Ballaram Hanumandas Charitable Trust, Kolkata V. CIT(Exemptions), Kol., Kolkata

ITA 431/KOL/2017

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 1451 (ITAT-KOLKATA)
• Duration Of Justice: 6 month(s) 13 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 15-09-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2012-2013
• Appeal Filed On: 03-03-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: A K TIBREWAL
• Assessee Lawyers: T VARKEY JUDIC IA L M EMBER
• Keywords: Charitable institution; Principle of natural justice; Opportunity of cross examination; Accommodation entries; Benefit of exemption; Cancellation of registration
• Section: 133A; 12A; 12AA; 131

Judgement Text

, B , IN THE INCOME TAX APPELLATE TRIBUNAL KOLKATA BENCH B KOLKATA BEFORE SHRI ABY.T VARKEY, JUDICIAL MEMBER AND SHRI WASEEM AHMED, ACCOUNTANT MEMBER ITA NO. 431 / KOL / 2017 ASSESSMENT YEAR :2012-13 BALLARAM HANUMANDAS CHARITABLE TRUST, 1, OLD COURT HOUSE CORNER, 4 TH FLOOR, TOBACCO HOUSE, KOLKATA-001 [ PAN NO.AAATB 5411 C ] V/S . THE COMMISSIONER OF INCOME TAX (EXEMPTIONS), 10B, MIDDLETON ROW, 6 TH FLOOR, KOLKATA-71 /APPELLANT .. / RESPONDENT /BY APPELLANT SHRI A.K. TIBREWAL, FCA & SHRI AMIT AGARWAL, ADVOCATE /BY RESPONDENT SHRI G. HANGSHING, CIT-DR /DATE OF HEARING 02-08-2017 /DATE OF PRONOUNCEMENT 15-09-2017 / 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 22.12.2016 U/S 12AA(3) OF THE INCOME TAX ACT, 1961 (HEREINAFTER RE FERRED TO AS THE ACT). SHRI A.K. TIBREWAL AND SHRI AMIT AGARWAL, LD. AUTHO RIZED REPRESENTATIVE APPEARED ON BEHALF OF ASSESSEE AND SHRI G. HANGSHIN G, LD. DEPARTMENTAL REPRESENTATIVE REPRESENTED ON BEHALF OF REVENUE. 2. GROUNDS RAISED BY ASSESSEE PER ITS APPEAL AS UND ER:- 1.THAT, ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE ORDER DATED 22.12.2016 PASSED BY THE LEARNED COMMISSIONER OF IN COME TAX ITA NO.431/KOL/2017 A.Y. 2012-13 BALLARAM HANUMANDAS CHARITABLE TRUST VS. CIT (EX) KOL. PAG E 2 (EXEMPTIONS), KOLKATA CANCELLING THE REGISTRATION O F THE APPELLANT ASSESSEE TRUST UNDER SECTION 12AA(3) OF THE INCOME TAX ACT, 1961 IS WITHOUT JURISDICTIONAL, ILLEGAL, INVALID, BAD-IN-LAW, UNREA SONABLE AND/OR OTHERWISE PERVERSE. 2.THAT THE LEARNED COMMISSIONER OF INCOME TAX (EXEM PTIONS), KOLKATA ERRED IN ARBITRARILY ALLEGING THAT THE ACTIVITIES OF THE APPELLANT ASSESSEE TRUST WERE NOT GENUINE AND WAS NOT BEING CARRIED OUT IN ACCORD ANCE WITH THEIR OBJECTIVE, IGNORING THE ADMITTED FACT THAT THE SAID TRUST WAS INVOLVED IN THE ACTIVITIES OF IMPARTING EDUCATION IN ACCORDANCE WITH THE OBJECTIV ES LAID DOWN IN ITS TRUST DEED. 3. THAT THE LEARNED COMMISSIONER OF INCOME TAX (EXE MPTIONS), KOLKATA ERRED IN CANCELLING THE REGISTRATION OF THE APPELLA NT ASSESSEE TRUST ON THE BASIS OF FOLLOWING FINDINGS AND OBSERVATIONS WHICH ARE ARBITRARY, PERVERSE AND CONTRARY TO THE FACTS AND EVIDENCES ON RECORD: (I) THE APPELLANT ASSESSEE TRUST HAD RECEIVED BOGUS DONATIONS OF RS.68.50LAKHS FROM M/S SCHOOL OF HUMAN GENETICS AND POPULATION HEALTH WHICH WAS ALLEGEDLY INVOLVED IN THE BUSINESS OF MONEY LAUNDERING AND PROVIDING ACCOMMODATION ENTRY OF DON ATIONS AGAINST COMMISSION. (II) THE APPELLANT ASSESSEE TRUST HAD GIVEN PRE-ARR ANGED ACCOMMODATION ENTRY BY RECEIVING BOGUS DONATIONS OF RS.20 LAKHS FROM KM/S QUADEYE SECURITIES PVT LTD IN FY 2011-12 RELEVANT TO THE ASSESSMENT YEAR 2012-13. (III) THE FUNDS OF THE TRUST HAD BEEN MIS-UTILISED AND ROUTED FOR NON- CHARITABLE ACTIVITIES BY WEB OF FINANCIAL TRANSACTI ONS INVOLVING GROUP COMPANIES IN WHICH THE TRUSTEES AND RELATIVES ARE D IRECTORS. (IV) THE APPELLANT ASSESSEE TRUST WAS INVOLVED IN M ONEY LAUNDERING BY ACCEPTING BOGUS DONATIONS AND RETURNING THE SAME TO DONORS. 4. THAT THE LEARNED COMMISSIONER OF INCOME TAX (EXE MPTIONS),KOLKATA MISDIRECTED HIMSELF IN LAW IN CANCELLING THE REGIST RATION OF THE APPELLANT ASSESSEE TRUST ON THE BASIS OF THE STATEMENT OF TH IRD PARTIES WITHOUT ALLOWING OPPORTUNITY OF CROSS-EXAMINATION. 5. THAT THE LEARNED COMMISSIONER OF INCOME TAX (EXE MPTIONS), KOLKATA ERRED IN CANCELLING THE REGISTRATION OF THE APPELLA NT ASSESSEE TRUST ON THE ALLEGED GROUND THAT BOGUS DONATIONS WERE RECEIVED F ROM M/S SCHOOL OF HUMAN GENETICS AND POPULATION HEALTH WHOSE APPROVAL UNDER SECTION 35(1)(II) OF THE INCOME TAX ACT, 1961 WAS SUBSEQUEN TLY WITHDRAWN WITH EFFECT FROM 15 TH SEPTEMBER, 2016. 