TaxTMI 
TaxTMI 
2019 (6) TMI 857
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....am Goel Charitable Trust is in the business of money laundering and providing accommodation entry to different individuals and organisations. According to the survey team, accommodation entry was provided by way of (i) accepting donations and returning the same to the donors through web of financial transactions after retaining the commission; and (ii) accepting money by cash or through a web of financial transactions and giving donations after retaining the commission. According to Ld. CIT(E), it appears from records that in the financial year 2013-14 relevant to AY 2014-15, M/s. Shivlal Zadiadevi Jan-kalyan Nidhi the [assessee/appellant] paid bogus donations amounting to Rs. 5 lakhs to M/s. Govind Ram Goel Charitable Trust. According to Ld CIT(E), the Managing Trustee of M/s. Govind Ram Goel Charitable Trust, Shri Anand Agarwal accepted this fact in his sworn statement recorded u/s. 131 of the Act on 11.09.2015. In reply to Q.8 & Q.9, the Managing Trustee clearly stated the fact that he had given a pre-arranged accommodation entry in the form of bogus corpus donation. The Managing Trustee also admitted the fact that they paid to the accommodation entry operators in cash which ....
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....re us. 4. We have heard rival submissions and gone through the facts and circumstances of the case. At the outset, the Ld. AR pleaded before us that registration of the trust has been cancelled only on the basis of statement of one Anand Agarwal who was Managing Trustee of Govind Ram Goel Charitable Trust recorded under section 133 A of the Act, who neither mentioned nor the statement contained the name of the Assessee Trust. According to him, the said statement cannot be relied up on by the Ld. CIT(E) as it was made at the time of survey u/s 133A as held by the Hon'ble Supreme Court in Khader Khan 352 ITR 480 (SC) and, therefore, it was stressed that it has no evidentiary value. Further, it was pointed out that this statement was retracted by the deponent (Shri Anand Agarwal) within 3 days of giving of deposition which has been noted by the coordinate bench of Tribunal in the case of Radharaman Behari Trust, ITA No. 29/Kol/2017 dated 15.09.2017. He also pleaded that no opportunity of cross-examination was given to the assessee in spite of several requests and visits at the appointed time of cross examination. According to Ld. AR, the same is now redundant in view of the fact th....
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....soning of the co-ordinate bench in the case of Radharaman Behari Trust vs CIT(E) (supra) wherein the Tribunal canceled the impugned order of Ld. CIT(E). The Tribunal in Radharaman Behari Trust, supra held as under: "4. There was a survey operation carried out u/s 133A of the Act on 11.09.2015 in the premises of M/s Govind Ram Goel Charitable Trust (for short GRGCT). 5. In the course of survey operations the Authorized Officer carrying out the survey recorded the statement of Shri Anand Agarwal, Managing trustee of GRGCT u/s 131 of the Act, wherein it was admitted that it is engaged in money laundering activities by way of giving/ accepting donations which is basically accommodation entries. The relevant extract of the statement is reproduced below:- . Q8. On going through the books of account it is found that there is a quantum jump, as enumerated below for reference, in corpus donation has taken place in the AYs 2013-14 to AY 2015-16, in comparison with the AY 2008-09 to AY 2012-13. Offer your explanation. A.Y Corpus donation 2008-09 Rs. 11,000/- 2009-10 Rs. 21,91,000/- 2010-11 Rs. 2,55,000/- 2011-12 Rs. 34,88,000/-....
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..... 10,01,27,103/- (Rupees ten crore one lakh twenty seven thousand one hundred and there over a period of that assessment years viz 2013-14, 2014-15, 2015-16 is voluntarily disclosed by me. This amount may be treated as income in the hands of the trust. Q14. You are being shown the following documents found from your business premises, found during the course of survey operation. It is also brought to you notice the implication of Sec.292C of IT Act, 1961. Therefore, the onus is on you to explain the entries from in those paper, inventorised as GRG 4. a) A slip of paper, which shows different amounts of payments in coded text b) A 8 papers of print out showing expenses of "Sekhra Iron" in respect of some realty project at B.T. Road c) A blank Memorandum of Understanding between Mr. P.B and Mr. A.A and signed by only P.B. Please explain all. A14. All the above documents are a proposal for a realty project at B.T. road brought to us by some broker quite some time back. The entries in the above documents reflected the then status of investments by various stakeholders. We were informed that if we were interested to join the above pr....
