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2016 (8) TMI 862 - AT - Income TaxContinuance of registration under section 12A denied - as per revenue the activities of the assessee were not genuine - Held that:- From the statement of Shri Dinesh Kumar Agarwal of M/s. Quadeye Securities Pvt. Ltd. it appears that there is prima facie ground to believe that the donation of ₹ 50,00,000 given by M/s. Quadeye Securities Pvt. Ltd was not genuine. Based on this statement alone it cannot be conclusively said that the donation in question was bogus. When the statement of Shri Dinesh Kumar Agarwal was confronted to the assessee and when the assessee was asked to appear before the respondent, the assessee chose to avoid appearing before the respondent. This conduct of the assessee was not justified. It is no doubt true that the statement of Shri Dinesh Kumar Agarwal without being subjected to cross-examination by the assessee and further corroborated by evidence of the persons who are stated to have arranged for bogus gifts cannot be believed in toto. Nevertheless the fact remains that there are grounds to believe that the donations received by the assessee had to be decided with regard to its genuineness. The fact that opportunity of cross-examination of Shri Dinesh Kumar Agrawal and the person who are alleged to have arranged the bogus gifts was not afforded to the assessee cannot be the basis to quash the order under section 12AA(3) of the Act. As rightly contended by the learned Departmental representative if it is found that the assessee was accepting bogus donations, then that fact can only lead to an inference that the activities of the trust are not genuine or are not carried out in accordance with the objects of the trust. We, therefore, are of the view that it would be proper in the interest of justice to set aside the order of the respondent and remand the issue of cancellation of registration to the respondent for fresh consideration. - Decided in favour of assessee for statistical purposes.
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