AI Drafter 
TaxTMI 
TaxTMI 
2022 (8) TMI 727
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....sed of by this order. 2. The brief facts leading to the controversy emanate from the record are that the assessee trust was formed vide trust deed dated 01st April, 1990 with the main object to provide education and set up research centers in the field of medical science. The assessee trust was granted registration under section 12A on 29.01.1999 and was also granted approval under section 80G(5) on 13.10.2009. Thereafter a search and seizure action under section 132 of the Act was carried out in respect of Jeevan Jyoti Group and assessee trust was also claimed to have been covered under the said search and seizure action. Pursuant to the search and seizure action under section 132 of the Act, the Assessing Officer issued notice under section 153A for the assessment years 200708 to 2013-14. In response to the notices issued under section 153A, the assessee filed return of income. Thereafter, the assessee also filed an application under section 245(C) of the Act before Income Tax Settlement Commission (in short 'ITSC') on 24th February, 2015 disclosing income of Rs. 65,00,000/- on account of anonymous donations and invested in the building and offered the same to tax under sectio....
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....07.2017 issued by predecessor ' Pr CIT' , and re-initiation of the same by the successor " Pr. CIT" by virtue of 2nd notice dated 20.12.2018 (and that too on the ground that were similar to the issues raised in 1st show cause notice dated 123.07.2019)are wholly vitiated; 2. Order dated 29.03.2019 passed by the Pr. CIT, cancelling the registration granted to the appellant earlier under section1 2 A and withdrawal of notification (approving donations for exemption under section 80G (5) in the hands of the donors) based on the assumption that appellant had been a person subjected to search and seizure action' within the meaning of section 132(1) of the Act, is wholly misplaced as is evident from the particulars of Panchnamas and other relevant information given in Annexure - I hereto; 3. The appellant had maintained 'books of account as defined in section 2 (12A) of the Act, as had been brought on the statute books by the Finance Act 2001, w.e.f. 1.6.2001, and utilization as had been found to be recorded there, for construction of school building and improvement of infrastructure incidental thereto, meant solely 'education purposes' and, view to the contrary as has b....
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....ural justice. 9. The order is contested in appeal on every cogent grounds and the appellant craves for the indulgence of the Hon'ble ITAT, to allow it (the appellant) to take such additional grounds and/or to delete the grounds as had been taken hereinbefore." 4. The ground no. 1 is regarding validity of the impugned order passed by the Pr. CIT due to two show cause notices were issued. The learned AR of the assessee has submitted that the Pr. CIT issued two show cause notices dated 13.07.2017 and 20.12.2018. The assessee has duly replied the first show cause notice dated 13.07.2017 vide letter dated 01.08.2017 and thereafter no action was taken for cancellation of registration on the basis of the first show cause notice dated 13.07.2017. He has thus pleaded that it is deemed to be withdrawn. The subsequent show cause notice dated 20.12.2018 for the cancellation of registration is not valid when the first show cause notice issued on the same grounds deemed to have been withdrawn. Therefore, the impugned order passed by the Pr. CIT is not valid as there was no valid show cause notice. 5. On the other hand, learned DR has submitted that the first show cause notice was ....
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....ion 12AA(3) or the impugned order. The Pr. CIT has dealt with this issue in para 5 of the impugned order as under:- "5. In the reply the assessee trust, instead of replying as how the assessee trusts fulfills for registration u/s 12A, has been more harping on irrelevant issues by picking some lines here and there out of context or raising the technical issues of validity of search or assessments u/s 153A in case of trust or restrictions for use of material facts admitted by applicant before ITSC or that in view of earlier reply given on 1.8.2017, there was no scope of issue of fresh show cause notice u/s 12AA93), etc. as regards the contention that the earlier show cause notice dated 18/7/2017 was earlier concluded in view of show cause on 20/12/2018, the same is totally incorrect. The reply dated 1/8/2017 was submitted but thereafter no order whatsoever was passed by the then incumbent, who got transferred on 25/8/2017, since there was a change in incumbent, it was necessary to issue the fresh show cause notice granting opportunity to the assessee. This fact was duly communicated to assessee also on 29/1/2019. Hence the presumption that the next show cause notice was beyo....
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....bjected to search and seizure action within the meaning of section 132(1) of the Act. 10. We have heard the learned AR as well as learned DR and considered the relevant material on record. The validity of the search is not an issue to be considered and decided in the present appeal filed against the order under section 12AA(3) of the Act. The assessee has already approached the Hon'ble High Court against the notices issued under section 153A but could not succeed. Further the matter was carried to this Tribunal against the assessment orders passed under section 153A which were set aside to the record of the CIT(A) for passing the fresh order. Therefore, the objections of the assessee against the validity of the proceedings initiated under section 153A is irrelevant so far as the order passed under section 12AA(3) and 80G(5) is concerned. The Pr. CIT has referred and considered the facts and material detected as a result of search and seizure action under section 132(1) of the Income Tax Act and consequent application of the assessee filed under section 145C before the ITSC. The evidentiary value of the material found during the search and seizure action revealing unaccounted....
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....ound recorded in the books but the same was utilized for the charitable purpose only in construction of building. Therefore, the said transaction of receipt of donation of Rs. 65 Lac would not amount to render the activity of the assessee not genuine or not being carried out in accordance with the objects of the trust. As regards, the allegation of granting benefit or working for the benefit of the trustees of the assessee trust namely Dr. Ashwani Kumar Bansal and Dr. Vandana Bansal as well as their family members, the said observation of the Pr. CIT is not based on correct facts. He has submitted that certain transactions of payments to the companies owned by the trustees of the assessee on duly recorded in the books of accounts however, these transactions are only repayment of the amounts received by the assessee trust and therefore it is not the transaction for giving the benefit or advances to the concerns of the trustees of the assessee but it is only the repayment of the money received from these entities. He has referred to balance-sheet as on 31st March, 2013 and submitted that though as per Schedule 9, the assessee has given loans and advances to the two trustees total amo....
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.... trust to fulfil its object will amount to an application of income for charitable and religious purpose within the meaning of section 11(1)(a) of the Income Tax Act. The learned AR has further contended that the Pr. CIT has referred and relied upon the newly introduced section 115 TD w.e.f. 1.6.2016 for the purpose of taxing the accredited income due to conversion into for not eligible for registration under section 12AA from the date on which the registration was granted till the date of cancellation of registration. He has submitted that the said section is introduced for the purpose of levy of exit tax where the charitable institution ceases to exist or convert into non charitable organization whereas in the case of the assessee there is no such conversion or cessation of trust. The trust is still in existence. Hence this section is not applicable in the case of the assessee. The learned AR has also raised an issue that the Pr. CIT has cancelled the registration with retrospective effect from 1.4.2006 which is not valid in view of the various binding precedents on this issue. He has relied upon the following decisions as under:- 1. ACIT Vs. Agra Development Authority (....
