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TMI Blog2023 (6) TMI 1404X X X X Extracts X X X X X X X X Extracts X X X X ..... Therefore, on the basis of such information registration could not be withdrawn. The assessee s contention has got merit which is further substantiated by the department by granting them registration u/s 12A(1)(ac)((vi) 80G(5)(iv) of the Income Tax Act on 10.03.2022. No substance in the contention of the department and therefore, are of the view that once the department itself has accepted that the assessee s activities are genuine, the cause for invoking provisions of section 10AA(3), effecting the cancellation of registration u/s 12A becomes nullified and therefore, considering the explanations and decisions in favour of various donors allegedly involved in the transactions of bogus donations who have granted donations to the assessee trust, we are of the opinion that the order of cancelation by ld. CIT(E) cannot survive, since the registration is granted to the assessee society having no change in its activities, byelaws and objects in a later year. We therefore, set aside the order of ld. CIT(E) and direct to restore registration u/s 12A of the society. Approval u/s 10(23C)(vi) - Since, the provisional registration u/s 12AA(i)(ac)(vi) and 80G(v)(iv) of I.T. Act has already bee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... IT(E), Raipur vide letter dated 12.04.2018 has forwarded the proposal of ACIT(E), Raipur to cancel registration u/s 12AA granted to the assessee in light of following issues:- The assessee trust is involved in money laundering by way of bringing unaccounted cash into the books of accounts in the garb of bogus donations through web of accommodation entries. This activity of the assessee trust is not legal and genuine and also not in accordance with the objects trust deed. This also shows that the trust is existing for profit motive. 4. The action of ld. CIT(E) was on the basis of information received from ld. CIT(E), Kolkata. In the report of ld. CIT(E), Kolkata, it was informed that the assessee society has received bogus donations from 3 of entities whose activities are found to have been bogus and involved in providing accommodation entries in the garb of donations. The show cause notices were issued to the assessee society and explanations were called for. The assessee society has submitted its explanations which were considered but were not found acceptable. 5. Finally, the assessee society was considered as not entitled for registration u/s 12AA of I.T. Act, 1961 and therefore ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er at PN 25 to 40 and 17 to 24 of case law compilation Bimaladevi Dharamprakash Jankalyan Nidhi Same observations as in the Same as in the case of Jha Education Trust case of Jha Education Trust Same as in the case of Jha Education Trust. Poddar Education Trust a) Information received 1 from Investigation Wing. Mumbai that during search in Podar Group of Mumbai, DDIT (Inv) ) Except for this, there is no other found that it was into material implicating the assessee money laundering activities through giving bogus donations, which was received back in cash. b) Information contained the name of assessee. c) Statement of one Shirt Jayesh Zananı (Manager, Accounts) recorded us 132(4), he admitted that bogus donations were given from Podar Group Trusts. d) Such modus operandi was carried out with the help of one Shri K. D. Suba, CA, who deposed in his statement u/s 131 that assessee was one of the beneficiary Trust which received bogus donation from Podar Education Trust and Anandilal Ganesh Podar Society. i) Name of assessee was mentioned by Shri KD Suba, CA and Shri Jayesh Zanami ii) Except for this, there is no other material implicating the assessee. iii) Both the deponents are ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... upport of the allegations leveled in the show cause notice Refer page no. 105 125 of PB. iv) In all the above referred trusts, it was a case of giving of donations whereas in the case of assessee, it is a case of receipt of donation. The charge in the case of above trusts is different from the charge in the assessee's case. 6. Assessee was established for imparting education. Objects of the assessee society at PN 48 of PB Assessee is running colleges and no dispute whatsoever has been raised at any time at any stage by the Department in respect of objects or the activities being carried out by the assessee. - Ld. Pr. CIT has concluded that activities of assessee society are not genuine and are not being carried out in accordance with objects of the society. - Such observations of Pr CIT are totally arbitrary, baseless and devoid of any supporting material/ evidence whatsoever. It is totally an unsupported, bald statement. 7. Sec, 12AA(3) can be invoked only if Pr. CIT is satisfied that the activities are not genuine or are not being carried out in accordance with the objects - No activity of the assessee found to be not genuine or not in accordance with the objects. - There is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng inference that the donations received from these two trusts is not genuine. Conclusions devoid of any finding material evidence. ii) In case of both the donor trust. registration was cancelled by their jurisdictional CIT invoking sec 12AA(3). Such cancellation held to be nor justified and registration u/s 12A directed to be restored in both the cases by Hon'ble Kolkata Bench of ITAT. Order of Hon'ble ITAT at PN 25 to 40 (Jha Education) 17 to 24 (Bimladevi Dharamprakash) of case law compilation. iii) In the case of Bimladevi Dharmprakash Jan Kalyan Nidhi Trust, Hon'ble ITAT gave specific finding that allegation of bogus donation is not proved. Such finding is in para no. 6 of the appellate order, PN 23 of case law compilation iv) In the case Jha Education Trust, a finding has been rendered that in the enquiry survey conducted, which was made the basis for cancellation of registration, there was no specific reference of Jha Education Trust and the name of that trust was not coming out anywhere. Such finding is at para no. 8.1 of the appellate order, PN 33 of case law compilation. v) Very basis of Pr. CIT's order becomes unsustainable so far as these two donors are ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... art whereof is at PN 106 of PB, last para. iii) When there is no specific reference of assessee, it is a case where there is no material whatsoever against the assessee. iv) Similar cancellation orders passed in other case, vacated On the basis of identical finding, other trusts which had received donation from HHBRF also were visited with the same consequence le cancellation of registration u/s 12A. Hon'ble Tribunal vacated the cancellation order passed us 12AA(3) and directed for restoration of registration u/s 12A. Reliance on. Vishwaroopa Charity Trust in ITA No. 106/Kol 2017 dt: 15.09.2017, PN 6 to 14 of case law compilation, relevant findings on PN 8 (para no. 4 5 of order), PN 13 14 (para no. 15 to 17) of case law compilation. Fateh Chand Charitable Trust in ITA No, 792/Lkw/2015 dt. 18.03.2016, PN 51 to 64 of further case law compilation, relevant findings on PN 63 64 (para no 22) thereof. Sanskriti Sagar in ITA No. 96/Kol/2017 dt. 15.09.2017, PN 65 to 74 of further case law compilation, relevant findings on PN 73 74 (para no 15,1 16) thereof. v) In Shree Jainarayan Hariram Goel Charitable Trust in ITA No. 25/RPR/2019 d. 02/08/2021, Hon'ble Raipur Bench held in the c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ations whereas in the case of assessee it is a case of receipt of donation. The charge in case of Jha Education Trust, Bimladevi Dharamprakash Jan Kalyan Nidhi, Kolkata is different from the charge in the assessee s case. No dispute whatsoever has been raised by the department in respect of object or the activities being carried out by the assessee trust, but ld. PCIT has concluded that activities of assessee s society are not genuine and are not being carried out in accordance with the objects of the society is totally arbitrarily, baseless and devoid of any supporting material/ evidence. The registration was cancelled relying solely on the statement recorded u/s 133A. There is absolutely no corroborative material on record against the assessee. It was also submissions of the assessee that no cross examination was allowed to the assessee. The ld. AR also alleged that no enquiry was carried out by ld. CIT(E). The ld. AR further submitted that due to amendment in law. The assessee has applied for re-registration u/s 12A 80G and provisional registration were granted to the assessee on 10.03.2022, which itself substantiate that the activities of the trust are considered as genuine by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ronouncement relied upon by the assessee. Admittedly, the proceedings of cancellation were initiated against the assessee trust as inspired by the report of ld. CIT(E), Kolkata wherein it is informed that the assessee society has received bogus donations from 3 of entities whose activities are found to have been bogus and involved in providing accommodation entries in the garb of donations. It was the allegation by the department that bogus donations were received from 3 trusts by the assessee s trust, namely Jha Education Trust, Kolkata, Bimladevi Dharamprakash Jan Kalyan Nidhi, Kolkata and M/s Hebicure Healthcare Bio-Herbal Research Foundation, Kolkata. Regarding Jha Education Trust, the assessee has placed before us a copy of order of ITAT, Kolkata in ITA Nos. 831 933/Kol/2016 dated 17.03.2017 wherein the issue of withdrawal of registration u/s 12AA has been quashed. The similar finding was given in the case of Bimladevi Dharamprakash Jan Kalyan Nidhi in ITA No. 10/Kol/2017 dated 18.10.2017, in the case of M/s Hebicure Healthcare Bi-Herbal Research Foundation, it was the submission of the assessee that the same trust has given donation to Sh. Jainarayan Hariram Goel Charitable T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tions and decisions in favour of various donors allegedly involved in the transactions of bogus donations who have granted donations to the assessee trust, we are of the opinion that the order of cancelation by ld. CIT(E) cannot survive, since the registration is granted to the assessee society having no change in its activities, byelaws and objects in a later year. We therefore, set aside the order of ld. CIT(E) and direct to restore registration u/s 12A of the society. In the result grounds raised in the present appeal are allowed. In the result, appeal no. 32/RPR/23019 of the assessee is allowed. 12. Now, we are taking the appeal filed by the assessee in ITA No. 60/RPR/2019, wherein the assessee has challenged the order of ld. CIT(E), Bhopal dated 15.02.2019 regarding cancellation of approval u/s 10(23)(c)(vi). 13. The assessee has raised the following grounds under this appeal. 1. That on the facts and circumstances of the case and in law, The learned Commissioner of Income Tax (Exemption) erred in cancelling the approval granted u/s 10(23C)(iv) of the Act vide order dated 15.02.2019. 2. That on the facts and circumstances of the case and in law, the learned Commissioner of Inc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 008 was withdrawn w.e.f 01.04.2010. 15. The ld. AR of the assessee society, at the outset, has submitted and reiterated the facts and submissions made in ITA No. 32/RPR/2019, which has been discussed in that forgoing paras of this order. 16. The ld. CIT-DR also vehemently supported the order of ld. CIT(E) and reiterated their submissions as discussed in ITA No. 32/RPR/2019 in that forgoing paras. 17. We have considered rival submissions since the cancellation of registration u/s 12A is restored by us in terms our observations hereinabove, in ITA No. 32/RPR/2019, we are of the considered view that since, the provisional registration u/s 12AA(i)(ac)(vi) and 80G(v)(iv) of I.T. Act has already been granted by ld. PCIT on 10.03.2022, therefore, the activities of the assessee societies are considered as genuine. In back drop of aforesaid discussion, we are inclined to set aside the order of ld. CIT(E) withdrawing the approval to the assessee society u/s 10(23C)(vi) dated 15.02.2019 and direct ld. CIT(E) to restore approval u/s 10(23C)(vi) to the assessee society. In the result ground of the appeal in the instant appeal of the assessee are allowed. In the result, appeal no 60/RPR/2019 of ..... X X X X Extracts X X X X X X X X Extracts X X X X
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