M/s D. S. Health & Education Trust, Kolkata V. CIT(EXEMPTIONS), KOLKATA, Kolkata

ITA 1209/KOL/2016

• Counselvise Citation: [2018] 126 COUNSELVISE.COM (IT) 1526 (ITAT-KOLKATA)
• Duration Of Justice: 1 year(s) 8 month(s) 18 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 14-02-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Next Hearing Date: 29-06-2017
• Assessment Year: 2011-2012
• Appeal Filed On: 27-05-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: G MALLIKERJUNA
• Keywords: Income from undisclosed sources; Accommodation entries; Cancellation of registration
• Section: 133A; 12A; 12AA

Judgement Text

, C , IN THE INCOME TAX APPELLATE TRIBUNAL KOLKATA BENCH C KOLKATA BEFORE SHRI N.V.VASUDEVAN, JUDICIAL MEMBER AND SHRI WASEEM AHMED, ACCOUNTANT MEMBER ITA NO. 1209 / KOL / 2016 ASSESSMENT YEAR :2011-12 M/S D.S. HEALTH & EDUCATION TRUST 60, M.G. ROAD, 1 ST FLOOR, KOLKATA-700 007 [ PAN NO.AABTD 1817 H ] V/S . COMMISSIONER OF INCOME TAX (EXEMPTION), KOLKTDA,10B, MIDDLETON ROW, 6 TH FLOOR, KOLKATA-71 /APPELLANT .. / RESPONDENT /BY APPELLANT SHRI SUJOY SEN, AR /BY RESPONDENT SHRI G. MALLIKERJUNA, CIT-DR /DATE OF HEARING 09-01-2018 /DATE OF PRONOUNCEMENT 14-02-2018 / O R D E R PER WASEEM AHMED, ACCOUNTANT MEMBER:- THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST TH E ORDER OF COMMISSIONER OF INCOME TAX (EXEMPTIONS), KOLKATA DA TED 18.03.2016 U/S 12AA(3) OF THE INCOME TAX ACT, 1961 (HEREINAFTER RE FERRED TO AS THE ACT) FOR ASSESSMENT YEAR 2011-12. THE ASSESSEE HAS RAISED TH E FOLLOWING GROUNDS:- LEARNED CIT(EXEMPTION) KOLKATA, VIDE ORDER PASSED U /S. 12AA(3) OF THE INCOME TAX ACT, 1961, ON 18.03.2016 IN THE CASE OF APPELLANT ASSESSEE NAMELY 'M/S. D.S. HEALTH & EDUCATION TRUST ' HAD ERRED IN WITHDRAWING/CANCELLING A REGISTRATION U/S. 12AA(3) EARLIER GRANTED ON 22.09.2009 ON THE GROUND:- (I) THAT THE ASSESSEE TRUST GOT REGISTRATION EARLIE R ON THE DEED OF TRUST CREATED AND ACTIVITIES OF THE TRUST ARE GENUINE; ITA NO.1209/KOL/2016 A.Y. 2011-12 M/S D.S. HEALTH & EDUCATION TRUST VS. CIT(EX) KO L. PAGE 2 (II) THAT ACTIVITIES OF THE ASSESSEE TRUST ARE CARR IED OUT IN ACCORDANCE WITH THE OBJECTS DECLARED IN THE DEED OF TRUST; (III) THAT THE ASSESSEE TRUST HAS RECEIVED CORPUS D ONATION OF RS. 25,00,000/- GENUINELY THROUGH CHEQUE ON 29.03.2011, WHICH IS SUPPORTED BY PROPER DOCUMENT IT WAS ACCOUNTED FOR I N THE ACCOUNTS DULLY AUDITED AS PER THE PROVISIONS OF THE INCOME T AX ACT, 196 I; (IV) THAT THE ACCOUNTS ITSELF REVEAL THAT THE SAID DONATION HAD NOT RETURNED EITHER IN CASH OR THROUGH WEB OF FINANCIAL TRANSACTIONS AFTER RETAINING COMMISSION AS ALLEGED IN THE SO CALLED DE POSITION MADE UNDER THE OATH BY ONE SHRI S.R. DASGUPTA, DIRECTOR OF AN ASSESSEE 'M/S. HERBICURE HEAITHCARE BIO-HERBAL RESEARCH FOUNDATION ' AND RETURNED IN THE COURSE OF SURVEY OPERATION CONDUCTED ON 27.01.2 015 BY THE INVESTIGATION WING OF THE I.T. DEPARTMENT AT THE OF FICE CUM RESEARCH PREMISES OF THE SAID RESEARCH FOUNDATION. (V) THAT THE STATEMENT OF