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....IT. 14. We have considered the rival submissions as well as the relevant material on record. Two issues arise in ground nos. 3 to 9 of the appeals. First issue is whether the conditions as prescribed under sub section 3 of section 12AA did exist to satisfy the Pr. CIT to pass the impugned order cancelling the registration of the assessee trust. The second issue arises is whether the cancellation of registration shall be applicable retrospective or prospective. As regards the conditions as prescribed under sub section 3 of section 12AA of the Act, the Pr. CIT has cited number of transactions and activities of the assessee which he considered as not being carried out in accordance with the objects of the assessee trust but in his view the activities of the assessees are being carried out for the benefit of the specified persons as given in section 13(3) and specifically the trustees of the assessee trust as well as the concerns in which the trustees are having substantial interest. Basically these two grounds are referred by the Pr. CIT for cancellation. The Pr. Commissioner has also cited the reason for cancellation as the assessee trust has sold all its educational institutions ....
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....given to the trustees through the concerns in which they have substantial interest. The assessee has not disputed these transactions of transfer of funds or advance given to the trustees however the explanation of the assessee is that the assessee trust has received loans and advances from those concerns which is more than the repayment amount as cited by the Pr. CIT. We find that there are loan and advances received by the assessee trust from the group concerns in which the trustees of the assessee trust are having substantial interest and the details of the amount of loans and advances received by the trust as per the balance-sheet as on 31st March, 2013 as under:- Jyoti Mediservices Limited Rs. 82,30,350/- Navjeevan Pediatrics Pvt Ltd Rs. 49,42,061/- Vandana Women Hospital Rs. 11,90,000/- Total Rs. 1,43,62,411/- 16. Thus it is a matter of record that the assessee trust received loan and advance from the group concerns total amounting to Rs. 1,43,62,411/- which were subsequently repaid by the assessee to the tune of Rs. 1,35,74,709/-. Therefore, the payment made by the assessee to that extent is nothing but repayment of earlier loan and advances and thi....
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....ust however, the fact is not disputed that the assessee trust right from the beginning is filing its return of income under one PAN. Though the other PANs were taken in the same name but nothing has been alleged that assessee has misused the other PANs allotted to the assessee. Therefore, if there is a violation of the provisions of the law by taking multiple PANs, the consequences of such violation are provided under the Act itself but so long there is no misuse of those PANs it cannot be presumed that the activities of the assessee are not genuine. In view of the above facts and circumstances of the case, we uphold the cancellation of the registration as well as granted under section 12A as well as approval granted under section 80G(5). 17. As regards the second issue whether the cancellation shall have with retrospective effect w.e.f. 1.4.2006 as held by the Pr. CIT or would be retrospective. The assessee has relied upon the various decisions which are relevant on this point. The Hon'ble jurisdiction High Court in the case of ACIT vs. Agra Development Authority (supra) has held in para 50 to 52 as under:- "50. Then, there is nothing in the language of Section 12A....
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....ion that the provisions of section 12AA (3) of the Act of 1961, empowers the Commissioner of Income Tax to initiate steps for giving the said provision, a retrospective effect, for in such a situation, the same would have been clearly specified in the said provision Interpretation of the said provision has to be harmonious rather than being prejudicial to the institutions as it would instigate and create a fear of the income Tax Department. I find support in my opinion from the following cases with reference to the issue of cancellation or withdrawal of registration with retrospective effect: A. In the case of Oxford Academy for Career Development (supra), it was thus observed that: 16.In the instant case, the petitioner is a registered society, which was earlier granted registration under Section 12A on 1-4-1999. A survey was conducted at the business premises on 20-09-2002, from where documents were impounded. The registration was cancelled from the assessment years 2000-01 and 2001-02 for the reasons that the surplus was quite heavy. In the impugned order, it was mentioned by the CIT that there was an unusual huge margin and the petitioner was engaged in the co....
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.... to an assessee at any time prior to the aforesaid amendment itself. However, it does not indicate that thereby the CIT had been empowered to cancel the registration of the assessee with retrospective effect i.e. w.e.f. a date prior to the date of issuance of the order/notice to cancel the registration. 52. Clearly, the act of cancellation of registration has serious civil consequences. In absence of any legislative intent expressed to suggest that the legislature had empowered the CIT to cancel the assessee's registration under s. 12A of the Act with retrospective effect,, such power could not be deemed to exist or arise or be exercised to unsettle closed/part transactions especially because in this case the ground for cancellation has not arisen out of allegation of fraud, collusion or misrepresentation. 53. Therefore, we are of the view that the cancellation of the assessee's under s. 12A of the Act, if at all, could be done only prospectively and not retrospectively as had been done by the CIT in this case, thus, question No.1 is answered in the negative that is in favour of the assessee and against the Revenue. 29. Thus, it is more than clear that se....
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....09. The assessee was created on 01.04.1990 and as part of its educational activities , it has claimed to be engaged in running various institutions and schools, i.e.- (i) Jyoti Hospital Nursing School (ii) Jeevan Jyoti Institute of Paramedical Sciences (iii) Jeevan Jyoti Public School (iv) Ascent Institute of Management & Technology As claimed by Revenue, there was a search and seizure operations conducted u/s 132 of the 1961 Act in the case of the assessee along with other cases of the Jeevan Jyoti Group on 29.05.2012 at the registered office of the assessee at 162, Bai-kaBagh, Allahabad, U.P.. The cases of the group were centralized with Central Circle by Revenue u/s 127 of the 1961 Act. The assessee was registered u/s 12A of the 1961 Act and had since been claiming exemption u/s 11 and 12 of the 1961 Act, on the strength of registration granted by ld. CIT , Allahabad on 29.01.1999 , u/s 12A of the 1961 Act. Pursuant to search and seizure operations conducted by Revenue u/s 132 of the 1961 Act, the assessee was issued notices by AO u/s 153A of the 1961 Act. In response to notice issued u/s 153A by Revenue , the assessee filed its return of i....
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....lication before ITSC against the order of ITSC dated 17.08.2016, but the M.A. stood rejected by ITSC, vide order dated 20.01.2017, passed u/s 245D(6B) of the 1961 Act by ITSC. Thereafter , the AO completed assessment for ay: 2007-08 to 201415 and the income assessed in the hands of the assessee for ay: 2007-08 to 2013-14, were to the tune of 34,43,24,119/-, as detailed hereunder:- S.No. Assessment Year Income declared (In Rs.) Income Assessed (in Rs.) Date of Assessment Order Assessment Order passed u/s 1. 2007-08 Nil 51,95,230/- 08.08.2017 153A read with Section 143(3) 2. 2008-09 Nil 2,81,70,980/- 08.08.2017 153A read with Section 143(3) 3. 2009-10 Nil 1,40,62,700/- 08.08.2017 153A read with Section 143(3) 4. 2010-11 Nil 2,25,97,490/- 08.08.2017 153A read with Section 143(3) 5. 2011-12 Nil 12,55,72,780/- 08.08.2017 153A read with Section 143(3) 6. 2012-13 Nil 9,01,24,550/- 08.08.2017 153A read with Section 143(3) 7. 2013-14 Nil 5,86,00,389/- 08.08.2017 Section 143(3) Total Nil 34,43,24,119/- 2.2 Th....
