Sri Mayapur Dham Pilgrim and Visitor's Trust, Nadia V. CIT(EXEMPTIONS), KOLKATA, Kolkata

ITA 1165/KOL/2016

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 1818 (ITAT-KOLKATA)
• Duration Of Justice: 11 month(s) 9 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 03-05-2017
• Appeal Filed By: Assessee
• Bench Allotted: C
• Next Hearing Date: 15-12-2016
• Assessment Year: misc
• Appeal Filed On: 25-05-2016
• Court: TRIBUNAL
• Department Lawyers: GOULEN HANGSHING
• Assessee Lawyers: A K TIBREWAL
• Keywords: Gift; Charitable institution; Principle of natural justice; Opportunity of cross examination; Accommodation entries; Cancellation of registration
• Section: 133A; 80G; 12A; 11

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH : KOLKATA [BEFORE HONBLE SRI N.V.VASUDEVAN, JM & SHRI WASE EM AHMED, AM ] I.T.A NO. 1165/KOL/20 16 SRI MAYAPUR DHAM PILGRIM AND -VS.- C.I. T. (EXEMPTIONS) VISITORS TRUST, NADIA KOLKATA [PAN : AAATM 4948 D] (APPELLANT) (RESPONDENT) FOR THE APPELLANT : SHRI A.K.TIBREWAL, FCA FOR THE RESPONDENT : SHRI GOULEN HANGSHING, CIT(DR) DATE OF HEARING : 18.04.2017. DATE OF PRONOUNCEMENT : 03.05.2017. ORDER PER N.V.VASUDEVAN, JM THIS IS AN APPEAL BY THE ASSESSEE AGAINST THE ORDER DATED 17.03.2016 OF C.I.T. (EXEMPTIONS), KOLKATA PASSED U/S 12AA(3) OF THE I NCOME TAX ACT, 1961 WITHDRAWING/CANCELLING THE REGISTRATION W.E.F. 01.0 4.2012 GRANTED TO THE ASSESSEE U/S 12A OF THE ACT. 2. THE ASSESSEE IS A CHARITABLE TRUST HAVING CO ME INTO EXISTENCE PURSUANT TO A DEED OF TRUST ON 22.02.1989. THE FACT THAT THE OBJECTS OF T HE TRUST ARE CHARITABLE IN NATURE IS NOT DISPUTED, AS THE REVENUE HAS IN AN ORDER DATED 23.0 3.1991 OF DIT(E), KOLKATA GRANTED REGISTRATION TO THE ASSESSEE U/S 12A OF THE ACT AS WELL AS APPROVAL U/S 80G((VI) OF THE ACT BY ORDER DATED 31.08.2010. 3. THE ACTIVITIES OF THE ASSESSEE DURING THE FIN ANCIAL YEAR 2013-14 ARE AS FOLLOWS :- 1. BUILT, MAINTAIN AND OPERATE GUEST HOUSE FOR THE COMFORTABLE STAY OF PILGRIMS AND VISITORS TO THE HOLY LAND OF SREEDHAM MAYAPUR. 2. BUILT, MAINTAIN AND OPERATE GUEST COTTAGES FOR B ENEFIT OF POOR AND LOW INCOME GROUP OF PILGRIMS AND VISITORS TO THE HOLY LAND OF SREEDHAM MAYAPUR. 3. CONSTRUCTED ROADS, GARDENS AND LOTUS POND FOR BE AUTIFICATION AND CLEANLINESS AND COMFORTABLE STAY AND ENTERTAINMENT OF THE VISITORS DURING THEIR STAY AT MAYAPUR . 2 ITA NO.1165/KOL/2016 SRI MAYAPUR DHAM PILGRIM AND VISITORS TRUST 2 4. PROVIDED WATER AND SANITARY FACILITIES FOR THE B ENEFIT OF VISITORS TO MAYAPUR . 5. PROVIDED MEDICAL CAMP AND DISTRIBUTED MEDICINES FREE OF COST TO. THE VILLAGERS AS A PART OF SOCIAL WELFARE MEASURE BY ARRANGING REGUL AR MEDICAL CHECKUP BY SPECIALIST DOCTORS. 6. CONDUCTED SEMINARS AND CLASSES TO IDENTIFY AND D EVELOP VARIOUS SITES OF PUBLIC INTEREST. 7. FREE DISTRIBUTION OF FOOD TO THE POOR AND DISTRE SSED VILLAGE PEOPLE WAS CARRIED OUT ON REGULAR BASIS. 8. FREE DISTRIBUTION OF CLOTHES AND CHILDREN'S GARM ENTS WAS ALSO CARRIED OUT FROM TIME TO TIME FOR BENEFIT OF POOR VILLAGERS. 