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2022 (9) TMI 1411 - HC - Income TaxExemption u/s 11 - cancellation of registration u/s 12AA(3) based on money laundering activities carried out by the assessee with Herbicure Health Care Bio Herbal Research Foundation - whether the CIT (Exemption) [CIT(E)] was justified in cancelling the registration granted in favour of the respondent society that too with retrospective effect? - tribunal has allowed the appeal filed by the respondent taking note of the fact that the opportunity to cross-examine the persons who were in charge of the company which had extended a donation of Rs.50 lacs to the assessee was fatal - HELD THAT:- On facts the tribunal found that the amount of Rs.50 lacs was being utilised for purchase of property and, therefore, even though the receipt of donation has to be treated as unexplained receipt of the assessee as per Section 68, the addition cannot be made because the assessee itself has applied the entire receipt for the objects of the assessee society. Further, the learned tribunal after taking note of the various decisions of the High Court, on facts, found that the assessee has shown the donation as corpus fund and had applied the same by advance money to the land and building which was shown in the balance-sheet as at 31.3.2011 which was placed before the tribunal in the form of a paper book. Tribunal also found that the application of the said fund was admittedly for a charitable purpose in tune with the objects of the assessee society. Tribunal noted that the revenue did not dispute the fact that the donations received by the respondent were not applied for charitable purposes. On the grounds mentioned in the order the tribunal came to the conclusion that the activities of the assessee society cannot be terminated to be ingenuine or it cannot be held that the their activities are not in accordance with the objects of the assessee trust. Revenue placed reliance on the decision of Batanagar Education and Research Trust[2021 (8) TMI 139 - SUPREME COURT] On going through the said decision we find that the same is factually distinguishable as in the said case the Hon’ble Supreme Court brought out the answers which were culled out from the managing trustee of the said trust. A questionnaire had been given by the department. In the case on hand the tribunal has noted that in spite of specific request made by the assessee for cross-examination of two persons, namely, Sri Swapan Ranjan Dasgupta and Sri Kishen Bhawshingka which was rejected on the ground that the assessee society has indulged in ingenuine activities. In fact, substantial part of the order passed by the learned tribunal has been devoted on the correctness of denial to afford an opportunity to cross-examine those two persons. Thus, we find that the tribunal has considered the factual position and granted relief to the assessee - Appeal dismissed.
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