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.... of donation of receipts, and which as per the AO indicates that these donations or receipts are not genuine and are part of undisclosed taxable income of the trustees, the AO had further reported that the assessee has during settlement proceedings declared total additional undisclosed income of Rs. 65,00,000/- for ay: 2007-08 to 2014-15, which itself reveals that the group is involved in concealment of taxable income, which was utilized for investments in properties and other investments, thirdly the AO reported that as per return of income of the assessee, huge receipts of the trust running in crores are shown as ' Amount applied for charitable purposes' in each year , but no details of such charitable purposes are furnished during assessment proceedings for verification. The ld. Pr. CIT(Central) further observed in the said SCN that as per Balance Sheet of the assessee for ay: 2013-14, the assessee has given advance of Rs. 89,50,000/- to Dr. A K Bansal through Jyoti Hospital Private Limited , and an advance of Rs. 46,24,790/- to Dr. Vandana Bansal through Jyoti Hospital Private Limited, which evidences that the trust is diverting funds for the benefits of the trustee. It was fur....
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....sal and Dr. Vandana Bansal(Wife) and their family members, who are trustees of the assessee, and the assessee is involved in such activities which are contrary to the objective of the assessee-trust. 2.4 The assessee submitted before ld. Pr. CIT(Central) that since inception, it is engaged in charitable purposes and is engaged in imparting education , through various institutions set up by it , from time to time. The assessee also claimed that it was never searched u/s 132(1) of the 1961 Act by Revenue, as there was no warrant of authorization (as per particulars given in the Panchnama's prepared by the Authorized Officers) where name of the assessee appeared. The assessee claimed that it had already objected before the AO as to framing of assessment u/s 153A of the 1961 Act, because as per assessee it was never searched by Revenue u/s 132(1) of the 1961 Act. The assessee also submitted before ld. Pr. CIT(Central) in response to SCN, that notwithstanding the inherent illegality of proceedings u/s 153A of the 1961 Act, the assessee has filed an application for settlement before ITSC on 24.02.2015 and sum of Rs. 65 lacs were declared as an additional income for ay's: 2007-08 to 20....
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....s in receipt of cash money , which was not recorded in books of accounts of the assessee. The ld. Pr. CIT(Central) observed that the assessee has admitted in settlement application that voluntary donation were received from public which has not been accounted for in books of accounts of the assessee trust. The ld. Pr. CIT(Central) also observed that names of donors, addresses or the amounts of donation received from such persons have not been given by assessee before AO during assessment proceedings nor the same were given in application filed before ITSC. The ld. Pr. CIT(Central) observed that the assessee was approved u/s 80G(5) and it was obligated to issue proper receipts to donors under clause (c) of Section 80G(5)(i) so as to enable donors to claim deduction under the 1961 Act. It was further observed that the assessee was under obligation to maintain separate books of accounts for receipts as per clause (iv) of Section 80G(5) and also account for such receipts in such books of accounts to fulfill the conditions for applying such receipts for charitable purposes as per objects of the trust and also clause (b) of Section 12A(1) of the 1961 Act which deals with conditions for r....
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....es. The ld. Pr. CIT(Central) quoted some instances of diversion of funds in its order dated 29.03.2019 at para 4.3 at page 14/15, as under: " i) In trust balance sheet at schedule-9 of advance of A.Y. 2013-14 the assessee has given loan & advance to trustee as under:- Rs. 89,50,000/- to Dr. A.K.Bansal through Jyoti Hospital Pvt. Ltd. Rs. 46,24,790/- to Dr. Vandana Bansal through Jyoti Hospital Pvt. Ltd. In A.Y. 2011-12, on several occasions , Jyoti Hospital Nursing School made payment to trustee's company as under:- Rs. 13,00,000/- to M/s Jyoti Hospital Pvt. Ltd. (amount transferred) Rs. 20,26,382/- to M/s Jyoti Hospital Pvt. Ltd.(amount advanced) From the above facts it is evident that the trust is diverting fund for the benefits of trustees or related entities of the trustees and hence the activities of the trust are not being genuinely carried as per the objects of the trust and also violating the conditions of clause (ii) of 80G(5). (ii) Further as per schedule-5 of fixed assets the assessee has transferred the funds for investment in assets as capital expenditure. The details of transaction in trust is as ....
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....ot held the order the appellate order passed by ld. CIT(A) in first round of litigation to be null and void, there is no merit on the issue raised by assessee on validity of search assessment u/s 153A, more so when these are not relevant for the purposes of these proceedings u/s 12AA which are independent. The ld. Pr. CIT(Central) further observed that even if search assessment are held to be bad in law, still material which was collected during search or otherwise, could still be used for any other proceedings under the 1961 Act. The reference was drawn by ld. Pr. CIT(Central) to the decision of Hon'ble Apex Court in the case of Dr. Pratap Singh & Anr. v. Director of Enforcement & ors. (1985) 155 ITR 166(SC). The ld. Pr. CIT(Central) also rejected the contentions of the assessee that the admission of additional income by assessee before ITSC cannot be used in any other proceedings, as in the opinion of ld. Pr. CIT(Central) admission of additional income by assessee in an application filed before ITSC will bind the assessee and it cannot now retract from its own admission merely because its application before ITSC had abated, in the proceedings conducted for cancellation of registr....
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....hen receipts or expenses are not recorded in books of accounts maintained by assessee, the test of the income applied for such purposes and computation of limit of 15% of income for accumulation would also fail. Thus, it could not be said that the activities of the trust were carried genuinely as per the charitable objects of the trust deed. The ld. Pr. CIT(Central) also rejected the contentions of the assessee that registration u/s 12A cannot be withdrawn retrospectively. The ld. Pr. CIT(Central) observed that the facts admitted by assessee in its SOF filed before ITSC indicates that the assessee-trust was receiving cash which was unaccounted for the period commencing from financial year 2006-07 relevant to ay: 2007-08 till ay:2014-15. The ld. Pr. CIT(Central) held that cancellation of registration u/s 12AA(3) is to be given effect retrospectively from the date from which the assessee-trust was found to be violating conditions of 12A registration i.e. 01.04.2006. The ld. Pr. CIT(Central) referred to Constitution Bench of Hon'ble Supreme Court decision in the case of Commissioner of Custom(Import) v. Dilip Kumar and Company (2018) 95 taxmann.com 327(SC), to hold that provisions of ....
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....t was granted on 13.10.2009, vide orders dated 29.03.2019. 3. Aggrieved by the orders dated 29.03.2019 passed by ld. Pr. CIT(Central) u/s 12AA(3) and 80G(5) of the 1961 Act, the assessee filed first appeal with tribunal. This appeal was heard by Division Bench of the tribunal through video conferencing through virtual court. My ld. Brother Hon'ble Judicial Member has reproduced grounds of appeal raised by assessee in memo of appeal filed with the tribunal , and for sake of brevity, the same are not reproduced by me in this order. My ld. Brother Hon'ble Judicial Member has recorded in his order the contentions raised by both the rival parties during the course of hearing , and hence for the sake of brevity the same are not repeated. 4. So far as ground number 1 and 2 raised by the assessee in memo of appeal filed with tribunal, which concerns itself with raising challenge to second notice issued by ld. Pr. CIT(Central) proposing to cancel registration u/s 12AA(3) , and also raising challenge to legality of search conducted by Revenue u/s 132 (1) against the assessee , I am in agreement with decision of my ld. Brother Hon'ble Judicial Member , and there is no divergence of my v....
