INCOME TAX ACT, 1961

Section 68

Income from undisclosed source - Charitable trust - Donation received, treated as unexplained cash credit under section 68 -

During the course of assessment proceedings, AO observed that assessee-trust received donations. On being called upon to furnish the list of donors, assessee submitted the same which contained names of several donors each contributing in cash. In order to verify the genuineness of donations, AO issued notices under section 133(6) to 49 persons from such list at the addresses provided by assessee. Most of the notices were returned by the Postal authorities with the remarks “Address incomplete/Person not known”. In remaining cases, no reply was received under section 133(6). Assessee was confronted with the same and required to prove the claim of genuineness of donations through identifiable persons, failing which the donations would be treated as `Anonymous donations' liable for tax under section 115BBC and made addition accordingly. Held: Show cause notice was issued requiring the assessee to prove the claim of having received donations from identifiable persons. Assessee submitted reply requiring some more time. Since the assessment was getting time barred, assessee was not allowed the time. CIT(A) upheld the action of AO in order taxing the amount under section 115BBC. In addition, he further directed AO to consider applicability of section 68 read with section 115BBE. Ends of justice would meet adequately if order was set-aside and the matter was remanded back to AO to examine the case afresh.

REFERRED :

FAVOUR : Matter remanded

A.Y. : 2016-17

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