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2017 (9) TMI 1976 - AT - Income TaxExemption u/s 11 - cancelling the registration of the Appellant assessee trust u/s 12AA(3) on illegal/money laundering activities carried on by the assessee - bogus donation was ascertained on the basis of the statement recorded u/s. 131 of the Act of the Director of the company - HELD THAT:- There is no evidence brought on record to show any connection between those brokers and the assessee. In the absence of such corroborative evidence, it is not possible to come to any conclusion that the assessee indulged in money laundering and that the donation received by it was a bogus donation. In fact on identical facts this Tribunal in the case of Sri Mayapur Dham Pilgrim and Visitors Trust [2017 (5) TMI 1486 - ITAT KOLKATA] came to the conclusion that cancellation of registration u/s 12AA of the Act cannot be sustained. Cancellation of registration granted to the assessee u/s 12A of the Act cannot be sustained and the impugned order is hereby quashed. The appeal of the assessee is accordingly allowed. Donation to assessee is bogus then the amount of bogus donation will not be eligible for exemptions u/s 11 - The registration certificate issued u/s 12AA of the Act cannot be cancelled as long as the objects of the trust are within the provisions of law. The objects/ byelaws of the trust are placed on pages 1 to 12 of the paper book and on the basis of same objects the assessee was given registration certificate u/s 12AA of the Act. While holding so, we find support & guidance from the judgment of Hon’ble High Court of Punjab & Haryana in the case of CIT Vs. Apeejay Education Society [2015 (4) TMI 303 - PUNJAB & HARYANA HIGH COURT] In the instant case the assessee is a charitable trust duly constituted as Charitable Trust under a Deed of Trust as a Public Charitable Trust for imparting education which is a “Charitable Purpose” u/s. 2(15) of the Income Tax Act. The trust duly applied for registration u/s. 12AA of the IT Act before the Director of Income Tax (Exemption) in conformity with rule 17A and submitted Form No. 10A together with other requisite documents. The Director of Income Tax (Exemption) after verification of documents and after being satisfied about the object of the trust and genuineness of its activities granted registration effective from 11.09.1979 vide order No. T-81/WB.VII of 1979-80 dated 11.09.1979 CIT(Exemption) before granting the registration certificate shall conduct necessary enquiries as he thinks fit in order to satisfy himself about the genuineness of activities of the trust. Once the ld CIT(Ex) is satisfied with the genuineness of the activities then he will grant the registration certificate. In the instant case before us, we find that the activities of the trust have not been doubted except the donation received by the assessee from two parties. Thus in our view at the most the exemption u/s 11 of the Act will be denied to such donation. Thus, in such circumstances the registration u/s 12A of the Act cannot be cancelled. We find that the activities of the trust in relation to its education activities have not been doubted and on the basis of same activities registration u/s 12AA of the Act was awarded to the assessee. Simply the assessee has received donation from some parties which are involved in the bogus transactions cannot be the basis for the denial of the registration certificates as discussed above. Appeal of assessee allowed.
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