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....not binding on the person making the statement. Therefore such a statement cannot be used against the assessee. The assessee in support of his claim relied on the judgement of the Honourable Supreme Court in the case of S Khader Khan & Sons reported in 352 ITR 480 (SC). Besides the above, the assessee requested to the Ld.CIT(Ex) for providing the opportunity of cross examination with the managing trustee of GRGCT Shri Anand Agarwal and as well as Shri Gaurav Agarwal who was acting as conduit in the transactions of bogus donations. 10. However the C.I.T.(Exemptions), Kolkata proceeded to pass an order u/s 12AA(3) of the Act by observing as under:- The A/R of the society also requested for cross examination of Shri Anand Agarwl, managing Trustee of M/s Govind Ram Goel Charitable Trust. Kind reference may be made to the order of the Hon'ble Bombay High Curt in the case of GTC Industries, Vs. Assistant Commissioner of Income Tax (1998) 60 TTJ Mumbai 308 wherein the Hon'ble High Court has made some observations, exerpts of which are as-here-in under:- ' In our opinion, right to cross-examine the witness who made adverse report, is not an invar....
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....n writing cancelling the registration of such trust or institution : Considering the activities of the assessee not genuine and are not being carried out in accordance with the objectives of the Trust, the registration u/s.12A of the IT Act 1961 vide order No.1119/T/WB.VII of 1997-78 dated 24.06.1997 is hereby cancelled u/s. 12A(3) of the IT Act 1961 w.e.f. 01.04.2013 i.e. FY 2013-14 relevant to AY 2014-15, as the violation took place in the FY 2013-14." 11. Aggrieved by the order of Ld. CIT(Ex), Kolkata the assessee has preferred the present appeal before the Tribunal. 12. The ld. Counsel for the assessee before us filed a paper book which is running from pages 1 to 19 and submitted that the registration certificate under section 12AA of the Act has been cancelled merely on the basis of the statement furnished by the managing trustee of the GRGCT obtained during the course of survey under section 131 of the Act wherein it was admitted by the managing trustee of the GRGCT that it is involved in bogus donations. It is important to note that the statement given by the managing trustee of the GRGCT was subsequently retracted as evident from the order of Hon'....
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....ellation of registration certificate issued under section 12AA of the Act. 13.1 The ld AR further submitted that the name of the assessee is not appearing in the statement furnished by the managing trustee of GRGCT therefore it cannot be concluded that the assessee has given bogus donation. It was also submitted that the learned CIT (ex) failed to provide the opportunity of cross examination as desired by the assessee. The learned AR in support of his claim has relied on the order of special bench of Hon'ble Bombay Tribunal in the case of GTC Industries Ltd versus ACIT in ITA No. 5996/Mum/1993 & 1055 & 1056/Bom/1994 where it was held as under:- "...Thus, the mandate of the Hon'ble High Court is that, this Tribunal should decide the entire appeal on merits. So far as the issue of violation of principles of Natural Justice is concerned, the same has been duly complied with in terms of directions contained in the earlier orders of the Tribunal which has been finally settled in several rounds of litigation before this Special Bench. As per the direction of the Tribunal, finally, the Revenue was required to provide certain material and cross-examination of....
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....ave given a very careful consideration to the rival submissions and perused the materials available on record. From the statement recorded during survey it is possible to entertain a doubt with regard to genuineness of the donations given to GRGCT. But such statement is not foolproof to support that the bogus donation was given by the assessee. So far as the assessee is concerned it gave donation to GRGCT for a sum of Rs. 6 lakh which was duly accounted in profit and loss account. There is no evidence of whatsoever brought on record to show that the cash was received by the assessee from GRGCT against the donation. 15.1 We also observe that the name of the assessee is not appearing in the statement furnished by the managing trustee of GRGCT. Therefore in such situation the opportunity of cross examination was very much required in the presence of assessee and managing trustee of GRGCT as well as the middle man namely Shri Gaurav Agarwal. Thus the ld. CIT(Ex) in the instant case erred in not giving the opportunity of cross examination. Thus, the cases laws cited by the ld. AR for the opportunity of cross examination is very much applicable to the instant case. 15.2....
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....relied upon the price list as maintained at the depot to determine the price for the purpose of levy of excise duty. Whether the goods were, in fact, sold to the said dealers/witnesses at the price which is mentioned in the price list itself could be the subject matter of cross-examination. Therefore, it was not for the Adjudicating Authority to presuppose as to what could be the subject matter of the cross-examination and make the remarks as mentioned above. We may also point out that on an earlier occasion when the matter came before this Court in Civil Appeal No. 2216 of 2000, order dated 17.03.2005 was passed remitting the case back to the Tribunal with the directions to decide the appeal on merits giving its reasons for accepting or rejecting the submissions. In view the above, we are of the opinion that if the testimony of these two witnesses is discredited, there was no material with the Department on the basis of which it could justify its action, as the statement of the aforesaid two witnesses was the only basis of issuing the Show Cause We, thus, set aside the impugned order as passed by the Tribunal and allow this appeal." There is no evidence ....