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2019 (6) TMI 707 - AT - Income TaxRegistration u/s 12AA - charitable activity or not? - cancellation of the registration retrospectively - assessee had received the donation in lieu of cash from M/s Herbicure Healthcare Bio-Herbal Research Foundation (hereinafter referred to as HHBRF) of Kolkata - whether appellant being a trust exists solely for educational, medical aid and other charitable purposes and not for the purpose of profit? - HELD THAT:- We are of the opinion that the decision of Hon’ble Apex Court in the case of M/s Andaman Timber Industries [2015 (10) TMI 442 - SUPREME COURT] would be squarely applicable and, respectfully following the same, we hold that the material collected behind the back of the assessee cannot be utilized against the assessee unless the copy of the same is supplied to the assessee and he is given an opportunity to rebut the same. The statement of office bearers of HHBRF cannot be utilized against the assessee because neither the copy of the statement was supplied to the assessee nor the assessee was allowed an opportunity to cross-examine such person whose statement is being sought to be relied upon by the CIT(Exemptions). Once these two documents are ignored, there remains no material for the Department to hold that the assessee received the donation from HHBRF in lieu of cash. The CIT(Exemption)’s finding, that the assessee was not carrying out activities in accordance with the objects of the society and no genuine activities are being carried out by the society, is solely based upon the allegation that the assessee received the donation of ₹ 85 lakhs in lieu of cash. As we have already stated, there is no basis for the Department to hold that the assessee received the donation of ₹ 85 lakhs from HHBRF in lieu of cash. Further, merely because the genuineness of one donation in one year is doubted, it cannot be a ground to draw the inference that the activities of the assessee society are not being carried out in accordance with the objects of the society or that no genuine activities are being carried out by the assessee. a conclusion cannot be drawn that the activities of the society are not being carried out in accordance with the objects of the society or that no genuine activity is being carried out by the assessee merely because the genuineness of one donation in one year is doubted. Case of Agra Development Authority [2018 (2) TMI 756 - ALLAHABAD HIGH COURT] correctly relied upon to support assessee's contention that Section 12AA(3) does not authorize the Commissioner to cancel charitable registration with retrospective effect. As pointed out that the show cause notice was given in this case by the CIT on 25th January, 2016 while the CIT cancelled the registration from 1st April, 2010, which is not permissible - Decided in favour of assessee
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