3. THE INTER-RELATED EFFECTIVE ISSUE RAISED BY ASSE SSEE IS THAT LD. CIT(EX) ERRED IN CANCELLING THE REGISTRATION CERTIFICATE UN DER THE PROVISION OF 12AA(3) OF THE ACT ON THE ALLEGATION OF ILLEGAL ACTIVITIES CAR RIED ON BY THE ASSESSEE. 4. BRIEFLY STATED FACTS ARE THAT ASSESSEE IS A TRU ST WHICH WAS REGISTERED VIDE DEED OF TRUST DATED 8 TH JUNE 1977. SUBSEQUENTLY THE ASSESSEE WAS ACCORDED THE REGISTRATION CERTIFICATE U/S. 12A OF T HE ACT VIDE NO. T-81/WB.VII ITA NO.431/KOL/2017 A.Y. 2012-13 BALLARAM HANUMANDAS CHARITABLE TRUST VS. CIT (EX) KOL. PAG E 3 OF 1979-80 DATED 11.09.1979. THE ASSESSEE ENGAGED I N PROVIDING EDUCATION IN VILLAGE BAHAL UNDER DISTRICT BHIWANI IN STATE OF HARYANA SINCE 1987. A SURVEY OPERATION WAS CONDUCTED U/S 133 OF THE ACT BY INVESTIGATION WING OF KOLKATA DATED 27.01.2015 ON M/S SCHOOL OF HUMAN GEN ETICS & POPULATION HEALTH (SHG & PH FOR SHORT). DURING THE COURSE OF S URVEY OPERATION, IT WAS REVEALED THAT SHG & PH ENGAGED IN THE ACTIVITY OF M ONEY LAUNDERING AND PROVIDING ACCOMMODATING ENTRIES TO DIFFERENT ORGANI ZATIONS IN THE MANNER AS DETAILED UNDER:- I) IT WAS ACCEPTING BOGUS DONATIONS FROM VARIOUS OR GANIZATIONS AND SAME WAS RETURNED BACK THROUGH THE WEB OF FINANCIAL TRANSACTIONS INVOLVING VARIOUS MEDIATORS AND ORGANIZATIONS. II) IT WAS ACCEPTING CASH AND TRANSFERRING THE SAME IN THE FORM OF DONATION THROUGH THE WEB OF FINANCIAL TRANSACTIONS. IN EITHER CASE, SHG & PH WAS CHARGING COMMISSION FO R PROVIDING THE ABOVE STATED ACCOMMODATION ENTRIES. DURING SURVEY AT SHG & PH IT WAS ASCERTAINED THAT A SSESSEE-TRUST HAS RECEIVED DONATION AMOUNTING TO 68.50 LAKH FROM SHG & PH THROUGH BANKING CHANNEL AGAINST THE CASH PROVIDED TO SHG & PH DURIN G THE FINANCIAL YEAR 2013-14. ACCORDINGLY, LD. CIT(EX) OPINED THAT ASSES SEE IS ENGAGED IN ILLEGAL ACTIVITIES WHICH ARE NOT CERTAINLY AS PER THE OBJEC TS OF THE TRUST. BESIDES THE ABOVE, IT WAS ALSO OBSERVED THAT ASSESS EE HAS ALSO ACCEPTED BOGUS DONATION FOR 20 LAKH IN THE FINANCIAL YEAR 2011-12 FROM M/S QAD EYE SECURITIES PVT. LTD. (QSP FOR SHORT). THIS FACT OF BOGUS DONATION WAS ASCERTAINED ON THE BASIS OF THE STATEMENT RECORDED U/S. 131 OF THE ACT OF THE DIRECTOR OF THE COMPANY, NAMELY, SHRI DINESH KUMA A GARWAL VIDE DATED 04.12.2015. THE NAME OF THE ASSESSEE IS VERY MUCH R EFLECTING IN QUESTION NO. 18 OF THE STATEMENT GIVEN BY THE DIRECTOR OF QS P. THE RELEVANT EXTRACT OF THE QUESTION NO. 18 AND ITS REPLY STANDS AS UNDER:- Q18. PLEASE FURNISH DETAILS OF DONATION MADE TO VA RIOUS CHARITABLE TRUST/ORGANISATION DURING F.Y 2009-10 TO 2014-15. ANS. SIR, THE DETAILS OF DONATION MADE BY M/S QUADE YE SECURITIES PVT LTD. & QUADEYE TRADING ARE AS UNDER: ITA NO.431/KOL/2017 A.Y. 2012-13 BALLARAM HANUMANDAS CHARITABLE TRUST VS. CIT (EX) KOL. PAG E 4 DETAILS OF DONATION PAID BY QUADEYE SECURITIES PVT. LTD & QUADEYE TRADING (PARTNERSHIP FIRM) DONATION PAID DURING THE F.Y TOTAL SL.NO. NAME OF TRUST 2014-15 2013-14 2012-13 2011-1 2 2010-11 2009-10 14 BALLARAM HANUMANDAS CHARITABLE TRUST - - - - 20,00,000 - - - - - - 2000000/- THE DIRECTOR OF QSP DESCRIBED THE MODUS OPERANDI FOR THE IMPUGNED BOGUS DONATION IN QUESTION NO. 19. THE RELEVANT EXTRACT O F THE QUESTION NO. 19 AND ITS REPLY STANDS AS UNDER:- Q.19. PLEASE STATE HOW DID YOU DECIDE TO MAKE SUCH DONATIONS TO VARIOUS TRUST/ORGANIZATION. ANS. SIR, IT WAS A PREARRANGED ACCOMMODATION ENTRY IN FORM OF BOGUS DONATION. THE SAME WAS ARRANGED BY MR. PRADEEP KUMA R AGARWAL & MR. AJAY AGARWAL, CA WHO IS ALSO AUDITOR OF MY GROUP CONCERN . SIR, DONATION WAS MADE BY QUADEYE SECURITIES PVT LT THROUGH CHEQUE/RT CG IN TURN THE ABOVE MENTIONED PERSONS RETURNED THE AMOUNT IN CASH AFTER DEDUCTING THEIR COMMISSION. AS PER THE STATEMENT OF THE DIRECTOR OF QSP, CHARTE RED ACCOUNTANT, PRADIP KUMAR AGARWAL AND CA, SHRI AJOY AGARWAL WERE ACTING AS CONDUIT IN THE ABOVE BOGUS TRANSACTIONS. IN VIEW OF THE ABOVE, ASSESSEE WAS SHOW CAUSED BY L D. CIT(EX) FOR CANCELLING THE REGISTRATION U/S.12AA(3) OF THE ACT ON THE GROUND OF ILLEGAL ACTIVITIES. IN COMPLIANCE THERETO, ASSESSEE SUBMITTED THAT IT H AS RECEIVED NO BOGUS DONATION AND NO MONEY OF WHATSOEVER WAS RETURNED BA CK. ALL THE MONEY OF DONATIONS WAS RECEIVED THROUGH BANKING CHANNEL. HOW