TaxTMI 
TaxTMI 
2017 (9) TMI 1582
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....proval u/s 80G(5) of the Act to the Assessee. 3. The C.I.T.(Exemptions), Kolkata issued a show cause notice dt. 04.12.2015 to the assessee proposing to cancel the registration granted to the assessee u/s 12A of the Act for the reason that in a survey conducted u/s 133A of the Act, on an entity by name School of Human Genetics and Population Health, Kolkata (SHG and PH) by the Investigation Wing of Kolkata on 27.01.2015 it transpired that the objects of the assessee were not genuine and the trust is not carrying out its activities in accordance with the objects of the Trust. It has further been mentioned in the show cause notice that during the survey operation statement of Smt. Moumita Raghavan, Treasurer of SHG and PH was recorded under oath and in her statement she admitted that SHG and PH was in the business of providing book entry of Donations to different individuals and organizations. It has further been mentioned in the show cause notice that the assessee has received donation of Rs. 1,23,87,550/- in A.Y.2013-14 from the aforesaid organization and since it transpired that the said organisation was providing accommodation entries of donations, received, the donation of Rs. 1....
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....und made against donations received." 6. It is not disputed that the name of the assessee figures in the said list and the fact that SHG & PH has admitted that Donations given by SHG and PH to the Assessee were against cash received from them in Financial Year 2012-13 of a sum of Rs. 1,23,87,550/-. 7. Based on the Survey in the case of SHG & PH and the admission of SHG & PH that the Assessee was also a person who gave cash and got donations in return, a survey u/s.133A of the Act was conducted on 3.9.2015 in the case of the Assessee also. In the course of such survey the statement of Shri Rabindranath Lahiri, Managing Trustee of the Assessee was recorded. He in his statement admitted that the Assessee paid cash and got donations in return. The following were the relevant question & answer in the statement recorded on the aspect of bogus donations: "Q.11 Please confirm the authenticity of the above mentioned Corpus Donation. Ans. A major part of the donations that were claimed mption u/s.11 (1) (d) were not-genuine. The donation received in F.Y.s 2008-09, 2009-10 and 2010-11 were genuine Corpus Donation received either from the Trustees or persons who were close to the Truste....
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.... bogus donations along with bogus donors. Ans. After going through the list of the donors appeared in such ledger it is understood that the Donors whose names are written in capital letters under the sub-head "Donation-13", "Donation-I" and "Donation-II" having total amount of Rs. 6, 03, 07, 550/- is bogus and out of which s.5,96,28,973/- was returned back through RTGS to the above mentioned seven (7) persons following the instructions of the mediators." 8. On the basis of the above material, the CIT(E) came to the following conclusion: "6.1. The intention of the legislature to -grant registration u/s 12AA and 80G, to give the benefit u/s 1 l to encourage medical relief to the poor and needy persons, promote education among masses and support to the poor section of the society. But time and again these provisions have been misused for personal need and for benefit of trustees/members of the trusts and societies. Survey u/s.133A conducted in the case of assessee elaborates the nature and volume of transactions in the alleged activities. 6.2. Looking at the volume and depth of the illegal activities performed and indulged by the society to use the provisions of the I.T.Act p....
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....d the present appeal before the Tribunal. The following are the grounds of appeal raised by the Assessee. "1. That, on the facts and in the circumstances of the case, the Ld. Commissioner of Income-tax ( Exemptions ) erred in alleging that the assessee-trust had violated the provisions of Sec.12-AA and Sec.80G(5)(vi) of the Income-tax Act, 1961, and that the activities of the assessee-trust were not genuine as well as not being carried out in accordance with its declared objects, and on the basis of such wholly unfounded allegations, he further erred in withdrawing and/or cancelling registration of the assessee-trust, with effect from 01-04-2012. 2. That, in consequence of the unfounded order withdrawing and / or cancelling uls.12-AA(3) registration of the appellant-trust, the Ld. C.LT. (Exemption) further erred in withdrawing approval given uls.80-G(5) of the Act with effect from 01-04-2012 . 3. That, the impugned order dated 25-02-2016, passed uls.12-AA(3) of the Act, is arbitrary, bad in law and perverse. 4. That, the appellant-trust craves leave to adduce additional grounds and/or to withdraw or modify any of the foregoing grounds before, or at the time of hearing of....
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....s of the trust/institution are not genuine and (b) the activities are not being carried out in accordance with the objects of the trust/institution. With regard to both the above conditions there is neither an allegation by CIT(E) in the impugned order nor facts exist which can justify coming to a satisfaction regarding the existence of both the aforesaid conditions. It was submitted that evidence and material gathered from a third party can be used against an assessee only after confronting the same to the assessee and allowing opportunity of cross examination of the deponent (if the material is oral evidence). It was submitted that in the absence of doing so, the order passed, placing reliance on such inadmissible evidence, should be held to be a nullity. 12. The ld. DR placed reliance on the order of CIT(E). In particular, he brought to our notice the fact that the Assessee the Managing Trustee of the Assessee in the course of Survey admitted the fact that the donations received by them were bogus. In the light of such admission and the absence of any possible explanation to the Show cause notice issued u/s.12AA(3) of the Act, the impugned order has to be upheld and the appeals....