THE ALLEGED DEPONENT IS V AGUE, GENERAL AND HYPOTHETICAL WITHOUT IDENTIFYING OR MENTIONING ANY PARTICULAR DONEE FOR ACCEPTANCE OF DONATION AND RETURN THEREOF THROUGH W EB OF FINANCIAL TRANSACTION AND ACCEPTANCE OF ANY MONEY BY CASH OR THROUGH WEB OF FINANCIAL TRANSACTION AND MAKING DONATION AFTER RET AINING COMMISSION AS ALLEGED IN THE SHOW CAUSE LETTER ISSUED BY LEARNED CIT(EXEMPTION) KOLKATA. (VI) THAT NO REFERENCE TO THE APPELLANT ASSESSEE WA S MADE BY THE DEPONENT IN ANY OF HIS LETTERS SUBMITTED BEFORE THE LEARNED CIT(EXEMPTION) KOLKATA. (VII) THAT THE ASSESSEE APPELLANT DIDN'T HAVE ANY B USINESS WHEREFROM IT IS ALLEGED BY THE LEARNED CIT(EXEMPTION), KOL TO HA VE PUMPED IN UNACCOUNTED MONEY GENERATED IN SUCH BUSINESS THROUG H BOGUS CORPUS DONATION. (VIII) THAT HAVING REGARD WITH TO THE FACTS AND CIR CUMSTANCES OF THE CASE, AS WELL AS IN LAW THE LEARNED CIT(EXEMPTION), KOL, HAD ERRED IN WITHDRAWING/CANCELLING THE REGISTRATION U/S 12AA(3) , ON THE BASIS OF THE STATEMENT RECORDED BY A THIRD PARTY VIZ. DIT (INVES TIGATION), KOL, AND INFORMATION RECEIVED THEREFROM TO THAT EFFECT, WITH OUT CONSIDERING THE MERIT OF THE CASE. RELIANCE PLACED ON THE DECISION TAKEN BY ITAT - MUMBAI IN THE CASE OF KAMLESH MUNDRA IN ITA.NO.6248 /MUML2012 (A.Y.2003-04), DATED 04.03.2016. (IX) THAT THE ASSESSEE APPELLANT CRAVES LEAVE TO AD D, AMEND, MODIFY, ALTER OR OMIT ANY GROUND BEFORE OR DURING THE COURS E OF APPEAL PROCEEDINGS. ITA NO.1209/KOL/2016 A.Y. 2011-12 M/S D.S. HEALTH & EDUCATION TRUST VS. CIT(EX) KO L. PAGE 3 SHRI SUJOY SEN, LD. AUTHORIZED REPRESENTATIVE APPEA RED ON BEHALF OF ASSESSEE AND SHRI G. MALLIKERJUNA, LD. DEPARTMENTAL REPRESENTATIVE APPEARED ON BEHALF OF REVENUE. 2. GROUND NO. (I) TO (IX) ARE INTER RELATED AND THE REFORE BEING TAKEN UP TOGETHER. SOLITARY ISSUE RAISED BY ASSESSEE IN THIS GROUND OF APPEAL IS THAT LD. CIT(EX) ERRED IN CANCELLING THE REGISTRATION CERTIF ICATE GRANTED TO ASSESSEE U/S. 12AA OF THE ACT ON THE GROUND THAT THE ACTIVITIES O F ASSESSEE ARE NOT GENUINE. 3. BEFORE GOING TO THE SPECIFIC ISSUE OF THIS APPEA L, WE FIND PERTINENT TO MAKE A NOTE IN BRIEF ABOUT THE HISTORY OF THE CASE WHICH STATES AS UNDER:- A SURVEY OPERATION WAS CONDUCTED U/S. 133A OF THE A CT DATED 23.01.2015 ON HERBICURE HEALTHCARE BIO-HERBAL RESEA RCH FOUNDATION (HHBHRF FOR SHORT). DURING THE COURSE OF SURVEY PRO CEEDINGS STATEMENT OF SHRI SWAPAN RANJAN DAS GUPTA, DIRECTOR OF HHBHRF WAS RECORDED U/S 133A OF THE ACT WHEREIN IT WAS ADMITTED THAT HH BHRF WAS ENGAGED IN PROVIDING / ACCEPTING BOGUS DONATION THROUGH CHA NNEL OF CERTAIN MEDIATORS. THE DONATION WAS PROVIDED / ACCEPTED FRO M DIFFERENT INDIVIDUALS / ORGANIZATIONS BY IT. IT WAS ACCEPTING CHEQUE / CASH WHICH WERE SUBSEQUENTLY FORWARDED IN CASH / CHEQUE THROUG H THE WEB OF FINANCIAL TRANSACTIONS AFTER INVOLVING THE LAYER OF MIDDLEMAN. NOW COMING TO THE CASE IN HAND, THE ASSESSEE WAS PA ID A DONATION OF 25 LAKH FROM HHBHRF IN THE PREVIOUS FINANCIAL YEAR 201 0-11 CORRESPONDING TO ASSESSMENT YEAR 