TaxTMI 
TaxTMI 
2022 (2) TMI 883
X X X X Extracts X X X X
X X X X Extracts X X X X
....man Genetics and Population Health and such activities has been established in other instances? (2) Whether on the facts and in the circumstances of the case, the Learned Tribunal is justified in law in quashing the order of the commissioner of Income Tax (Exemption) on the basis of perceived procedural lapses ignoring the truthfulness of facts? (3) Whether on the facts and circumstances of the case, the Learned Tribunal is justified in law to pronounce an order to be quashed whereas orders have been set aside for fresh adjudication in several cases by the higher Courts including apex court in similar instances.?" We have heard Mr. P.K. Bhowmick, learned standing counsel appearing for the appellant/revenue and Mr. J.P. Khaitan, learned senior counsel assisted by Mr. Ananda Sen, learned advocate appearing for the respondent/assessee. The assessee is a trust registered under Section 12A of the Act, by order dated 23rd March, 1991 an approval under Section 80G(VI) was also granted by order dated 31st August, 2010. The objects of the trust were charitable in nature and in particular to build, maintain and operate guest house for the comfortable stay of pilgrims ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....law. After elaborately hearing learned counsel for the parties and carefully perusing the materials placed on record, we are of the considered view that the tribunal was fully justified in allowing the assessee's appeal. We support such conclusion with the following reasons. At the first instance, we note that the allegation in the show cause notice was that the assessee was accepting bogus donation and returning the money to the organisation (donor) by cash thereby indulging in money laundering. However, while passing the order dated 17th March, 2016, the CIT(E) has rendered a totally different finding from that of the allegation contained in the show cause notice. The CIT(E) held that the assessee paid cash and took donation from the said organisation. Such was not the allegation made against the assessee in the show cause notice. Apart from that, there was no material available with the CIT(E) to come to such conclusion. The CIT(E) heavily placed reliance on the statements which were recorded during investigation made pursuant to the survey operations conducted on the School of Human Genetics & Population Health. The CIT(E) has also extensively referred to the statement....
X X X X Extracts X X X X
X X X X Extracts X X X X
....eceive donation from the organisation. Even assuming that the name of the assessee trust figures in the list of donations given by the organisation, that by itself would not establish the allegation that the assessee was engaged in money laundering activities. The CIT(E) has used the expression 'money laundering' without noting the serious implications which flow from use of such expression. On a perusal of Section 3 of the Prevention of Money Laundering Act, 2002 assuming that such activity was being done by a person, it is rather doubtful to bring it under the definition of "money laundering". Apart from that, the CIT(E) in paragraph 6.1 of the order dated 17th March, 2016 mentioned that the Treasurer and Secretary of the organisation were permitted to be cross-examined but the assessee trust did not avail the opportunity but merely filed their declaration on 13th January, 2016. The correctness of this finding was considered by the Tribunal and on going through the order-sheet maintained by the CIT(E) it was found that such finding was factually incorrect. Furthermore, the Treasurer and Secretary of the organisation were never presented for cross-examination and the assessee h....
X X X X Extracts X X X X
X X X X Extracts X X X X
....o money laundering. This conclusion is duly supported by the decision of the Hon'ble Supreme Court in Andaman Timber Industries (supra) before us. The learned senior standing counsel for the revenue submitted that the matter may be remanded to the CIT(E) for fresh consideration. We are not inclined to do so for more than one reason. Firstly, the documents which were the basis of the finding of the CIT(E) were not furnished to the assessee/trust. Secondly, the persons from whom statements were recorded, namely, the treasurer and secretary of the said organisation, were not presented for cross-examination. Therefore, the revenue cannot be heard to say that they should be given one more opportunity to rectify the defects. This procedure is unknown to law. The leaned senior standing counsel placed reliance on the decision of the Hon'ble Supreme Court in Tin Box Company Vs. Commissioner of Income-Tax reported in(2001) 249 ITR 216. The case involved in the said decision was challenge to an order of assessment on the ground that the assessee was not provided with fair and reasonable opportunity of furnishing an explanation with regard to the alleged discrepancy and, therefore, the addi....