EVER, LD. CIT (EX) DISREGARDED THE SUBMISSION MADE BY ASSESSEE AND CAN CELLED THE REGISTRATION CERTIFICATE OF ASSESSEE BY OBSERVING AS UNDER:- IT IS PERTINENT TO MENTION HERE THAT THE CENTRAL BO ARD OF DIRECT TAXES VIDE ITS NOTIFICATION NO. 82/2016/F.NO.203/64/2009/ITA.II DA TED 15 TH SEPTEMBER 2016 HAS WITHDRAWN THE APPROVAL U/S. 35(1)(II) OF THE IT ACT 1961 IN RESPECT OF M/S SCHOOL OF HUMAN GENETICS AND POPULATION HEALTH FOR INDULGING IN MONEY LAUNDERING AND PROVIDING ACCOMMODATION ENTRIES. INDULGING IN INGENUINE ACTIVITIES WHICH IS NOT AT P AR 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 IT ACT, 19 61 IS AS FOLLOWS:- ITA NO.431/KOL/2017 A.Y. 2012-13 BALLARAM HANUMANDAS CHARITABLE TRUST VS. CIT (EX) KOL. PAG E 5 WHERE A TRUST OR AN INSTITUTION HAS BEEN GRANTED R EGISTRATION UNDER CLAUSE (B) OF SUB-SECTION (1) [OR HAS OBTAINED REGI STRATION 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 BE, HE SHALL PASS AN ORDER IN WRITING CANCELLING TH E REGISTRATION OF SUCH TRUST OR INSTITUTION. CONSIDERING THE ACTIVITIES OF THE ASSESSEE NOT GENU INE AND ARE NOT BEING CARRIED OUT IN ACCORDANCE WITH THE OBJECTIVES OF TH E SOCIETY, THE REGISTRATION U/S. 12A OF THE IT ACT 1961 VIDE ORDER NO.T-81/W.B. VII OF 1979-80 DATED 11.09.979 IS HEREBY CANCELLED U/S. 12A(3) OF THE IT ACT 1961 W.E.F. 01.04.2011 I.E. FY 2011-12 RELEVANT TO A.Y. 2012-13, AS THE FI RST VIOLATION TOOK PLACE IN THE FY 2011-12. BEING AGGRIEVED BY THIS ORDER OF LD. CIT(EX) ASSESS EE CAME IN APPEAL BEFORE US. 5. BEFORE US LD. AR FOR THE ASSESSEE FILED PAPER BO OK WHICH IS RUNNING FROM PAGES 1 TO 65 AND SUBMITTED THAT REGISTRATION U/S.12A OF THE ACT WAS CANCELLED BY LD. CIT (EX) ON THE GROUND THAT ASSESS EE WAS ENGAGED IN ILLEGAL ACTIVITIES. THE VIEW OF THE LD.CIT(EX) THAT ASSESSE E IS ENGAGED IN ILLEGAL ACTIVITIES IS BASED ON THE STATEMENT GIVEN BY TWO P ARTIES AS DETAILED BELOW:- 1) AUTHORIZED REPRESENTATIVE OF SGH & PH 2) DIRECTOR OF QSP HOWEVER, LD. CIT(EX) NEVER PROVIDED ANY OPPORTUNITY TO ASSESSEE FOR CROSS- EXAMINED OF THE STATEMENTS OF THE AFORESAID PARTIES . THEREFORE, IMPUGNED ORDER OF LD. CIT (EX) FOR CANCELLING THE REGISTRATI ON CERTIFICATE IS NOT SUSTAINABLE IN EYES OF LAW. LD. AR IN THIS CONNECTI ON RELIED ON THE ORDER OF CO- ORDINATE BENCH OF THIS TRIBUNAL IN THE CASE OF SRI MAYAPUR DHAM PILGRIM AND VISITORS TRUST VS. CIT (EX) IN ITA NO.1165/KOL/2016 DATED 03.05.2017. LD. AR FURTHER SUBMITTED THAT WHATEVER DONATION WAS RECEIVED BY ASSESSEE- TRUST DURING THE FINANCIAL YEAR 2013-14 HAS BEEN UT ILIZED IN MAKING THE ADDITION TO THE FIXED ASSET OF THE ASSESSEE-TRUST. DURING TH E YEAR TOTAL ADDITION IN FIXED ASSETS WAS MADE FOR 38.02 CRORES. LD. AR FURTHER SUBMITTED THAT DIRECTO R OF QSP HAS GIVEN CONTRADICTORY STATEMENT IN QUESTION N O. 37 OF THE STATEMENT ITA NO.431/KOL/2017 A.Y. 2012-13 BALLARAM HANUMANDAS CHARITABLE TRUST VS. CIT (EX) KOL. PAG E 6 WHEREIN IT WAS STATED THAT PUSHPA DEVI BANSAL CHARI TABLE TRUST IS ACTIVELY ENGAGED FOR UPLIFTMENT OF POOR PEOPLE. THEREFORE TH E DONATION MADE TO IT WAS A GENUINE DONATION. THE RELEVANT EXTRACT OF THE QUE STION NO. 37 AND ITS REPLY STANDS AS UNDER:- Q37 . IT IS SEEN FROM LOOSE SHEET INVENTORISED VIDE ID MARKED QSPL/O1 THAT VARIOUS DONATIONS WAS RECEIVED BY PUSHPA DEVI BANSAL CHARITABLE TRUST. PLEASE EXPLAIN NATURE OF CHARITABLE ACTIVITY BEING DONE BY THE SAID TRUST AND ALSO FURNISH NAME OF THE TRUSTEE. ANS . SRI, PUSHPA DEVI BANSAL CHARITABLE TRUST IS ACTIV ELY INVOLVED IN SOCIAL WELFARE ACTIVITIES AND UPLIFTMENT OF POOR PE OPLE AND ALSO DONATE TO RAJASTHAN GO KALYAN A TRUST TO SAVE HELPLESS COWS . THE GOSHALA IS SITUATED AT BARASAT, KOLKATA. SIR, ME AND MY FATHER SRI SANT LAL BANSAL ARE TRUSTEE. IT WAS ALSO SUBMITTED THAT THE LEARNED CIT(EX) FAIL ED TO PROVIDE THE OPPORTUNITY OF CROSS EXAMINATION AS DESIRED BY THE ASSESSEE. TH E LEARNED AR IN SUPPORT OF HIS CLAIM HAS RELIED ON THE ORDER OF SPECIAL BEN CH OF HONBLE BOMBAY TRIBUNAL IN THE CASE OF GTC INDUSTRIES LTD VERSUS A CIT IN ITA NO. 5996/MUM/1993 & 1055 & 1056/BOM/1994 WHERE IT WAS HELD AS UNDER:- SO FAR AS THE ISSUE OF VIOLATION OF PRINCIPLES OF NATURAL JUSTICE IS CONCERNED, THE SAME HAS BEEN DULY COMPLIED WITH IN TERMS OF DIRECTIONS CONTAINED IN THE EARLIER ORDERS OF THE TRIBUNAL WHI CH HAS BEEN FINALLY