TMI Blog2019 (4) TMI 1928X X X X Extracts X X X X X X X X Extracts X X X X ..... ereinafter referred to as the CIT(A)] relevant to assessment year 2010-11. 2. The grounds taken by the assessee are as under: 1. On the facts and in the circumstances of the appellant's case and in law the Ld. CIT(A) erred in dismissing/rejecting the following legal ground of appeal raised before him:- 1. On the facts and the circumstances of the appellant's case and in law the learned Assessing Officer erred in reopening the assessment u/s. 147 by issue of notice u/s. 148 dated 08.03.2016, which is barred by limitation in view of 1st proviso to section 147 of the Act. 2. On the facts and the circumstances of the appellant's case and in law, the Ld. Assessing Officer erred in confirming the AO's action of making addition of ₹ 10,00,000/- on account of contribution made to Navjeevan Charitable Trust which was allowed as deduction u/s. 35AC in the regular assessment order dated 22.01,2013 passed u/s. 143(3). 3. The appellant craves leave to add to. alter, amend and /or delete all or any of the foregoing grounds of appeal. 3. The first issue is against the order of Ld. CIT(A) confirming the reopening of assessment under section 147 of the Act ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ced by the assessee on the Bombay High Court decision is not applicable in the instant case as the AO had specific information for initiating proceedings u/s 147 of the IT Act. The assessee again vide letter dated 14.10.2016 submitted that the reassessment proceedings are barred by limitation and therefore illegal and void ab-initio and the donation made to Navjeevan Charitable Trust is an allowable deduction under section 35AC of the Act. The AO, however, not accepting the contentions of the assessee observed that Navjeevan Charitable Trust was engaged in the racket of hawala donations by accepting donations through cheques and returning the cash after retaining the commission. Even the statement recorded during the course of search revealed that the trust was operating a hawala racket of accepting donations and there were 400 doners to the trust out of which the assessee is one of the doners who claimed deduction under section 35AC. During the course of assessment proceedings also an inspector was sent to the office of Navjeevan Charitable Trust at New Marine Lines, Mumbai and the inspector vide her report dated 25.08.2016 stated that the said trust no longer operates from th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... opened as no fault can be attributed to the assessee for no disclosing any material facts for the assessment of income and thus the reopening is void ab-initio. The ld counsel of the assessee submitted that on that count also, the reassessment proceedings may be quashed. 7. The Ld. D.R., on the other hand, relied on the order of Ld. CIT(A) by submitting that the Navjeevan Charitable Trust was found engaged in the racket of hawala donations by accepting donations in cheques and returning the cash in the form of various expenses after retaining the commission and therefore this was a clear cut case of bogus donation of ₹ 10,00,000/- given by the assessee and the deduction claimed of the said amount was rightly withdrawn by the AO and confirmed by the Ld. CIT(A). The Ld. D.R. also pointed out that the recognition of the trust was withdrawn retrospectively by the CBDT after the fact of bogus donation racket was unearthed during the search action on the Navjeevan Charitable Trust and the fact of hawala being carried on by the trust was also accepted in the statement of trustees/secretary of the trust during search. 8. After hearing both the parties and perusing the material ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t of such sum by the assessee, the approval granted to the association, university, college or other institution referred to in clause (ii) or clause (iii) has been withdrawn. Hence the aforesaid provisions of the Act are very clear that the payer (the assessee herein) would not get affected if the recognition granted to the payee had been withdrawn subsequent to the date of contribution by the assessee. Hence no disallowance u/s 35(1)(ii) of the Act could be made in the instant case. 8.3. We find that there is no provision in section 35(1)(ii) of the Act to withdraw the recognition granted to the assessee therein. When there is no provision for withdrawal of recognition in the Act, the action of the revenue in withdrawing the recognition with retrospective effect from 1.4.2007 is unwarranted. In this regard, the recent decision of the Hon'ble Supreme Court in the case of Industrial Infrastructure Development Corporation (Gwalior) M.P. Ltd vs CIT Gwalior reported in (2018) 90 taxmann.com 281 (SC) wherein it was held that :- 21. In our considered opinion, the CIT had no express power of cancellation of the registration certificate once granted by him to the assessee und ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hence such power could be exercised by the CIT only on and after 01.10.2004, i.e., (assessment year 2004-2005) because the amendment in question was not retrospective but was prospective in nature. 28. The issue involved in this appeal had also come up for consideration before three High Courts, namely, Delhi High Court in the case of DIT (Exemptions) v. Mool Chand Khairati Ram Trust [2011] 11 taxmann.com 42/199 Taxman 1/339 ITR 622, Uttaranchal High Court in the case of Welham Boys' School Society v. CBDT [2006] 285 ITR 74/[2007] 158 Taxman 199 and Allahabad High Court in the case of Oxford Academy for Career Development v. Chief CIT [2009] 315 ITR 382. 29. All the three High Courts after examining the issue, in the light of the object of Section 12A of the Act and Section 21 of the General Clauses Act held that the order of the CIT passed under Section 12A is quasi judicial in nature. Second, there was no express provision in the Act vesting the CIT with power of cancellation of registration till 01.10.2004; and lastly, Section 21of the General Clauses Act has no application to the order passed by the CIT under Section 12A because the order is quasi judicial in nature ..... X X X X Extracts X X X X X X X X Extracts X X X X
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