,32 3 / - . IT HAS BEEN EXPLAINED BY THE ASSESSEE THAT OUT OF THE SAID AMOUNT OF RS.27,04,323/ - AN AMOUNT OF RS. 18,99,571/ - WAS RECEIVED BY CHEQUE, DEMAND DRAFT ETC. RECORD HAS ALSO BEEN MAINTAINED REGARDING CA SH RECEIPTS OF RS. 8,04,752/ - AND COMPLETE DETAILS OF NAME AND ADDRESS OF THE DONORS WAS SUBMITTED TO THE LD. CIT(A) UPON WHICH THE LD. CIT(A) HAD CALLED REMAND REPORT. AFTER CONSIDERING THE REMAND REPORT, THE LD. CIT(A) HELD THAT THE ASSESSEE HAD MAINTAIN ED A ND SUBMITTED THE RECORD RELATING ITA NO.3466 & 3467 /M/2012 GURUDEV SIDDHA PE ETH 3 TO OFFERING OF RS.27,04,323/ - INCLUDING CASH RECEIPTS OF RS.8,04,752/ - . HE THEREFORE HELD THAT THE SAID AMOUNT OF RS.27,04,323/ - DID NOT FALL IN THE CATEGORY OF ANONYMOUS DONATIONS LIABLE TO BE TAXED UNDER SECTION 115B BC OF THE ACT. HE, HOWEVER, HELD THAT THE ASSESSEE HAD NOT MAINTAINED THE RECORD RELATING TO THE OTHER DONATIONS DETAIL OF WHICH IS AS UNDER: I) OFFERINGS IN THE SAMADHI SHRINE OF SWAMI MUKTANAND OF RS.9,62,089/ - . II) OFFERING IN THE NITYANAND DHYAN MA NDIR OF RS. 17,23,952/ - III) OFFERING IN KIND (GOLD AND SILVER ARTICLES) OF RS.1,39,495/ - THE LD. CIT(A) , THEREFORE, HELD THAT AS PER THE PROVISIONS OF SECTION 115BBC ANONYMOUS DONATIONS AS DETAILED ABOVE WERE LIABLE TO BE TAXED AT THE RATE OF 30%. AGGR IEVED BY THE ORDER OF THE LD. CIT(A), THE ASSESSEE HAS COME IN APPEAL BEFORE US. 4. WE HAVE HEARD THE RIVAL CONTENTIONS AND HAVE ALSO GONE THROUGH THE RECORDS. THE LOWER AUTHORITIES HAVE TAXED THE ASSESSEE IN RELATION TO THE OFFERINGS RECEIVED IN T HE DONATIONS BOXES AT SAMADHI SHRINE OF SWAMI MUKTANAND AND BHAGWAN NITYANAND MANDIR. TO GET PROPER CONCLUSION OF THE MATTER, WE HAVE TO DELIBERATE UPON THE PROVISIONS OF SECTION 115BBC WHICH FOR THE SAKE OF REFERENCE IS REPRODUCED AS UNDER: ANONYMOUS DONATIONS TO BE TAXED IN CERTAIN CASES. 115BBC. (1) WHERE THE TOTAL INCOME OF AN ASSESSEE, BEING A PERSON IN RECEIPT OF INCOME ON BEHALF OF ANY UNIVERSITY OR OTHER EDUCATIONAL INSTITUTION REFERRED TO IN SUB - CLAUSE (IIIAD) OR SUB - CLAUSE (VI) OR ANY HOSPITAL OR OTHER INSTITUTION REFERRED TO IN SUB - CLAUSE (IIIAE) OR SUB - CLAUSE (VIA) OR ANY FUND OR INSTITUTION REFERRED TO IN SUB - CLAUSE (IV) OR ANY TRUST OR INSTITUTION REFERRED TO IN SUB - CLAUSE (V) OF CLAUSE (23C) OF SECTION 10 OR ANY TRUST OR INSTITUTION REFERRED TO IN SECTION 11 , INCLUDES ANY INCOME BY WAY OF ANY ANONYMOUS DONATIO N, THE INCOME - TAX PAYABLE SHALL BE THE AGGREGATE OF [ (I) THE AMOUNT OF INCOME - 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: ITA NO.3466 & 3467 /M/2012 GURUDEV SIDDHA PE ETH 4 (A) FIVE PER CENT OF THE TOT AL DONATIONS RECEIVED BY THE ASSESSEE; OR (B) ONE LAKH RUPEES, AND (II) THE AMOUNT OF INCOME - TAX WITH WHICH THE ASSESSEE WOULD HAVE BEEN CHARGEABLE HAD HIS TOTAL INCOME BEEN REDUCED BY THE AGGREGATE OF ANONYMOUS DONATIONS RECEIVED .] _________________ TH E FOLLOWING CLAUSE (II) SHALL BE SUBSTITUTED