SETTLED IN SEVERAL ROUNDS OF LITIGATION BEFORE THIS SPECIAL BE NCH. AS PER THE DIRECTION OF THE TRIBUNAL, FINALLY, THE REVENUE WAS REQUIRED TO PROVIDE CERTAIN MATERIAL AND CROSS-EXAMINATION OF CERTAIN WITNESS. IN COMPLIANCE THEREOF, THE REVENUE HAS PROVIDED THE OPPORTUNITY TO CROSS-EXAMINE IN THE CA SE OF FIVE PERSONS AS PER THE LIST GIVEN BY THE ASSESSEE. THE LD. COUNSEL FOR THE ASSESSEE ALSO RELIED ON THE JUDGMENT OF HONBLE APEX COURT IN THE CASE OF STATE OF KERALA VS. K.T. SHADULI YUSUFF ETC. REPORTED IN 1977 AIR 1627, 1977 SCR (3) 233 WHEREIN IT WAS HELD AS UNDER : .. SUCH AN ISSUE CAN ONLY BE DETERMINED AFTER EX AMINATION OF THE ACCOUNTS OF BOTH THE PARTIES AND AFTER AFFORDING TH E ASSESSEE THE RIGHT TO CROSS-EXAMINE THE WHOLESALE DEALERS CONCERNED, P ARTICULARLY WHEN THE ASSESSEE MAKES A SPECIFIC PRAYER TO THIS EFFECT . ACCORDING TO THE LD. AR THE STATEMENT RECORDED AT T HE TIME OF SURVEY BASED ON WHICH THE IMPUGNED ORDER WAS PASSED WAS NOT INCRIMI NATING, SO FAR THE ITA NO.431/KOL/2017 A.Y. 2012-13 BALLARAM HANUMANDAS CHARITABLE TRUST VS. CIT (EX) KOL. PAG E 7 ASSESSEE IS CONCERNED. ACCORDING TO HIM THEREFORE T HE VERY BASIS ON WHICH THE IMPUGNED ORDER HAS BEEN PASSED BY THE C.I.T.(EX EMPTIONS), KOLKATA IS UNSUSTAINABLE. HIS NEXT SUBMISSION WAS THAT THERE W AS NO OTHER INCRIMINATING MATERIAL ON THE BASIS OF WHICH IT CAN BE CONCLUDED THAT THE ASSESSEE RECEIVED BOGUS DONATION. IT WAS ALSO IN HIS SUBMISSION THAT THERE IS NO EVIDENCE OF THE ASSESSEE HAVING INDULGE IN MONEY LAUNDERINGS. ACCORDING TO THE LD. AR, THE LD.CIT(EX), KOLKATA HA S NO DIRECT EVIDENCE AGAINST THE ASSESSEE WARRANTING CANCELLATION OF REGISTRATIO N U/S 12AA (3) OF THE ACT. IT WAS SUBMITTED BY HIM THAT REGISTRATION GRANTED TO T HE ASSESSEE CAN BE CANCELLED U/S 12AA(3) OF THE ACT ONLY ON CONDITIONS BEING SATISFIED (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 . ON THE OTHER HAND, LD. DR VEHEMENTLY RELIED ON THE ORDER OF LD. CIT (EX) AND HE REQUESTED THE BENCH TO RESTORE THE MATTER TO THE FILE OF LD. CIT(EX) FOR THE PURPOSE OF CROSS-EXAMINATION OPPORTUNITY TO ASSESSE E. 6. WE HAVE HEARD THE RIVAL CONTENTIONS OF BOTH THE PARTIES AND PERUSED AND CAREFULLY CONSIDERED THE MATERIAL ON RECORD; IN CLUDING THE JUDICIAL PRONOUNCEMENTS CITED AND PLACED RELIANCE UPON. IN T HE INSTANT CASE, THE REGISTRATION CERTIFICATE U/S 12A OF THE ACT WAS CAN CELLED BY LD. CIT (EX) ON THE GROUND THAT ASSESSEE-TRUST WAS ENGAGED IN MONEY LAU NDERING ACTIVITIES. THE REASONS FOR FORMING THE OPINION THAT THE ASSESSEE W AS ENGAGED IN MONEY LAUNDERING ACTIVITIES ARE BASED ON THE FACTS AS DET AILED UNDER : I) ACCEPTANCE OF DONATION FROM SHG & PH OF 68.60 LAKH II) ACCEPTANCE OF DONATION FOR 20 LAKH FROM QSP ITA NO.431/KOL/2017 A.Y. 2012-13 BALLARAM HANUMANDAS CHARITABLE TRUST VS. CIT (EX) KOL. PAG E 8 THE ARGUMENT OF THE LD. AR IS THAT IT HAS NOT RECEI VED ANY BOGUS DONATION FROM THE ABOVE PARTIES. ALL DONATIONS WERE RECEIVED THRO UGH BANKING CHANNEL. THE LD. AR ALSO SUBMITTED THAT DONATION FROM QSP WAS RE CEIVED ONLY FOR RS.10 LACS ONLY. THE FIGURE OF DONATION OF RS. 20 LACS FR OM QSP IS INCORRECT. 6.1 WE ALSO OBSERVE IN THE INSTANT CASE THE OPPORTU NITY OF CROSS EXAMINATION WAS VERY MUCH REQUIRED IN THE PRESENCE OF ASSESSEE AND OTHER PARTIES. THUS THE LD. CIT(EX) IN THE INSTANT CASE E RRED IN NOT GIVING THE OPPORTUNITY OF CROSS EXAMINATION. THUS THE CASES LA WS CITED BY THE LD. AR FOR THE OPPORTUNITY OF CROSS EXAMINATION IS VERY MUCH A PPLICABLE TO THE INSTANT CASE. THERE WAS A SPECIFIC REQUEST MADE BY THE ASSE SSEE FOR THE OPPORTUNITY OF CROSS-EXAMINATION AS EVIDENT FROM THE REPLY OF A SSESSEE VIDE LETTER DATED 01.02.2016 WHICH IS ENCLOSED ON THE PAGES 16 TO 19 OF THE PAPER BOOK. THE RELEVANT EXTRACT OF THE REPLY IS REPRODUCED BELOW:- IT IS APPARENT FROM THE STATEMENT OF SHRI DINESH AG ARWAL THAT HE IS IN THE BUSINESS OF TRADING IN SECURITIES AS WELL AS REAL E STATE WITH HUGE TURNOVER. HE IS ALSO HAVING BUSINESS ABROAD. WHEN SUCH A PERSON OR HIS CONCERN MAKES ANY DONATION FOR PHILANTHROPIC PURPOSES, SUCH DONAT ION SHOULD NOT HAVE BEEN DOUBTED OR DISPUTED. MAY BE THAT THE GENTLEMAN HAS GIVEN THE STATEMENT FOR HIS PECUNIARY INTEREST OR SUCH STATEMENT HAVE BEEN OBTAINED UNDER COERCION. IT IS ALSO APPARENT FROM QUESTION 21 OF THE