9. IN ORDER TO PROMOTE VILLAGE AND COTTAGE INDUSTRI ES PRODUCTS, THE TRUST USED TO REGULARLY COLLECT VARIOUS PRODUCTS MADE BY THE LOCA L VILLAGERS FOR DISTRIBUTION TO THE PILGRIMS AND VISITORS TO MAYAPUR. 3. THE C.I.T.(EXEMPTIONS), KOLKATA ISSUED A SHOW CAUSE NOTICE DT. 04.12.2015 TO THE ASSESSEE PROPOSING TO CANCEL THE REGISTRATION GRANT ED TO THE ASSESSEE U/S 12A OF THE ACT FOR THE REASON THAT IN A SURVEY CONDUCTED U/S 133 A OF THE ACT, ON AN ENTITY BY NAME SCHOOL OF HUMAN GENETICS AND POPULATION HEALTH, KOL KATA (SHG AND PH) BY THE INVESTIGATION WING OF KOLKATA ON 27.01.2015 IT TRAN SPIRED THAT THE OBJECTS OF THE ASSESSEE WERE NOT GENUINE AND THE TRUST IS NOT CARR YING OUT ITS ACTIVITIES IN ACCORDANCE WITH THE OBJECTS OF THE TRUST. IT HAS FURTHER BEEN MENTIONED IN THE SHOW CAUSE NOTICE THAT DURING THE SURVEY OPERATION STATEMENT OF SMT. MOUMI TA RAGHAVAN, TREASURER OF SHG AND PH WAS RECORDED UNDER OATH AND IN HER STATEMENT SHE ADMITTED THAT SHG AND PH WAS IN THE BUSINESS OF PROVIDING BOOK ENTRY OF DONA TIONS TO DIFFERENT INDIVIDUALS AND ORGANIZATIONS. IT HAS FURTHER BEEN MENTIONED IN TH E SHOW CAUSE NOTICE THAT THE ASSESSEE HAS RECEIVED DONATION OF RS.18 LAKHS IN A.Y.2013-14 FROM THE AFORESAID ORGANIZATION AND SINCE IT TRANSPIRED THAT THE SAID ORGANISATION WAS PROVIDING ACCOMMODATION ENTRIES OF DONATIONS, RECEIVED, THE DONATION OF RS.18 LA CS RECEIVED BY THE ASSESSEE FROM THE SAID ORGANIZATION WAS ALSO BOGUS. THE CIT(EXEMPTIO NS) ACCORDINGLY PROPOSED TO INVOKE HIS POWERS U/S 12AA(3) OF THE ACT TO CANCEL THE REGISTRATION GRANTED TO THE ASSESSEE. 3 ITA NO.1165/KOL/2016 SRI MAYAPUR DHAM PILGRIM AND VISITORS TRUST 3 4. IN REPLY TO THE AFORESAID SHOW CAUSE NOTICE T HE ASSESSEE SUBMITTED THAT ITS ACTIVITIES WERE CHARITABLE IN NATURE AND THAT THE TRUST HAS N OT VIOLATED ANY LAW OR INDULGED IN MONEY LAUNDERING ACTIVITIES. THE ASSESSEE POINTED O UT THAT IT HAD ISSUED APPEAL LETTERS FOR DONATION TO THE INSTITUTION IN QUESTION AND THE Y HAVE GIVEN A DONATION BY BANK TRANSFER TO THE ASSESSES ACCOUNT. THE ASSESSEE SUB MITTED THAT WHATEVER CASH COLLECTIONS, THE ASSESSEE RECEIVES FROM GUEST HOUSE AND FOOD DIS TRIBUTION ARE DEPOSITED IN THE BANK ACCOUNT REGULARLY AND NO CASH WAS KEPT IN HAND. THE ASSESSEE ALSO POINTED OUT THAT ITS NAME APPEARING IN THE LIST OF ALLEGED BOGUS DONATIO NS ALLEGEDLY GIVEN BY SECRETARY OF SHG AND PH COULD BE DUE TO ERROR ON THEIR PART. 5. THE CIT(E) HOWEVER MADE A REFERENCE TO THE ST ATEMENT RECORDED IN THE COURSE OF SURVEY U/S 133A OF THE ACT OF SMT. SAMADRITA MUKHER JEE SARDAR, SECRETARY OF SCHOOL OF HUMAN GENETICS AND POPULATION HEALTH (SHG&PH) AND T HE STATEMENT OF SMT. MOUMITA RAGHAVAN, TREASURER OF SHG&PH. THESE STATEMENTS ARE REPRODUCED IN PARA 4.1 AND 4.2 OF THE IMPUGNED ORDER OF THE CIT(EXEMPTIONS). THE G IST OF THE STATEMENT OF SMT. MOUMITA RAGHAVAN IS THAT SHG&PHS SOURCE OF INCOME WAS THE MONEY RECEIVED IN THE FORM OF DONATIONS FROM CORPORATE BODIES AS WELL A S FROM