TaxTMI 
TaxTMI 
2023 (6) TMI 1404
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....n not following the principles of natural justice while revoking the registration granted to the appellant u/s 12A. 3. That on the facts and circumstances of the case and in law, The Commissioner of Income Tax (Exemption) could not point out a single instance of misapplication of the funds by the appellant towards the objects of the appellant and also could not point out single instance wherein the appellant has deviated from its objects. 4. That on the facts and circumstances of the case and in law, The Commissioner of Income Tax (Exemption) relied on various reports and other documents which were irrelevant to the facts of the case of the appellant." The sole issue involved in this appeal is regarding revocation of registration granted u/s 12AA which is raised by the assessee by the aforesaid grounds. 3. The brief fact on the issues are that the assessee is a trust registered u/s 12A, granted on 07.03.2003. The assessee society is managed by member of Jain Group, Raipur and runs colleges and schools at Raipur. The ld. JCIT(E), Raipur vide letter dated 12.04.2018 has forwarded the proposal of ACIT(E), Raipur to cancel registration u/s 12AA granted to the as....
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....ht on record which implicates the assessee. iv) Adverse inference drawn on the basis of statement of one Shri Swapan Ranjan Dasgupta. Various Tribunals, including jurisdictional Raipur Bench have held that in absence of any material brought on record to show that the recipients paid cash to HHBRF, which came back in the form of donation, registration u/s 12A could not be cancelled. Details of such cases mentioned in the synopsis at para no. 14(iv). v) In the case of Shree Jainarayan Hariram Goel Charitable Trust, which a received donation from HHBRF. held that on the basis of such information, registration could not be withdrawn. Jha Education Trust AO reported that assessee)) received bogus donation of Rs 5 lakh and Rs. 10 lakh from Jha Education Trust and Bimladevi Dharamprakash Jan Kalyan Nidhi, which are sham trusts involved in money laundering and registration u/s 12A has been cancelled. i) Except for mentioning this, there is no reference of any other material whatsoever. Observations are unsupported and unsubstantiated. There is absolutely nothing brought on record. ii) Registration u/s 12A of these two trusts withdrawn, has been restored. Copy of ITAT orde....
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.... Trust, except that its appeal before Hon'ble ITAT is pending. 3. Nothing brought on record, nothing confronted, no evidence Except for mentioning this fact, nothing else brought on record nor anything confronted to the assessee by the ld. Pr. CIT. There is no evidence whatsoever in support of the observations made in the show cause notice and in sec. 12AA(3) cancellation order. 4. Nothing brought on record to show that cash was exchanged between assessee and the donor trusts. 5. In the show cause notice and the cancellation order, there is allegation of some statements recorded on the basis of which Id. Pr. CIT concluded that the assessee is engaged in money laundering activity. i) In none of the relied upon statements, there is any reference of name of the assessee. Therefore, there is nothing specific against the assessee ii) Donation from Jha Educational Trust and Bimla Devi Dharamprakash Jankalyan Nidhi - there is absolutely no reference of any statement of anybody and therefore, allegation in respect of these two donors is absolutely baseless and arbitrary. Reference of these two trusts in para no. 42 & 4.3-no reference of any mate....
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....s been utilized by ld Pr CIT without providing it to the assessee and without confronting it to the assessee. Such material is liable to be ignored. Reliance on:- i) Kishinchand Chellaram vs CIT (1980) 125 ITR 713 (SC) ii) HR. Mehta vs ACIT in Income Tax Appeal no. 58 of 2001 order dt. 30.06.2016 of Mumbai High Court iii) CIT vs Ashwani Gupta, (2010) 322 ITR 396 (Del.). iv) ACIT vs. Mahesh K. Shah in ITA no. 5194/Mum 2014, order dt. 31.01 2017 of Chellaraj B" Bench of Mumbai ITAT v) DCIT vs Shri Sanjay Hirachand Dhokad in ITA no. 5243/Mum /2013 order dr. 31.03.2017 of "E" Bench of Mumbai ITAT. 10. No cross-examination allowed Ld. Pr. CIT has relied upon statement of some persons. However, none of the deponents were allowed to be cross examined by the assessee. In view of this, their statements could not have been utilized to draw adverse inference. Reliance on Andaman Timber Industries vs Commissioner of Central Excise (2015) 281 CTR 241 (SC) 11. No enquiry by ld. Pr. CIT Pr. CIT has not carried out any enquiry whatsoever 12. Assessee granted registration u/s 12A and approval u/s 80G subsequen....