FOR THE EXISTING CLAUSE (II) OF SUB - SECTION (1) OF SECTION 115BBC BY THE FINANCE (NO.2) ACT, 2014, W.E.F. 1 - 4 - 2015: (II) THE AMOUNT OF INCOME - TAX WITH WHICH THE ASSESSEE WOULD HAVE BEEN CHARGEABLE HAD HIS TOTAL INCOME BEEN REDUCED BY THE AGGREGATE OF ANONYMOUS DONATIONS RECEIVED IN EXCESS OF THE AMOUNT REFERRED TO IN SUB - CLAUSE (A) OR SUB - CLAUSE (B) OF CLAUSE (I), AS THE CASE MAY BE.] ___________________ (2) THE PROVISIONS OF SUB - SECTION (1) SHALL NOT APPLY TO ANY ANONYMOUS DONATION RECEIVED BY (A) ANY TRUST OR INSTITUTION CREATED OR ESTABLISHED WHOLLY FOR RELIGIOUS PURPOSES; (B) ANY TRUST OR INSTITUTION CREATED OR ESTABLISHED WHOLLY FOR RELIGIOUS AND CHARITABLE PURPOSES OTHER THAN ANY 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. (3) FOR THE PURPOSES OF THIS SECTION, 'ANONYMOUS DONATION' MEANS ANY VOL UNTARY CONTRIBUTION REFERRED TO IN SUB - CLAUSE (IIA) OF CLAUSE (24) OF SECTION 2 , WHERE A PERSON RECEIVING SUCH CONTRIBUTION DOES NOT MAINTAIN A RECORD OF THE IDENTI TY INDICATING THE NAME AND ADDRESS OF THE PERSON MAKING SUCH CONTRIBUTION AND SUCH OTHER PARTICULARS AS MAY BE PRESCRIBED. 5. THE SECTION 115BBC HAS BEEN INSERTED BY FINANCE ACT, 2006 W.E.F. 01.04.07. A PERUSAL OF THE ABOVE SECTION REVEALS THAT THIS SEC TION IS BASICALLY MEANT TO CHECK THE MOVEMENT OF BLACK MONEY INTO THE SYSTEM IN THE NAME OF ANONYMOUS DONATIONS. HOWEVER, CERTAIN DONATIONS WHICH CANNOT BE SAID TO BE MADE TO AVOID THE IDENTITY OF THE DONOR FOR ANY ILLEGAL PURPOSES E.G. BLACK MONEY ETC. THE SAME HAVE BEEN EXCLUDED FROM THE PURVIEW OF SUB SECTION ( 1 ) OF SECTION 115BBC. SUB SECTION ( 2 ) IN THIS RESPECT PROVIDES THAT THE PROVISIONS OF SUB SECTION ( 1 ) SHALL NOT APPLY TO ANY ANONYMOUS DONATIONS RECEIVED BY (A) AN INSTITUTION ESTABLISHED FOR RE LIGIOUS PURPOSES (B) TO ANY TRUST OR INSTITUTION ITA NO.3466 & 3467 /M/2012 GURUDEV SIDDHA PE ETH 5 CREATED OR ESTABLISHED FOR RELIGIONS AND CHARITABLE PURPOSES OTHER THAN ANY ANONYMOUS DONATIONS MADE WITH A SPECIFIC DIRECTION THAT SUC H DONATION IS FOR ANY UNIVERSITIES, EDUCATIONAL INSTITUTION S , HOSPITAL O R MEDICAL INSTITUTION ETC. A CAREFUL READING OF THE ENTIRE SECTION OF 115BBC REVEALS THAT THE PROVISIONS HAVE BEEN MEANT TO CHECK THE INFLOW OF BLACK MONEY/UNACCOUNTED MONEY INTO THE SYSTEM/INSTITUTIONS SUCH AS UNIVERSITIES, EDUCATIONAL INSTITUTIONS, MEDI CAL INSTITUTIONS ETC. AND IT HAS BEEN PROVIDED THAT THE RECORD OF THE DONOR ALONG WITH NAME AND ADDRESS ETC. SHOULD BE MAINTAINED. SUB SECTION ( 2 ) SPECIFICALLY EXCLUDES ANONYMOUS DONATIONS RECEIVED BY AN INSTITUTION WHICH ARE OTHER THAN ANY ANONYMOUS DONA TIONS MADE WITH A DIRECTION THAT SUCH DONATION IS FOR UNIVERSITY, MEDICAL INSTITUTION ETC. WHEN WE READ CLAUSE (A) AND CLAUSE (B) OF SUB SECTION (2) IN HARMONY AND IN CONSCIENCE WITH EACH OTHER THEN IT BECOMES CLEAR THAT THE PROVISIONS OF SUB SECTION (1) WILL NOT APPLY TO THE DONATIONS LIKE THAT HAS BEEN