INDIVIDUALS. SHE IN HER STATEMENT EXPLAINED THAT THERE WERE ABOUT NINE BROK ERS WHO USED TO BRING DONATIONS IN THE FORM OF CHEQUE/RTGS TO SHG AND PH. THE DONATION S RECEIVED WOULD BE RETURNED BY ISSUE OF CHEQUE/RTGS IN THE NAME OF COMPANIES OR ORGANIZATION SPECIFIED BY THE NINE BROKERS. THE ASSESSEE WOULD RECEIVE 7 OR 8% OF THE DONATIONS AMOUNT. HER FURTHER STATEMENT WAS THAT SINCE THE ASSESSEE WAS ENTITLED TO EXEMPTION U/S 80G AND U/S 35 OF THE ACT THEIR ORGANIZATION WAS CHOSEN BY THE BROKER S FOR GIVING DONATIONS TO SHG AND PH AS WELL AS FOR GIVING DONATIONS BY SHG AND PH. T HE GIST OF THE STATEMENT OF SMT. SAMADRITA MUKHERJEE SARDAR, SECRETARY OF SHG&PH WAS ALSO IDENTICAL. IN REPLY TO QUESTION NO.13 AS TO HOW THE MONEY RECEIVED AS DONA TIONS ARE GIVEN BACK, SHE EXPLAINED THAT CHEQUES ARE ISSUED IN THE NAMES OF VARIOUS CO MPANIES/ORGANIZATIONS SPECIFIED BY THE BROKERS AND THE SUMS SO RETURNED ARE SHOWN AS E XPENSES IN THE BOOKS OF SHG&PH. 4 ITA NO.1165/KOL/2016 SRI MAYAPUR DHAM PILGRIM AND VISITORS TRUST 4 6. IN THE PROCEEDINGS FOR CANCELLATION OF REGIST RATION U/S 12A OF THE ACT IN THE CASE OF SHG&PH SMT. SAMADRITA MUKHERJEE SARDAR HAD GIVEN A LIST OF DONATIONS AND THE SOURCE OF THOSE DONATIONS WERE GIVEN BY HER AS FOL LOWS :- THIS IS TO CONFIRM THAT DONATIONS PAID BY OUR SOCI ETY TO VARIOUS TRUSTS/SOCIETIES UNDER THE HEAD RESEARCH & DEVELOPMENT EXPENSES IN O UR INCOME & EXPENDITURE ACCOUNT FOR THE RESPECTIVE YEARS. HOWEVER, WHILE PR EPARING THE REVISED ACCOUNT FILED BEFORE THE HONBLE SETTLEMENT COMMISSION, KOL KATA THESE DONATIONS HAVE BEEN SHOWN AS PARTS OF REFUND MADE AGAINST DONATION S RECEIVED. 7. ACCORDING TO THE REVENUE THE NAME OF THE ASSE SSEE FIGURES IN THE LIST PAID OF DONATIONS GIVEN BY SHG AND PH AGAINST CASH YEAR-WIS E FOR A SUM OF RS.18 LAKHS. BASED ON THE ABOVE STATEMENTS OF SECRETARY AND TREA SURER OF SHG AND PH THE CIT(E) CONCLUDED THAT THE REPLY OF THE ASSESSEE WAS A ROUT INE REPLY AND THAT THE ASSESSEE WAS GIVEN THE STATEMENT OF SMT. MOUMITA RAGHAVAN AND SM T. SAMADRITA MUKHERJEE SARDAR AND OTHER DOCUMENTS WERE ALSO GIVEN OPPORTUNITY TO CROSS EXAMINE THOSE PERSONS BUT THE ASSESSEE DID NOT AVAIL OF THE OPPORTUNITY. THE CIT(EXEMPTIONS) ACCORDINGLY PROCEEDED TO DISCUSS THE PROVISION OF SECTION 12AA( 3) AND FINALLY CONCLUDED THAT THE ASSESSEES REGISTRATION U/S 12A OF THE ACT WAS LIAB LE TO BE CANCELLED AS THE ACTIVITIES OF THE ASSESSEE WERE NOT GENUINE AND WERE NOT BEING CA RRIED OUT IN ACCORDANCE WITH ITS OBJECTS. 8. AGGRIEVED BY THE ORDER OF CIT(EXEMPTIONS) CANC ELLING THE REGISTRATION GRANTED U/S 12A OF THE ACT THE ASSESSEE HAS PREFERRED THE PRESE NT APPEAL BEFORE THE TRIBUNAL. 