SHREE SWAMINARAYAN VISHWA VIDYAPITH TRUST, SURAT V. THE INCOMETAX OFFICER, EXEMPTION WARD, SURAT, SURAT

ITA 457/SRT/2024

• Counselvise Citation: [2024] 130 COUNSELVISE.COM (IT) 4727 (ITAT-SURAT)
• Duration Of Justice: 4 month(s) 18 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 04-09-2024
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 05-08-2024
• Assessment Year: 2016-2017
• Appeal Filed On: 17-04-2024
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: VINOD KUMAR
• Assessee Lawyers: HIREN VEPARI
• Keywords: Additional evidence; Question of law; Corroborative evidences; Charitable institution; Benefit of exemption
• Section: 143(3); 68; 43; 12A; 13; 80G; 20

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, SURAT BENCH, SURAT BEFORE SHRI PAWAN SINGH, JUDICIAL MEMBER AND SHRI BIJAYANANDA PRUSETH, ACCOUNTANT MEMBER ITA No. 457/SRT/2024 for AY: 2016-17 (Physical hearing) Shree Swaminarayan Vishwa Vidyapith Trust, 1, Swaminarayan Sankul, Kadodara Char Rasta, Kadodara, Taluka-Palsana, Surat – 394327. PAN : AABTS8075N Vs The ITO, Exemption Ward, Surat APPELLANT RESPONDEDNT Appellant by Shri Hiren Vepari, CA Respondent by Shri Vinod Kumar, Sr. DR Date of hearing 06/08/2024 Date of pronouncement 05/09/2024 Order under Section 254(1) of Income tax Act PER PAWAN SINGH, JUDICIAL MEMBER: 1. This appeal by assessee is directed against the order of learned Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (in short ‘the NFAC’), Delhi, dated 28.03.2024 for assessment year (AY) 2016- 17. The assessee has raised following grounds of appeal: “(1) On the facts and circumstances of the case, the learned CIT(A) was not justified in denying relief u/s 11(1)(d) on Rs.41,81,205, particularly when the appellant furnished necessary particulars. (2) Without prejudice to the above, with neither the registration u/s. 12A disputed nor objects / activities, the appellant deserves to be granted benefit u/s 11(1)(a). (3) All of the above grounds are prejudiced to one another. (4) The appellant craves leave to add, alter or vary any of the grounds of appeal.” 2. Brief facts of the case are that assessee is a trust registered with Charity Commissioner, Surat. The assessee is also having registration under section 12A/12AB and approval under section 80G of Income-tax Act (Act). The assessee filed its return of income for AY.2016-17 on 19.09.2016 declaring total income ‘Nil’. The case was selected for scrutiny. During the ITA No.457/SRT/2024/AY.2016-17 Shree Swaminarayan Vishwa Vidyapith Trust 2 assessment, the Assessing Officer (AO) noted that assessee has shown to have received corpus donation of Rs.52,92,316/-. The assessee was asked to furnish complete list of persons with their name and address, along with copy of receipt, who had made such donations. The AO noted that no such details were furnished, thus, again vide show cause notice dated 13.11.2018, the assessee was asked as to why corpus donation of Rs.52,92,316/- be treated as the anonymous donation and disallowed in absence of details. The AO further recorded that no response was made by the assessee. The AO treated the entire donation as an anonymous donation and taxed the same under section 115BBC of the Act in assessment order passed under section 143(3) on 10.12.2018. 3. Aggrieved by the addition in the assessment order, the assessee filed appeal before Ld. CIT(A). The assessee filed its detailed written submission in support of grounds of appeal. The submissions of assessee are recorded in para 4, 5 and 6 of the order of Ld. CIT(A). In the submission, the assessee stated that they are holding valid registration under section 12A dated 30.01.1997 as well as approval under section 80G of the Act. The trust is registered with Charity Commissioner, Surat. Such facts were not disputed by AO. During the assessment, assessee was asked to furnish corpus donation detail vide show cause notice dated 14.07.2018. In response to such notice, the assessee vide his reply dated 04.09.2018, furnished the details of donation of Rs.11,11,111/- and informed that balance corpus donations were in the form of thousands of small donation of Swaminarayan Bhakta. Later on, show cause notice dated 13.11.2018 was issued to justify as to why the entire donation should not be treated as anonymous. The