AI OCR 
TaxTMI 
TaxTMI 
TaxTMI 
2019 (4) TMI 1928
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....he appellant's case and in law, the Ld. Assessing Officer erred in confirming the AO's action of making addition of Rs. 10,00,000/- on account of contribution made to Navjeevan Charitable Trust which was allowed as deduction u/s. 35AC in the regular assessment order dated 22.01,2013 passed u/s. 143(3). 3. The appellant craves leave to add to. alter, amend and /or delete all or any of the foregoing grounds of appeal." 3. The first issue is against the order of Ld. CIT(A) confirming the reopening of assessment under section 147 of the Act and the issue in 2nd ground is against the confirmation of addition of Rs. 10,00,000/- as made by the AO towards bogus contribution to Navjeevan Charitable Trust under section 35AC. 4. The facts in brief are that the assessee filed the return of income on 08.10.2010 declaring income of Rs. 80,790/-. The case of the assessee was reopened under section 147 of the Act by issuing notice under section 148 dated 08.03.2016 after the AO received information from Pr. DIT (Inv.) Mumbai that the assessee has given donation to Navjeevan Charitable Trust which was accepting donations from various companies/individuals and returning back the cash aft....
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.... after retaining the commission. Even the statement recorded during the course of search revealed that the trust was operating a hawala racket of accepting donations and there were 400 doners to the trust out of which the assessee is one of the doners who claimed deduction under section 35AC. During the course of assessment proceedings also an inspector was sent to the office of Navjeevan Charitable Trust at New Marine Lines, Mumbai and the inspector vide her report dated 25.08.2016 stated that the said trust no longer operates from the said premises and had stopped functioning since last four years and accordingly a letter was written to the CBDT for withdrawing the recognition of the trust with retrospective effect and the said trust was derecognized by withdrawal of exemption certificate under section 12 and thus the AO dismissed the legal as well as factual ground of the assessee resulting into withdrawal of exemption under section 35AC of Rs. 10,00,000/- to the assessee which was added to the income of the assessee. In the assessment order framed under section 143(3) read with section 147 of the Act dated 29.10.2016. 5. In the appellate proceedings, the Ld. CIT(A) also dismis....
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.... the deduction claimed of the said amount was rightly withdrawn by the AO and confirmed by the Ld. CIT(A). The Ld. D.R. also pointed out that the recognition of the trust was withdrawn retrospectively by the CBDT after the fact of bogus donation racket was unearthed during the search action on the Navjeevan Charitable Trust and the fact of hawala being carried on by the trust was also accepted in the statement of trustees/secretary of the trust during search. 8. After hearing both the parties and perusing the material on record, we find that the issue at hand is identical to one as decided by the co-ordinate bench of the Tribunal in the case of DCIT circle-12(1), Kolkata vs. Maco Corporation (India) Pvt. Ltd. (supra). The operative part of the decision is reproduced hereunder: "8. We have heard the rival submissions and perused the materials available on record. The brief facts pertaining to HHBHRF are as under:- a) HHBHRF was registered u/s 12AA of the Act by the ld DIT(Exemptions), Kolkata with effect from 26.12.2003. b) HHBHRF was also recognized in the year 2006-07 as a scientific industrial research organization (SIRO) by Ministry of Science & Technology, Government of ....
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....in the Act, the action of the revenue in withdrawing the recognition with retrospective effect from 1.4.2007 is unwarranted. In this regard, the recent decision of the Hon'ble Supreme Court in the case of Industrial Infrastructure Development Corporation (Gwalior) M.P. Ltd vs CIT Gwalior reported in (2018) 90 taxmann.com 281 (SC) wherein it was held that :- 21. In our considered opinion, the CIT had no express power of cancellation of the registration certificate once granted by him to the assessee under Section 12A till 01.10.2004. It is for the reasons that, first, there was no express provision in the Act vesting the CIT with the power to cancel the registration certificate granted under Section 12A of the Act. Second, the order passed under Section 12A by the CIT is a quasi judicial order and being quasi judicial in nature, it could be withdrawn/recalled by the CIT only when there was express power vested in him under the Act to do so. In this case there was no such express power. 22. Indeed, the functions exercisable by the CIT under Section 12A are neither legislative and nor executive but as mentioned above they are essentially quasi judicial in nature. 23. Third, ....
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....h Courts after examining the issue, in the light of the object of Section 12A of the Act and Section 21 of the General Clauses Act held that the order of the CIT passed under Section 12A is quasi judicial in nature. Second, there was no express provision in the Act vesting the CIT with power of cancellation of registration till 01.10.2004; and lastly, Section 21of the General Clauses Act has no application to the order passed by the CIT under Section 12A because the order is quasi judicial in nature and it is for all these reasons the CIT had no jurisdiction to cancel the registration certificate once granted by him under Section 12A till the power was expressly conferred on the CIT by Section 12AA(3) of the Act w.e.f. 01.10.2004. We hold that the ratio decidendi of the aforesaid judgement of the Hon'ble Apex Court would squarely be applicable to the facts of the instant case. Infact the assessee's case herein falls on a much better footing than the facts before the Hon'ble Apex Court. In the case before Hon'ble Apex Court, the power of cancellation of registration us 12A of the Act was conferred by the Act on the ld CIT w.e.f. 1.10.2004 and the Hon'ble Apex C....