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TMI Blog2017 (10) TMI 418X X X X Extracts X X X X X X X X Extracts X X X X ..... e registration without really going into the genuineness of the activities of the appellant and without any evidence whatsoever has erred in holding that the activities of the trust are not being carried out in accordance with the objects of the appellant. (4) That the Ld. CIT (E) erred in cancelling the registration of the appellant on the ground that the Corpus Donation of Rs. 500000 received by the appellant from M/s. Herbicure Healthcare Sio-Herbal Research Foundation (Herbicure) during the Financial Year 2010-2011 was an accommodation entry based on the alleged statement of the Director of Herbicure, even though the genuineness of the donation having been confirmed by Herbiucure subsequently. (5) That the Ld. CIT (E) was not justified in cancelling the registration of the appellant without providing an opportunity to the appellant for crossexamination of the Director of Herbicure which is in gross violation of the principles of natural justice and therefore the order of the Ld. CIT (E) deserves to be quashed. (6) That the Ld. CIT (E) erred in cancelling the registration of the appellant despite there being no specific information with regard to the ingenuineness of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... le computing business income of such payee. Any sum paid means it includes donations also. 5. In the course of survey operations the authorised officer carrying out the survey recorded the statement of Shri Swapan Ranjan Dasgupta, the founder director of HHBHRF. The revenue had information that since HHBHRF enjoys approval u/s 35(1)(ii) of the Act and therefore it was being used by money launderers to give donations which is basically accommodation entries. Question No.22 and 23 and answer to those questions will show the modus operandi of alleged money laundering carried out by HHBHRF. The same reads as follows :- "Q.22. Let me remind you that as one of the Directors of Herbicure Healthcare Bio-Herbal Research Foundation you are duty bound' to keep complete information regarding transactions being made by the said entity and the genuineness of persons / entities with whom the said transactions are being made. Your attention is further been drawn to the computer extracts taken out of the tally which was found in your e-mail. These pages are related to the bank book of Herbicure Healthcare Bio-Herbal Research Foundation wherein it is clearly reflected that the amount of Rs. 2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... modation entries to different beneficiaries. Ans. The entire accommodation entries of bogus donations are facilitated by Mr Kishan Bhawasingka having his mobile nos, 9830087866 & 9883051515 who lives somewhere in Bhawanipore near Netaji Subhas Metro Station. The modus is like this. The information is given to us by Mr. Kishan Bhawasingka as to bogus donation entry is needed by a particular party. Sometimes we come to know about the accommodation entry being given to a party when we directly receive communication from the concerned bank that the amount has been credited. Thus, the accommodation entry is completely controlled and managed by Mr Kishan Bhawasingka. The bogus donations are received vide cheque/RTGS into any of the bank accounts mentioned by me in response to question no.7 of this statement. After this, payment is made to any of the paper /bogus companies on account of bogus purchase /expense on the advice of Mr Kishan Bhawasingka. The remaining transaction is also managed on paper by him only which happens in the form of routing of the donation amount through his bogus/paper companies in 2 to 3 layers. Finally, cheque of the donation amount (after deducting the cut o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ue no. 645854 dated 3.03.2011. Since the assessee had received donations from HHBHRF the Ld. CIT(Ex) Kolkata was of the view that the assessee had also indulged in money laundering and therefore the registration granted to the assessee u/s 12AA of the Act deserves to be cancelled by invoking the powers of C.I.T.(Exemptions), Kolkata vested u/s 12AA(3) of the Act which reads as follows :- "12AA (3) Where a trust or an 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 of ] 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". 8. The Ld, CIT(Ex), Kolkata issued a show cause notice dated 02.12.2015 in which he explained the survey operations in the case of HHBHRF and admission by them that they were engaged in providing accommodation ent ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... F. The Ld. CIT(Ex) thereafter referred to the fact that CBDT vide its Notification dated 06.09.2016 had withdrawn the approval accredited to HHBHRF u/s 35(1)(ii) of the Act. Thereafter the Ld. CIT(Ex) withdrew the registration granted to the assessee by observing as follows :- "Indulging in ingenuine activities which is not at par with the trust deed leads to the ultimate conclusion that the society is in the act of money laundering. The provisions of Section 12AA(3) of the I.T.Act 1961 is as follows: "Where a trust or an 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, 1.996 (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" Considering the activities of the assessee not genuine and are not being carried out in accordance w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dence brought on record whatsoever to show either of the aforesaid conditions have been satisfied to warrant cancellation of registration u/s 12AA(3) of the Act. The ld. counsel for the assessee placed strong reliance on the decision of ITAT, Kolkata Bench rendered in the case of Sri Mayapur Dham Pilgrim and Visitors Trust Nadia vs C.I.T.(Exemptions), Kolkata in ITA No.1165/Kol/2016 order dated 03.05.2017. 14. The ld. DR placed reliance on the order of Ld. CIT(Ex), Kolkata. According to him, the answer given at the time of survey in reply to question no.22 is sufficient to come to a conclusion that the assessee has indulged in money laundering. Alternatively it was his submission that the assessee should be afforded an opportunity of cross examination of Shri Swapan Ranjan Dasgupta, the founder / director of HHBHRF. 15. We have given a very careful consideration to the rival submissions. From the answer to question no.22 given by Shri Swapan Ranjan Dasgupta, founder director of HHBHRF at the time of survey in the business premises of HHBHRF, it is possible to entertain a doubt with regard to genuineness of the donations given by HHBHRF. It can be a money launderings indulged by a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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