9. WE HAVE HEARD THE SUBMISSIONS OF THE LD. COUN SEL FOR THE ASSESSEE AND THE LD. DR. THE LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE CONCLUSIONS OF THE CIT(E) IN THE IMPUGNED ORDER ARE PURELY BASED ON SURMISES AND CON JECTURES. IN PARA-2 OF THE IMPUGNED ORDER THE CIT(E) HAS REFERRED TO THE FACTS WITH REGARD TO SURVEY U/S 133A OF THE ACT ON 27.01.2015 IN THE PREMISES OF SHG&PH, KO LKATA AND THE STATEMENT OF SMT. MOUMITA RAGHAVAN, TREASURER OF SHG&PH THAT SHG&PH W AS IN THE BUSINESS OF PROVIDING ENTRY TO DIFFERENT INDIVIDUALS AND ORGANI ZATIONS BY 5 ITA NO.1165/KOL/2016 SRI MAYAPUR DHAM PILGRIM AND VISITORS TRUST 5 (A) ACCEPTING DONATIONS AND RETURNED THE SAME THROUGH W EB OF FINANCIAL TRANSACTIONS AFTER RETAINING COMMISSION AND (B) ACCEPTING MONEY BY CASH OR THROUGH WEB OF FINANCIAL TRANSACTIONS AND MAKING DONATIONS AFTER RETAINING COMMISSION. THE CIT(E) HAS CONCLUDED THAT SINCE THE ASSESSEE RE CEIVED DONATION AMOUNTING TO RS.18 LAKHS IN A.Y.2013-14 FROM SHG&PH THE DONATION RECEI VED BY THE ASSESSEE IS ALSO BOGUS AND THAT THE ASSESSEE HAS RETURNED MONEY REPR ESENTING THE VALUE OF GIFT BACK TO SHG&PH. HE DREW OUR ATTENTION TO THE FACT THAT ALL THE GENERAL DONATION RECEIVED DURING THE F.Y. 2012-13 BY THE ASSESSEE INCLUDING T HE DONATION RECEIVED FROM SHG&PH HAVE BEEN DULY REFLECTED IN ASSESSEES BOOKS OF ACC OUNTS AND PROFIT AND LOSS ACCOUNT (PAGE 38 OF THE PAPER BOOK S THE LIST OF GENERAL DO NATIONS AND PAGE 105 OF THE PAPER BOOK IS INCOME AND EXPENDITURE ACCOUNT FOR THE YEAR ENDING 31.03.2013). HE ALSO BROUGHT TO OUR NOTICE THAT THE RETURN OF INCOME FIL ED FOR A.Y.2013-14 CLEARLY INDICATES THE DONATION RECEIVED, APPLICATION OF INCOME OF THE ASSESSEE FOR CHARITABLE PURPOSES AND ACCUMULATION OF UNUTILIZED INCOME. IN THE LIGHT OF THE ABOVE DOCUMENTS, THE ALLEGATION OF CIT(E) IN THE SHOW CAUSE NOTICE THAT THE ASSESSE E RETURNED DONATION RECEIVED BACK TO SHG&PH IS UNSUSTAINABLE. 10. THE LD. COUNSEL FOR THE ASSESSEE DREW OUR AT TENTION TO THE STATEMENT OF SMT. MOUMITA RAGHAVAN AND THAT OF SMT. SAMADRITA MUKHERJ EE SARDAR , THE TREASURER AND SECRETARY OF SHG&PH AND POINTED OUT THAT IN THEIR S TATEMENTS THEY HAVE NOT SAID ANYTHING ABOUT THE DONATIONS GIVEN BY SHG&PH AND THAT THEY HAVE ONLY NARRATED ABOUT THE DONATION GIVEN TO SHG AND PH. HE ALSO BROUGHT T O OUR NOTICE THAT THE CIT(E) IN THE IMPUGNED ORDER HAS PLACED RELIANCE ON A LETTER DATE D 24.08.2015 BY SMT. SAMADRITA MUKHERJEE SARDAR, THE SECRETARY OF SHG&PH, IN THE COURSE OF PROCEEDINGS INITIATED BY CIT(E) FOR CANCELLATION OF REGISTRATION GRANTED U/S 12A OF THE ACT TO SHG&PH WHEREIN SHE HAD ADMITTED THAT SHG&PH HAD RECEIVED INCOME BY PROVIDING ACCOMMODATION ENTRIES FOR DONATION THROUGH CERTAIN MEDIATORS. THE DONATIONS RECEIVED WERE REFUNDED BACK AS PER THE INSTRUCTION OF THE MEDIATORS AFTER RETAINING SERVICE CHARGES. IT IS ALSO 6 ITA NO.1165/KOL/2016 SRI MAYAPUR DHAM PILGRIM AND VISITORS TRUST 6 CLAIMED BY THE REVENUE THAT IN THE SAID LETTER SHG AND PH ADMITTED THAT THE REFUNDS MADE WERE IN THE FORM OF DONATIONS TO DIFFERENT PAR TIES AS PER THE INSTRUCTION OF MIDDLEMEN AND BY DEBITING SUCH DONATIONS AND BOOKIN G DONATIONS AS EXPENSES OF SHG&PH. THERE IS ALSO A REFERENCE TO THE FACT THAT A SETTLEMENT APPLICATION U/S 245C OF THE ACT BEFORE THE HONBLE INCOME TAX SETTLEMENT CO MMISSION (INCOME