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....t PN 75 to 110 of further case law compilation, relevant contention at PN 85 thereof. iii) Both the persons retracted their admission and their retraction was cross-examined by their AO during the assessment proceedings and in such cross-examination also, they stood by their retraction and thereby, their retraction has become final. This is coming out of the order of the Tribunal in the case of above trust, at PN 75 to 110 of further case law compilation. Relevant finding at PN 96 of thereof. iv) Hon'ble ITAT has held in the case of trust that retraction of the two deponents is valid. v) When no adverse view taken in the case of Podar Education Trust, there is no question of taking any adverse view in the case of assessee society vi) Summary of order. 15. Anandilal & Ganesh Podar Trust Matter pending before Hon'ble Mumbai ITAT 16. HHBRF i) Allegation is that assessee received alleged bogus donation from this trust. Case of the assessee for AY 2010/11 & 2011/12 reopened u's 147 on the basis of same information and in the re-assessment so made, donation received from this institution has been added as assessee....
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....e in absence of tangible evidence to corroborate the assertion. - PN 48 [para no. (iii)] of case law compilation - In absence of tangible evidence to implicate assessee, satisfaction contemplated u/s 12AA(3) cannot be achieved. - PN 48 [para no. (iv)] of case law compilation - Since no cross-examination was allowed, statement could not be used. - PN 48 [para no. (v)] of case law compilation - Neither the activity nor the application of fund ever doubted. - PN 48 [para no. (vi)] of case law compilation - No instance recorded that the assessee is generating unaccounted cash, which was allegedly transferred to the donor for receiving money through cheque. - PN 48 [para no. (vii)] of case law compilation - Addition to the extent of alleged ingenuine donation may be plausible but registration cannot be withdrawn. - PN 49 of case law compilation, para 7.4-CIT(E) wrongfully placed onus of proving bonafide of donation on assessee without showing reasons/ evidence for drawing adverse conclusions. 17. Cancellation not justified." 8. From the aforesaid submissions by the ld. AR, the main contentions of the assessee coming out a....
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....ho alleges untruthfulness against the other persons. In the instant case, the allegation has been made on behalf of the Revenue for adversial conduct of the assessee. It is thus the duty of the Revenue to comply with the sacrosanct principles of natural justice and grant opportunity to the assessee for rebuttal of evidences in possession of the Revenue. The registration already granted cannot be withdrawn arbitrarily and in a light hearted manner giving retrospective effect. All pleas noted above and other arguments and position of law that were canvassed on behalf of the assessee requires proper appraisal and disposal thereof in an objective manner. The order of the CIT(E) requires to deal with various pleas of the assessee raised to defend the registration granted. The doctrine of legitimate expectations demands that the assessee should be made privy to the tangible evidences in corroboration of statement sought to be relied upon. Similarly, the cross examination of deponent's statement is incumbent to prevent miscarriage of justice. 7.4 As told in the open Court, the re-registration application of the assessed has been accepted by the Revenue recently and registrati....
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.... documents are ignored, there remains no material with the department to hold that the assessee received the donation from M/s Hebicure Healthcare Bio-Herbal Research Foundation, Kolkata in lieu of the cash. Therefore, on the basis of such information registration could not be withdrawn. On another allegation by the department with respect to the information received from Investigation Wing, Mumbai that a search and seizure operation carried out in the case of Poddar Group of Mumbai and the DDIT ( Inv.) has found that the assessee is into money laundering activities through bogus donations given by Poddar Group Trust, Mumbai. In this respect, it was the submission of the assessee that name of the assessee mentioned by Sh. K. D. Suba, CA and Sh. Jayesh Zanani, Manager Accounts, except for their statements, there is no other material implicating the assessee. Both these persons have retracted from their statement subsequently and the retraction has become final and accepted by Hon'ble ITAT, Mumbai in ITA Nos. 1876, 1877, 1880 and 1869/Mum/2021 vide order dated 28.09.2022. Effectively, department has no case against the assessee with respect to Poddar Education Trust as well. The....
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....f the appellant and also could not point out single instance wherein the appellant has deviated from its objects. 4. That on the facts and circumstances of the law and in law, The Commissioner of Income Tax (Exemption) relied on various reports and other documents which were irrelevant to the facts of the case of the appellant and same also not confronted to the appellant even after specific request for the copy of the same." 14. Brief facts of the case are that, the assessee whose registration u/s 12A has already been cancelled u/s 12AA(3) of the Act vide order dated 14.11.2018. Subsequently, a proposal was received from the AO duly recommended by the range head for cancellation of approval given to the assessee trust u/s 10(23)(c)(vi) of the Act. The ld. CIT(E), Bhopal has discussed the involvement of some entities in money laundering activities from whom the assessee has received bogus donations. A show cause notice was issued on 03.12.2018 requesting the assessee society to explain as to why the exemption u/s 10(23)(c)(vi) should not be cancelled of the assessee. The written submission dated 06.02.2019 in response to the show cause notice were made by the assessee. ....