2011-12. ACCORDINGLY, LD. CIT(EX) O BSERVED THAT THE ACTIVITIES OF THE ASSESSEE ARE NOT GENUINE AS IT IS ENGAGED IN MONEY LAUNDERING ACTIVITIES. THUS, LD. CIT(EX) PROPOSED F OR CANCELLATION OF CERTIFICATE GRANTED U/S 12AA OF THE ACT AND ACCORDINGLY ISSUED SHOW CAUSE NOTICE DATED 02.11.2015. IN COMPLIANCE THERETO, ASSESSEE SUBMITT ED THAT SHRI SWAPAN RANJAN DAS GUPTA, DIRECTOR OF HHBHRF IN HIS STATEME NT FURNISHED U/S 133A OF THE ACT NOWHERE MENTIONED THAT THE DONATION PAID TO ASSESSEE IS BOGUS. THERE IS NO EVIDENCE FOUND DURING THE SURVEY PROCEE DINGS U/S 133A OF THE ACT SUGGESTING THAT THE AMOUNT OF DONATION FOR 25 LAKH RECEIVED BY ASSESSEE IS BOGUS / FICTITIOUS. THUS, IN THE ABSENCE OF ANY COR ROBORATIVE EVIDENCE NO ITA NO.1209/KOL/2016 A.Y. 2011-12 M/S D.S. HEALTH & EDUCATION TRUST VS. CIT(EX) KO L. PAGE 4 INFERENCE CAN BE DRAWN AGAINST THE ASSESSEE MERELY ON THE BASIS OF THE STATEMENT. THE AMOUNT OF DONATION WAS RECEIVED BY A SSESSEE THROUGH BANKING CHANNEL AND SAME WAS DULY ACCOUNTED FOR IN THE BOOKS OF ACCOUNT. THE STATEMENT RECORDED U/S 133A OF THE ACT DOES NOT SPECIFY THE NAME OF THE PERSONS / ORGANIZATIONS THROUGH WHICH FINANCIAL TRA NSACTIONS WERE SETTLED BY HHBHRF. THUS, THE STATEMENT FURNISHED U/S 133A IS V AGUE IN THE ABSENCE OF ANY SPECIFIC NAME OF THE PARTIES INVOLVED IN IT. TH US, NO RELIANCE CAN BE PLACED ON SUCH STATEMENTS. THE STATEMENT OF SHRI SWAPAN RA NJAN DAS GUPTA U/S 133A OF THE ACT WAS CONFINED TO THE AMOUNT OF DONAT ION RECEIVED HHBHRF AND IT IS NOT ABOUT THE AMOUNT OF DONATION DONATED BY HHBHRF TO OTHER PARTIES INCLUDING ASSESSEE. THUS, NO ADVERSE INFERE NCE CAN BE DRAWN AGAINST THE ASSESSEE. MOREOVER THE STATEMENT U/S 133A OF TH E ACT WAS RECORDED BY REVENUE IN THE ABSENCE OF ASSESSEE. THEREFORE, IT C ANNOT BE USED AGAINST ASSESSEE WITHOUT GIVING OPPORTUNITY OF CROSS-EXAMIN ATION. THEREFORE THE REGISTRATION CERTIFICATE GRANTED U/S.12AA OF THE AC T CANNOT BE CANCELLED MERELY ON THE BASIS OF SINGLE TRANSACTIONS. 4. HOWEVER, LD. CIT(EX) DISREGARDED THE CONTENTION OF ASSESSEE AND CANCELLED THE REGISTRATION CERTIFICATE GRANTED TO A SSESSEE BY OBSERVING AS UNDER:- THE A/R WAS GIVEN COPY OF STATEMENT OF THE DIRECTOR OF HHBHRF ABOUT THE MODUS OPERANDI AND REPLY OF HHBHRF FOR BOGUS DONATI ON PAID ON 29.12.2015. THEY WERE EVEN REQUESTED TO CROSS-EXAMI NE MR. SWAAN RANJAN DAS GUPTA ON 13.01.2016. BUT A/R DID NOT AVAIL THE OPPORTUNITY TO CROSS- EXAMINE MR. DAS GUPTA. THEY DID NOT SHOW INTENTION TO PROCEED FURTHER AND JUST CLOSED THE MATTER BY MERE FILING A REPLY OF SH OW-CAUSE 13.01.2016. MERELY FILING AN APPEAL LETTER AND RECEIVING OF DONATION B Y CHEQUE IS NOT ENOUGH TO ESTABLISH THE GENUINESS OF DONATION RECEIVED. ASSES SEE TRUST HAS FAILED TO DISCHARGE THE ONUS THAT CORPUS DONATION IS GENUINE, VOLUNTARY END NOT AGAINST CASH. 6. LEGAL PROVISIONS APPLICABILITY OF SECTION 12AA(3): 'WHERE A TRUST OR ON INSTITUTION HAS BEEN GRANTED R EGISTRATION UNDER CLAUSE (B) OF SUB-SECTION(1) OR HAS OBTAINED REGIST RATION 