TAX AND WEALTH TAX) FOR A.Y.2012-13 TO 2014-15 HAD BEEN FIL ED BY SHG&PH. IN SUCH AN APPLICATION THE ENTIRE INCOME INCLUDING THE INCOME ARISING OUT OF ACCOMMODATION ENTRIES FOR DONATION HAVE BEEN OFFERED FOR TAXATION WITHOUT CLAIMING ANY EXEMPTION. THE LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE ABO VE LETTER DOES NOT ESTABLISH THE FACT THAT DONATIONS OF RS.18 LAKHS RECEIVED BY THE ASSES SEE FROM SHG&PH WAS A BOGUS DONATION. IT WAS HIS CONTENTION THAT AS FAR AS THE ASSESSEE IS CONCERNED AN APPEAL FOR DONATION WAS MADE AND THE DONATIONS WERE RECEIVED. IN THE AFORESAID LETTER THERE IS NO SPECIFIC REFERENCE TO THE NAME OF THE ASSESSEE AS T HE RECIPIENT OF BOGUS DONATIONS GIVEN BY SHG&PH. 11. IT WAS SUBMITTED THAT THE CIT(E) IN THE IMPU GNED ORDER HAS PLACED RELIANCE OF ANOTHER LETTER DATED 24.10.2015 WHICH AGAIN IS A LE TTER FILED BY THE SECRETARY OF SHG&PH IN THE COURSE OF PROCEEDINGS FOR CANCELLATIO N OF THEIR REGISTRATION U/S 12A OF THE ACT. IN THIS LETTER IT IS ALLEGED THAT THERE IS A REFERENCE TO THE FACT THAT DONATIONS PAID BY SHG&PH WERE BOOKED UNDER THE HEAD RESEARCH AND DEVELOPMENT IN THEIR INCOME AND EXPENDITURE ACCOUNT AND HAVE BEEN SHOWN AS REFU ND MADE AGAINST THE DONATIONS RECEIVED. 12. THE LD. COUNSEL FOR THE ASSESSEE SUBMITTED T HAT COPIES OF BOTH LETTERS WERE NEVER FURNISHED TO THE ASSESSEE AND THEY WERE NOT CONFRON TED WITH THE AFORESAID LETTERS. IT WAS ALSO SUBMITTED THAT THE ASSESSEE IN REPLY TO THE SH OW CAUSE NOTICE ISSUED BEFORE CANCELLATION OF REGISTRATION U/S 12A OF THE ACT BY ITS LETTER DATED 24.12.2015 CLEARLY MENTIONED THAT THEY HAVE RECEIVED DONATIONS AND HAV E NOT INDULGED IN ANY MONEY LAUNDERING ACTIVITIES AT ANY TIME AND THAT THE DONA TIONS IN QUESTION WERE GENUINE. THE LD. COUNSEL FOR THE ASSESSEE BROUGHT TO OUR NOTICE DECLARATION OF THE CHAIRMAN AND THE 7 ITA NO.1165/KOL/2016 SRI MAYAPUR DHAM PILGRIM AND VISITORS TRUST 7 TRUSTEE OF THE ASSESSEE FILED BEFORE THE CIT(E) WHE REIN THEY HAVE DENIED THAT THE ASSESSEE GAVE CASH TO THE DONOR AND SUBSEQUENTLY RE CEIVED DONATION BY RTGS. 13. THE LD. COUNSEL FOR THE ASSESSEE BROUGHT TO OUR NOTICE THAT IN PARA 6.1. OF THE IMPUGNED ORDER THE CIT(E) HAS REFERRED TO THE FACT THAT ON 13.01.2016 THE ASSESSEE TRUST WAS GIVEN AN OPPORTUNITY TO CROSS EXAMINE THE SECRE TARY AND TREASURER OF SHG&PH. IN THIS REGARD A COPY OF THE ORDER SHEET ENTRIES IN TH E PROCEEDINGS BEFORE CIT(E) WERE FILED BEFORE US AND THE SAME IS GIVEN AS ANNEXURE TO THIS ORDER. IT WAS BROUGHT TO OUR NOTICE THAT ON 14.01.2016 THE TRUSTEE OF THE ASSESSEE HAD APPEARED AND IT WAS ON THIS DATE THAT THE DECLARATION OF THE TRUSTEE REFERRED TO EARLIER WAS FILED BEFORE CIT(E). THEREFORE IT IS NOT CORRECT TO CONTEND THAT THE ASSESSEE WAS GIVEN OPPORTUNITY TO CROSS EXAMINE THE TREASURER AND SECRETARY OF SHG&PH. 14. THE LD. COUNSEL FOR THE ASSESSEE POINTED OUT THAT THE REGISTRATION ALREADY GRANTED TO THE TRUST OR AN INSTITUTION U/S 12A CAN BE CANCELLE D ONLY AFTER FULFILLING THE CONDITIONS