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....ment & Technology As claimed by Revenue, there was a search and seizure operations conducted u/s 132 of the 1961 Act in the case of the assessee along with other cases of the Jeevan Jyoti Group on 29.05.2012 at the registered office of the assessee at 162, Bai-kaBagh, Allahabad, U.P.. The cases of the group were centralized with Central Circle by Revenue u/s 127 of the 1961 Act. The assessee has on the other hand disputed that the assessee was never searched by Revenue. The assessee was registered u/s 12A of the 1961 Act and had since been claiming exemption u/s 11 and 12 of the 1961 Act, on the strength of registration granted by ld. CIT , Allahabad on 29.01.1999 , u/s 12A of the 1961 Act. Pursuant to search and seizure operations as claimed to be conducted by Revenue u/s 132 of the 1961 Act which is although disputed by the assessee, the AO issued notices to the assessee, u/s 153A of the 1961 Act. In response to notices issued u/s 153A by Revenue , the assessee filed its return of income claiming exemption u/s 11 and 12 of the 1961 Act. The Revenue has claimed that several incriminating documents pertaining to assessee-trust were also found and seized during the aforesaid sear....
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....an order dated 17.08.2016, u/s 245D(4) of the 1961 Act abating the applications before ITSC and restored the proceedings back to the file of the AO. The assessee filed Miscellaneous Application before ITSC against the order of ITSC dated 17.08.2016, but the M.A. stood rejected by ITSC, vide order dated 20.01.2017, passed u/s 245D(6B) of the 1961 Act by ITSC. It is also pertinent to mention at this stage that additional income offered before ITSC by various persons/ entities of the group(including assessee) were to the tune of Rs. 6,47,84,610/- , while so far as assessee is concerned the additional income offered for taxation by assessee before ITSC was in aggregate to the tune of Rs. 65 lacs for ay's; 2007-08 to 2014-15 . Thereafter , the AO completed assessment for ay: 200708 to 2014-15 and the income assessed in the hands of the assessee for ay: 2007-08 to 2013-14, were to the tune of 34,43,24,119/-, as detailed hereunder:- S.No. Assessment Year Income declared (In Rs.) Income Assessed (in Rs.) Date of Assessment Order Assessment Order passed u/s 1. 2007-08 Nil 51,95,230/- 08.08.2017 153A read with Section 143(3) 2. 2008-09 Nil 2,81....
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....als that the group is involved in concealment of taxable income, which was utilized for investments in properties and other investments, thirdly the AO reported that as per return of income of the assessee, huge receipts of the trust running in crores are shown as ' Amount applied for charitable purposes' in each year , but no details of such charitable purposes are furnished during assessment proceedings for verification. The assessee thus, did not gave details, such as name and address of the donors as well amount of donation and purpose of donation. The ld. Pr. CIT(Central) also observed that names of donors, addresses or the amounts of donation received from such persons have not been given by assessee before AO during assessment proceedings nor the same were given in application filed before ITSC. The ld. Pr. CIT(Central) observed that the assessee was approved u/s 80G(5) and it was obligated to issue proper receipts to donors under clause (c) of Section 80G(5)(i) so as to enable donors to claim deduction under the 1961 Act. It was further observed by ld. Pr. CIT(Central) that the assessee was under obligation to maintain separate books of accounts for receipts as per clause (....
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.... objects of the trust nor it could be said that the activities of the assesee-trust were genuine or being carried out as per objects of the trust deed. Thus, it is one of the main grievance of the Revenue in all the proceedings be it for framing assessment or proceedings conducted for cancellation of Registration u/s 12AA(3) of the 1961 Act, that the assessee has not provided details of donations or sum received by it to prove its genuineness , as no details of name and address of the persons , purpose of donation etc. was provided by assessee to Revenue, which concerns both with these donations of Rs. 65 lacs which are not recorded in its books of accounts as well other sum received which stood recorded in assessee's books of accounts . It is a matter of record that the assessee has not given any details of these receipts before any of the authorities , including us. The assessee on the other hand is advancing arguments, that there is no relevance of seeing the sources of receipts. This argument of the assessee is fallacious and is hereby rejected. I have observed while going through the audited accounts of the assessee and institution run by it, for the financial year 2006-07 onw....
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.... No 1955 of 2015, vide orders dated 21.01.2021( reported in (2021) 126 taxmann.com 21(SC). If the assessee hands are clean , then it should come forward with all the details and there is no reasons to withheld such details. If the assessee does not furnish these details, then presumption will be drawn against the assessee. Reference is drawn to provisions of Section 114(g) of the Indian Evidence Act, 1872. It is also one of the contentions of the Revenue that the assessee has given advance of Rs. 89,50,000/- to Dr. A K Bansal through Jyoti Hospital Private Limited , and an advance of Rs. 46,24,790/- to Dr. Vandana Bansal through Jyoti Hospital Private Limited, which evidences that the trust is diverting funds for the benefits of the trustee. It is also the grievance of Revenue that in ay: 2011-12, on several occasions , Jyoti Hospital Nursing School made payment to trustee's company as under:- Rs. 13,00,000/- to M/s Jyoti Hospital Pvt. Ltd. (amount transferred) Rs. 20,26,382/- to M/s Jyoti Hospital Pvt. Ltd.(amount advanced) It is contended by Revenue that from the above facts it is evident that the trust is diverting fund for the benefits of trustees or relate....
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....13(3) of the 1961 Act and in case of violations consequences will follow. The onus is on the assessee to bring on record all cogent material in connection therewith in its defense , to explain all the transactions entered into by it with its trustees, their relatives and /or entities associated/connected therewith, as provided u/s 13(2) and 13(3) of the 1961 Act. The Revenue has also alleged that assessee has diverted the sale proceeds of assets of the trust for repayment of outstanding bank loans of the trustee's group concern and not utilized for betterment of charitable trust. The assessee had sold Building of Jeevan Jyoti Public School at Bheerpur , and Building of Jeevan Jyoti Nursing School at Apnagaon , Rewa Road , Allahabad in September, 2017, and sale proceeds utilized for payment of bank loans of trustee's group concern. These are again serious allegations levelled by Revenue as to diversion of funds to group entities. The onus is on assessee to bring on record all cogent material in its defense. The assessee had filed first appeal before ld. CIT(A) against assessment orders passed by AO pursuant to search for all these ay's , which stood dismissed by ld. CIT(A) in first ....