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 OR COMMISSIONER IS SATISFIED THAT THE ACTIVITIES OF SUCH TRUST OR INSTITUTION ARE NOT GENUINE OR ARE NOT BEI NG CARRIED OUT IN ACCORDANCE WITH THE OBJECTS OF THE TRUST OR INSTITU TION, AS THE CASE MAY ITA NO.1209/KOL/2016 A.Y. 2011-12 M/S D.S. HEALTH & EDUCATION TRUST VS. CIT(EX) KO L. PAGE 5 BE, HE SHALL PASS AN ORDER IN WRITING CANCELLING TH E REGISTRATION OF SUCH TRUST OR INSTITUTION' THE MATTER BEING SO, THE REGISTRATION ALREADY GRANT ED UNDER SECTION 12AA CON BE CANCELLED ONLY UNDER TWO SPECIFIC CIRCUMSTANCES. NAMELY: (I) THE AUTHORITY IS SATISFIED THAT THE ACTIVITIES OF SUCH TRUST OR I NSTITUTION ORE NOT GENUINE, AND (II) THE AUTHORITY IS SATISFIED THAT THE ACTIVITIES OF THE ASSESSEE CUE NOT BEING CARRIED OUT IN ACCORDANCE WITH ITS DECLARED OBJECTS . IN THE INSTANT CASE OF ACTIVITIES OF THE SOCIETY AR E FOUND TO BE NOT GENUINE AND THE ACTIVITIES OF THE SOCIETY ARE NOT 0$ PER OBJECT S OF THE TRUST. MONEY LAUNDERING TROUGH RECEIPTS OF RESEARCH CONTRIBUTION S AND REPAYING THEM IN CASH THROUGH BOGUS; EXPENSE WERE NEVER THE OBJECTS OF THE TRUST AND HENCE FOUND TO BE INGENUINE AND ILLEGAL ACTIVITY. 7. CONCLUSION : 7.1 THE INTENTION OF THE LEGISLATURE TO GRANT REGIS TRATION U/S.12AA AND 80G, TO GIVE THE BENEFIT U/S.11 TO ENCOURAGE MEDICAL RELIEF TO THE POOR AD NEEDY PERSONS, PROMOTE EDUCATION AMONG MASSES AND SUPPORT TO THE POOR SECTION OF THE SOCIETY. BUT TIME AND AGAIN THESE PROVISION HAVE BEEN MISUSED FOR PERSONAL NEED AND FOR BENEFIT OF TRUSTEES/MEMBERS O F THE TRUSTS AND SOCIETIES. IN THE INSTANT CASE, THE MODUS OPERANDI OF THE TRUS TEES AND MEMBERS WERE TO CONVERT THEIR UNACCOUNTED MONEY AND CHANNELIZE THRO UGH ROUTE OF BOGUS CORPUS DONATIONS RECEIVED IN LIEU OF CASH IN TRUST/ SOCIETY ACCOUNT. OVER THE YEAR HUGE AMOUNT HAS BEEN CONVERTED BY WAY OF THIS METHODOLOGY OF ACCOMMODATION ENTRIES AND FICTITIOUS TRANSACTIONS. IN FY 2010-11, THEY HAVE CONVERTED UNACCOUNTED CASH OF RS.1.97 CR. AND RECEI VED AS CORPUS DONATION IN TRUST. 7.2. LOOKING AT THE VOLUME AND DEPTH OF THE ILLEGA L ACTIVITIES PERFORMED AND INDULGED BY THE SOCIETY TO USE THE PROVISIONS OF TH E IT ACT PROVIDING SUPPORT AND ENCOURAGEMENT TO THE ORGANIZATIONS FOR DOING TH E BENEVOLENT ACTIVITIES, ASSESSEE SOCIETY NOT ONLY OPENED PANDOAS BOX DEF YING THE SOLE BENEVOLENT PURPOSE OF PROVISIONS AS PER THE I.T. ACT. BUT ALSO CHALLENGED THE CAUSE OF THE CONSTITUTIONAL PROVISIONS BY MAINTAINING CERTAIN WE LL-NEEDED OBJECTIVES AS PER THE ACT AND PERFORMING THE REVERSE IN REALTY. 7.3. THE ASSESSEE PUMPED IN UNACCOUNTED MONEY GENER ATED IN BUSINESS THROUGH BOGUS CORPUS DONATION AND CLAIMED EXEMPTIO N U/S. 11(1)(D). THERE IS NO COMPULSION ON THE ASSESSEE TO APPLY A SINGLE PEN NY FROM CORPUS DONATION. THE ASSESSEE CHOSE THIS ROUTE TO PARK ITS UNACCOUNT ED MONEY IN THE TRUST THROUGH BOGUS CORPUS DONATION. THIS ACTIVITY IS SQU ARELY INGENUINE, ILLEGAL AND OBVIOUSLY NOT IN ACCORDANCE WITH THE OBJECTIVES OF THE TRUST. 