Absence of PAN in confirmation letters of donors won’t give rise to suspicion: ITAT

Case Details: ACIT v. Siddhartha Academy of General & Technical Education - [2022] 141 taxmann.com 287 (Visakhapatnam-Trib.)

Judiciary and Counsel Details

• • Duvvuru Rl Reddy, Judicial Member & S. Balakrishnan, Accountant Member
  • M.N. Murthy Naik, CIT-DR for the Appellant.
  • C. Subrahmanyam for the Respondent.

Facts of the Case

Assessee was a trust running educational institutions. The Assessing Officer (AO) noted that the assessee received a corpus donation out of which the assessee did not file confirmation letters for certain amount. According, he treated said amount as an anonymous donation under section 115BBC and made additions to income of assessee.

Considering the confirmation letters from donors submitted by the assessee, CIT(A) allowed the appeal of the assessee and granted relief. Aggrieved-AO filed an appeal before the Tribunal.

AO submitted before the Tribunal that the CIT(A) failed to appreciate the fact that the confirmation letters were filed at the fag end of the assessment proceedings. Further, no PAN details were submitted for a few donors and the same was evident from the record submitted by assessee.

ITAT Held

The Tribunal held that the assessee had provided the details of 2300 donors along with the names and addresses of the donors before the AO. The AO had failed to scrutinize the donations received from various donors. It was noted from the paper book filed by the assessee that confirmation letters from the donors have been obtained and provided before the Revenue Authorities.

The mere absence of PAN in the confirmation letters of the donors does not give rise to the suspicion that they are anonymous donations as the maintenance of the name and address details of the contributors is a sufficient document as prescribed under section 115BBC.

In view of this, the tribunal was of the view that the assessee had established the identity of the donors as provided under section 115BBC. Hence the donations received by the assessee couldn’t be categorized as anonymous donations and couldn’t be subjected to tax as per the provisions of section 115BBC.

List of Cases Referred to

• • Cognizance for Extension of Limitation, In re [2022] 134 taxmann.com 307/441 ITR 722 (SC) (para 2)
  • ITO v. Saraswati Educational Charitable Trust [2016] 69 taxmann.com 64 (Lucknow – Trib.) (para 7).