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.... attached with grant of exemption and onus squarely lies on the tax-payer. The decision of Constitution Bench of Hon'ble Supreme Court in the case of Commissioner of Custom(Import) v. Dilip Kumar and Company (2018) 95 taxmann.com 327(SC) is relevant. It is pertinent to mention here that cancellation of registration u/s 12AA(3) and 80G(5) of the 1961 Act as was done by Ld. Pr. CIT(Central) and that too with retrospective effect has serious and wide ramifications/implications causing severe prejudice to the tax-payer , thus it become all the more important that before cancelling registration u/s 12AA(3) and 80G(5) of the 1961 Act , all the issues/aspects which has bearing on continuation of registration u/s 12A and approval u/s 80G shall be considered and confronted to the tax-payer by giving proper opportunity of being heard in view of principles of natural justice, so that if so warranted based on facts and circumstance of the case , a comprehensive order covering all aspects/issues having bearing on cancellation of Registration u/s 12AA(3) and approval u/s 80G(5) of the 1961 Act need be passed, covering all the instances of infringement of conditions attached to registration u/s 1....
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.....2020. This complaint dated 10.02.2020 filed by one Mr. Amrish Kumar Singh shall also be considered and taken into cognizance by ld. Pr. CIT(Central) while adjudicating the cancellation of registration of the assessee, u/s 12AA(3) of the 1961 Act, as in my considered view if the evidence brought in by the complainant have substance, then obviously it will also have important bearing on decision to cancel registration u/s 12AA and 80G. I have already stated that cancellation of registration u/s 12AA and 80G has serious and wide ranging ramification and hence composite and comprehensive order, if facts so warrant, is required to be passed considering all aspects which evidences and establishes misuse of status of registration u/s 12AA and 80G of the 1961 Act, need to be passed and of course after giving proper opportunity of being heard to the assessee. At the same time, needless, to say that filing of frivolous complaint also lead to serious prejudice , harassment and inconvenience to the person against whom such frivolous complaint is filed, and such frivolous complaints also have its own legal consequences against the person who has filed such frivolous complaint. Now , coming ....
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....tion were genuine like the earlier years. However, a major part of the donations received in these two F.Ys. viz. 2011-12 and 2012-13, shown as Corpus Donation, were in the nature of accommodation entries to facilitate two things- (a) To procure loans from the Bank we had to show substantial amount of Capital Reserve in our Balance Sheet. (b) We require funds for the expansion of our college. The fees received from the students along with genuine donations from the Trustees and their contacts were not sufficient to run the institution. Q.12. Why are you saying that a major part of the donations received were not genuine? Ans. In those cases, which I admit as accommodation entries, a part of the donation received was returned back to the donors through intermediaries. Q. 13. Who were the intermediaries and what were the modes of returning the money? Ans. We were instructed to transfer funds through RTGS to the following seven (7) persons: 1. Santwana Syndicate 2. P.C. Sales Corporation 3. Kalyani Enterprises 4. Riya Enterprises 5. Laxmi Narayan Traders 6. Hanuman Traders ....
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.... provisions of the I.T. Act providing support and encouragement to the organizations for doing the benevolent activities, assessee society not only opened the pandora's box defying the sole benevolent purpose of provisions as per the I.T. Act, but also challenged the cause of the constitutional provisions by maintaining certain well-needed objectives as per the Act and performing the reverse in reality. 6.3 Based on the facts and circumstantial evidences as discussed in Paras 1 to 5, it can be inferred: - (a) Assessee trust has received a sum of Rs. 1,23,87,550/- as bogus donation from M/s. School of Human Genetics & Population Health and voluntarily offered as income. SHG & PH has admitted their bogus transactions by filing application before the Hon'ble Settlement Commission, Kolkata and through confirmation filed. (b) They have received bogus corpus donation not only from SGHG & PH but also from various parties in different years. (c) Society/Trust has grossly misused the provision of sections 12AA and 80G(5) (vi). (d) They have violated the objects of the trust as converting cheque received through corpus donation in cash bey....
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....uch proceedings, Smt. Samadrita Mukherjee Sardar (in a letter dated 24-8-2015) had given a list of donations which were given by them after getting cash of equivalent amount. It is not disputed that the name of the assessee figures in the said list and the fact that SHG & PH to the Assessee were against cash received from them in Financial Year 201213 of a sum of Rs. 1,23,87,550/-. Even at this stage all admissions were by third parties and the same were not binding on the Assessee. However, in a survey conducted in the case of the Assessee on 24-8-2015, the Managing Trustee of the Assessee admitted that it gave cash and got back donations. We have already extracted the statement given by the Managing Trustee. Even in the proceedings for cancellation of registration, the Assessee has not taken any stand on all the evidence against the Assessee. In such circumstances, we are of the view that the conclusions drawn by the CIT(E) in the impugned order which we have extracted in the earlier part of the order are correct and calls for no interference. It is clear from the evidence on record that the activities of the Assessee were not genuine and hence their registration is liable to be ....
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....y action against the appellant in respect of any future activities. The appeal is hereby allowed to the extent above." 10. In this appeal, we have heard Mr. N. Venkataraman, learned ASG in support of the appeal and Mr. Rana Mukherjee, learned Senior Advocate for the Trust. It is submitted by the learned ASG that the answers given to the questionnaire clearly show a definite tendency on part of the Trust to return in cash, the donation it received from several entities. Mr. Mukherjee, learned Senior Advocate appearing for the Trust submitted that the conclusions drawn by the High Court were quite correct and did not call for any interference. 11. The answers given to the questionnaire by the Managing Trustee of the Trust show the extent of misuse of the status enjoyed by the Trust by virtue of registration under section 12AA of the Act. These answers also show that donations were received by way of cheques out of which substantial money was ploughed back or returned to the donors in cash. The facts thus clearly show that those were bogus donations and that the registration conferred upon it under sections 12AA and 80G of the Act ....
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....m when the assessee started misusing its status conferred u/s 12AA of the 1961 Act. Thus, based on detailed reasoning as outlined above in my order in preceding para, I am setting aside the order dated 29.03.2019 passed by ld. Pr. CIT(Central) , Lucknow cancelling registration u/s 12AA(3) w.e.f. 01.04.2006 and withdrawal of approval u/s 80G(5) of the 1961 Act and restoring the matter back to file of ld. Pr. CIT for considering afresh issue of cancellation of registration u/s 12AA(3) and withdrawal of approval u/s 80G(5) of the 1961 Act. Needles of say that ld. Pr. CIT shall give proper and adequate opportunity of being heard to the assessee in set aside remand proceedings , and evidences/explanations submitted by assessee in its defense shall be admitted by ld. Pr. CIT in the in the interest of justice and adjudicated on merits in accordance with law. I order accordingly. 7. In the result, the appeal filed by assessee is partly allowed for statistical purposes. I order accordingly. Order pronounced in the open Court on .10.2021 at Allahabad Sd/- 26.10.2021 [RAMIT KOCHAR] ACCOUNTANT MEMBER IN THE INCOME TAX APPELLATE TRIBUNAL BENCH....