LAID DOWN IN SECTION 12AA(3) OF THE ACT VIZ. (A) IF THE COMMISSIONER IS SATISFIED THAT THE ACTIVITIES OF THE TRUST/INSTITUTION ARE NOT GENUINE AND (B) THE ACTIVITIES ARE NOT BEING CARRIED OUT IN ACCORDANCE WITH THE OBJECTS OF THE T RUST/INSTITUTION. WITH REGARD TO BOTH THE ABOVE CONDITIONS THERE IS NEITHER AN ALLEGATION BY CIT(E) IN THE IMPUGNED ORDER NOR FACTS EXIST WHICH CAN JUSTIFY COMING TO A SATISFACT ION REGARDING THE EXISTENCE OF BOTH THE AFORESAID CONDITIONS. IT WAS SUBMITTED THAT EVIDENC E AND MATERIAL GATHERED FROM A THIRD PARTY CAN BE USED AGAINST AN ASSESSEE ONLY AFTER CO NFRONTING THE SAME TO THE ASSESSEE AND ALLOWING OPPORTUNITY OF CROSS EXAMINATION OF THE DE PONENT (IF THE MATERIAL IS ORAL EVIDENCE). IT WAS SUBMITTED THAT IN THE ABSENCE OF DOING SO, THE ORDER PASSED, PLACING RELIANCE ON SUCH INADMISSIBLE EVIDENCE, SHOULD BE H ELD TO BE A NULLITY. IN THIS REGARD RELIANCE WAS PLACED BY HIM ON THE DECISION OF THE H ONBLE SUPREME COURT IN THE CASE OF ANDAMAN TIMBER INDUSTRIES VS COMMISSIONER OF CENTRA L EXCISE (2015) 62 TAXMANN.COM 3 (SC) AND KISHINCHAND CHELLARAM VS. CI T (1980) 125 ITR 713 (SC). THE FOLLOWING DECISIONS RENDERED IN THE CONTEXT OF SECT ION 12AA(3) OF THE ACT WHERE IDENTICAL PROPOSITION AS ABOVE WERE ALSO REFERRED TO : 8 ITA NO.1165/KOL/2016 SRI MAYAPUR DHAM PILGRIM AND VISITORS TRUST 8 1) JHA EDUCATIONAL TRUST VS CIT(E) IN ITA NOS.931-933/ KOL/2016 JUDGMENT DATED 17.03.2017 2) BHUTORIA MEMORIAL TRUST VS CIT(E) IN ITA NO.537/KOL /2016 JUDGMENT DATED 09.11.2016. 15. IT WAS ALSO SUBMITTED THAT THE CIT(E) IN THE IMPUGNED ORDER HAS DRAWN CONCLUSIONS IN PARA-8 OF HIS ORDER THAT OVER THE Y EARS HUGE AMOUNT HAS BEEN CONVERTED BY PROVIDING ACCOMMODATION ENTRIES AND THAT LOOKING INTO THE VOLUME AND DEPTH OF THE LAUNDERING ACTIVITIES THE ASSESSEE DEFIED THE PURPO SE BEHIND GRANTING EXEMPTION U/S 11 OF THE ACT WITHOUT ANY BASIS OR MATERIAL TO SUBSTAN TIATE SUCH CONCLUSION. IT WAS ALSO SUBMITTED THAT THERE ARE ALLEGATIONS THAT THE ASSES SEE PUMPED IN UNACCOUNTED MONEY GENERATED IN BUSINESS THROUGH BOGUS CORPUS DONATION S. IT WAS SUBMITTED BY HIM THAT ALL THESE ALLEGATIONS ARE PURELY BASED ON SURMISES AND CONJECTURES WITHOUT BRINGING OUT ANY EVIDENCE ON RECORD. IT WAS ALSO SUBMITTED THAT THE FINAL CONCLUSION IN PARA 8.4. THAT THE ACTIVITIES OF THE SOCIETY ARE NOT GENUINE AND ARE N OT BEING CARRIED OUT IN ACCORDANCE WITH THE OBJECTS OF THE TRUST ARE AGAIN UNSUSTAINABLE CONCLUSIONS. 16. REFERENCE WAS ALSO MADE TO THE DECISION OF TH E HONBLE KARNATAKA HIGH COURT IN THE CASE OF CIT VS ISLAMIC ACADEMY OF EDUCATION IN IT APPEAL NO.805 OF 2008 ORDER DATED 9 TH SEPTEMBER, 2014 AND CIT VS RED ROSE SCHOOL 163 TAX MAN 19 (ALL.). 17. THE LD. DR PLACED RELIANCE ON THE ORDER OF CI T(E). ACCORDING TO HIM IN THE EVENT OF THE ASSESSEE CLAIMING THAT IT HAD NOT GOT AN OPP ORTUNITY OF CROSS EXAMINATION OF THE SECRETARY AND TREASURER OF SHG&PH, SUCH OPPORTUNITY SHOULD BE AFFORDED TO THE ASSESSEE AND FOR THIS PURPOSE THE ISSUE SHOULD BE R EMANDED BACK TO THE CIT(E). ACCORDING TO HIM FAILURE TO AFFORD OPPORTUNITY OF C ROSS EXAMINATION CANNOT RENDER THE IMPUGNED ORDER OF THE CIT(E) A NULLITY. 