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2017 (9) TMI 1582 - AT - Income TaxWithdrawing approval u/s 80G - cancellation of the registration granted to the assessee u/s 12A - no proof of charitable purposes - Held that - 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 ₹ 1,23,87,550/-. Even at this stage all admissions were by third parties and the same were not binding on the Assessee. However in a survey conducted in the case of the Assessee on 24.8.2015, the Managing Trustee of the Assessee admitted that it gave cash and got back donations. We have already extracted the statement given by the Managing Trustee. Even in the proceedings for cancellation of registration, the Assessee has not taken any stand on all the evidence against the Assessee. Thus the conclusions drawn by the CIT(E) in the impugned order which we have extracted in the earlier part of the order are correct and calls for no interference. It is clear from the evidence on record that the activities of the Assessee were not genuine and hence their registration is liable to be cancelled u/s.12AA(3) of the Act, and was rightly cancelled by the CIT(E) - Decided against assessee.
Issues Involved:
1. Cancellation of registration granted to the assessee under section 12A of the Income Tax Act, 1961. 2. Withdrawal of approval granted to the assessee under section 80G(5) of the Income Tax Act, 1961. Issue-wise Detailed Analysis: 1. Cancellation of Registration under Section 12A: The assessee, a trust with charitable objects, had its registration under section 12A of the Income Tax Act, 1961, cancelled by the CIT (Exemptions), Kolkata. The cancellation was based on findings from a survey conducted under section 133A on another entity, School of Human Genetics and Population Health (SHG & PH), which revealed that the assessee's activities were not genuine and it was not operating in accordance with its stated objectives. The CIT(E) referenced statements from SHG & PH officials admitting to providing book entry donations and refunds through intermediaries, indicating that donations received by the assessee from SHG & PH were bogus. In a subsequent survey on the assessee, the Managing Trustee admitted that a significant portion of donations received were not genuine and were part of accommodation entries to facilitate loans and fund expansion. The CIT(E) concluded that the assessee misused provisions of the Income Tax Act for personal benefit and was involved in money laundering activities, thus violating the objects of the trust and justifying the cancellation of registration under section 12AA(3). 2. Withdrawal of Approval under Section 80G(5): Following the cancellation of registration under section 12A, the approval granted to the assessee under section 80G(5) was also withdrawn. The CIT(E) found that the assessee received bogus corpus donations, misused the provisions of sections 12AA and 80G, and engaged in activities not aligned with its declared charitable objects. The trust was involved in hawala activities, and the corpus donations were deemed fictitious and not voluntary. Tribunal's Decision: The Tribunal upheld the CIT(E)'s decision, noting that the evidence on record, including the Managing Trustee's admission, supported the conclusion that the assessee's activities were not genuine. The Tribunal dismissed the assessee's appeals, confirming the cancellation of registration under section 12AA(3) and the withdrawal of approval under section 80G(5). Conclusion: The appeals were dismissed, and the order pronounced on 13.09.2017 confirmed the cancellation of the assessee's registration and approval due to non-genuine activities and misuse of provisions for personal benefit.
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