TaxTMI 
TaxTMI 
2022 (10) TMI 1108
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....ssee has received donation to the tune of Rs.29,07,17,560/-. Further, he noted that the assessee has transferred substantial part of this donation to the following 3 parties: Dreams of the Century Rs.15,09,78,250 Monipure Women Dev.Society Rs. 6,67,07,250 Vichar Manch Rs. 3,19,92,000 Total Rs.24,96,77,500 3. He observed that the assessee is engaged in carrying out scientific research. Some of the activities in this field carried out during the year are stated as under: a) R&D Projects in Robotics b) Application of Nickel Titanium Alloys c) Rodent Control using sand blasting techniques d) Interactive displays for visuals training aids. 3.1 It was supposed to carry out research work on its own as per the aims and objectives. However, substantial amount of fund was transferred to the above 3 parties as project sponsorship. On being questioned by the Assessing Officer, the assessee replied as under which has been reproduced by the Assessing Officer in the assessment order: "Since these societies were carrying out the research in those projects in which the Hyderabad Science Society was also interested to carry o....
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....fore, rejected the claim of exemption by the assessee u/s 11 of the Act by recording the following: "9 The explanation offered by the assessee is considered but not tenable. Assessee has received substantial amount as donation which in turn re-donated to the three parties as mentioned above after retaining part of it. The re-donation was Compulsion to the assessee as per terms and conditions of getting donation from the donors. Assessee has allowed to utilize its banks account to receive donations and subsequent transfer. It is noteworthy that assessee had transferred the fund to Vichar Manch in account no. 400120110000339, Bank of India, Bara Bazar Branch which was opened for specific purpose of money laundering by one Mr. Pankaj. This has made it clear that assessee directly or indirectly involved in money laundering chain. Out of donation of Rs. 29.07 Crores, the assessee re-donated the sum of Rs. 24.96 Crores to these three parties as per the directions of the donors or their representatives. In the process, the assessee had retained an amount of Rs. 4.11 Crores, out of total donation received. It is claimed that this sum is utilized for its own research activities. Th....
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.... and objects. c)The Ld. CIT(A) erred in holding that the appellant society did not transfer the fund to three other societies for carrying out any research work but transferred to adhere to the precondition set by donors to re-donate the fund to the particular societies and that it has nothing to do with the project sponsorship. d) The Ld. CIT(A) erred in holding that the impugned donation to the appellant was given for specific purpose of getting fraudulent benefit of exemption/deduction. 4. The Ld. CIT(A) ought to have appreciated that the AO erred in determining the total income of the appellant at Rs. 3,92,40,750/- instead of Nil income as declared by the appellant. 5. The Ld. CIT(A) has erred in observing that the appellant is directly or indirectly involved in money laundering claim. 6. The Ld. CIT(A) has erred in concluding that the appellant has not carried out its activities as per its aims and objects. The Ld. CIT(A) erred in holding that the denial of benefit of exemption. 7. was fair and reasonable as the appellant had violated the preconditions for allowing exemption u/s 11 of the Act. 8. The Ld. CIT(A) oug....
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....s 12AA vide order dated 8.6.2022. He submitted that since the CIT(E) has restored the registration u/s 12AA, which was cancelled by him on the basis of the recommendation of the Assessing Officer, therefore, in the interest of justice this matter should be restored to the file of the Assessing Officer for fresh adjudication of the issue. 9. The learned DR, on the other hand, heavily relied on the order of the Assessing Officer and the CIT(A). He submitted that the assessee in the instant case has indulged in money laundering activities, since substantive donation received by the assessee has been transferred to three parties which are given by the Assessing Officer at Page 3 of the assessment order. The assessee in the instant case has not done any research work and in turn has transferred the funds to other societies/trusts. Therefore, the Assessing Officer was fully justified in denying the benefit of exemption u/s 11 of the I.T. Act. He submitted that the learned CIT (A) has passed the order giving valid reasons while rejecting the grounds raised by the assessee. He accordingly submitted that the order of the CIT(A) should be upheld and the grounds raised by the assessee shou....
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.... are accordingly allowed for statistical purposes. ITA No.269/Hyd/2022 - A.Y. 2016-17 12. The grounds raised by the assessee are under: "1. The learned CIT (A) erred in dismissing the appeal instead of allowing the same. 2. (a) The learned CIT (A) ought to have appreciated that the order of cancellation of registration passed by the CIT (Exemptions), Hyderabad u/s 12AA (3) r.w.s. 12AA (4) of the Income Tax Act, 1961, dated 31.12.2018 in the appellant's case has been quashed by the Gro Hon'ble ITAT, Bench "B", Hyderabad, vide their order in ITA No.361/Hyd/2019 dated 07.09.2021. b) The Ld. CIT(A) ought to have appreciated that when once the cancellation order passed u/s 12AA (3) r.w.s. 12AA (4) dated Tech Gro 31.12.2018 has been quashed by the Hon'ble ITAT, the existing registration u/s 12AA of the Act is restored to the appellant. c The Ld. CIT(A) ought to have appreciated that when the registration u/s 12AA of the Act is restored on 07.09.2021, the denial of exemption u/s 11(1)(c) of the Act for the assessment year under consideration i.e., assessment year 2016-17 is not in order. 3. a) The Ld. CIT(A) erred in holding t....