Charitable Trust Registration Cancelled for Non-Genuine Activities

The Tribunal upheld the CIT(E)'s decision to cancel the assessee's registration under section 12AA(3) of the Income Tax Act, 1961, and withdraw approval under section 80G(5). The assessee, a charitable trust, was found to have engaged in non-genuine activities, misused provisions for personal benefit, and violated the trust's declared charitable objectives. The cancellation was based on evidence including admissions by the Managing Trustee regarding non-genuine donations and involvement in money laundering activities. The Tribunal confirmed the cancellation of registration and approval on 13.09.2017.

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Issues Involved:

1. Cancellation of registration granted to the assessee under section 12A of the Income Tax Act, 1961.
2. Withdrawal of approval granted to the assessee under section 80G(5) of the Income Tax Act, 1961.

Issue-wise Detailed Analysis:

1. Cancellation of Registration under Section 12A:

The assessee, a trust with charitable objects, had its registration under section 12A of the Income Tax Act, 1961, cancelled by the CIT (Exemptions), Kolkata. The cancellation was based on findings from a survey conducted under section 133A on another entity, School of Human Genetics and Population Health (SHG & PH), which revealed that the assessee's activities were not genuine and it was not operating in accordance with its stated objectives. The CIT(E) referenced statements from SHG & PH officials admitting to providing book entry donations and refunds through intermediaries, indicating that donations received by the assessee from SHG & PH were bogus.

In a subsequent survey on the assessee, the Managing Trustee admitted that a significant portion of donations received were not genuine and were part of accommodation entries to facilitate loans and fund expansion. The CIT(E) concluded that the assessee misused provisions of the Income Tax Act for personal benefit and was involved in money laundering activities, thus violating the objects of the trust and justifying the cancellation of registration under section 12AA(3).

2. Withdrawal of Approval under Section 80G(5):

Following the cancellation of registration under section 12A, the approval granted to the assessee under section 80G(5) was also withdrawn. The CIT(E) found that the assessee received bogus corpus donations, misused the provisions of sections 12AA and 80G, and engaged in activities not aligned with its declared charitable objects. The trust was involved in hawala activities, and the corpus donations were deemed fictitious and not voluntary.

Tribunal's Decision:

The Tribunal upheld the CIT(E)'s decision, noting that the evidence on record, including the Managing Trustee's admission, supported the conclusion that the assessee's activities were not genuine. The Tribunal dismissed the assessee's appeals, confirming the cancellation of registration under section 12AA(3) and the withdrawal of approval under section 80G(5).

Conclusion:

The appeals were dismissed, and the order pronounced on 13.09.2017 confirmed the cancellation of the assessee's registration and approval due to non-genuine activities and misuse of provisions for personal benefit.

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