NARAYANI SIDDHAR PEEDAM CHARITABLE TRUST,VELLORE V. DDIT (EXEMPTIONS-III), CHENNAI

ITA 1532/CHNY/2025

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The case involves Narayani Siddhar Peedam Charitable Trust, which appealed against the order of the CIT(A) confirming the addition made by the Assessing Officer. The addition pertained to donations received by the trust, which were treated as anonymous donations under section 115BBC of the Income Tax Act, 1961. The trust argued that it had maintained records of all donations with full particulars of the donors. However, the Assessing Officer and the CIT(A) were not satisfied with the evidence provided, leading to the appeal to the Tribunal. The Tribunal found that the trust did not conclusively establish the identity and creditworthiness of the donors, thus upholding the taxability of the donations.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 774121 (ITAT-CHENNAI)
• Duration Of Justice: 3 month(s) 12 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-09-2025
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 2011-2012
• Appeal Filed On: 28-05-2025
• Other Referred Cases: CIT v. Precision Finance (P.) Ltd. 208 ITR 465 (Cal)
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: V. ASWATHY
• Keywords: Charitable institution; Maximum Marginal Rate
• Section: 143(3); 11; 12AA

Judgement Text

"आयकर अपीलीय अिधकरण, ’ए’ Ɋायपीठ, चेɄई IN THE INCOME-TAX APPELLATE TRIBUNAL ‘A SMC’ BENCH, CHENNAI ŵी एस.एस. िवʷनेũ रिव, Ɋाियक सद˟ क े समƗ Before Shri S.S. Viswanethra Ravi, Judicial Member आयकर अपील सं./I.T.A. No.1532/Chny/2025 िनधाŊरण वषŊ/Assessment Year: 2011-12 Narayani Siddhar Peedam Charitable Trust, Rep. by its Trustee K. Soundararajan, Thirumalaikodi, Ariyur Villager, Vellore 632 055. [PAN: AAATN3254F] Vs. The Deputy Director Income Tax [Exemptions – III], Chennai. (अपीलाथŎ/Appellant) (ŮȑथŎ/Respondent) अपीलाथŎ की ओर से / Appellant by : None ŮȑथŎ की ओर से/Respondent by : Ms. V. Aswathy, JCIT सुनवाई की तारीख/ Date of hearing : 04.09.2025 घोषणा की तारीख /Date of Pronouncement : 09.09.2025 आदेश /O R D E R This appeal filed by the assessee is directed against the order dated 29.03.2025 passed by the Addl/JCIT(A)-5 Mumbai for the assessment year 2011-12. 2. When the appeal was taken up hearing, none appeared on behalf of the assessee nor filed any adjournment petition. Hence, the assessee is called absent and proceeds to decide the appeal on merits after hearing the ld. DR. Printed from counselvise.com I.T.A. No.1532/Chny/25 2 3. The assessee raised 5 grounds of appeal in challenging the action of the ld. CIT(A) in confirming the addition made by the Assessing Officer by invoking the provisions of section 115BBC of the Income Tax Act, 1961 [“Act” in short] and treating the donation as anonymous donation in the facts and circumstances of the case. 4. At the outset, it is noted that the assessment was completed under section 143(3) Act, wherein, the Assessing Officer held that the entire donation receipt of ₹.23,15,008/- becomes taxable under section 115BBC(1) of the Act since the assessee has not complied with the provisions of section 115BBC(3) of the Act as the assessee is a charitable institution, it cannot gain immunity as provided under section 115BBC(2) of the Act. By denying the exemption under section 11 of the Act, the Assessing Officer arrived at the taxable income of the assessee at ₹.21,99,258/- and taxed the same at Maximum Marginal Rates after treating the assessee as an AOP. The ld. CIT(A) confirmed the addition made by the Assessing Officer. 5. The ld. DR Ms. V. Aswathy, JCIT submits that the assessee should have maintained a record of the identity indicating the name and address of the person making contribution/donation as required under section 115BBC(3) of the Act and such record or register should be available with Printed from counselvise.com I.T.A. No.1532/Chny/25 3 the assessee in the financial year 2010-11 itself. She submits that it is a permanent record that should remain in the possession of the assessee and submitted as and when required. But, seeking time to provide the record and that too after much delay is incongruous and strengthens the opinion of the Assessing Officer that the donations received are anonymous. She further submits that the assessee is a charitable institution and it cannot gain immunity as provided under section 115BBC(2) of the Act. The ld. DR argued that since the assessee has not complied with the provisions of section 115BBC(3) of the Act, the Assessing Officer has rightly treated the entire donation receipt as taxable under section 115BBC(1) of the Act and prayed to dismiss the grounds raised by the assessee. 6. Having heard the ld. DR, it is noted that the assessee is a public charitable trust registered under section 12AA of the Act and also approved under section 80G(5)(vi) of the Act. The total receipts of the assessee includes donation received from various donors during the year to an extent of ₹.3,05,80,752/-. However, the Assessing Officer disallowed the donations amounting to ₹.23,15,008/- for the reason that no confirmation was received from the donors and accordingly, by invoking the provisions of section 115BBC of the Act, treated a portion of Printed from counselvise.com I.T.A. No.1532/Chny/25 4 the donation received by the assessee as anonymous and arrived at taxable income of ₹.21,99,258/-. Before the ld. CIT(A), the assessee has contended that ever since the formation of the trust, the trust has incorporated all details of donations received with full particulars of name and complete address of the donors along with the details of cheque/mode of receipts in the books of account itself and produced the same during the course of scrutiny proceedings. The assessee further contended before the ld. CIT(A) that the donations have been received through banking channels and the assessee also furnished the confirmation of donors for an amount of ₹.17,13,508/- and stated for the confirmation of balance donations of ₹.6,01,500/- was well below the eligible exemption limit of ₹.15,29,038/-, the ld. CIT(A), not satisfied with the contentions, confirmed the addition made by the Assessing Officer. 7. On perusal of the impugned order, it is noted that out of total 15 donors, the assessee has submitted confirmation in respect of 11 persons and the confirmations are not supported by return of income or any other document establishing the capacity of such persons to give donation. It is also noted that the assessee has not furnished copy of Aadhar card or PAN card (except PAN card of Shri Seetharamireddy Ramireddy). Thus, the assessee has not established the identity of the donors. It is pertinent Printed from counselvise.com I.T.A. No.1532/Chny/25 5 to mention here that merely entering a transaction through banking channel does not make a transaction sacrosanct and genuine in view of observations of the Hon’ble High Court of Calcutta in the case of CIT v. Precision Finance (P.) Ltd. 208 ITR 465 (Cal). Therefore, I am of the opinion that the assessee has not conclusively established the identity and creditworthiness of the donor and genuineness of the transaction and thus, the ld. CIT(A) has rightly confirmed the addition made by the Assessing Officer is justified. Thus, the ground raised by the assessee is dismissed. 8. In the result, the appeal filed by the assessee is dismissed. Order pronounced on 09th September, 2025 at Chennai. Sd/- (S.S. VISWANETHRA RAVI) JUDICIAL MEMBER Chennai, Dated, 09.09.2025 Vm/- आदेश की Ůितिलिप अŤेिषत/Copy to: 1. अपीलाथŎ/Appellant, 2.ŮȑथŎ/ Respondent, 3. आयकर आयुƅ/CIT, Chennai/Madurai/Coimbatore/Salem 4. िवभागीय Ůितिनिध/DR & 5. गाडŊ फाईल/GF. Printed from counselvise.com "