AI Drafter 
TaxTMI 
TaxTMI 
2018 (3) TMI 1507
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....ealth Care Bio-Herbal Research Foundation (iii) Matrivani Institute of Experimental Research and Foundation. 2.1 In these cases, bogus funds to the tune of Rs. 750 crores were paid to these Trust/Societies which were subsequently returned in cash after deducting commission. The ld. CIT(E), Kolkata after receipt of the report of the Investigation Wing, carried further investigation and during the course of investigation of these corporate/non-corporate entities, it was noted that they had paid bogus donation running in several crores to the three named Trust/Societies in violation of the provisions. One of the Trust/Society was assessee. The report of ACIT (E), Lucknow, dated 09.02.2017 forwarded to JCIT (E), Lucknow vide letter dated 09.02.2017 has also recommended for cancellation of Registration granted to the assessee under section 12A of the Income Tax Act, 1961. A show cause notice under section 12AA(3) of the Act, was issued to the Assessee-Trust on 13th February, 2017 for compliance on 28th February, 2017 by speed post which have been delivered to the Assessee but none appeared on the date of hearing. Therefore, on the same day, ld. CIT(E), cancelled the registra....
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....ld not have cancelled the registration with retrospective effect from 01.04.2010. The assessee is carrying out scientific research activities as per its objects and has been granted registration under section 35(i)(iii) of the I.T. Act by the Government of India which has not been withdrawn. The assessee has also granted approval under section 80G(5) of the I.T. Act. The allegations in the impugned order are unfounded and irrelevant because they do not relate to the assessee for the purpose of cancellation of registration. The order of the ld. CIT(E) is based on irrelevant facts and on mere assumptions. Whatever information received from the Investigation Wing was not supplied to the assessee and the same was also not confronted to the assessee at any stage. Therefore, the same cannot be read in evidence against the assessee. The assessee had never entered into any transaction with the three institutions referred to in the impugned order. The assessee has not received any donation from them or has not re-donated any amount to them. No allegations of donating any amount to other institutions were found. No evidence of commission charged by assessee or receipt of re-donation, subject....
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.... (a) Activities of such Trust or Institution are not genuine or (b) Are not being carried out in accordance with the objects of the Trust or Institution. 5.1 In the present case, assessee has already been granted registration under section 12A vide order dated 30th August, 2007, w.e.f. 01.04.2003 and approval under section 80G(5) vide order dated 10th February, 2010. The assessee has also been granted approval under section 35(i)(ii) of the I.T. Act by the Government of India vide Notification dated 01.02.2008 w.e.f. 01.04.2007 for carrying out scientific research. It is not in dispute that notification dated 01.02.2008 of the Government of India have not been withdrawn or have not been reported to have been withdrawn. Learned Counsel for the Assessee placed on record detailed material to show that assessee has been carrying out scientific research activities till date. Learned Counsel for the Assessee submitted that assessee has not received any donation from any of the party as mentioned in the report of the Investigation and has also not re- donated any amount subject to commission. The copies of the balance sheet from A.Ys. 2013-2014 to 2017-2018 have been fi....
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..... May be the assessee did not appear before ld. CIT(E) as argued by ld. D.R. and he has submitted that the matter may be remanded to ld. CIT(E) for re-consideration but the facts noted above clearly prove that ld. CIT(E) merely on assumption and presumption and without confronting any material to the assessee, has passed the impugned order in haste within the period of 10 days from the alleged delivery of the notice upon the assessee. Identical matter has been considered by the ITAT, Lucknow Bench in the case of Fateh Chand Charitable Trust (supra), in which the issue was, cancellation of registration under section 12AA(iii) of the I.T. Act. The Tribunal set aside the impugned order of the ld. CIT(E) and restore the registration under section 12AA of the I.T. Act and decided the appeal in favour of the assessee. The findings of the Tribunal in paras 13 to 23 are reproduced as under : 13. "Having carefully examined the order of the Id. Commissioner of Income Tax (Exemptions) in the light of the rival submissions, we find that on receipt of certain information from the Id. Commissioner of Income Tax (Exemptions), Kolkata; Id. Commissioner of Income Tax (Exemptions) has issue....
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....ed to the assessee either to cross-examine the said witness or to make any further comments in this regard and the Id. Commissioner of Income Tax (Exemptions) has passed an order on the very same day cancelling the registration earlier granted to the assessee. No doubt, the Id. Commissioner of Income Tax (Exemptions) is empowered to cancel the registration as per provisions of section 12AA(3), where the Principle CIT is satisfied that the activities of such trust or institution are not genuine or are not being carried out in accordance with the objects of the trust or institution, as the case may be. But in the instant case Id. Commissioner of Income Tax (Exemptions) has simply received information from the Id. Commissioner of Income Tax (Exemptions), Kolkata that M/s Herbicure Health Care Bio Herbal Research Foundation was engaged in giving donations on receipt of cash through brokers, but nowhere it has been stated that M/s Herbicure Health Care Bio Herbal Research Foundation has paid donation to the assessee on receipt of cash of the equal amount through brokers. Similar statement of Shri Swapan Ranjan Das Gupta was also made, but in that statement also there was no reference of....
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.... attention was invited to the judgment of the Honble jurisdictional High Court in the case of CIT v. Uttaranchal Welfare Society, [2014] 364 ITR 398 , in which their Lordships have held that section 68 of the Act has no application where assessee had disclosed donations as its income. While relying on this proposition of law, their Lordships have followed the view taken by Hon'ble Delhi High Court in the case of DIT (Exemptions) v. Keshav Social & Charitable Foundation, 278 ITR 152 and the judgment of the Hon'ble Apex court in the case of S.RM.M.CT.M. Tiruppani Trust v. CIT, 230 ITR 636, in which it was held that section 68 of the Act has no application in such cases where the assessee has disclosed donations as its income. 18. Similarly in the case of Director of Income Tax v. Hans Raj Samarak Society, 35 taxmann.com 642, their Lordships of the Hon'ble Delhi High Court has held that provisions of section 68 of the Act could not be applied as donation had already been shown by the assessee as income. 19. Similar views were also expressed by the Chennai Bench of the Tribunal in the case of Padanilam Welfare Trust v. DCIT (supra) in which it was....
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....ce was brought on record by the Revenue. It was simply an oral assertion and moreover the assessee was not afforded any opportunity to cross-examine the witness, whose statement was relied on by the Id. Commissioner of Income Tax (Exemptions) for cancellation of registration under section 12AA of the Act earlier granted to the assessee. Even assuming, for the sake of argument, that if the assessee has received donation on making payment in cash and it may be his own money which was introduced in the trust through circuitous means, but it was applied for charitable purposes, therefore, it cannot be added under section 68 of the Act. Thus, even on merit, we do not find any force in the allegations raised by the Revenue. The Id. Commissioner of Income Tax (Exemptions) has cancelled the registration under section 12AA of the Act on the basis of conjunctures and surmises, as he has observed in his order that the assessee might have been charging capitation fee from the parents of the students, but in this regard no evidence was brought on record. It is also obvious from the record that the Id. Commissioner of Income Tax (Exemptions) has passed an order on the same day when the assessee ....