STATEME NT OF SHRI DINESH AGARWAL THAT DONATION WAS ALLEGEDLY ARRANGED BY ONE MR. PRA DIP AGARWAL, CA AND MR. AJAY AGARWAL. WE DO NOT KNOW SUCH PERSONS. THEREFOR E, THE DONATION GIVEN TO US CANNOT BE TREATED TO BE NOT GENUINE. IT ALSO APP EARS FROM THE STATEMENT OF SHRI DINESH AGARWAL THAT HE WAS GIVING GENUINE DONA TION AS APPEARS FROM LATER PART OF THE REPLY TO QUESTION NO. 26 & 37. IT ALSO APPEARS FROM THE STATEMENT THAT THE COMPANIES UNDER THE MANAGEMENT O F SHRI DINESH AGARWAL WERE GENUINE COMPANIES TAKING AND GIVING LOANS. TH EREFORE THE NATURE OF ENTRIES IN THE BOOKS OF THE SAID CONCERNS CANNOT BE DENIED OR DISPUTED. IN VIEW OF THE ABOVE, IT IS NECESSARY THAT THE DEPO NENT SHRI DINESH KUMAR AGARWAL AND THE TWO PERSONS NAMED BY HIM NAMELY, SH RI PRADIP AGARWAL, CA AND MR. AJAY AGARWAL ARE ALLOWED TO BE CROSS EXAMIN ED IN THE PRESENCE OF EACH OTHER TO BRING HOME THE TRUTH BEHIND THE DONAT IONS. WE, THEREFORE, REQUEST YOU TO KINDLY ARRANGE CROSS EXAMINATION OF SHRI DINESH AGARWAL, SHRI AJAY KUMAR AGARWAL AND SHRI PRADIP AGARWAL AT THE S AME TIME. WE ARE READY TO CROSS EXAMINE THEM ON ANY DAY AS MAY BE FIXED UP BY YOUR HONOUR. UNLESS SUCH CROSS EXAMINATION IS ALLOWED. IT WILL BE DIFFI CULT TO MAKE COMPLIANCE TO THE SHOW CAUSE NOTICE ISSUED U/S 12AA(3). THE PRINCIPLE OF AUDI ALTERAM PARTEM IS ONE OF THE MOST ESSENTIAL PRINCIPLES OF NATURAL JUS TICE. THE RIGHT TO CROSS- EXAMINE WITNESSES THEREFORE IS A PREREQUISITE TO TH E WITNESS'S STATEMENT BEING USED AS EVIDENCE. REFERENCE MAY BE MADE TO THE JUDG EMENT OF THE HON'BLE ITA NO.431/KOL/2017 A.Y. 2012-13 BALLARAM HANUMANDAS CHARITABLE TRUST VS. CIT (EX) KOL. PAG E 9 SUPREME COURT IN THE CASE OF STATE OF KERALA VS. SH ADUI YUSUFF AIR 1977 SC 1627. WE ASSURE YOU THAT WE SHALL FILE ALL THE EVID ENCES AS REQUIRED AND SHALL ALSO COMPLY WITH ALL THE REQUISITIONS AS MAY BE MAD E BY YOUR HONOUR, BUT UNLESS THE CROSS EXAMINATION AS ASKED FOR IS ALLOWE D AND THE DOUBTS IN YOUR MIND ARE MADE CLEAR, ALL OUR COMPLIANCES WILL BE PR EMATURE. FURTHER REGARDING THE RECEIPT OF DONATION OF RS.68, 50,000/- FROM SCHOOL OF HANUMAN GENETICS AND POPULATION HEALTH OF 6A, MALAN GA LANE, 11 FLOOR, KOLKATA-700012 ,IN THE FINANCIAL YEAR 2013-2014, IT IS SUBMITTED THAT THE SAID DONATION IS GENUINE AND WE HAVE NEITHER RETURNED TH E FIGURE OF DONATION AND NOR PAID ANY COMMISSION FOR THE SAME. AS FAR AS THE STATEMENT OF SMT. MOUMITA RAGHVAN OF SCHOOL OF HUMAN GENETIC POPULATI ON HEALTH IN COURSE OF SURVEY OPERATION U/S. 133A OF THE INCOME TAX ACT, 1 961 ON 27.01.2015 A CONCERNED, SHE MIGHT HAVE GIVEN THE STATEMENT FOR H ER PECUNIARY INTEREST OR SUCH STATEMENT MIGHT HAVE BEEN OBTAINED UNDER COERC ION. A CROSS EXAMINATION OPPORTUNITY MAY BE GIVEN TO US FOR CROS S EXAMINATION OF SMT. MOUMITA RAGHVAN AND ANY OTHER ALLEGED MIDDLEMAN STA TED IN HER STATEMENT, WHO ARE NOT KNOWN TO US. IT IS FURTHER SUBMITTED THAT THE STATEMENT GIVEN BY MRS. RAGHVAN DID NOT CONTAIN ANY NAMES OF THE PARTIES. THEREFORE, NAME O F OUR ORGANIZATION WAS NOT MENTIONED IN THE STATEMENT. FURTHER, SMT. RAGHV AN HAD GIVEN THE STATEMENT IN RESPECT OF THE DONATION TAKEN BY SCHOO L OF HANURNAN GENETICS AND POPULATION HEATH, 6A, MALANGA LANE, 1ST FLOOR, KOLKATA- 700012 AND NOT THE DONATIONS GIVEN BY THEM. WE HAVE RECEIVED DONAT ION WHICH IS NOT COVERED BY THE STATEMENT GIVEN DURING THE SURVEY: WITHOUT PREJUDICE, THE STATEMENT OF THE AFORESAID T WO PARTIES CANNOT BE USED AGAINST THE ASSESSEE TRUST WITHOUT ANY OPPORTUNITY OF CROSS EXAMINATION. 6.2 HOWEVER THE LD. CIT(EX) DESPITE OF THE REQUEST OF THE ASSESSEE FAILED TO PROVIDE THE OPPORTUNITY OF CROSS EXAMINATION TO THE ASSESSEE WHICH IN OUR CONSIDERED VIEW IS AGAINST THE PRINCIPLE OF NATURAL JUSTICE. IN THIS CONNECTION WE ALSO RELY IN THIS CONNECTION WE RELY IN THE CASE CIT VS. S. KHADER KHAN SON REPORTED IN 352 ITR 480 (SC) WHERE THE HONBLE SUPREME COURT HAS HELD THAT : SECTION 133A DOES NOT EMPOWER ANY IT AUTHORITY TO E XAMINE ANY PERSON ON OATH, HENCE, ANY SUCH STATEMENT HAS NO EVIDENTIARY VALUE AND ANY ADMISSION MADE DURING SUCH STATEMENT CANNOT, BY ITSELF, BE MA DE THE BASIS FOR ADDITION IN THE ABSENCE OF THE CROSS EXAMINATION OF THE STAT EMENT THE IMPUGNED ADDITION CANNOT STAND AS HELD BY THE HONBLE SUPREM E COURT IN THE CASE OF ITA NO.431/KOL/2017 