ITA No.457/SRT/2024/AY.2016-17 Shree Swaminarayan Vishwa Vidyapith Trust 3 assessee immediately furnished the complete details of the donors from whom corpus donation was received to their consultant J. R. Kakadiya & Co. The assessee was under the impression that the information provided to the consultant was submitted before AO within the stipulated time. The assessee realized only when the assessment order was finalized informing those details were not furnished before the AO. The assessee filed affidavit of one of the trustees. The assessee in addition to this also filed application under Rule 46A for allowing admission of Additional evidence in furnishing the name and address of donors. The submission of assessee along with additional evidence was referred to the AO for his remand report, with the direction for conducting necessary enquiry. In response to the direction, the AO submitted his remand report along with his letter dated 06.12.2023. The contents of remand report are recorded on page nos. 10 to 13 of impugned order. In the remand report, the AO reiterated that in response to show cause notice, the assessee has not furnished any reply or details, hence entire donation was treated as anonymous donation. During the appellate proceedings, the assessee has furnished the detailed list of 1304 donors who donated amount of Rs.52,92,613/- along with their receipts. However, the assessee has not submitted any documents showing the specific direction to the donor and no specific purpose is mentioned on such receipts. The assessee has shown corpus donation of Rs.52,92,613/- and as per section 11(1)(d) any voluntary contribution received by a trust or an institution created only for religious purpose with a specific direction shall form part of corpus of the trust shall not be included in the total income, so that recipient has not liberty to apply these funds as they wish to keep on ITA No.457/SRT/2024/AY.2016-17 Shree Swaminarayan Vishwa Vidyapith Trust 4 long-term basis on a permanent fund. The assessee does not file any written documents with a direction from donor. The AO thus contended that he correctly assessed the total income by treating corpus donation as an anonymous donation. The AO has also objected against the admission of additional evidence. The copy of remand report was provided to the assessee for their comment. The assessee filed their comment against the remand report on 15.03.2024. The assessee in its objection / rejoinder submitted that they are primarily an education trust and runs school and colleges and imparting modern education within Indian values to general public. They operate in Kadodara, which is small village near the City of Surat. The AO mainly objected on three grounds viz. (i) that there is no specific direction from the donor, (ii) that assessee has not invested the sums in the amounts specified under section 11(5) and (iii) additional evidence should not be allowed. Against the objection no. (i), the assessee stated that all total corpus donation should be divided into five parts which were detailed in a tabulated form in the following manner; ITA No.457/SRT/2024/AY.2016-17 Shree Swaminarayan Vishwa Vidyapith Trust 5 4. The assessee stated that details of Rs.11,11,111/- were furnished during the assessment vide letter dated 18.09.2023 and is not at all additional evidence. The assessee also explained the scope of section 115BBC and submitted that in the remand report the AO has not doubted the identity of the donors, so it cannot be termed as anonymous. On second objection, the assesse submitted that section 11(5) simply prescribed the permissible mode with investing or depositing the funds for safeguard of surplus public money belonging to the trust being, wrongly invested in the risky avenues. From the balance sheet, it is clear that no funds have been invested or deposited in modes other than this prescribed under section 11(5). Against objection no.3, the assessee submitted that they have explained genuine reason for non-submission or evidence during the assessment as they were completely dependent on tax consultant or necessary compliance. 