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.... by the Hon'ble AM : "It is pertinent to mention here that cancellation of registration u/s 12AA(3) and 80G(5) of the 1961 Act as was done by Ld. Pr. CIT(Central) and that too with retrospective effect has serious and wide ramifications/implications causing severe prejudice to the tax-payer , thus it become all the more important that before cancelling registration u/s 12AA(3) and 80G(5) of the 1961 Act , all the issues/aspects which has bearing on continuation of registration u/s 12A and approval u/s 80G shall be considered and confronted to the tax-payer by giving proper opportunity of being heard in view of principles of natural justice, so that if so warranted based on facts and circumstance of the case , a comprehensive order covering all aspects/issues having bearing on cancellation of Registration u/s 12AA(3) and approval u/s 80G(5) of the 1961 Act need be passed, covering all the instances of infringement of conditions attached to registration u/s 12A. This would require detailed analysis of the financial statements and the other relevant material by the authorities. The assessee on its part is directed to file all relevant details and co-operate in the proceedings....
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....ol (ii) Jeevan Jyoti Institute of Paramedical Sciences (iii) Jeevan Jyoti Public School (iv) Ascent Institute of Management & Technology 5. There was a search and seizure operations conducted u/s 132 of the Act in the case of the assessee along with other cases of the Jeevan Jyoti Group, on 29.05.2012 at the registered office of the assessee at 162, Bai-ka-Bagh, Allahabad, U.P. Pursuant to search and seizure operations, notices u/s 153A of the Act was issued by the Assessing Officer (AO). In response to the said notice, the assessee filed its return of income claiming exemption u/s 11 and 12 of the Act. While assessment proceedings were in progress, the assessee filed application before the Income Tax Settlement Commission (ITSC), New Delhi on 24.02.2015, wherein additional income of Rs. 65,00,000/- was disclosed by the assessee-trust for the assessment years 2007-08 to 2014-15, as detailed hereunder: S.No. Assessment Year Additional Income declared before ITSC (In Rs.) Tax Paid (In Rs.) 1. 2007-08 10,00,000 6,31,000 2. 2008-09 10,00,000 5,94,000 3. 2009-10 10,00,000 5,57,000 4. 2010-11 10,00,000....
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....3) 4. 2010-11 Nil 2,25,97,490/- 08.08.2017 153A read with Section 143(3) 5. 2011-12 Nil 12,55,72,780/- 08.08.2017 153A read with Section 143(3) 6. 2012-13 Nil 9,01,24,550/- 08.08.2017 153A read with Section 143(3) 7. 2013-14 Nil 5,86,00,389/- 08.08.2017 Section 143(3) Total Nil 34,43,24,119/- 9. The assessee filed first appeal before ld. CIT(A) for all these ay's , which stood dismissed by ld. CIT(A), vide separate appellate orders all dated 10.07.2018, passed by ld. CIT(A) for Assessment Years: 2007-08 to 2013-14. The assessee filed second appeal with Division Bench of Income Tax Appellate Tribunal, Allahabad, wherein tribunal restored the matter back to the file of ld. CIT(A) for fresh adjudication, vide composite order dated 21.12.2018 passed by tribunal in ITA No. 322 to 328/Alld/2018 for Assessment Years : 2007-08 to 2013-14. 10. It is the aforesaid background of facts, the PCIT issued Show Cause Notice(SCN) for cancellation of registration u/s 12AA(3) , dated 13/18.07.2017. After considering the reply of the assessee to the show cause notice, the PCIT passed th....
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.... trust to the trustees namely Dr. A.K Bansal and Dr. Vandana Bansal through Jyoti Hospital Pvt. Ltd., the Hon'ble JM took the view that the assessee has not disputed the transactions of advance to Dr. A.K. Bansal and Dr. Vandana Bansal as these amounts of Rs. 13,20,26,382/- were transferred by the assessee trust to Jyoti Hospital Pvt. Ltd. Similarly, a sum of Rs. 1,35,74,790/- were also treated as the benefit given to the trustees through the concerns in which they have substantial interest. The assessee has not disputed these transactions of transfer of funds or advance given to the trustees. However, the explanation of the assessee was that the assessee trust has received loans and advances from those concerns which is more than the repayment amount as cited by the PCIT. the Hon'ble JM held that there are loan and advances received by the assessee trust from the group concerns in which the trustees of the assessee trust were having substantial interest and the details of the amount of loans and advances received by the trust as per the balance-sheet as on 31st March, 2013 as under:- Jyoti Mediservices Limited Rs. 82,30,350/- NavjeevanPediatrics Pvt Ltd Rs. 49,42,061/-....
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....ed to exist, the same would fall in the category that the activities are not being carried out in accordance with the objects of the trust. Hence the undisputed fact of sale of all the educational institutions by the assessee trust would definitely lead to disentitlement of benefit under section 11 and 12 of the Act and consequently cancellation of registration granted under section 12A of the Income Tax Act. In view of the above facts and circumstances of the case, the Hon'ble JM upheld the order of cancellation of the registration as well as granted under section 12A as well as approval granted under section 80G(5). 15. As regards the second issue whether the cancellation shall have with retrospective effect w.e.f. 1.4.2006 as held by the Pr. CIT or would be retrospective, the Hon'ble JM held relied on the decision of the Hon'ble Jurisdiction High Court in the case of ACIT vs. Agra Development Authority (2018) 90 taxman.com 282 (All) 407 ITR 562(All) wherein it was held in para 50 to 52 as under:- "50. Then, there is nothing in the language of Section 12AA(3) of the Act that may suggest registration of the assessee may be cancelled with retrospective effect. The use o....
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....ch the activity of the assessee ceased to exist. 17. The Hon'ble AM took the view in paragraph 5.2 of his order that he differs from the decision of the Hon'ble JM for the reason that the matter needs to be set aside and resorted to the file of the PCIT for denovo consideration of issue of cancellation of registration u/s.12AA(3) and withdrawal of approval u/s.80G(5) of the Act. The first reason given by him for doing so are that in the application filed by the assessee before the ITSC it had admitted receipt of donations but in assessment proceedings as well as in the proceedings for cancellation of registration u/s.12AA(3), the assessee did not provide details of donations or sums received but to prove its genuineness, like name and address of the person, purpose of donation etc. According to the Hon'ble AM there is evidence of the assessee having received, from FY 2006-07 onwards, large sums of money towards, donations, corpus funds, building fund, Development fund etc., which stood credited in its books of accounts. Educational institutions in India illegally demand capitation fee and other forced amount of money by way of corpus fund, building fund, development fund, donati....
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.... This arguments is also fallacious, as every entity is a separate entity and hence all the transactions with inter-related parties who are hit by Section 13(2) and 13(3) of the 1961 Act are to be separately explained vis-à-vis- reference to books of accounts and flow of money. The assessee has claimed itself to be a charitable entity and there is a prohibition that trustees and their relatives, concerns in which they or their relatives are interested shall not derive any benefit from the charitable trust. Reference is drawn to Section 13(2) and 13(3) of the 1961 Act. I have gone through the audited financial statements of the assessee for the financial year 2006-07 to 2017-18, which are placed in paper book(s) at page 254 to 524 and 730-741, and I have observed that several transaction of substantial amounts have been conducted by assessee, with Jyoti Hospitals Private Limited, Dr. Ashwani Kumar Bansal and Dr Vandana Bansal. The assessee has claimed exemption of income u/s 11 and 12 , by getting itself registered u/s 12A of the 1961 Act and the onus is on the assessee to prove by cogent evidences that no benefit was derived by trustees , their relatives or concerns in which ....