RECEIVED BY THE ASSESSEE IN DONATION BOXES FROM NUMEROUS DEVOTEES WHO HAVE OFFERED THE OFFERINGS ON ACCOUNT OF RESPECT , ESTEEM , REGARD, REFERENCE AND THEIR PRAYER FOR THE DEITY/SIDDHA PEETH. SUCH TYPE OF OFFERINGS ARE MADE/PUT INTO THE DONATION BOX BY NUMEROUS VISITORS AND ITS GENERALLY NOT POSSIBLE FOR ANY SUCH TYPE OF INSTITUTIONS TO MAKE AND KEEP RECORD OF EACH OF THE DONOR WITH HIS NAME ADDRESS ETC. EVEN SOMETIMES THE DONORS OUT OF THEIR ESTEEM, RESPE CT AND REGARD AND SELFLESSNESS THEY DO NOT WANT THAT THEIR NAME BE REGISTERED AS A DONOR BEFORE THE DEITY FOR WHOM THEM MAKE THE PRAYER IN THE BELIEF THAT THE DEITY IS THE ULTIMATE GIVER OF ALL THE WORTH AND VIRTUES OF THEIR LIFE. NOW REVERTING TO THE DEF INITION OF ANONYMOUS DONATIONS UNDER SUB SECTION (3) OF SECTION 115BBC , WE FIND THAT IT HAS BEEN MENTIONED THAT ANONYMOUS DONATIONS MEANS VOLUNTARY CONTRIBUTIONS WHERE THE PERSON RECEIVING SUCH CONTRIBUTIONS DOES NOT MAINTAIN A RECORD OF THE IDENTITY INDIC ATING THE NAME AND ADDRESS OF THE PERSON MAKING SUCH CONTRIBUTION AND SUCH OTHER PARTICULARS AS MAY BE PRESCRIBED. IN THE CASE OF A RELIGIOUS OR ITA NO.3466 & 3467 /M/2012 GURUDEV SIDDHA PE ETH 6 CHARITABLE TRUST AS IN THE CASE OF THE ASSESSEE AS WE HAVE OBSERVED ABOVE, IT IS GENERALLY NOT ONLY DIFFICULT BUT ALSO NOT POSSIBLE TO MAINTAIN SUCH TYPE OF RECORD. A PERUSAL OF THE ENTIRE SECTION 115BBC SHOWS THAT THE PROVISIONS OF SAID SECTION ARE NOT APPLICABLE TO THE INSTITUTIONS LIKE THAT OF ASSESSEE TRUST AS THE SAME ARE MEANT TO CHECK THE INFLOW OF UNACCOU NTED/BLACK MONEY INTO THE SYSTEM WITH A MODUS OPERANDI TO MAKE OUT AS A PART OF THE ACCOUNTS OF THE INSTITUTIONS LIKE UNIVERSITY, MEDICAL INSTITUTIONS WHERE THE PROBLEM RELATING TO THE RECEIPT OF CAPITATION FEES, ETC. IS GENERALLY HIGHLIGHTED. UNDER SUCH CIRCUMSTANCES, WE DO NOT FIND ANY JUSTIFICATION ON THE PART OF THE LD. CIT(A) IN TAXING THE OFFERINGS RECEIVED IN THE HUNDIS/DONATION BOXES AS INCOME OF THE ASSESSEE UNDER SECTION 115BBC. 6. IN VIEW OF OUR ABOVE OBSERVATIONS AND SUBJECT TO TAXABILITY OF THE INCOME UNDER ANY OTHER PROVISION OF THE ACT AS THE CASE MAY BE, THE AP PEAL OF THE ASSESSEE IS ALLOWED. ITA NO. 3467/M/2012 FOR A.Y. 2008 - 09 7. SINCE THIS APPEAL IS IDENTICAL IN NATURE TO THE APPEAL OF THE ASSESSEE I.E. ITA NO.3466/M/2012 FOR A.Y.20 07 - 08 , HENCE THIS APPEAL IS ALSO DECIDED IN FAVOUR OF TH E ASSESSEE, IN VIEW OF THE DISCUSSION MADE ABOVE. 8. IN THE RESULT, BOTH THE APPEALS OF THE ASSESSEE ARE HEREBY ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 22.7.2015. SD SD ( R.C. SHARMA ) (SANJAY GARG) ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI, DATED: 22.7. 201 5 . * KISHOR E , SR. P.S. ITA NO.3466 & 3467 /M/2012 GURUDEV SIDDHA PE ETH 7 COPY TO: THE APPELLANT THE RESPONDENT THE CIT, CONCERNED, MUMBAI THE CIT ( A) CONCERNED, MUMBAI THE DR CONCERNED BENCH //TRUE COPY// [ BY ORDER TRUE COPY DY/ASSTT. REGISTRAR, ITAT, MUMBAI.