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TMI Blog2021 (12) TMI 459X X X X Extracts X X X X X X X X Extracts X X X X ..... 14.6.2019. Nobody had appeared on behalf of the assessee, and it was adjourned time and again. Earlier, Shri Bharat S. Shah partner in Shah & Dalal Co. has put appearance on behalf of the assessee, but thereafter, he withdrew his appearance and filed a letter to that effect on 19.10.2020. Hearing was adjourned to 18.1.2021 and fresh notice was issued. One Shalini Somani partner in Atal Shriram & Associates, CA filed a letter of authority on behalf of the assessee and sought adjournment. Hearing was adjourned; but again nobody appeared on the adjourned date. Fresh notice was issued. In spite of service, none has come present. Thereafter, notice was served through department through affixture. A report to this effect has been submitted by Shr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 6,55,045/- (v) Sollywood Corporation Rs. 52,000/- Rs. 11,17,045/- Complete justification of these transactions should be filed. Please give detailed reply, how these transactions are not violating the provisions of Section 13 of the I.T Act, I 961. B) Statutory auditor in annexure to the audit report had mentioned that these are interest bearing advances and interest @ 12% is being charged. This way, interest on these advances works out to Rs. 1,34,045/-. This interest has not been declared in the Income &, Expenditure Account. This is a serious discrepancy. The auditors had just mentioned the fact of charging interest to evade the provisions of section 13. You are requested to give detailed justification in respe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion Pvt. Ltd vi) Solly wood Corporation However, in the audit report the auditors have mentioned that these advances were interest bearing and interest at 12% is being charged on these advances. The submission made by you during the assessment proceedings is contradictory and does not confirm with the financial statements. Detailed justification, for the same may be filed now. 3. You are requested to furnish detailed justification for the above discrepancies. In case the discrepancies are no explained satisfactorily, registration granted to you u/s. 12A is proposed to be withdrawn as per the provisions of Section 12AA(3) of the Incometax act, 1961. These details should reach to my office latest by 06.03.201." 5. In response to the s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... his regard reads as under: "6. The issue of registration is to be decided within the factual metrics as mentioned in para 5 of this order. The legalities for cancellation of registration is mentioned u/s. 12AA(4) of the IT. Act, 1961. Section 12AA(4) reads as under: tt[4] Without prejudice to the provisions of sub-section (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 ii is noticed that the activities of the trust or like institution are being carried out in a manner that the provisions of sections 11 and 12 do not apply to exclu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... A of the I.T. Act. For the ready reference the relevant para of the explanatory notes are reproduced as under : "9.4 Therefore, in order to rationalize the provisions relating to cancellation of registration of a trust section 12AA of the Income-tax Act has been amended to provide that where a trust or an institution has been granted registration, and subsequently it is noticed that its activities are being carried out in such a manner that,- i) its income does not enure for the benefit of the public. (ii) It is for benefit of any particular religious community or caste (in case it is established after commencement of the Income-tax Act, 196I): (iii) any income or property of the trust is used or applied directly or indirectly for t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... are violated, the provisions of section 12AA(4) comes into play. it. is also a matter of fact that the assessee had advanced trust funds to the trustees or other- persons where trustees are interested in violation to provisions of section 11(5) of the I.T. Act, 1961. As discussed in para 6.1 of this order, violation of section 11(5) also attracts provisions of section 12AA(4) of the I.T. Act, 1961." 7. The ld.CIT-DR relied upon the order of the ld.Commissioner. 8. A perusal of the above order would indicate that the ld.Commissioner has highlighted irregularities committed by the assessee-trust by utilization of its funds meant for fulfillment of charitable objects, for granting benefit to persons falling in the category to take undue adv ..... X X X X Extracts X X X X X X X X Extracts X X X X
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