5. The Ld. CIT(A) after considering the submission of assesse, accepted the application under Rule 46A and admitted the evidence filed before him. The Ld. CIT(A) while considering the submission on merit allowed part relief to the assessee with regard to Rs.11,11,111/- wherein specific purpose was mentioned by the donor in his letter which was furnished by assessee. However, for remaining amount of Rs.41,81,205/-, the ld CIT(A) held that the assessee has not proved with supporting evidence that the said corpus donations were given by the donors for specific purpose. The assessee also raised ground that AO has not allowed deduction to the extent of 15% of gross income / receipt. The Ld. CIT(A) held that in section 11(1)(d), in specific provision is made for exemption in respect of corpus donation subjected to fulfillment of certain conditions. When such contribution is ITA No.457/SRT/2024/AY.2016-17 Shree Swaminarayan Vishwa Vidyapith Trust 6 made without specific direction, thus, the assessee does not qualify for exemption under section 11(1)(a) of the Act, therefore such ground of appeal was also dismissed. Further aggrieved, the assessee filed present appeal before this Tribunal. 6. We have heard the submission of the learned authorised representative (Ld. AR) of the assessee and Learned Commissioner of Income Tax Departmental Representative (Ld. CIT-DR) for the Revenue and with their active assistance has gone through the orders of lower authorities. The Ld. AR of the assessee submitted that assessee-trust is registered with Charity Commissioner, Surat, having registration under section 12AB and approval under section 80G of the Act. The genuineness of activity of assessee-trust is not doubted by lower authorities. Basic issue involved in the present appeal relates to treating the corpus donation as non-corpus donation by treating it as anonymous donation and / or not received with specific direction from donor. The Ld. AR of the assessee submits that though the assessee has given all details to their consultant but the same was not filed before the AO in time, therefore, the AO held that required details about donors were not furnished. And in absence of documentary evidence, entire corpus donation was treated as anonymous donation. Before Ld. CIT(A), the assessee filed application for admission of additional evidence. The Ld. CIT(A) graciously accepted the prayer of assessee and remanded all such evidence to AO for his examination and to furnish his remand report. The AO furnished the remand report. On the basis of remand report, the Ld. CIT(A) allowed corpus donation of Rs.11,11,111/-, however remaining donation of Rs.41,81,205/- was not allowed and was treated as non-corpus. ITA No.457/SRT/2024/AY.2016-17 Shree Swaminarayan Vishwa Vidyapith Trust 7 The Ld. CIT(A) treated such donation as non-corpus for the want of supporting evidence for specific purpose under section 11(1)(d) of the Act. The assessee furnished the name and addresses of all the donors, the name and address were not disputed by AO in his remand report as well as by Ld. CIT(A) in his order. The Ld. AR of assessee submits that maintenance of name and address is sufficient for the requirement of Section 115BBC, and no further requirement is prescribed. The Ld. AR of assessee carried us through the provision of sub-section (3) of Section 115BBC and would submit that for the purpose of this section, “anonymous donation” means any voluntary contribution referred to in sub-clause (iia) of clause (24) of section 2, where a person received such contribution does not maintain a record of identity indicating the name and address of the person making such contribution and such other particulars, as may be prescribed. The Ld. AR of assessee submits that nothing is prescribed in the Income-tax Rules or in any Circular by CBDT for compliance of sub-section (3) of 115BBC. Once the name and addresses of donor is maintained, the donation received from such person cannot be treated as “anonymous donation”. When the genuineness of the activities is not doubted, the donation may be treated as regular donation for their application. The assessee has kept all the donation in a separate account for using for its objects under “trust fund or corpus”, copy of relevant part of balance sheet is filed at page No. 186 of Paper Book (PB). To support such submission, the assessee relied upon the decision of Mumbai Tribunal in case of Bombay Pinjrapole Trust, in ITA No.5745/Mum/2011. On treating the donation as non-corpus donation, the Ld. AR submits that each receipt specified corpus for which donation ITA No.457/SRT/2024/AY.2016-17 Shree Swaminarayan Vishwa Vidyapith Trust 8 was received, which take care of condition of Section 11(1)(d). Large number of devotees of Swaminarayan contributed small amounts for the cause, which they are very well aware. 