Peoples Forum vs Commissioner Of Income Tax
2023 Latest Caselaw 8542 Ori

Citation : 2023 Latest Caselaw 8542 Ori
Judgement Date : 4 August, 2023

Orissa High Court

Peoples Forum vs Commissioner Of Income Tax on 4 August, 2023

     IN THE HIGH COURT OF ORISSA AT CUTTACK
                          ITA No.62 of 2022
                        (Through Hybrid mode)

Peoples Forum                                  ....                      Appellant


                                    -versus-

Commissioner of Income Tax                     ....                    Respondent



Learned advocates appeared in this case:

For petitioner           :    Mr. Chitrasen Parida, Advocate


For opposite party :          Mr. Radheshyam Chimanka, Advocate
                              (Senior Standing Counsel, I.T)

CORAM:
JUSTICE ARINDAM SINHA
JUSTICE G. SATAPATHY
-----------------------------------------------------------------------------------

Dates of hearing : 01.08.2023 Date of judgment : 04.08.2023

-----------------------------------------------------------------------------------

1. Appellant (assessee) seeks to prefer this appeal against order

dated 15th June, 2022 in ITA no.44/CTK/2021 for assessment year

2016-17, made by the Income Tax Appellate Tribunal (ITAT),

Cuttack Bench.

// 2 //

2. Mr. Parida, learned advocate appears on behalf of

appellant(assessee). He submits, without minimum inquiry and on the

eve of expiry of the period of limitation, the Commissioner interfered

with the assessment under section 263 in Income Tax Act, 1961. His

client preferred appeal to the Tribunal but by impugned order dated

15th June, 2022, the Tribunal upheld the revision order. He draws

attention to definition of 'anonymous donation', given in section

2(24)(iia) and submits, sub-section (3) in section 115-BBC requires

the assessee to maintain record of identity indicating name and

address of the donors and such other particulars as may be prescribed.

There has not been any further prescription. He demonstrates from

reply dated 27th March, 2021 given by his client, as had enclosed

therewith detailed list of donors along with complete addresses and

amount of donations. In the circumstances, it cannot be said the

Assessing Officer (AO) did not verify, leading to finding of erroneous

assessment requiring revision.

3. Mr. Chimanka, learned advocate, Senior Standing Counsel

appears on behalf of respondent (revenue) and draws attention to

revision order dated 30th March, 2021, paragraph 9. He relies upon a

passage therein, reproduced below.

// 3 //

"9. During the review of assessment considering the assessee's reply by the commissioner, the following things were observed;

As per the Receipt & Payment account for the year ending 31.03.2016, as well as Balance Sheet as at 31.03.2016, the assessee has received donation for corpus fund of Rs.3,45,60,000/-. In respect of said donation, the AO has not verified the relationship between donors and trust, credit worthiness of donors, date and mode of payment of donation and genuineness of donation etc. during the course of scrutiny assessment. Hence, the donation of Rs.3,45,60,000/- is required to be treated as anonymous donation and taxable at the rate of 30% u/s 115BBC in accordance with the provisions of law."

                             xxx       xxx   xxx

                                                                  (emphasis supplied)

He submits further, the Commissioner also relied on section 13(7) to

hold that anonymous donation is not eligible for deduction under

sections 11 and 12.

4. We admit the appeal on the substantial question of law as

below.

// 4 //

Where the AO has not verified relationship between donors

and the trust, credit worthiness of donors, date or mode of

payment of donation and genuineness of donation etc., is the

assessment erroneous on it being prejudicial to the interest of

revenue, requiring interference in revision under section 263?

5. We have not been shown that there has been further

prescription regarding recipients of donation to maintain record of

further particulars in addition to identity, name and address of the

person making the contribution, as provided under sub-section (3) of

section 115-BBC. Section 2(24)(iia) gives definition of anonymous

donation. Appellant (assessee) must first be shown to have received

anonymous donation.

6. We have perused the assessment order and found the AO said,

inter alia, as reproduced below.

"During the course of assessment proceedings the assessee produced the relevant documents as per questionnaire through e-proceeding. The Books of account including bank statements, audit report, statement of income and the ledgers furnished for verification were examined. Considering the submissions made and after verification of the documents submitted by the assessee the total income

// 5 //

of the assessee trust is hereby accepted. Accordingly, the total income of the assessee is determined at Rs. Nil."

(emphasis supplied)

As aforesaid, the Commissioner in the revision order had reproduced

assessee's reply to the show-cause notice, where in paragraph 3.2 the

assessee said it had again enclosed therewith, detailed list of donors

along with their complete address and amounts of donations given by

them as annexure-1. The paragraph is reproduced below.

"3.2. That thereafter the Ld. Assessing Officer complied all the details filed by the assessee with the books of account and other documents impounded which were found to be in order, therefore did not make any additions or did not treated the corpus donations as anonymous donation and passed the assessment order u/s. 143(3) by accepting the returned income. For your kind perusal again herewith we are enclosing the detailed list of the donor along with their complete address and the amount of donations given by them as Annexure-1"

(emphasis supplied)

The Commissioner went on to only say, the assessee's reply had been

considered but not found tenable. In the circumstances, we did not

find a dispute regarding disclosure of identity of donors, their

// 6 //

addresses and the amount of donations they had made to the assessee.

This fact is sufficient for compliance of requirement under section

115-BBC(3), in claiming exemption of the donations from being

chargeable to income tax.

7. Facts found by the Commissioner and the Tribunal clearly

show that the assessee had furnished record of the identities indicating

name and address of persons making the contributions. Revenue has

not been able to demonstrate further requirement by prescribed

particulars, as mentioned under sub-section (3) in section 115-BBC.

As such, we answer the question in the negative and in favour of

appellant (assessee).