Law:

Section:

â- Section 11, read with section 68, of the Income-tax Act, 1961 - Charitable or religious trust - Exemption of income from property held under - Assessment year 1991-92 - Assessee, a charitable trust, had disclosed donations received by it as its income and had spent 75 per cent of amount for charitable purposes - On failure of assessee to furnish details of donations, Assessing Officer treated that amount as cash credit under section 68 and benefit under section 11 was denied - Whether fact that complete list of donors was not filed or that donors were not produced, did not necessarily lead to inference that assessee was trying to introduce unaccounted money by way of donation receipts - Held, yes - Whether section 68 had no application to facts of case because assessee had in fact disclosed donations as its income - Held, yes FACTS The assessee, a charitable trust, was engaged in the activity of providing medical advise to the poor and needy in various parts of the State. During the relevant previous year, the assessee was asked to furnish the details of donations received by it. However, the Assessing Officer, on finding that the assessee was unable to satisfactorily explain the donations and the donors were fictitious persons, held that the assessee had tried to introduce unaccounted money in its books by way of donations and, therefore, the amount was to be treated as cash credit under section 68. On that basis, the benefit under section 11 was denied to the assessee. On appeal, the Commissioner (Appeals) held that treating donation as income under section 68 was not correct the assessee had disclosed the donations as its income and had spent 75 per cent of the amount for charitable purposes. On the revenue's appeal, the order of Commissioner (Appeals) was upheld by the Tribunal. On appeal : HELD To obtain the benefit of the exemption under section 11, an assessee is required to show that the donations were voluntary. In the instant case, the assessee had not only disclosed its donations, but had also submitted a list of donors. The fact that the complete list of donors was not filed or that the donors were not produced, did not necessarily lead to…

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