TaxTMI 
TaxTMI 
2023 (6) TMI 1404
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....evoking 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 assessee in light of following issues:- "The assessee trust is involved....
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....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 held that on the basis of such information, registration could not be withdrawn.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 ii) Registration u/s 12A of these two trusts withdrawn, has been restored.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 order at PN 25 to 40 and 17 to 24 of case law compilation Bimaladevi Dharamprakash Jankalyan Nidhi Same observations as in the Same as in the case of Jha ....
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.... 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 material whatsoever. iii) In written submission filed before ld. Pr. CIT, it was specifically mentioned that nothing has been provided to the assessee in support of the allegations leveled in the show cause notice Refer page no. 105 & 125 of PB. ....
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....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 subsequently. Due to amendment in law, assessee applied for re-registration u/s 12A and 80G, which was granted, Registration certificates at PN 127 to 131 of PB. 13 ha Educational Trust & Bimaladevi Dharamprakash Jan Kalyan Nidhi i) Neither in the show cause notice nor in the cancellation order, there is any reference of any material whatsoever for drawing inference that ....
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....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's income. Whatever consequence could flow in respect of the alleged bogus donation, it has already flown in assessee's case. No further adverse view possible. ii) Adverse view taken on the basis of statement of one Shri Swapan Ranjan Dasgupta, founder director of HHBRF. Copy of his statement at PN 58 to 66 of PB. There is no specific reference of assessee in such statement No reference of any other donee also. This fact brought to the notice of Id. Pr. CIT vide the writte....
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....ssee 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 are that the information based on which the cancellation was affected except for mentioning the facts nothing has brought on records nor confronted to the assessee by the ld. PCIT. There is no evidence whatsoever in support of the observations made in show cause notice and in cancellation order. The revenue has nothing brought on record to show that cash was exchanged between the assessee and the donor trust. The action was motivated from the allegations in some statements recorded, however none of relied upon the statements there is any reference of the name of the assessee. Therefore, there....
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....ppraisal 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 registration has been granted from a prospective date. All these facts require proper consideration. The CIT(E) while cancelling the registration appears to have wrongfully placed the onus of proving bonafides of donations on the assessee without showing reasons/evidence for drawing adverse conclusion on a registered trust." 9. On the contrary, the ld. CIT-DR drew our attention to para 7 of the ld. CIT(E) and has submitted that the requisite information was provided to the assessee, but no plausible explanation could be given by the assessee and therefore, the ld. CIT(E) has rightly cancelled the registration u/....
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....roup 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 same explanation has been offered by the assessee for Anandilal & Ganesh Podar Society also. 11. We have thoughtfully considered the submissions and referred to case laws relied upon by the assessee. The assessee's contention has got merit which is further substantiated by the department by granting them registration u/s 12A(1)(ac)((vi) & 80G(5)(iv) of the Income Tax Act on 10.03.2022. In view of the aforesaid observations, we do not see any substance in the contention of the department and therefore, are of the view that once the department itself has accepted that the assessee's activities are genuine, ....
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....O 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. The submissions of the assessee are duly considered, however, the same were not found acceptable by the department. The ld. CIT(E) has noted various information received from ld. CIT(E), Kolkata as well as from DCIT (Inv.), Units 7(iv), Mumbai, discussed the modus operandi pertaining to bogus donations, reproduced relevant part of the statements recorded u/s 133A of the IT. Act and has concluded that the assessee societie's activities are found to be not genuine, even the donations received and shown in its accounts are nothing but bogus accommodation entries. In light of such irregularities pointed out, the ld. CIT(E) considered that the ....