TMI Blog2018 (2) TMI 1358X X X X Extracts X X X X X X X X Extracts X X X X ..... Shri N.V.Vasudevan, Judicial Member And Shri Waseem Ahmed, Accountant Member For The Appellant : Shri Sujoy Sen, AR For The Respondent : Shri G. Mallikerjuna, CIT-DR ORDER PER Waseem Ahmed, Accountant Member:- This appeal by the assessee is directed against the order of Commissioner of Income Tax (Exemptions), Kolkata dated 18.03.2016 u/s 12AA(3) of the Income Tax Act, 1961 (hereinafter referred to as the Act ) for assessment year 2011-12. The assessee has raised the following grounds:- Learned CIT(Exemption) Kolkata, vide Order passed u/s. 12AA(3) Of the Income Tax Act, 1961, on 18.03.2016 in the case of appellant assessee namely M/S. D.S. HEALTH EDUCATION TRUST had erred in withdrawing/cancelling a registration u/s. 12AA(3) earlier granted on 22.09.2009 on the ground:- (i) that the assessee trust got registration earlier on the deed of trust created and activities of the trust are genuine; (ii) that Activities of the assessee trust are carried out in accordance with the objects declared in the deed of trust; (iii) that the assessee trust has received corpus donation of ₹ 25,00,000/- genuinely through cheque on 29.03.2011, which ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sessee in this ground of appeal is that Ld. CIT(Ex) erred in cancelling the registration certificate granted to assessee u/s. 12AA of the Act on the ground that the activities of assessee are not genuine. 3. Before going to the specific issue of this appeal, we find pertinent to make a note in brief about the history of the case which states as under:- A survey operation was conducted u/s. 133A of the Act dated 23.01.2015 on Herbicure Healthcare Bio-Herbal Research Foundation (HHBHRF for short). During the course of survey proceedings statement of Shri Swapan Ranjan Das Gupta, Director of HHBHRF was recorded u/s 133A of the Act wherein it was admitted that HHBHRF was engaged in providing / accepting bogus donation through channel of certain mediators. The donation was provided / accepted from different individuals / organizations by it. It was accepting cheque / cash which were subsequently forwarded in cash / cheque through the web of financial transactions after involving the layer of middleman. Now coming to the case in hand, the assessee was paid a donation of ₹25 lakh from HHBHRF in the previous financial year 2010-11 corresponding to Assessment Year 2011-12. Ac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... filing a reply of show-cause 13.01.2016. Merely filing an appeal letter and receiving of donation by cheque is not enough to establish the genuiness of donation received. Assessee trust has failed to discharge the onus that corpus donation is genuine, voluntary end not against cash. 6. Legal provisions Applicability of Section 12AA(3): Where a trust or on 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 or 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 The matter being so, the registration already granted under section 12AA con be cancelled only under two specific circumstances. namely: (i) the authority is satisfied that the activities of such trust or institution ore not genuine, and (ii) the authority is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Assessee trust has received a um of ₹ 25,00,000/- as bogus corpus donation from M/5. Herbicure Healthcare Bio-Herbal Research Foundation in lieu of cash. Merely receiving donation by cheque is not enough. The trustee has to establish the genuineness of the donation. b) They have received bogus corpus donation not only from HHBHRF but also from various parties in and out of Kolkata of ₹ 1.97Cr. and have channelized their unaccounted cash generated in business. c) Society/Trust has grossly misused the provision of Section12AA and 80G(5)(vi). d) They have violated the objects of the society as converting cash in cheque is beyond the objects. e) The activity of converting unaccounted income of business and pumping them in the Trust as corpus donation is illegal, ingenuine and immoral. f) Corpus donation received is not volu9ntray, merely an accommodation entry and factitious. Therefore, the claim of exemption u/s. 11(1)(d) was not absolutely tenable. g) Activities of the society are not genuine as well as not being carried out in accordance with its objects. h) Even ingenuine and illegal activities carried on by assessee through money laundering do not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ves of both the parties. At the threshold, it was observed that in the identical facts circumstances this Tribunal has decided the identical issue in favour of the assessee in the case of Vishwaroopa Charity Trust Vs. CIT (Exemption) in ITA 106/Kol/2017 . As the issue the facts are exactly identical of the present case, therefore we are inclined to follow the same principles reasoning provided in the case of Vishwaroopa Charity (Supra) by this Tribunal. The relevant extract of the order is reproduced below : 12. We have heard the submissions of the ld. Counsel for the assessee and the ld. DR. The ld. Counsel for the assessee firstly drew our attention to the answer given by founder and director of HHBHRF to question no. 22 recorded at the time of survey carried out in the business premises of HHBHRF. He drew our attention to the fact that in the said statement the founder director had specifically referred to a period from which bogus donations were received by HHBHRF viz., after A.Y.2010-11.He drew our attention to the fact donation was given to the assessee by HHBHRF through cheque dated 03.03.2011 which was admittedly prior to the period in which bogus donati ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ible to entertain a doubt with regard to genuineness of the donations given by HHBHRF. It can be a money launderings indulged by a third party, who gave donations to the assessee by using the middlemen connected with HHBHRF. So far as the assessee is concerned it received donation from HHBHRF a sum of ₹ 5 lakh duly accounted the same in profit and loss account as corpus donation. There is no evidence whatsoever brought on record to show that the cash was paid by the assessee which in turn reached the hands of HHBHRF which was returned in the form of donation to the assessee after retaining the commission. As we have already observed that the answer to question no.22 given by Shri Swapan Ranjan Dasgupta referred to donations given in the financial year 2011-12 as bogus donations. With regard to the donations received/given prior to 31.03.2011 there is no reference to such donations given or received by HHBHRF being in the nature of bogus donations. The assessee had received the donation from HHBHRF on 03.03.2011. It is therefore not possible to place reliance on the statement recorded at the time of survey and come to a conclusion that the assessee has been indulging in money ..... 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