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....peal by the Assessee to the Tribunal against the said order, the Tribunal upheld the same. On appeal against the order of the Tribunal, the Hon'ble Calcutta High Court reversed the order of the Tribunal. On further appeal by the Revenue to the Hon'ble Supreme Court, the order of the CIT(E) was upheld and the order of the High Court was reversed. 21. According to the Hon'ble AM, the above decision of Hon'ble Supreme Court has to be read as conferring power on the revenue to cancel registration with retrospective effect for the following reasons: "In the above case before Hon'ble Supreme Court, the trust was registered u/s 12AA of the 1961 Act vide order dated 06.08.2010 and it was also accorded approval u/s 80G(vi) of the 1961 Act, the survey u/s 133A of the 1961 Act took place on the entity namely School of Human Genetics and Population Health, Kolkata , and SCN was issued by CIT on 04.12.2015 proposing cancellation of registration . The CIT cancelled registration u/s 12AA and 80G with effect from 01.04.2012 , as it transpired that for financial year 2011-12 and onwards, the aforesaid tax-payers was engaged in accepting bogus donation which were by way of accommodation ....
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....ivided, they shall state the point or points on which they differ, and the case shall be referred by the President of the Appellate Tribunal for hearing on such point or points by one or more of the other members of the Appellate Tribunal, and such point or points shall be decided according to the opinion of the majority of the members of the Appellate Tribunal who have heard the case, including those who first heard it." 23. As a third member, I have to confine myself to the point of difference between the members who constituted the Division Bench. The point of difference is firstly on the question whether the order of CIT(E) cancelling registration u/s.12AA(3) of the Act has to be upheld as was the opinion of the Hon'ble JM or the impugned order has to be set aside to the CIT(E) for examining de novo serious allegations made against the assessee and calling upon the assessee to divulge all information to CIT(E) to enable CIT(E) to pass a comprehensive order, as proposed by the Hon'ble AM. The second point of difference is as to whether the registration granted u/s.12A can be cancelled with retrospective effect as was opined by the learned AM or can be cancelled only prospecti....
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....ne ground viz., sale of the very institution which was to carry out the charitable activities. In this regard, the main aspect which has to be taken note of is the principle that the grant of registration u/s12A of the Act, does not automatically enable an assessee to claim exemption u/s 11 & 12 of the Act. The AO even in a case, where a trust or charitable organization for which registration u/s 12A of the Act subsists has to go in to the question, as to whether the income has been applied for charitable purposes and to the extent contemplated by Sec.11 & 12 of the Act. Even in a case, where the trust or charitable organization applies its income for charitable purposes, but does not have registration u/s 12A of the Act, such trust or charitable organization cannot claim the benefit of Sec.11 & 12 of the Act. The apprehensions expressed by the learned AM have to be addressed or looked into in accordance with law and the parties should be left to explore remedies open to the them in law. Therefore, I agree with the learned JM that the impugned order cancelling registration has to be upheld and there is no necessity to set aside the impugned order and remand the issue for de novo ex....
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.... 1992 Supp 1 SCR 732 ".....It is neither desirable nor permissible to pick out a word or a sentence from the judgment of this Court, divorced from the context of the question under consideration and treat it to be the complete 'law' declared by this Court. The judgment must be read as a whole and the observations from the judgment have to be considered in the light of the questions which were before this Court. A decision of this Court takes its colour from the questions involved in the case in which it is rendered and while applying the decision to a later case, the courts must carefully try to ascertain the true principle laid down by the decision of this Court and not to pick out words or sentences from the judgment, divorced from the context of the questions under consideration by this Court, to support their reasonings. In Madhav Rao Jiwaji Rao Scindia Bahadur and Ors. v. Union of India this Court cautioned: It is not proper to regard a word, a clause or a sentence occurring in a judgment of the Supreme Court, divorced from its context, as containing a full exposition of the law on a question when the question did not even fall to be answered in that ....
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....ant Member, however, took a view that the order cancelling the registration under section 12A and withdrawing approval under section 80G(5) has to be set aside and the matter be remanded to the record of the Pr. CIT(Exemption) for consideration de novo. The learned Accountant Member also took a view that the Pr. CIT(Exemption) has powers to cancel registration with retrospective effect i.e. from the date when the assessee infringes conditions subject to which registration under section 12A was granted and misused the status of the registered trust. Accordingly the question of difference was referred by the Hon'ble President, vide order dated 31.01.2022 to the Third Member (Hon'ble Vice President, Bangalore Zone, Bangalore). As the Members of Division Bench framed separate question of difference the Hon'ble Third Member framed the question / point of difference and decided the same vide order dated 20.5.2022 as under:- "3. There was a difference of opinion on the question framed projecting the point of difference between the Hon'ble JM and the Hon'ble AM. At the time of hearing before me, the parties agreed that the following question, can be considered as refle....
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....Delhi on 24.02.2015, wherein additional income of Rs. 65,00,000/- was disclosed by the assessee-trust for the assessment years 2007-08 to 2014-15, as detailed hereunder: S.No. Assessment Year Additional Income declared before ITSC (In Rs.) Tax Paid (In Rs.) 1. 2007-08 10,00,000 6,31,000 2. 2008-09 10,00,000 5,94,000 3. 2009-10 10,00,000 5,57,000 4. 2010-11 10,00,000 5,20,000 5. 2011-12 10,00,000 4,83,000 6. 2012-13 5,00,000 2,25,000 7. 2013-14 5,00,000 2,07,500 8. 2014-15 5,00,000 1,80,000 6. So far as sources of the said additional income offered by assesse before ITSC, the assessee has claimed that the said additional income offered by it in settlement application filed before ITSC has arisen out of variety of sources, one such sources being donation received from public at large. The assessee further claimed that these donations so received by it were meant for construction of school building and other infrastructure as also for other educational activities, and the same were directly invested in such activities, without recording in the books of accounts of the a....
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....estored the matter back to the file of ld. CIT(A) for fresh adjudication, vide composite order dated 21.12.2018 passed by tribunal in ITA No. 322 to 328/Alld/2018 for Assessment Years : 2007-08 to 2013-14. 10. It is the aforesaid background of facts, the PCIT issued Show Cause Notice (SCN) for cancellation of registration u/s 12AA(3) , dated 13/18.07.2017. After considering the reply of the assessee to the show cause notice, the PCIT passed the order dated 29.3.2019, impugned in the appeal, cancelling registration granted to the assessee u/s 12AA(3) w.e.f. 01.04.2006 and withdrawing approval granted u/s 80G with effect from 13.10.2009. 11. Though number of instances have been cited by the PCIT in the impugned order for cancelling registration, three reasons have been cited as principal reasons for cancelling registration. The first reason was that the activities of the assessees are being carried out for the benefit of the specified persons as given in section 13(3) and specifically the trustees of the assessee trust as well as the concerns in which the trustees are having substantial interest. The second reason given was that the assessee admitted in the applicat....