7. In alternative submission, the Ld. AR of the assessee submits that in case corpus donation are to be treated as non-corpus, it may be added to the income with the allowance of benefit under section 11(1) of the Act. To support all such contentions, the Ld. AR of assessee relied upon the following decisions:  DIT vs. Sri Ramakrishna Seva Ashrama, 18 taxmann.com 37 (Kar),  J. B. Educational Society, 98 DTR 347 (Hyderabad),  Indian Society of Anesthesiologists, 47 taxmann.com 183 (Chennai Trib),  St. Ann’s Home for the Aged. Vs ITO, 13 TTJ 185 (Bangalore),  ITO Vs Shri Satya Kabir Sahababni Gadi, 50 TTJ 501 (Ahmedabad Trib),  Jaipur Golden Charitable Clinical Laboratory Trust – 311 ITR 365 (Delhi),  CIT vs. Bharatiya Samskriti Vidyapith Trust, (2014) 43 taxmann.com 1295 (Kar)  ACIT vs. Shree Maheswari Samaj, (2024) 162 taxmann.com 804 (Jodhpur Trib)  DIT(E) vs. Sri Belimatha Mahasamsthana Socio Cultural and Educational Trust, (2012) 20 taxmann.com 694 (Karnataka),  CIT(E) vs Om Prakash Jindal Gramin Jan Kalyan Sansthan, (2022) 139 taxmann.com 85 (Delhi),  ITO(E) vs. Serum Institute of India Research Foundation, (2018) 90 taxmann.com 229 (Pune – Trib),  Dhirendra Pal Singh Institute of Higher Education Agra Vs JCIT (2018) TMI 1464 (Agra),  ACIT Vs Shree Shiv Vankeshwar Educational Trust & Social Welfare Trust (2019) TMI 1057 (ITAT Delhi),  ITO Vs Aishwarya Foundation Patna (2023) TMI 273 (ITAT Patna),  Peoples Forum Vs CIT (2023) 154 taxmann.com 505 (Orrisa),  Radhakrishna Akshar Vikas Nyas Vs ACIT (2024) 161 taxmann.com 739 (Indoor Trib),  DCIT (E) Vs Shree Ramswaroop Charitable Trust (2019) (3) TMI 1930 (ITAT Lucknow),  ITO Vs The Himalayan Public School Sewa Sansthan 2018 (8) TMI 2017 (ITAT Lucknow),  DIT vs Hansraj Samarak Society 2012(9) 843 (Delhi High Court), ITA No.457/SRT/2024/AY.2016-17 Shree Swaminarayan Vishwa Vidyapith Trust 9  Gain Sagar Educational Society and Charitable Trust Vs DCIT 2024 (1) TMI 350 (ITAT Delhi). 8. On the other hand, Ld. CIT-DR for the Revenue supported the order of Ld. CIT(A). The Ld. CIT-DR for Revenue submitted before AO, the assessee has not furnished any evidence to substantiate the claim of corpus donation. Before Ld. CIT(A), the assessee filed all such evidence in support of alleged corpus donation. The Ld. CIT(A), on the application of assessee for admission of additional evidence, called remand report of AO. The Ld. CIT(A) on appreciation of such remand report and the evidence so furnished by assessee, accepted the claim of the assessee with regard to donation of Rs.11,11,111/- which was received from a single donor with specific direction, however, other remaining corpus donation was not accepted and was treated as “anonymous donation” as there is no specific direction mention on donation receipt for treatment of their donation as corpus donation. The all the receipts of remaining donor are stereotype and does not contain complete address and PAN of such donors. In absence of specific direction, such donation was rightly treated as “anonymous donation”. The Ld. CIT-DR by referring all the decisions which is filed and relied by Ld. AR of the assessee would submit that in all decisions, there is specific direction of donor for donation either for building fund or for corpus. No such reference is mentioned in any of the receipts filed by assessee. 