A.Y. 2012-13 BALLARAM HANUMANDAS CHARITABLE TRUST VS. CIT (EX) KOL. PAG E 10 ANADAMAN TIMBER INDUSTRIES IN CIVIL APPEAL NO. 4228 OF 2006. THE RELEVANT EXTRACT OF THE JUDGMENT READS AS UNDER: ' ACCORDING TO US, NOT ALLOWING THE ASSESSEE TO CROSS -EXAMINE THE WITNESSES BY THE ADJUDICATING AUTHORITY THOUGH THE STATEMENTS OF THOSE WITNESSES WERE MADE THE BASIS OF THE IMPUGNED ORDER IS A SERIOUS FLAW W HICH MAKES THE ORDER NULLITY INASMUCH AS IT AMOUNTED TO VIOLATION OF PRINCIPLES OF NATURAL JUSTICE BECAUSE OF WHICH THE ASSESSEE WAS ADVERSELY AFFECTED. IT IS TO BE BORNE IN MIND THAT THE ORDER OF THE COMMISSIONER WAS BASED UPON THE STATEM ENTS GIVEN BY THE AFORESAID TWO WITNESSES. EVEN WHEN THE ASSESSEE DIS PUTED THE CORRECTNESS OF THE STATEMENTS AND WANTED TO CROSS-EXAMINE, THE ADJ UDICATING AUTHORITY DID NOT GRANT THIS OPPORTUNITY TO THE ASSESSEE. IT WOULD BE PERTINENT TO NOTE THAT IN THE IMPUGNED ORDER PASSED BY THE ADJUDICATING AUTHORITY HE HAS SPECIFICALLY MENTIONED THAT SUCH AN OPPORTUNITY WAS SOUGHT BY TH E ASSESSEE. HOWEVER, NO SUCH OPPORTUNITY WAS GRANTED AND THE AFORESAID PLEA IS NOT EVEN DEALT WITH BY THE ADJUDICATING AUTHORITY. AS FAR AS THE TRIBUNAL IS CONCERNED, WE FIND THAT REJECTION OF THIS PLEA IS TOTALLY UNTENABLE. THE TR IBUNAL HAS SIMPLY STATED THAT CROSS-EXAMINATION OF THE SAID DEALERS COULD NOT HAV E BROUGHT OUT ANY MATERIAL WHICH WOULD NOT BE IN POSSESSION OF THE APPELLANT T HEMSELVES TO EXPLAIN AS TO WHY THEIR EX-FACTORY PRICES REMAIN STATIC. IT WAS N OT FOR THE TRIBUNAL TO HAVE GUESS WORK AS TO FOR WHAT PURPOSES THE APPELLANT WA NTED TO CROSS-EXAMINE THOSE DEALERS AND WHAT EXTRACTION THE APPELLANT WAN TED FROM THEM. AS MENTIONED ABOVE, THE APPELLANT HAD CONTESTED THE TRUTHFULNESS OF THE STATEMENTS OF THESE TWO WITNESSES AND WANTED TO DIS CREDIT THEIR TESTIMONY FOR WHICH PURPOSE IT WANTED TO AVAIL THE OPPORTUNITY OF CROSS-EXAMINATION. THAT APART, THE ADJUDICATING AUTHORITY SIMPLY RELIED UPO N THE PRICE LIST AS MAINTAINED AT THE DEPOT TO DETERMINE THE PRICE FOR THE PURPOSE OF LEVY OF EXCISE DUTY. WHETHER THE GOODS WERE, IN FACT, SOLD TO THE SAID D EALERS/WITNESSES AT THE PRICE WHICH IS MENTIONED IN THE PRICE LIST ITSELF COULD B E THE SUBJECT MATTER OF CROSS- EXAMINATION. THEREFORE, IT WAS NOT FOR THE ADJUDICA TING AUTHORITY TO PRESUPPOSE AS TO WHAT COULD BE THE SUBJECT MATTER OF THE CROSS -EXAMINATION AND MAKE THE REMARKS AS MENTIONED ABOVE. WE MAY ALSO POINT OUT T HAT ON AN EARLIER OCCASION WHEN THE MATTER CAME BEFORE THIS COURT IN CIVIL APP EAL NO. 2216 OF 2000, ORDER DATED 17.03.2005 WAS PASSED REMITTING THE CASE BACK TO THE TRIBUNAL WITH THE DIRECTIONS TO DECIDE THE APPEAL ON MERITS GIVING IT S REASONS FOR ACCEPTING OR REJECTING THE SUBMISSIONS. IN VIEW THE ABOVE, WE ARE OF THE OPINION THAT IF TH E TESTIMONY OF THESE TWO WITNESSES IS DISCREDITED, THERE WAS NO MATERIAL WIT H THE DEPARTMENT ON THE BASIS OF WHICH IT COULD JUSTIFY ITS ACTION, AS THE STATEM ENT OF THE AFORESAID TWO WITNESSES WAS THE ONLY BASIS OF ISSUING THE SHOW CA USE WE, THUS, SET ASIDE THE IMPUGNED ORDER AS PASSED BY THE TRIBUNAL AND ALLOW THIS APPEAL.' THERE IS NO EVIDENCE BROUGHT ON RECORD TO SHOW ANY CONNECTION BETWEEN THOSE BROKERS AND THE ASSESSEE. IN THE ABSENCE OF S UCH CORROBORATIVE ITA NO.431/KOL/2017 A.Y. 2012-13 BALLARAM HANUMANDAS CHARITABLE TRUST VS. CIT (EX) KOL. PAG E 11 EVIDENCE, IT IS NOT POSSIBLE TO COME TO ANY CONCLUS ION THAT THE ASSESSEE INDULGED IN MONEY LAUNDERING AND THAT THE DONATION RECEIVED BY IT WAS A BOGUS DONATION. IN FACT ON IDENTICAL FACTS THIS TRI BUNAL IN THE CASE OF SRI MAYAPUR DHAM PILGRIM AND VISITORS TRUST (SUPRA) CAME TO THE CONCLUSION THAT CANCELLATION OF REGISTRATION U/S 12AA OF THE ACT CA NNOT BE SUSTAINED. 6.3 APART FROM THE ABOVE, THE GROUNDS FOR CANCELLAT ION FOR REGISTRATION U/S 12AA(3) OF THE ACT IS THAT THE ACTIVITIES OF THE TR UST SHOULD NOT BE GENUINE OR THE ACTIVITIES OF THE TRUST ARE NOT BEING CARRIED O UT IN ACCORDANCE WITH THE OBJECTS OF THE TRUST. THERE IS NEITHER AN ALLEGATIO N IN THE IMPUGNED ORDER NOR FINDING THAT ANY OF THE AFORESAID CONDITIONS EXIST IN THE CASE OF THE ASSESSEE. WE THEREFORE ARE OF THE VIEW 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 ACCOR DINGLY ALLOWED. 