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....ch is more than the repayment amount as cited by the PCIT. the Hon'ble JM held that there are loan and advances received by the assessee trust from the group concerns in which the trustees of the assessee trust were having substantial interest and the details of the amount of loans and advances received by the trust as per the balance-sheet as on 31st March, 2013 as under:- Jyoti Mediservices Limited Rs. 82,30,350/- NavjeevanPediatrics Pvt Ltd Rs. 49,42,061/- Vandana Women Hospital Rs. 11,90,000/- Total Rs. 1,43,62,411/- The Hon'ble JM therefore held that it was a matter of record that the assessee trust received loan and advance from the group concerns total amounting to Rs. 1,43,62,411/- which were subsequently repaid by the assessee to the tune of Rs. 1,35,74,709/-. Therefore, the payment made by the assessee to that extent is nothing but repayment of earlier loan and advances and this would not even amount to violation of provisions of section 11(5) or 13 of the Income Tax Act. Therefore, these transactions cannot be regarded as the activities of the assessee are only for the benefit of the trustees of the assessee trust. On the PCIT action in m....
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....ctive effect w.e.f. 1.4.2006 as held by the Pr. CIT or would be retrospective, the Hon'ble JM held relied on the decision of the Hon'ble Jurisdiction High Court in the case of ACIT vs. Agra Development Authority (2018) 90 taxman.com 282 (All) 407 ITR 562(All) wherein it was held in para 50 to 52 as under:- "50. Then, there is nothing in the language of Section 12AA(3) of the Act that may suggest registration of the assessee may be cancelled with retrospective effect. The use of the words or have obtained registration at any time under Section 12a of the Act' added by amendment w.e.f. 01.06.2010 only indicate that the Commissioner was vested with the power to cancel a registration that may have been granted to an assessee at any time prior to the aforesaid amendment itself. However, it does not indicate that thereby the Commission had been empowered to cancel the registration of the assessee with retrospective effect i.e. with effect from a date prior to the date of issuance of the order/notice to cancel the registration. 51. Clearly, the act of cancellation of registration has serious civil consequences. In absence of any legislative intent expressed to suggest th....
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....eived but to prove its genuineness, like name and address of the person, purpose of donation etc. According to the Hon'ble AM there is evidence of the assessee having received, from FY 2006-07 onwards, large sums of money towards, donations, corpus funds, building fund, Development fund etc., which stood credited in its books of accounts. Educational institutions in India illegally demand capitation fee and other forced amount of money by way of corpus fund, building fund, development fund, donations etc., from students/parents of students, while admitting students in the institution. These receipts are illegal causing wreckage and very fundamental of education system in our country. Therefore, the matter should be set aside for de novo consideration by the PCIT. The Hon'ble AM further directed the assessee to provide the relevant details of the donations and all other sums so received in the form of building fund, corpus fund, development fund, donations etc., to prove that these are genuine receipts, and are neither bogus nor have any nexus/co-relation with the admission of students i the institutions run by the assessee. He also directed the PCIT to verify whether there exists a....
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....ich are placed in paper book(s) at page 254 to 524 and 730-741, and I have observed that several transaction of substantial amounts have been conducted by assessee, with Jyoti Hospitals Private Limited, Dr. Ashwani Kumar Bansal and Dr Vandana Bansal. The assessee has claimed exemption of income u/s 11 and 12 , by getting itself registered u/s 12A of the 1961 Act and the onus is on the assessee to prove by cogent evidences that no benefit was derived by trustees , their relatives or concerns in which they are interested etc. and provisions of Section 13(2) and 13(3) are not hit, and merely making balled and general statement is not sufficient nor is it sufficient to say that group entities have advanced more sum of money to assessee than what is advanced by the assessee to the trustees , their relatives or concerns in which trustees are interested , and hence consequently Section 13(2) and 13(3) are not hit. The onus is on the assessee to bring on record cogent evidences in its defense. On the part of Revenue, it has to do in-depth analysis of financial records and other relevant material to arrive at decision whether or not any benefit was derived by trustees or their relatives or ....
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....06.08.2010 and it was also accorded approval u/s 80G(vi) of the 1961 Act, the survey u/s 133A of the 1961 Act took place on the entity namely School of Human Genetics and Population Health, Kolkata , and SCN was issued by CIT on 04.12.2015 proposing cancellation of registration . The CIT cancelled registration u/s 12AA and 80G with effect from 01.04.2012 , as it transpired that for financial year 2011-12 and onwards, the aforesaid tax-payers was engaged in accepting bogus donation which were by way of accommodation entries. The Hon'ble Supreme Court reversed the decision of Hon'ble High Court and held that the aforesaid tax-payer completely misused the registration granted u/s 12AA and 80G of the 1961 Act and Hon'ble Supreme Court held that an entity which is misusing the status conferred upon it by Section 12AA of the 1961 Act is not entitled to retain and enjoy said status. The Hon'ble Supreme Court held that the authorities were therefore, right and justified in cancelling the registration u/s 12AA and 80G of the 1961 Act. Thus, in view of authoritative decision of Apex Court in Batanagar Education and Research Trust(supra), this contention of the assessee that registration u/s ....
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....12AA(3) of the Act has to be upheld as was the opinion of the Hon'ble JM or the impugned order has to be set aside to the CIT(E) for examining de novo serious allegations made against the assessee and calling upon the assessee to divulge all information to CIT(E) to enable CIT(E) to pass a comprehensive order, as proposed by the Hon'ble AM. The second point of difference is as to whether the registration granted u/s.12A can be cancelled with retrospective effect as was opined by the learned AM or can be cancelled only prospectively, as was held by the learned JM. 24. On the first point of difference, I may first refer to the provisions of Sec. 12AA(3) of the Act, which reads thus: "(3) Where a trust or an institution has been granted registration under clause (b) of sub-section (1) and subsequently the Commissioner 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, he shall pass an order in writing cancelling the registration of such trust or institution: Provided that no order under this sub-section shall be passed unles....
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....me for charitable purposes, but does not have registration u/s 12A of the Act, such trust or charitable organization cannot claim the benefit of Sec.11 & 12 of the Act. The apprehensions expressed by the learned AM have to be addressed or looked into in accordance with law and the parties should be left to explore remedies open to them in law. Therefore, I agree with the learned JM that the impugned order cancelling registration has to be upheld and there is no necessity to set aside the impugned order and remand the issue for de novo examination by the CIT(E). 26. On the question whether the registration already granted can be cancelled retrospectively, I find that the decisions referred to by the Hon'ble JM rendered by the Hon'ble Allahabad High Court in the case of Agra Development Authority (supra) and the Hon'ble Rajasthan High Court in the case of Indian Medical Trust Vs. PCIT (supra) are decisions rendered in cases where the question before the Hon'ble Court was as to whether registration granted u/s.12A of the Act can be cancelled u/s.12AA(3) of the Act, with retrospective effect. The Hon'ble Courts have expressed the view that u/s.12AA of the Act, registration gra....