TMI Blog2017 (10) TMI 527X X X X Extracts X X X X X X X X Extracts X X X X ..... RGCT 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 cannot be sustained. Apart from the above, the grounds for cancellation for registration u/s 12AA(3) of the Act is that the activities of the trust should not be genuine or the activities of the trust are not being carried out in accordance with the objects of the trust. There is neither an allegation in the impugned order nor finding that any of the aforesaid conditions exist in the case of the assessee. We therefore are of the view that the cancellation of registration granted to the assessee u/s 12A of the Act cannot be sustained and the impugned order is hereby quashed - Decided in favour of assessee. - ITA No.29/Kol /2017 - - - Dated:- 15-9-2017 - Shri N.V.Vasudevan, Judicial Member And Shri Waseem Ahmed, Accountant Member For The Appellant : Shri S.M. Surana, Advocate For The Respondent : Shri Goulean Hangshing, CIT-DR ORDER PER Waseem Ahmed, Accountant Member:- This appeal by the assessee is directed against the ord ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gshing, Ld. Departmental Representative represented on behalf of Revenue. 2. This is an appeal by the assessee against the order dated 10.01.2017 of Ld. CIT(Ex), Kolkata cancelling the registration granted to the assessee trust u/s 12AA of the Income Tax Act, 1961 (Act). 3. The assessee is a trust constituted under the deed of trust dated 19.12.1951. The Assessee was granted registration u/s 12AA of the Act by an order dated 23.06.1977 by the Director of Income Tax (Exemption), Kolkata. The assessee has been enjoying the benefit of registration ever since the grant of registration. The assessee is engaged in various charitable activities. 4. There was a survey operation carried out u/s 133A of the Act on 11.09.2015 in the premises of M/s Govind Ram Goel Charitable Trust (for short GRGCT). 5. In the course of survey operations the Authorized Officer carrying out the survey recorded the statement of Shri Anand Agarwal, Managing trustee of GRGCT u/s 131 of the Act, wherein it was admitted that it is engaged in money laundering activities by way of giving/ accepting donations which is basically accommodation entries. The relevant extract of the statement is reproduced below ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... plain because everything was done by Shri Gaurav Agarwal. Q.12. In many cases it is seen that the bank statements of the alleged donors are kept along with the covering letters, received from them. Please explain the reason. A12. We understand that the creditworthiness and existence of any donor, if not established, then such donation may not be treated as genuine by the Income Tax Department. Some of the donors submitted such documents through Shri Gaurav Agarwal on their own. Q.13. In view of the all above please state specifically what amount are being disclosed by you voluntarily. A13. The total sum as mentioned in A8 amounting to ₹ 10,01,27,103/- (Rupees ten crore one lakh twenty seven thousand one hundred and there over a period of that assessment years viz 2013-14, 2014-15, 2015-16 is voluntarily disclosed by me. This amount may be treated as income in the hands of the trust. Q14. You are being shown the following documents found from your business premises, found during the course of survey operation. It is also brought to you notice the implication of Sec.292C of IT Act, 1961. Therefore, the onus is on you to explain the entries from in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of such trust or institution are not genuine or are not being carried out in accordance with the objects of the trust or institution , as the case may be, he shall pass an order in writing cancelling the registration of such trust or institution : 8. The Ld. CIT(Ex), Kolkata issued a show cause notice dated 03.12.2015 in which he explained that it was admitted by Managing Trustee of GRGCT during survey operations that it was engaged in providing accommodation entries of bogus donations. 9. Accordingly, in response to the notice, assessee replied that the statement recorded during the course of survey operation is not binding on the person making the statement. Therefore such a statement cannot be used against the assessee. The assessee in support of his claim relied on the judgement of the Honourable Supreme Court in the case of S Khader Khan Sons reported in 352 ITR 480 (SC). Besides the above, the assessee requested to the Ld.CIT(Ex) for providing the opportunity of cross examination with the managing trustee of GRGCT Shri Anand Agarwal and as well as Shri Gaurav Agarwal who was acting as conduit in the transactions of bogus donations. 10. However the C.I.T.( ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... visions of Section 12AA(3) of the IT Act 1961 is as follows:- 12AA (3) Where a trust or an institution has been granted registration under clause (b) of sub-section (1)[or has obtained registration at any time under section 12A [as it stood before its amendment by the Finance (No.2) Act, 1996 (33 of 1996)]] and subsequently the [Principal Commissioner of ] Commissioner is satisfied that the activities of such trust or institution are not genuine or are not being carried out in accordance with the objects of the trust or institution , as the case may be, he shall pass an order in writing cancelling the registration of such trust or institution : Considering the activities of the assessee not genuine and are not being carried out in accordance with the objectives of the Trust, the registration u/s.12A of the IT Act 1961 vide order No.1119/T/WB.VII of 1997-78 dated 24.06.1997 is hereby cancelled u/s. 12A(3) of the IT Act 1961 w.e.f. 01.04.2013 i.e. FY 2013-14 relevant to AY 2014-15, as the violation took place in the FY 2013-14. 11. Aggrieved by the order of Ld. CIT(Ex), Kolkata the assessee has preferred the present appeal before the Tribunal. 12. The ld. Coun ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... onations. It is not the case of the revenue that the trustees of the trust had misappropriated the funds belonging to the trust in the instant case, the business concerns of the trustees had given their undisclosed income and had brought donations to the trust. Hence there is no case made out for taxing of the subject mentioned amount of ₹ 10.01 crores in the hands of the trust, except the statement of managing trustee, which was signed without understanding the contents thereon. In view of the above AR submitted that such statement cannot be relied for the purpose of cancellation of registration certificate issued under section 12AA of the Act. 13.1 The ld AR further submitted that the name of the assessee is not appearing in the statement furnished by the managing trustee of GRGCT therefore it cannot be concluded that the assessee has given bogus donation. It was also submitted that the learned CIT (ex) failed to provide the opportunity of cross examination as desired by the assessee. The learned AR in support of his claim has relied on the order of special bench of Hon ble Bombay Tribunal in the case of GTC Industries Ltd versus ACIT in ITA No. 5996/Mum/1993 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ne (b) that the activities of the trust or institution are not being carried out in accordance with the objects of the trust or institution. There is no evidence brought on record whatsoever to show either of the aforesaid conditions have been satisfied to warrant cancellation of registration u/s 12AA(3) of the Act. 14. The ld. DR heavily reliance on the order of Ld.CIT(Ex), Kolkata. According to him, the assessee should be afforded an opportunity of cross examination of Shri Anand Agarwal, the managing trustee of GRGCT. 15. We have given a very careful consideration to the rival submissions and perused the materials available on record. From the statement recorded during survey it is possible to entertain a doubt with regard to genuineness of the donations given to GRGCT. But such statement is not foolproof to support that the bogus donation was given by the assessee. So far as the assessee is concerned it gave donation to GRGCT for a sum of ₹ 6 lakh which was duly accounted in profit and loss account. There is no evidence of whatsoever brought on record to show that the cash was received by the assessee from GRGCT against the donation. 15.1 We also observe that the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mselves to explain as to why their ex-factory prices remain static. It was not for the Tribunal to have guess work as to for what purposes the appellant wanted to cross-examine those dealers and what extraction the appellant wanted from them. As mentioned above, the appellant had contested the truthfulness of the statements of these two witnesses and wanted to discredit their testimony for which purpose it wanted to avail the opportunity of cross-examination. That apart, the Adjudicating Authority simply relied upon the price list as maintained at the depot to determine the price for the purpose of levy of excise duty. Whether the goods were, in fact, sold to the said dealers/witnesses at the price which is mentioned in the price list itself could be the subject matter of crossexamination. Therefore, it was not for the Adjudicating Authority to presuppose as to what could be the subject matter of the cross-examination and make the remarks as mentioned above. We may also point out that on an earlier occasion when the matter came before this Court in Civil Appeal No. 2216 of 2000, order dated 17.03.2005 was passed remitting the case back to the Tribunal with the directions to d ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