7.4. BASED ON THE FACTS AND CIRCUMSTANTIAL EVIDENCE S AS DISCUSSED IN PARA 1 TO 6. IT CAN BE INFERRED:- A) ASSESSEE TRUST HAS RECEIVED A UM OF RS.25,00,00 0/- AS BOGUS CORPUS DONATION FROM M/5. HERBICURE HEALTHCARE BIO- HERBAL RESEARCH FOUNDATION IN LIEU OF CASH. MERELY RECEIVING DONATI ON BY CHEQUE IS NOT ENOUGH. THE TRUSTEE HAS TO ESTABLISH THE GENUINENES S OF THE DONATION. ITA NO.1209/KOL/2016 A.Y. 2011-12 M/S D.S. HEALTH & EDUCATION TRUST VS. CIT(EX) KO L. PAGE 6 B) THEY HAVE RECEIVED BOGUS CORPUS DONATION NOT ONL Y FROM HHBHRF BUT ALSO FROM VARIOUS PARTIES IN AND OUT OF KOLKATA OF RS.1.97CR. AND HAVE CHANNELIZED THEIR UNACCOUNTED CASH GENERATED I N BUSINESS. C) SOCIETY/TRUST HAS GROSSLY MISUSED THE PROVISION OF SECTION12AA AND 80G(5)(VI). D) THEY HAVE VIOLATED THE OBJECTS OF THE SOCIETY AS CONVERTING CASH IN CHEQUE IS BEYOND THE OBJECTS. E) THE ACTIVITY OF CONVERTING UNACCOUNTED INCOME OF BUSINESS AND PUMPING THEM IN THE TRUST AS CORPUS DONATION IS ILL EGAL, INGENUINE AND IMMORAL. F) CORPUS DONATION RECEIVED IS NOT VOLU9NTRAY, MERE LY AN ACCOMMODATION ENTRY AND FACTITIOUS. THEREFORE, THE CLAIM OF EXEMPTION U/S. 11(1)(D) WAS NOT ABSOLUTELY TENABLE. G) ACTIVITIES OF THE SOCIETY ARE NOT GENUINE AS WEL L AS NOT BEING CARRIED OUT IN ACCORDANCE WITH ITS OBJECTS. H) EVEN INGENUINE AND ILLEGAL ACTIVITIES CARRIED ON BY ASSESSEE THROUGH MONEY LAUNDERING DO NOT COME WITHIN THE CONCEPTUAL FRAMEWORK OF CHARITY VIS--VIS ACTIVITY OF GENERAL PUBLIC UTILIT Y ENVISAGED THE INCOME TAX ACT AS LAID DOWN IN SECTION 2(15). 8. KEEPING IN VIEW THE ABOVE, PROVISION OF SECTION 12AA(3) IS INVOKED AND REGISTRATION GRANTED U/S. 12AA IS WITHDRAWN/CANCELL ED W.E.F. 01.04.2010 FROM THE STARTING OF FINANCIAL YEAR, THE YEAR THE SOCIET Y WAS FOUND TO BE INVOLVED IN MONEY LAUNDERING THROUGH RECEIPT OF BOGUS DONATION, INGENUINE ACTIVITIES AND NOT CARRYING OUT ACTIVITIES AS PER OBJECT OF THE TR UST. AGGRIEVED BY THIS, THE ASSESSEE HAS COME UP IN APPE AL BEFORE US. 5. LD. AR FOR THE ASSESSEE FILED PAPER BOOK WHICH I S RUNNING FROM PAGES 1 TO 51 AND CITED A FEW TRIBUNALS ORDER AND STATED T HAT MANAGING TRUSTEE OF HHBHRE HAS CLEARLY ADMITTED IN HIS STATEMENT FURNIS HED U/S 133A OF THE ACT THAT IT RECEIVED NO BOGUS DONATION TILL THE FINANCI AL YEAR 2010-11. THUS, HHBHRE STARTED TAKING THE BOGUS DONATION AFTER FINA NCIAL YEAR 2010-11 BUT THE IMPUGNED DONATION RECEIVED BY ASSESSEE PERTAINI NG TO FINANCIAL YEAR 2010-11 CORRESPONDING TO ASSESSMENT YEAR 2011-12. T HUS, IT CANNOT BE HELD THAT ASSESSEE HAS RECEIVED BOGUS DONATION FROM HHBH RE. LD AR DREW OUR ATTENTION ON PAGE 48 OF THE PAPER BOOK WHERE THE DE TAILS OF THE CORPUS DONATION RECEIVED BY ASSESSEE DURING THE YEAR UNDER CONSIDERATION PLACED. ITA NO.1209/KOL/2016 A.Y. 2011-12 M/S D.S. HEALTH & EDUCATION TRUST VS. CIT(EX) KO L. PAGE 7 THE LD. AR FURTHER SUBMITTED THAT AMOUNT OF DONATIO N OF 25 LAKH WAS RECEIVED THROUGH BANKING CHANNEL. THEREFORE THE AMO UNT OF DONATION CANNOT BE HELD AS BOGUS. LD. AR IN SUPPORT OF ASSESSEES C LAIM ALSO RELIED