18. WE HAVE GIVEN A VERY CAREFUL CONSIDERATION T O THE RIVAL SUBMISSIONS. WE HAVE ALSO PERUSED THE STATEMENT OF SMT. MOUMITA RAGHAVAN AND THAT OF SMT. SAMADRITA MUKHERJEE SARDAR , THE TREASURER AND SECRETARY OF SHG&PH. THESE STATEM ENTS ARE PLACED AT PAGES 7 TO 18 OF THE ASSESSEES PAPER BOO K. AS WE HAVE ALREADY MENTIONED 9 ITA NO.1165/KOL/2016 SRI MAYAPUR DHAM PILGRIM AND VISITORS TRUST 9 WHILE NARRATING THE FACTS OF THE CASE, THE GIST OF THE STATEMENT OF THE SECRETARY AND TREASURER WAS THAT NINE BROKERS WHOSE NAMES HAVE BE EN GIVEN IN ANSWER NO.11 BY SMT. SAMADRITA MUKHERJEE SARDAR, USED TO GIVE DONATIONS TO SHG&PH. , IN THE FORM OF CHEQUES/RTGS AND SIMULTANEOUSLY USED TO ASK FOR RET URN CHEQUES IN THE NAME OF CERTAIN COMPANIES/ORGANISATIONS. THE SHG&PH WOULD RECEIVE A COMMISSION OF 7 TO 8% OF THE DONATION AMOUNT. IT IS NOT IN DISPUTE BEFORE US THA T NONE OF THE NINE BROKERS REFERRED TO IN THE STATEMENT HAVE BEEN EXAMINED BY THE REVENUE AUTHORITIES. THERE IS NOTHING INCRIMINATING SO FAR AS THE ASSESSEE IS CONCERNED W ITH REGARD TO THE GIFTS GIVEN BY SHG&PH IN FAVOUR OF THE ASSESSEE. BASED ON THE STAT EMENTS OF THE TREASURER AND SECRETARY OF SHG&PH IT CANNOT BE CONCLUDED THAT THE ASSESSEE HAD PAID CASH TO THE TREASURER AND SECRETARY OF SHG&PH AND GOT BACK DONA TION IN THE FORM OF CHEQUES AFTER PAYING THE COMMISSION DUE TO SHG&PH.. THE CIT(E) IN THE IMPUGNED ORDER HAS PLACED RELIANCE ON THE LETTERS DATED 24.10.2015 AND 24.08. 2015OF SMT. SAMADRITA MUKHERJEE SARDAR IN THE PROCEEDINGS FOR CANCELLATION OF REGIS TRATION U/S 12A OF THE ACT IN THE CASE OF SHG&PH. IN THE LETTER DATED 24.10.2015 IT IS ALL EGED THAT THE LIST OF DONATIONS PAID BY SHG&PH AT THE INSTRUCTION OF THE BROKERS ALSO INCLU DED THE DONATION TO THE ASSESSEE OF RS. 18 LAKHS. IT IS AN ADMITTED POSITION THAT THE C OPIES OF THESE LETTERS WERE NOT FURNISHED TO THE ASSESSEE AND AN OPPORTUNITY OF CROSS EXAMINA TION OF SMT. SAMADRITA MUKHERJEE SARDAR AFFORDED TO THEM. IN THE DECLARATION DATED 1 1.1.2016 AS WELL AS IN THE LETTER DATED 24.12.2015, THE ASSESSEE HAS DENIED THAT THE DONATI ON IN QUESTION WAS A BOGUS DONATION AND THAT THE ASSESSEE HAD PAID EQUIVALENT CASH TO T HE DONORS. IN THE LIGHT OF SUCH DENIAL, THE CIT(E) OUGHT TO HAVE CONFRONTED THE MATERIAL AG AINST THE ASSESSEE AND OUGHT TO HAVE AFFORDED AN OPPORTUNITY OF CROSS EXAMINATION TO THE ASSESSEE. WITHOUT DOING SO THE CIT(E) IS NOT ENTITLED TO USE THE MATERIAL GATHERED AGAINST THE ASSESSEE. THE DECISION OF THE HONBLE SUPREME COURT IN THE CASE OF ANDAMAN TI MBER INDUSTRIES VS CCE (SUPRA) CLEARLY SUPPORTS THE PLEA OF THE ASSESSEE THAT RELI ANCE CANNOT BE PLACED ON SUCH STATEMENT WITHOUT AFFORDING RIGHT OF CROSS EXAMINATION AND D OING SO IS A SERIOUS FLAW WHICH MAKES HIS ORDER A NULLITY AS IT AMOUNTS TO VIOLATIO N OF PRINCIPLES OF NATURAL JUSTICE. IT IS 10 ITA NO.1165/KOL/2016 SRI MAYAPUR DHAM PILGRIM AND VISITORS TRUST 10 CLEAR FROM A PERUSAL OF THE IMPUGNED ORDER THAT EXC EPT THE STATEMENT RECORDED AT THE TIME OF SURVEY AND LETTERS GIVEN IN THE COURSE OF P ROCEEDINGS FOR CANCELLATION OF REGISTRATION GRANTED U/S 12A OF THE ACT OF SHG&PH T HERE IS NO OTHER MATERIAL AGAINST THE ASSESSEE TO COME TO A CONCLUSION THAT THE ASSES SEE HAS INDULGED IN RECEIVING ANY BOGUS DONATIONS. 