9. We have considered the rival submission of both the parties and perused the material available on record. We have also deliberated on various case laws relied by the assessee. There is no dispute that the assessee is charitable trust having registration under section12AB and approval under ITA No.457/SRT/2024/AY.2016-17 Shree Swaminarayan Vishwa Vidyapith Trust 10 section 80G. Activities of the assessee are not doubted by the lower authorities. As recorded earlier, the AO treated entire donation as anonymous donation for the want of proper evidence by the assessee. We find that before ld CIT(A), the assessee filed copy of all the receipt of donation made by 1304 doners. The evidence filed by assessee was forwarded to the AO for his comment and his remand report. The AO furnished his remand report on 06/12/2023. The ld CIT(A) on considering the contents of remand report accepted the donation of Rs. 11,11,111/- as genuine as purpose of donation was mentioned in the letter of donor. However, remaining amount of donation from 1304 donor of Rs. 41,81,205/- was confirmed by holding that the assessee failed to prove with supporting evidence that said donations were given by donors for specific purpose. It was also held that the assessee has not maintained record of identity of name and address of donors. Before us, the ld AR of the assessee while making his submissions vehemently argued that for the purpose of section 115BBC (3), “anonymous donation” means any voluntary contribution referred to in sub-clause (iia) of clause (24) of section 2, where a person received such contribution does not maintain a record of identity indicating the name and address of the person making such contribution and such other particulars, as may be prescribed. And that nothing is prescribed in the Income-tax Rules or in any Circular by CBDT for compliance of sub-section (3) of 115BBC. We find convincing force in the submissions of ld AR of the assessee that once the name and addresses of donor is maintained, the donation received from such person cannot be treated as “anonymous donation”. The assessee also furnished the name ITA No.457/SRT/2024/AY.2016-17 Shree Swaminarayan Vishwa Vidyapith Trust 11 and address of 1304 donor with the amount of donation by each of the donors. We find that out of the total donation disallowance confirmed by ld CIT(A), the assessee furnished the name and address of total donors, who donated Rs. 35,58,309/- out of which Rs. 20,666/- was received through banking channel and remaining in cash. Further donation of Rs. 2,51,866/- also received through banking channel. Further, donation of Rs. 87500/- was also received through banking channel but their name and address are not available/traceable by assessee. All such details were provided to the ld. CIT(A) as recorded on page No. 16 of impugned order. The details of which we have scanned in para 3 (supra). The AO in his remand report objected that there is no written document with specific direction from the donor and a general comment is mentioned in all the receipts “trust fund”. 10. The Hon’ble Karnataka High Court in CIT vs. Bharatiya Samskriti Vidyapith Trust (supra) while considering the question of law ‘whether the appellate authorities were right in holding that donation received by the assessee would not be brought to tax under section 68 of the Act as assessee failed to disclose the names of the donors and further held that the said donations are utilized as corpus towards building fund’, held that, though the word ‘specific direction’ is used in the provision, the Legislature consciously not used the word ‘in writing’. In absence of any writing, only means to find out as to what is the specific direction can be gathered by considering how the recipient of the amount has accounted for it. The recipient has accounted amount received towards building fund and thereafter, a separate account is maintained for the said amount. From this, it could be inferred that there is a specific direction of the donor. Further, Hon’ble Karnataka High Court in ITA No.457/SRT/2024/AY.2016-17 Shree Swaminarayan Vishwa Vidyapith Trust 12 DIT Vs Sri Belimatha Mahasamsthana Socio Cultural and Educational Trust (supra) held that when assessee was not able to give name and address of donors as well as modes of payments etc., if said amount utilized or spent for charitable purpose then said amount would be eligible for exemption under Section 11AB of the Act. Further in DIT Vs Ramakrishna Sewa Ashrama (supra) held that where donation received by assessee-trust is kept in deposit account and income earned therefrom is utilized for charitable purpose, assessee is entitled to the benefit of exemption under Section 11(1)(d) in respect of the said income. It was also held that the word “corpus” is used in the context of the Act. One