ON THE ORDER OF CO-ORDINATE BENCH OF THIS TRIBUNAL IN THE CASE OF VISHWAROOPA CHARITY TRUST VS. CIT(EX) IN ITA NO.106/KOL/2017 DATED 15.09.2017 AND LASTLY REQUESTED THE BENCH TO CANCEL THE ORDER OF LD. CIT( EX) AND GRANT REGISTRATION CERTIFICATE. ON THE OTHER HAND, LD. DR SUBMITTED THAT ASSESSEE I S ENGAGED IN THE ACTIVITY OF MONEY LAUNDERING AND THEREFORE THE CERTIFICATE G RANTED U/S 12AA(3) WAS LIABLE FOR CANCELLATION. LD. DR IN SUPPORT OF HIS A RGUMENTS RELIED ON THE ORDER OF CO-ORDINATE BENCH IN THE CASE OF BATANAGAR EDUCATION AND RESEARCH VS. CIT(EX) IN ITA NO. 756 & 912/KOL/2016 DATE 13.09.2017. HE R EQUESTED THE BENCH TO CONFIRM THE ORDER OF LD. CIT(EX). 6. WE HAVE HEARD THE SUBMISSIONS MADE BY THE RIVAL PARTIES. WE HAVE ALSO EXAMINED THE ORDERS PASSED BY THE AUTHORITIES BELOW AND THE JUDGMENTS/ORDERS CITED BY THE REPRESENTATIVES OF BO TH THE PARTIES. AT THE THRESHOLD, IT WAS OBSERVED THAT IN THE IDENT ICAL FACTS & CIRCUMSTANCES THIS TRIBUNAL HAS DECIDED THE IDENTICAL ISSUE IN FA VOUR OF THE ASSESSEE IN THE CASE OF VISHWAROOPA CHARITY TRUST VS. CIT (EXEMPTION) IN ITA 106/KOL/2017 . AS THE ISSUE & THE FACTS ARE EXACTLY IDENTICAL OF T HE PRESENT CASE, THEREFORE WE ARE INCLINED TO FOLLOW THE SAME PRINCIPLES & REASON ING PROVIDED IN THE CASE OF VISHWAROOPA CHARITY (SUPRA) BY THIS TRIBUNAL. THE RELEVANT EXTRACT OF THE ORDER IS REPRODUCED BELOW : 12. WE HAVE HEARD THE SUBMISSIONS OF THE LD. CO UNSEL FOR THE ASSESSEE AND THE LD. DR. THE LD. COUNSEL FOR THE ASSESSEE FI RSTLY DREW OUR ATTENTION TO THE ANSWER GIVEN BY FOUNDER AND DIRECTOR OF HHBHRF TO QUESTION NO. 22 RECORDED AT THE TIME OF SURVEY CARRIED OUT IN THE B USINESS PREMISES OF HHBHRF. HE DREW OUR ATTENTION TO THE FACT THAT IN T HE SAID STATEMENT THE FOUNDER DIRECTOR HAD SPECIFICALLY REFERRED TO A PER IOD FROM WHICH BOGUS DONATIONS WERE RECEIVED BY HHBHRF VIZ., AFTER A.Y.2 010-11.HE DREW OUR ATTENTION TO THE FACT DONATION WAS GIVEN TO THE ASS ESSEE BY HHBHRF THROUGH CHEQUE DATED 03.03.2011 WHICH WAS ADMITTEDLY PRIOR TO THE PERIOD IN WHICH BOGUS DONATIONS WERE RECEIVED BY HHBHRF. ACCORDING TO HIM THE STATEMENT RECORDED AT THE TIME OF SURVEY BASED ON WHICH THE I MPUGNED ORDER WAS PASSED WAS NOT INCRIMINATING, SO FAR THE ASSESSEE I S CONCERNED. ACCORDING TO HIM THEREFORE THE VERY BASIS ON WHICH THE IMPUGNED ORDER HAS BEEN PASSED ITA NO.1209/KOL/2016 A.Y. 2011-12 M/S D.S. HEALTH & EDUCATION TRUST VS. CIT(EX) KO L. PAGE 8 BY THE LD. CIT(EX), KOLKATA IS UNSUSTAINABLE. HIS N EXT SUBMISSION WAS THAT THERE WAS NO OTHER INCRIMINATING MATERIAL ON THE BA SIS OF WHICH IT CAN BE CONCLUDED THAT THE ASSESSEE GAVE CASH AND IN RETURN GOT DONATION OF RS.5 LAKHS AND IT WAS THE ASSESSEE WHO ARRANGED THROUGH THE BROKERS FOR GETTING BOGUS DONATIONS. IT WAS ALSO HIS SUBMISSION THAT TH ERE IS NO EVIDENCE OF THE ASSESSEE HAVING INDULGED IN MONEY LAUNDERINGS. THE ASSESSEE BROUGHT TO OUR NOTICE THAT ASSESSEE HAS BEEN CARRYING OUT CHAR ITABLE ACTIVITIES. 