INCOME TAX ACT, 1961

--Charitable trust--DonationsApplicability of section 68 vis-a-vis section 115BBC--The assessee-society had filed its return on 24-10-2007 declaring nil income. It was picked up for scrutiny by issuing notice under section 143(2) on 1-9-2008. It was found that the assessee-society had been registered under section 12A(a) on 20-4-1968 and it had also been granted approval under section 80G on 8-3-2007 for the period 1-9-2006 to 31-3-2009. The society is running Hans Raj Middle School at Krishna Nagar and Hans Raj Samarak Senior Secondary School at Dilshad Garden, Delhi. In respect of addition of Rs. 19,25,047, it has been mentioned in the assessment that a sum of Rs. 20,39,547 was credited to the building fund account. The assessee filed confirmation letters covering the amount of Rs. 1,14,500. In respect of the balance amount, the assessee expressed inability to collect letters of confirmations from the donors. This shows that it does not maintain record of the donor. Cash vouchers could not be produced in support of the credit made in the books by way of cash donations. Thus, out of total donations of Rs. 20,39,547, the amount of Rs. 19,25,047 was considered as anonymous donation liable to be taxed under section 115BBC. Aggrieved by this order, the assessee filed appeal before the CIT(A), which was disposed of on 14-12-2010. The appeal was partly allowed. It is mentioned that the assessing officer observed that the assessee has not maintained evidence regarding the identity of the donor, therefore, the provision contained in section 115BBC is applicable. It is further observed that the donations have been recorded in a manner to show that these have been received from different donors and from different parts of India. However, the receipts were issued from one book. Therefore, it has been held that the donations are bogus. In this connection, a copy of receipt -payment account was required to be filed. The same could not be filed before the assessing officer on account of virus in the computer. The assessee could not submit evidence regarding identity of donors also. The position continues to be the same in the appellate proceedings. Therefore, it has been held that the provisions of section 115BBC are applicable. Held: The assessing officer has taxed the amount by mentioning that confirmation letters from the donors have not been filed. Such confirmations are not required to be filed for coming to the conclusion as to whether the donation was anonymous or not. Therefore, the case of the revenue regarding taxation of this amount under sub-section (2) fails on this ground itself. Further, the assessee had shown the amount under the building fund, but at the time of filing the return, this amount was added to the income. It cannot be disputed that all receipts other than corpus donation would be the income in the hands of the assessee. There was, therefore, full disclosure of income and its application for charitable purposes. The provisions contained in section 68 cannot be invoked as the amount has already been disclosed as income. It is held that the amount was taxable as income in the hands of the assessee.