has to understand the same in the context of a capital, opposed to an expenditure. It is capital of the assessee; a capital of an estate; capital of a trust; a capital of an institution. Therefore, if any voluntary contribution is made with specific direction, it shall be treated as the capital of the trust for carrying on its charitable or religious activities, then, such an income falls under Section 11(1)(d) and is not liable to tax. It is not necessary that a voluntary contribution should be made with a specific direction to treat it as corpus. If the intention of donor is to give that money to a trust which will keep it in trust account in deposit and the income from the same is utilized for carrying on a particular activity, it satisfied the definition part of corpus. 11. We find that the Coordinate Bench of Agra Tribunal in Dhirendra Pal Singh Institute of Higher Education Vs JCIT (supra) also held that when assessee furnished the name and address of all the contributors, it duly complied requirement of Section 115BBC(3). There is no further requirement in the Section. No particulars have been shown to have been further prescribed. ITA No.457/SRT/2024/AY.2016-17 Shree Swaminarayan Vishwa Vidyapith Trust 13 Delhi Bench of Tribunal in the case of ACIT Vs Shree Shiv Vankeshwar Educational & Social Welfare Trust (supra) also held that Sub-Section (3) of Section 115BBC defines anonymous donation, which means any voluntary contribution referred to in Section 2(24)(iia), where a person receiving such contribution does not maintain a record consisting of identity of person making such contribution indicating name and address of a person and such other particulars as may be prescribed. It was held that Bench asked whether CBDT has prescribed any particulars which required to be maintained by the assessee-trust, the answer was no. It was held that there is no such prescription about what kind of particulars, the assessee-trust is required to maintain, thus simple requirement is maintaining name and address of the donors. It was also held that when the assessee has given the name and address of the donors with other particulars and it was not the case of revenue that the assessee not maintained and provided details to the Assessing Officer. So the donation received by assessee will not fall into the definition of anonymous donation and the CIT(A) correctly reached on the conclusion that donation received by the assessee is not anonymous donation. Similar view as taken by the Patna Bench of Tribunal in ITO Vs Aishwarya Foundation, Patna (supra). 12. Now turning the case in hand, we find that the assessee has given name and address of majority of the donors except certain meagre amount of Rs. 87,500/- which was received through banking channel but the assessee could not press the name and address, such detail is duly recorded by the ld. CIT(A) which we have referred in para 3 (supra). We further find that the assessee has kept the donation in a separate account as has been ITA No.457/SRT/2024/AY.2016-17 Shree Swaminarayan Vishwa Vidyapith Trust 14 shown in the balance-sheet, copy of which is filed at page No. 186 of the paper book. We also find that maintenance of separate account of such donation is not disputed by the Assessing Officer. At the cost of repetition, we may mention that activities of assessee-trust are also not disputed by the Assessing Officer. Thus, in view of aforesaid factual and legal discussion, we do not find any justification for treating the corpus donation as anonymous donation. Hence we direct the Assessing Officer to allow the entire voluntary contribution of Rs. 41,81,205/- as a part of corpus donation. Considering the fact that we have allowed relief to the assessee on primary submission, therefore, adjudication on alternative plea for allowing the benefit under Section 11(1)(a) of the Act has become academic. In the result, grounds of appeal raised by the assessee are allowed. 13. In the result, appeal of assessee is allowed. Order pronounced on 05/09/2024 in the open court. Sd/- Sd/- (BIJAYANANDA PRUSETH) (PAWAN SINGH) ACCOUNTANT MEMBER JUDICIAL MEMBER Surat, Dated: 05/09/2024 *Ranjan Copy to: 1. Appellant 2. Respondent 3. CIT(A) 4. CIT 5. DR 6. Guard File By Order Assistant Registrar/Sr.PS/PS, ITAT, Surat