13. ACCORDING TO THE LD. AR, THE LD. CIT(EX), K OLKATA HAS NO DIRECT EVIDENCE AGAINST THE ASSESSEE WARRANTING CANCELLATION OF REG ISTRATION U/S 12AA (3) OF THE ACT. IT WAS SUBMITTED BY HIM THAT REGISTRATION GRANTED TO THE ASSESSEE CAN BE CANCELLED U/S 12AA(3) ONLY ON CONDITIONS BEING S ATISFIED (A) THAT THE ACTIVITIES OF THE TRUST OF INSTITUTION ARE NOT GENU INE (B) THAT THE ACTIVITIES OF THE TRUST OR INSTITUTION ARE NOT BEING CARRIED OUT IN A CCORDANCE WITH THE OBJECTS OF THE TRUST OR INSTITUTION. THERE IS NO EVIDENCE BROU GHT ON RECORD WHATSOEVER TO SHOW EITHER OF THE AFORESAID CONDITIONS HAVE BEEN S ATISFIED 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 AN D 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 S URVEY IN REPLY TO QUESTION NO.22 IS SUFFICIENT TO COME TO A CONCLUSION THAT TH E ASSESSEE HAS INDULGED IN MONEY LAUNDERING. ALTERNATIVELY IT WAS HIS SUBMISSI ON THAT THE ASSESSEE SHOULD BE AFFORDED AN OPPORTUNITY OF CROSS EXAMINAT ION 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 SHRISWAP AN 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 RE GARD TO GENUINENESS OF THE DONATIONS GIVEN BY HHBHRF. IT CAN BE A MONEY LAUNDE RINGS INDULGED BY A THIRD PARTY, WHO GAVE DONATIONS TO THE ASSESSEE BY USING THE MIDDLEMEN CONNECTED WITH HHBHRF. SO FAR AS THE ASSESSEE IS CO NCERNED IT RECEIVED DONATION FROM HHBHRF A SUM OF RS.5 LAKH DULY ACCOUN TED THE SAME IN PROFIT AND LOSS ACCOUNT AS CORPUS DONATION. THERE IS NO EV IDENCE WHATSOEVER BROUGHT ON RECORD TO SHOW THAT THE CASH WAS PAID BY THE ASSESSEE WHICH IN TURN REACHED THE HANDS OF HHBHRF WHICH WAS RETURNED IN THE FORM OF DONATION TO THE ASSESSEE AFTER RETAINING THE COMMIS SION. AS WE HAVE ALREADY OBSERVED THAT THE ANSWER TO QUESTION NO.22 GIVEN BY SHRI SWAPAN RANJAN DASGUPTA REFERRED TO DONATIONS GIVEN IN THE FINANCI AL YEAR 2011-12 AS BOGUS DONATIONS. WITH REGARD TO THE DONATIONS RECEIVED/GI VEN PRIOR TO 31.03.2011 THERE IS NO REFERENCE TO SUCH DONATIONS GIVEN OR RE CEIVED BY HHBHRF BEING IN THE NATURE OF BOGUS DONATIONS. THE ASSESSEE HAD RECEIVED THE DONATION FROM HHBHRF ON 03.03.2011. IT IS THEREFORE NOT POSS IBLE TO PLACE RELIANCE ON THE STATEMENT RECORDED AT THE TIME OF SURVEY AND CO ME TO A CONCLUSION THAT THE ASSESSEE HAS BEEN INDULGING IN MONEY LAUNDERING . 16. IN ANSWER TO QUESTION NO.23 SHRI SWAPAN RANJ AN DASGUPTA FOUNDER DIRECTOR OF HHBHRF HAS MADE REFERENCE TO CERTAIN MI DDLE MEN WHO ARE ITA NO.1209/KOL/2016 A.Y. 2011-12 M/S D.S. HEALTH & EDUCATION TRUST VS. CIT(EX) KO L. PAGE 9 ENGAGED IN MONEY LAUNDERING USING HHBHRF AS A MEDIU M FOR MONEY LAUNDERING. THERE IS NO EVIDENCE BROUGHT ON RECORD TO SHOW ANY CONNECTION BETWEEN THOSE BROKERS AND THE ASSESSEE. IN THE ABSE NCE OF SUCH CORROBORATIVE EVIDENCE, IT IS NOT POSSIBLE TO COME TO ANY CONCLUSION THAT THE ASSESSEE INDULGED IN MONEY LAUNDERING AND THAT THE DONATION RECEIVED BY THE ASSESSEE FROM HHBHRF WAS A BOGUS DONATION. IN FACT ON IDENTICAL FACTS THIS TRIBUNAL IN THE CASE OF SRI MAYAPUR DHAM PILGRIM AN D VISITORS TRUST (SUPRA) CAME TO THE CONCLUSION