TaxTMI 
TaxTMI 
2021 (12) TMI 459
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.... defect. This appeal was listed on board on 14.6.2019. Nobody had appeared on behalf of the assessee, and it was adjourned time and again. Earlier, Shri Bharat S. Shah partner in Shah & Dalal Co. has put appearance on behalf of the assessee, but thereafter, he withdrew his appearance and filed a letter to that effect on 19.10.2020. Hearing was adjourned to 18.1.2021 and fresh notice was issued. One Shalini Somani partner in Atal Shriram & Associates, CA filed a letter of authority on behalf of the assessee and sought adjournment. Hearing was adjourned; but again nobody appeared on the adjourned date. Fresh notice was issued. In spite of service, none has come present. Thereafter, notice was served through department through affixture. A rep....
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....p Corporation Rs. 1}55,000/- (iv) Sdnkalp Corporation Pvt. Ltd Rs. 6,55,045/- (v) Sollywood Corporation Rs. 52,000/- Rs. 11,17,045/- Complete justification of these transactions should be filed. Please give detailed reply, how these transactions are not violating the provisions of Section 13 of the I.T Act, I 961. B) Statutory auditor in annexure to the audit report had mentioned that these are interest bearing advances and interest @ 12% is being charged. This way, interest on these advances works out to Rs. 1,34,045/-. This interest has not been declared in the Income &, Expenditure Account. This is a serious discrepancy. The auditors had just mentioned the fact of charging int....
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.... Shri Ramesh Patel ii) Shri Kamlesh Patel iii) Sankalp Corporation iv) Sankalp Corporation Put. Ltd - v) Sollywood Corporation Pvt. Ltd vi) Solly wood Corporation However, in the audit report the auditors have mentioned that these advances were interest bearing and interest at 12% is being charged on these advances. The submission made by you during the assessment proceedings is contradictory and does not confirm with the financial statements. Detailed justification, for the same may be filed now. 3. You are requested to furnish detailed justification for the above discrepancies. In case the discrepancies are no explained satisfactorily, registration granted to you u/s. 12A is p....
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.... the Act, and also made reference to the part of the explanatory note explaining scope of sub-section (4) of section 12AA of the Act. The discussion made by the ld.Commissioner in this regard reads as under: "6. The issue of registration is to be decided within the factual metrics as mentioned in para 5 of this order. The legalities for cancellation of registration is mentioned u/s. 12AA(4) of the IT. Act, 1961. Section 12AA(4) reads as under: tt[4] Without prejudice to the provisions of sub-section (3), where a trust or an institution has been, granted registration under clause (b) of sub-section (1) or has obtained registration at any time under section 12A /as it stood before its amendment by the Finance (No.2) Act, 199....
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....or the benefit of the specified persons like author of the trust, trustee, etc. or the funds are not invested in specified modes, in cases the Commissioner is empowered to cancel the registration granted u/s. 12AA/12A of the I.T. Act. For the ready reference the relevant para of the explanatory notes are reproduced as under : "9.4 Therefore, in order to rationalize the provisions relating to cancellation of registration of a trust section 12AA of the Income-tax Act has been amended to provide that where a trust or an institution has been granted registration, and subsequently it is noticed that its activities are being carried out in such a manner that,- i) its income does not enure for the benefit of the public. ....
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....nterest free loans Rs. 2,40,000/- Total Rs. 11,37,045/- Thus trust property had been utilized for the benefit of trustees and the concerns where the trustees are interested. This way, the provisions of section 13(1) are attracted in the case of the assessee, Once provisions of section 13(1) are violated, the provisions of section 12AA(4) comes into play. it. is also a matter of fact that the assessee had advanced trust funds to the trustees or other- persons where trustees are interested in violation to provisions of section 11(5) of the I.T. Act, 1961. As discussed in para 6.1 of this order, violation of section 11(5) also attracts provisions of section 12AA(4) of the I.T. Act, 1961." 7. The ld.CIT-DR relied ....