7. WITHOUT PREJUDICE TO THE ABOVE EVEN ASSUMING THA T THE DONATION TO ASSESSEE IS BOGUS THEN THE AMOUNT OF BOGUS DONATION WILL NOT BE ELIGIBLE FOR EXEMPTIONS U/S 11 OF THE ACT. UNDER SUCH CIRCUMSTAN CES, THE REGISTRATION CERTIFICATE ISSUED U/S 12AA OF THE ACT CANNOT BE CA NCELLED AS LONG AS THE OBJECTS OF THE TRUST ARE WITHIN THE PROVISIONS OF L AW. THE OBJECTS/ BYELAWS OF THE TRUST ARE PLACED ON PAGES 1 TO 12 OF THE PAPER BOOK AND ON THE BASIS OF SAME OBJECTS THE ASSESSEE WAS GIVEN REGISTRATION CE RTIFICATE U/S 12AA OF THE ACT. WHILE HOLDING SO, WE FIND SUPPORT & GUIDANCE F ROM THE JUDGMENT OF HONBLE HIGH COURT OF PUNJAB & HARYANA IN THE CASE OF CIT VS. APEEJAY EDUCATION SOCIETY REPORTED IN 59 TAXMANN.COM 102 WHEREIN IT WAS HELD AS UNDER : UNDER SECTION 12AA OF THE ACT, THE COMMISSIONER, AT THE RELEVANT TIME IN THE YEAR 1999 HAD CALLED FOR ALL DOCUMENTS AND INFORMAT ION FROM THE RESPONDENT- ASSESSEE TO SATISFY HIMSELF ABOUT THE GENUINENESS O F THE ACTIVITIES OF THE INSTITUTION AND AFTER MAKING ENQUIRES HAD PASSED TH E ORDER REGISTERING THE SAID INSTITUTION AND GIVING IT THE BENEFIT UNDER SECTION 12A OF THE ACT, WHICH MADE THE INSTITUTION ELIGIBLE FOR EXEMPTION FROM THE PRO VISIONS OF SECTIONS 11 AND 12 OF THE ACT. UNDER SECTION 12AA(3) OF THE ACT, THE C OMMISSIONER WAS TO BE ITA NO.431/KOL/2017 A.Y. 2012-13 BALLARAM HANUMANDAS CHARITABLE TRUST VS. CIT (EX) KOL. PAG E 12 SATISFIED ABOUT THE ACTIVITIES OF THE SAID INSTITUT ION AND IF THEY WERE NOT GENUINE AND THE SAME WERE NOT BEING CARRIED OUT IN ACCORDAN CE WITH THE OBJECTS OF THE INSTITUTION HE COULD PASS THE ORDER CANCELLING THE REGISTRATION. IT CANNOT BE DISPUTED THAT THE RESPONDENT-ASSESSEE IS ENGAGED IN CARRYING OUT ITS OBJECTS AND THE GENUINENESS OF THE SAME HAS NEVER BEEN DOUB TED. THE ALLEGATION IS REGARDING THE ALLEGED SUPPLY OF THE INSTALLATION OF THE SOFTWARE AND WHETHER THE SAME WAS DONE BY M/S. WSL OR NOT. MERELY BECAUS E SH. SANJAY D. SONAWANI HAD GIVEN A STATEMENT, THE COMMISSIONER AS SUCH IS NOT JUSTIFIED IN CANCELLING THE REGISTRATION GRANTED ON 13.05.1999 W .E.F. THE ASSESSMENT YEAR 2004-05. THE ASSESSEE HAD PLACED VARIOUS MATERIALS BEFORE THE TRIBUNAL TO SHOW THAT SOFTWARE MODULES PURCHASED WERE INSTALLED BETWEEN 2004 TO 2011 AND THE ASSESSEE HAD INCURRED AS MUCH AS 91.71% OF THE RECEIPTS FOR THE ASSESSMENT YEAR 2004-05. ACCORDINGLY, KEEPING IN VIEW THE PECULIAR FACTS AND CIRCUMSTANCES AS NOTICED ABOVE, HIGH COURT ARE OF THE OPINION THAT THE COMMI SSIONER OF INCOME TAX WAS NOT JUSTIFIED IN PASSING THE IMPUGNED ORDER FOR WITHDRAWING THE EXEMPTION AS ADMITTEDLY, THE RESPONDENT-ASSESSEE IS CARRYING OUT EDUCATIONAL ACTIVITIES BY RUNNING A LARGE NUMBER OF EDUCATIONAL INSTITUTIO NS ALL OVER THE COUNTRY AND, THEREFORE, THE QUESTIONS OF LAW SOUGHT TO BE RAISED DO NOT ARISE. THE FACTS OF THE ABOVE CASE ARE SIMILAR TO THE INST ANT CASE BEFORE US. IN THE INSTANT CASE THE ASSESSEE IS A CHARITABLE TRUST DUL Y CONSTITUTED AS CHARITABLE TRUST UNDER A DEED OF TRUST AS A PUBLIC CHARITABLE TRUST FOR IMPARTING EDUCATION WHICH IS A CHARITABLE PURPOSE U/S. 2(15) OF THE INCOME TAX ACT. THE TRUST DULY APPLIED FOR REGISTRATION U/S. 12AA O F THE IT ACT BEFORE THE DIRECTOR OF INCOME TAX (EXEMPTION) IN CONFORMITY WI TH RULE 17A AND SUBMITTED FORM NO. 10A TOGETHER WITH OTHER REQUISITE DOCUMENT S. THE DIRECTOR OF INCOME TAX (EXEMPTION) AFTER VERIFICATION OF DOCUME NTS AND AFTER BEING SATISFIED ABOUT THE OBJECT OF THE TRUST AND GENUINE NESS OF ITS ACTIVITIES GRANTED REGISTRATION EFFECTIVE FROM 11.09.1979 VIDE ORDER N O. T-81/WB.VII OF 1979-80 DATED 11.09.1979. A COPY OF THE SAID REGISTRATION I S ENCLOSED ON PAGES 20 OF THE PAPER BOOK. BESIDES THE ABOVE WE FIND THAT THERE WERE CERTAIN F ACTS WHICH WERE NOT CHALLENGED BY THE LD. CIT(EX). THESE FACTS ARE DETA ILED AS UNDER : 1. THE ASSESSEE IS RUNNING A EDUCATIONAL INSTITUTIO N IMPARTING EDUCATION TO 2993 STUDENTS IN THE STATE OF HARYANA. ITA NO.431/KOL/2017 A.Y. 2012-13 BALLARAM HANUMANDAS CHARITABLE TRUST VS. CIT (EX) KOL. PAG E 13 2. THE ASSESSEE DURING THE YEAR 2013-14 HAS RECEIVE D DONATION WORTH OF RS. 7,71,02,000.00 ONLY FROM 172 PARTIES AS EVIDENT FROM THE DETAILS ENCLOSED ON PAGES 21 TO 32 OF THE PAPER BOOK. THE L D. CIT(EX) HAS NOT DOUBTED ON THE GENUINENESS OF OTHER DONATION EXCEPT FROM TWO PARTIES AS DISCUSSED ABOVE. 