19. THE FACT THAT ASSESSEES NAME FIGURES IN THE LI ST OF DONATIONS GIVEN BY SHG&PH AS SUBMITTED BY THEM IN AN APPLICATION FILED BEFORE TH E SETTLEMENT COMMISSION OF INCOME TAX U/S 245C OF THE ACT, THROWS DOUBTS ABOUT THE GE NUINENESS OF THE DONATION RECEIVED BY THE ASSESSEE FROM SHG&PH. AS FAR AS THE ASSESSEE IS CONCERNED ALL GENERAL DONATIONS RECEIVED BY IT DURING THE F.Y. RELEVANT T O A.Y. HAVE BEEN DULY ACCOUNTED FOR AND SPENT FOR CHARITABLE PURPOSE. THE MONEY REPRESE NTING THE DONATION FROM SHG&PH CANNOT BE SAID TO BE MONEY OF THE ASSESSEE. THE CAS E OF THE REVENUE ALSO IS THAT THE MONEY REPRESENTING THE DONATION IS NOT THAT OF ASSE SSEE. THE CHARGE OF THE REVENUE IS THAT MONEY REPRESENTING THE VALUE OF DONATION HAS B EEN LAUNDERED. THE QUESTION AS TO WHOSE MONEY WAS LAUNDERED AND BY WHOM IS NOT SPELT OUT IN THE IMPUGNED ORDER. THERE IS NO MATERIAL BROUGHT ON RECORD TO COME TO A CONCL USION THAT THE ASSESSEE WAS PART OF THE SCHEME OF MONEY LAUNDERING AND THAT THE DONATIO N RECEIVED BY THE ASSESSEE FROM SHG&PH WAS ALSO PART OF SUCH SCHEME OF MONEY LAUNDE RING. THE ASSESSEE IS A CHARITABLE TRUST AND RECEIVES DONATIONS FROM DONORS AND HAS UTILIZED THE DONATIONS FOR CHARITABLE PURPOSE. IN THE GIVEN FACTS AND CIRCUMST ANCES IT CANNOT BE CONCLUDED THAT THE ASSESSEE IS NOT CARRYING OUT ITS OBJECTS OR THAT TH E ASSESSEES ACTIVITIES ARE NOT GENUINE. 20. APART FROM THE ABOVE, THE GROUNDS FOR CANCELL ATION FOR REGISTRATION U/S 12AA(3) IS THAT THE ACTIVITIES OF THE TRUST SHOULD NOT BE GENU INE OR THE ACTIVITIES OF THE TRUST ARE NOT BEING CARRIED OUT IN ACCORDANCE WITH THE OBJECTS OF THE TRUST. THERE IS NEITHER AN ALLEGATION IN THE IMPUGNED ORDER NOR FINDING THAT A NY OF THE AFORESAID CONDITIONS EXIST IN THE CASE OF THE ASSESSEE. WE THEREFORE ARE OF THE V IEW THAT THE CANCELLATION OF REGISTRATION GRANTED TO THE ASSESSEE U/S 12A OF THE ACT CANNOT BE SUSTAINED AND THE IMPUGNED ORDER IS HEREBY QUASHED. THE APPEAL OF THE ASSESSEE IS ACCORDINGLY ALLOWED. 11 ITA NO.1165/KOL/2016 SRI MAYAPUR DHAM PILGRIM AND VISITORS TRUST 11 21. IN THE RESULT THE APPEAL BY THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED IN THE COURT ON 03.05.2017. SD/- SD/- [WASEEM AHMED] [ N.V.VASUDEVAN ] ACCOUNTANT MEMBER JUDICIAL MEMBER DATED : 03.05.2017. [RG PS] COPY OF THE ORDER FORWARDED TO: 1.SRI MAYAPUR DHAM PILGRIM AND VISITORS TRUST, P.O . SRI MAYAPUR, P.S. NABADWIP, DIST. NADIA, W.B. PIN 741313. 2. C.I.T. (EXEMPTIONS) KOLKATA. . 3..CIT(DR), KOLKATA BENCHES, KOLKATA. TRUE COPY BY ORDER ASSTT.REGISTRAR, ITAT, KOLKATA BENCHES