THAT CANCELLATION OF REGISTR ATION U/S 12AA CANNOT BE SUSTAINED. IN FACT IN THE CASE OF SRI MAYAPUR DHAM PILGRIM AND VISITORS TRUST (SUPRA) THE FACTUAL POSITION WAS THAT THE DONOR HAD MADE A REFERENCE TO THE NAME OF THAT ASSESSEE IN A LIST OF BOGUS DONATIONS GIVEN BY IT IN AN APPLICATION FILED BEFORE THE SETTLEMENT COMMISSION OF INCOME TA X. STILL THE TRIBUNAL CAME TO THE CONCLUSION THAT THERE WAS ABSENCE OF MATERIA L TO SHOW THAT THE CONCERNED TRUST HAD INDULGED IN MONEY LAUNDERING. W E ARE OF THE VIEW THAT IN THE CASE OF THE ASSESSEE IN THIS APPEAL STANDS ON A MUCH BETTER FOOTING THAN IN THE CASE OF THE ASSESSEE OF SRI MAYAPUR DHAM PIL GRIM AND VISITORS TRUST (SUPRA). 17. 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 GENUINE OR THE ACTIVITIES OF THE TRUST ARE NOT BEING CARRIED OUT IN ACCORDANC E WITH THE OBJECTS OF THE TRUST. THERE IS NEITHER AN ALLEGATION IN THE IMPUGN ED ORDER NOR FINDING THAT ANY OF THE AFORESAID CONDITIONS EXIST IN THE CASE OF TH E ASSESSEE. WE THEREFORE ARE OF THE VIEW THAT THE CANCELLATION OF REGISTRATION G RANTED 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. THUS AFTER CONSIDERING THE ABOVE ORDER WE REFRAIN O URSELVES FROM TAKING ANY CONTRARY VIEW IN THE CASE ON HAND. 6.1 SIMILARLY WE ALSO OBSERVE THAT THE FACTS OF THE CASE I.E. BATANAGAR EDUCATION & RESEARCH TRUST (SUPRA)) AS RELIED BY TH E LD. DR ARE NOT APPLICABLE IN THE INSTANT CASE. IN THE CASE RELIED BY THE LD. DR, THAT THERE WAS A SURVEY ON THE ASSESSEE ON 03.09.2015 AND ACCORDIN GLY STATEMENT U/S. 133A OF THE ACT WAS RECORDED OF SHRI RABINDRA NATH LAHAR I, MANAGING TRUSTEE OF BATANAGAR EDUCATION AND RESEARCH TRUST WHEREIN IT W AS ADMITTED THAT THE TRUST HAS PAID CASH AND GOT DONATION IN THE RETURN. THUS, THE HONBLE TRIBUNAL CONFIRMED THE CANCELLATION ORDER OF LD. CIT(EX). BU T THE IN THE CASE ON HAND, NO SUCH ADMISSION WAS MADE BY THE ASSESSEE THAT IT GOT DONATION AGAINST THE CASH. THUS, WE HOLD THAT THE CASE LAW RELIED BY THE LD. DR CANNOT BE APPLICABLE TO THE INSTANT FACTS OF THE CASE. ITA NO.1209/KOL/2016 A.Y. 2011-12 M/S D.S. HEALTH & EDUCATION TRUST VS. CIT(EX) KO L. PAGE 10 AFTER CONSIDERING THE FACT IN TOTALITY AS DISCUSSED ABOVE, WE HOLD THAT THE IMPUGNED ORDER PASSED BY LD. CIT(EX) CANCELLING THE REGISTRATION CERTIFICATE GRANTED U/S. 12AA OF THE ACT IS NOT SUSTAINABLE. WE ORDER ACCORDINGLY. HENCE, THE GROUND OF ASSESSEES APPEAL IS ALLOWED. 7. IN THE RESULT, ASSESSEES APPEAL STANDS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT 14/ 02/2018 SD/- SD/- ($ &) ( &) (N.V.VASUDEVAN) (WASEEM AHMED) (JUDICIAL MEMBER) (ACCOUNTANT MEMBER) KOLKATA, *DKP, SR.P.S (- 14 / 02 /201 8 / COPY OF ORDER FORWARDED TO:- 1. /APPELLANT-M/S D.S. HEALTH & EDUCATION TRUST, 160, M.G. ROAD, 1 ST FL, KOL-007 2. /RESPONDENT-CIT(EX), 10B, MIDDLETON ROW, 6 TH FLOOR, KOLKATA-71 3. 3 4 / CONCERNED CIT KOLKATA 4. 4- / CIT (A) KOLKATA 5. 7 $$3, 3, / DR, ITAT, KOLKATA 6. < / GUARD FILE. BY ORDER/ , /TRUE COPY/ SR. PRIVATE SECRETARY, HEAD OF OFFICE/DDO 3,