TMI Blog2022 (10) TMI 1108X X X X Extracts X X X X X X X X Extracts X X X X ..... ed the registration u/s 12AA of the I.T. Act and the CIT has given the appeal effect and has granted registration u/s 12AA of the I.T. Act. Under these circumstances, we deem it proper to restore the issue to the file of the Assessing Officer with a direction to grant one more opportunity to the assessee to substantiate his case and decide the issue as per fact and law. We hold and direct accordingly. The grounds raised by the assessee are accordingly allowed for statistical purposes. - ITA Nos.268 & 269/Hyd/2022 - - - Dated:- 26-10-2022 - Shri R.K. Panda, Accountant Member And Shri K. Narasimha Chary, Judicial Member For the Assessee : Shri P Murali Mohan Rao, CA For the Revenue : Shri K.P.R.R. Murty, CIT(DR) ORDER PER R.K. PANDA, A.M The above two appeals filed by the assessee are directed against the order dated 09.06.2022 of the learned CIT-(A) NFAC, Delhi relating to A.Ys.2015-16 2016-17 respectively. Since identical grounds have been raised by the assessee in both these appeals, therefore, these were heard together and are being disposed of by this common order. ITA 268/Hyd/2021 (A.Y 2015-16) 2. Facts of the case, in brief, are that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt for achievements of its aims and objects. The Assessing Officer referred to the inspections conducted on 5.12.2016 and observed that most of the parties who had donated the funds to the assessee have claimed deduction u/s 35(1)(ii) of the I.T. Act on donation made to the assessee. However, the donors were not eligible for claim of such deduction as the assessee society had such registration till 31.3.2007. He further noted that the donation received by the assessee was subsequently transferred to the above mentioned 3 parties. The Assessing Officer recorded the statement of Shri Sanjar Ali Khan on 7.12.2016 wherein in his reply to question No.7 regarding identification of the donor, he stated that the donations were received on appeal made in this regard and the donors have sent their representatives conveying their willingness to donate certain amounts. He had also stated that the donors, in turn, had made certain preconditions wherein the society was allowed to retain certain percentage of amount donated by them and the balance amounts had to be donated to the societies identified by them. On being questioned as to why this precondition was made by the donor, it was stated tha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... separately for filing of inaccurate particulars of income . 5. In appeal, the learned CIT (A) upheld the action of the Assessing Officer. 6. Aggrieved with such order of the learned CIT (A), the assessee is in appeal before the Tribunal by raising the following grounds of appeal: 1. The Ld. CIT(A) erred in dismissing the appeal instead of allowing the same. 2 a)The Ld. CIT(A) ought to have appreciated that the order of Cancellation of registration passed by the CIT (Exemptions), Hyderabad u/s 12AA (3) r.w.s. 12AA (4) of the Income Tax Act, 1961, dated 31.12.2018 in the appellant s case has been quashed by the Hon'ble ITAT, Bench B , Hyderabad, vide their order in ITA No.361/Hyd/2019 dated 07.09.2021. b) The Ld. CIT(A) ought to have appreciated that when once the cancellation order passed u/s 12AA (3) r.w.s. 12AA (4) dated 31.12.2018 has been quashed by the Hon'ble ITAT, the existing registration u/s 12AA of the Act is restored to the appellant. c) The Ld. CT(A) ought to have appreciated that when the registration u/s 12AA of the Act is restored on 07.09.2021, the denial of exemption u/s 11(1)(c) of the Act for the assessment year under considera ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the appeal . 7. The learned Counsel for the assessee strongly challenged the order of the learned CIT (A) in upholding the order of the Assessing Officer. Referring to page 33 of the Paper Book, he drew the attention of the Bench to the copy of the letter issued by the Department of Scientific Industrial Research, Govt. of India by renewing the recognition of scientific and industrial research organizations. Referring to page 83 of the Paper Book, he drew the attention of the Bench to the letter issued by the Ministry of Home Affairs, Govt. of India, dated 31.10.2016 requesting Mr. Sanjar Ali Khan to give a presentation to explain the technology, R D processes and other information related to the project. Referring to page No.84 of the Paper Book, he drew the attention of the Bench to the letter issued by the Ministry of Home Affairs, Govt. of India to Shri Turabul Hussain, President of the assessee Society regarding permission given to the society to visit the area of responsibility of Jammu Frontier BSF on NCNC basis to understand the operational requirement and field conditions and thereafter propose any scientific solution for improvement of border security. 8. Ref ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on was compulsion to the assessee as per the terms and conditions of getting donations from the donors. The assessee has allowed to utilize its Bank A/c to receive donation and subsequently transfer the same which is nothing but laundering of money. We find the CIT(A) upheld the action of the Assessing Officer. It is the submission of the learned Counsel for the assessee that since the Tribunal has restored the registration u/s 12A which was cancelled by the PCIT and since the PCIT has passed consequential order by granting registration u/s 12A, therefore, the denial of exemption u/s 11 is not justified. 11. We find the Assessing Officer in the instant case denied exemption u/s 11 for the impugned A.Y and following this order he also rejected the claim of benefit u/s 11 of the I.T. Act. for the A.Y 2016-17. After the orders passed by the Assessing Officer for the A.Ys 2015-16 and 2016-17, the Pr.CIT cancelled the registration issued to the assessee u/s 12A of the I.T. Act. We find on appeal by the assessee, the Tribunal vide ITA No.361/Hyd/2019 dated 7.9.2021 restored the registration u/s 12AA of the I.T. Act and the CIT vide order dated 8.6.2022 has given the appeal effect and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n determining the total income of the appellant at Rs. 5,77,71,128/- instead Rs. of Nil income as declared by the appellant. 5. The Ld. CIT(A) has erred in observing that the appellant is directly or indirectly involved in money laundering claim. 6. The Ld. CIT(A) has erred in concluding that the appellant has not carried out its activities as per its aims and objects. 7. The Ld. CIT(A) erred in holding that the denial of benefit of exemption was fair and reasonable as the appellant had violated the pre-conditions for allowing above exemption u/s 11 of the Act. 8. The Ld. CIT(A) ought to have appreciated that the appellant is eligible to As stated the exemption claimed under section 11 of the Act as it is carrying out the above objects which are wholly charitable. 9 The Ld. CIT(A) ought to have appreciated that the Assessing Officer erred in rejecting the exemption u/s 11 of the Act even though the assessee is As stated above holding a valid registration u/s 12AA of the Act at the time of making the assessment. 10. The Ld. CIT(A) erred in holding that the appellant had acted as an intermediary for destined diversion of funds without any research relate ..... X X X X Extracts X X X X X X X X Extracts X X X X
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