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TMI Blog2012 (7) TMI 398X X X X Extracts X X X X X X X X Extracts X X X X ..... account of corporate donation received - AO disallowed exemption u/s 11(2) of the Act on the ground that registration of the society u/s 12AA of the Act has been cancelled – Held that:- Addition was based on the cancellation of the assessee trust u/s 12AA and denying the exemption u/s 11 of the Act - appeal of the assessee for granting the registration allowed, therefore, addition deleted - assessee is allowed. Cancellation of registration granted to the assessee trust for the purpose of exemption u/s 12AA - alleged that activities of the trust are not genuine and charitable – unaccounted cash found and seized from the residence of trustees of assessee – Held that:- Revenue’s appeal dismissed by confirming the relief granted to assessee - unexplained cash transfer entry has been also decided in favour of the assessee - all the issues on which registration was cancelled did not survive - CIT has found the trust and its activities as genuine and the objectives have been found charitable - assessee has been granted registration again Denial of approval of exemption u/s 80G - on the basis of the cancellation of registration of the assessee trust u/s 12AA – Held that:- Assessee’s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by the revenue are as under:- 1. The Ld. CIT(A) has erred both in law and on facts of the case in deleting an addition of Rs.9,30,850/- made by the A.O. (on protective basis) u/s 69A of the LT. Act on account of unexplained cash/money. 2. The Ld. CIT(A) has erred both in law and on facts of the case in deleting an addition of Rs.13,38,600/- made on account of unexplained cash entries. 3. The Ld. CIT(A) has erred both in law and on facts of the case in allowing the registration u/s 12AA without appreciating that the assessee has not applied 85% of additional income of Rs.13,38,600/- towards charity or religious purpose in the previous year relevant to A.Y.2006-07. 4. The Appellant craves leave to add or amend the grounds of appeal on or before the appeal is heard and disposed off. 5. It is prayed that the order of the Commissioner of Income-tax (Appeals) be set-aside and that of the A.O. be restored. 2. Ground No.1 in this appeal is against the deletion of the addition of Rs.9,30,850/- made by the Assessing Officer on account of unexplained cash found at the time of search. The Assessing Officer made substantive addition of the cash found at the time of search in th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... CIT (A). 4. We have heard both the sides in detail. In assessee s case, the assessment was made on protective basis. At the time of search itself, the trustee, Shri O.P. Bhalla has stated that part of the money was belonging to the assessee trust. The cash was from the available balance in the books of the account of the assessee. The revenue has failed to pinpoint any specific defects in the books of account. The allegation of the manipulation in the cash book could not be established. No evidence of manipulation has been brought on record. Simply stating that there may be possibility of manipulation in the cash books cannot be made sole basis for making the addition. The evidences filed by the assessee show that assessee society was having cash in hand of Rs.7,65,000/-. In the statements at the time of search itself, the part of money found was stated to be belonging to the assessee trust. The reasons for keeping the cash at the residence are also explained and the same is acceptable reason as the location of the institutions run by Trust is at the periphery of the city. Due to security reasons, the cash was kept at the residence of the Trustee. Further, in the assessee s case, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2 is concerned, it is seen from asstt order that notice u/s 143(2) of the Act was issued on 12-6-2008 which was served upon the assessee fixing the date of hearing on 18-6-2008. In this case the return declaring nil income was filed on 31-10-2007. It is therefore, seen that notice u/s 143(2) has been issued and served within the time and hence the ground No.2 is dismissed. 4.4 As regard the addition of Rs.7,89,96,478/- made on account of corporate donation received no submissions have been filed by the AR/ assessee. It is seen from facts discussed in the asstt order that the assessee M/s M.R. Education Society was registered u/s 12AA of the Act and assessee accordingly claimed that income arising from activities of society was exempt u/s 11 of the Act. Assessee society inter-alia received corpus fund amounting to Rs.7,89,96,478/- during the year under consideration which has been treated by AO as assessee's income by disallowing exemption u/s 11(2) of the Act on the ground that registration of the society u/s 12AA of the Act has been cancelled by CIT, Central, Ludhiana. Assessee filed appeal against the cancellation of registration before Hon'ble ITAT Bench "B" New Delhi. Hon'bl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2005 and additions made in the hands of the assessee for the Assessment Year 2004-05 had been deleted by the CIT (A) and the revenue has now preferred the appeal with the higher forum. For the Assessment Year 2006-07 also, the CIT (A) deleted all the additions made. The registration was cancelled vide order dated 30.01.2008 and it has been again granted on 12.06.2008 which is evident from page 20 of the paper book. It is the same officer, i.e., CIT, Central, Ludhiana who cancelled the registration and granted again. While granting registration the CIT has recorded that he is satisfied with the genuineness of the Society/Trust and of its present activities. Further, even after the search operation on the premises of assessee trust and its trustees, nothing adverse has been found. No addition was sustained even up to the level of CIT(A) which could be made a basis for cancellation of the registration. None of the allegations, on the basis of which the registration has been cancelled, has been found correct even at the first appellate level itself. The subsequent assessment for the Assessment Year 2008-09 has been finalized at the nil income by accepting the return of income filed by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f Rs.8 lacs made to M/s. R.K. Engineering Works has also been deleted and no appeal has been filed against the deletion of the addition. Therefore, in our considered view, this ground also does not survive. The third ground of unexplained cash transfer entry has been also decided in favour of the assessee. Therefore, all the issues on which registration was cancelled did not survive. The assessee has been granted registration again on 30.11.2008 although it was made effective from Assessment Year 2008-09. The CIT has found the trust and its activities as genuine and the objectives have been found charitable. These objectives were found charitable at the time of initial registration. The additions made to the income of Trust have been deleted in the quantum appeal. Nothing survives which can be made basis for denial of registration. Therefore, in our considered view, there is nothing on record on which the assessee can be denied the continuation of the registration. 19. In the result, we allow the assessee s appeal being ITA No.793/Del/2011. ITA No.972/Del/2011 20. This appeal filed by the assessee against the order of the CIT, Central, Ludhiana for denying the approval of e ..... X X X X Extracts X X X X X X X X Extracts X X X X
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