3. IT IS ALSO IMPORTANT TO NOTE THAT THE ASSESSEE H AS BEEN RECEIVING DONATION IN EVERY YEAR WHICH HAS BEEN DULY ACCEPTED BY THE REVENUE AS EVIDENT FROM ASSESSMENT ORDERS FRAMED UNDER SECT ION 143(3)OF THE ACT FOR THE AYS 2010-11, 2011-12 & 2012-13 WHICH AR E ENCLOSED ON PAGES 49 TO 60 OF THE PAPER BOOK. 4. BALLARAM HANUMANDAS CHARITABLE TRUST, KOLKATA (B HCT) FOUNDED IN THE YEAR 1977, HEADED BY SHRI HARI KRISHNA CHAUDHARY, I S A CSR PROJECT OF VIKRAM-PRATIBHA GROUP OF INDUSTRIES. THE TRUST HAS BEEN SET UP WITH AN OBJECTIVE OF TRANSFORMING THE MUCH DEPRIVED RURAL A REA SURROUNDING THE CHAUDHARY FAMILY'S ANCESTRAL VILLAGE BAHAL (DISTRIC T BHIWANI) IN HARYANA, 30 KM NORTH OF PILANI (RAJASTHAN). BHCT CATERING TO THE NEED FOR HIGH-QUALITY ENGLISH- MEDIUM SCHOOLING, FOR AROUND 100 VILLAGES SURROUNDING BAHAL. SUBSEQUE NTLY, BRCM PUBLIC SCHOOL, VIDYAGRAM, A PREMIER RESIDENTIAL SCHOOL, FR OM CLASS IV TO XII, WAS ADDED TO PROVIDE FOR ALL ROUND DEVELOPMENT OF S TUDENTS IN A BOARDING SET UP, THE SCHOOL AFFILIATED TO CBSE, IS A MEMBER OF THE INDIAN PUBLIC SCHOOL CONFERENCE (IPSC) AND EDUCATIN G STUDENTS FROM ALL OVER INDIA AND ABROAD. IN AUGUST 1999, BHCT VENTURED INTO THE FIELD OF PRO VIDING TECHNICAL EDUCATION BY ESTABLISHING BRCM COLLEGE OF ENGINEERI NG AND TECHNOLOGY (BRCM-CET). THE COLLEGE IS DULY APPROVED BY THE AICTE & GOVERNMENT OF HARYANA, AND PERMANENTLY AFFILIATED T O M.D. UNIVERSITY, ROHTAK FOR 4-YEAR B.TECH. COURSES IN CSE, ME, EEE & CIVIL ENGINEERING & 2 YEAR M.TECH COURSES IN ME, EEE, CSE & CIVIL ENGINEERING. FOR STUDENTS AND FACULTY OF ALL ITS IN STITUTIONS, BHCT PROVIDES AESTHETICALLY DESIGNED MODERN AND ENVIRONM ENT FRIENDLY ITA NO.431/KOL/2017 A.Y. 2012-13 BALLARAM HANUMANDAS CHARITABLE TRUST VS. CIT (EX) KOL. PAG E 14 CLASSROOMS, LABORATORIES. WORKSHOP, SPORTS AND RECR EATIONAL FACILITIES ALONG WITH ALL OTHER ESSENTIAL UTILITIES AND WELL F URNISHED & COMFORTABLE ON ACCOMMODATION IN AN ECO FRIENDLY ENVIRONMENT. BH CT FURTHER PLANS TO ADD LAW, ARCHITECTURE AND BUSINESS MANAGEMENT & ENTREPRENEURIAL STUDIES WITH POST-GRADUATE TEACHING & RESEARCH FACI LITIES, THUS ENHANCING LEARNING POSSIBILITIES FROM KG TO VARIOUS UG & PG PROGRAMS. GDC MEMORIAL COLLEGE, A UNIT OF HKC FOUNDATION (A S ISTER CONCERN OF BHCT) WAS ESTABLISHED IN THE YEAR 2011 TO PROVIDE Q UALITY UG AND PG LEVEL EDUCATION TO THE YOUTH OF THIS REMOTE & RURAL AREA, SPECIFICALLY FOR THE GIRL STUDENTS. AN ABSOLUTELY FREE SCHOOL, IN TH E NAME OF 'NANHE KADAM' IS FUNCTIONAL SINCE 2010, WHERE UNDERPRIVILE GED STUDENTS OF THE SOCIETY ARE GETTING FREE EDUCATION. BHCT IS ALSO MA NAGING RDNL VIDYA MANDIR, AN EXCLUSIVE KINDERGARTEN AND A 30 BED FULL Y FUNCTIONAL MANY KALYAN TRUST HOSPITAL AT BAHAL. AT PRESENT BHCT IS PROVIDING EDUCATION TO MORE THAN 5000 STUDENTS ALTOGETHER FOR ENHANCING LEARNING POSSIBILITIES FROM KG TO VARIOUS UG & PG PROGRAMS T HROUGH IT EDUCATIONAL VENTURES. 7.1 SIMILARLY, WE ALSO RELY IN THE JUDGMENT OF HON BLE HIGH COURT OF KARNATAKA IN THE CASE OF CIT VS. ISLAMIC ACADEMY OF EDUCATION REPORTED IN 59 TAXMANN.COM 102 WHEREIN IT WAS HELD AS UNDER:- IF TRUSTEES WERE MISAPPROPRIATING FUNDS AND WERE MA INTAINING FALSE ACCOUNTS, IT WAS OPEN TO AUTHORITIES TO DENY BENEFIT UNDER SE CTION 11 OF THE INCOME TAX ACT, BUT THAT COULD NOT BE GROUND FOR CANCELATION O F REGISTRATION ITSELF. APPLYING THE ABOVE RATIO LAID DOWN BY THE HONBLE H IGH COURT OF KARNATAKA IN THE CASE OF ISLAMIC ACADEMY OF EDUCATION (SUPRA), IT CAN BE CONCLUDED THAT EVEN THE DONATION IS PROVED TO BE BOGUS THEN ALSO T HE REGISTRATION U/S 12AA OF THE ACT CANNOT BE CANCELLED BUT THE SAID AMOUNT OF DONATION WILL NOT BE ELIGIBLE FOR EXEMPTION U/S 11 OF THE ACT. 7.2 THE PROVISIONS OF SECTION 12AA OF THE ACT PRESC RIBE CONDITIONS FOR REGISTRATION OF TRUST AND MAKE OBLIGATORY TO THE TR UST OR THE INSTITUTION TO SEEK ITA NO.431/KOL/2017 A.Y. 2012-13 BALLARAM HANUMANDAS CHARITABLE TRUST VS. CIT (EX) KOL. PAG E 15 REGISTRATION UNDER SECTION 12AA OF THE ACT, IF SUCH TRUST OR INSTITUTION INTENDS TO HAVE THE BENEFIT OF THE PROVISIONS OF SECTION 11 AN D 12 OF THE ACT. THESE PROVISIONS THUS MAKE IT CLEAR THAT IF THE TRUST OR THE INSTITUTION IS NOT REGISTERED UNDER SECTION 12AA OF THE ACT, IT WOULD NOT BE ABLE TO CLAIM ANY EXEMPTION OR EXCLUSION OF ITS INCOME FROM THE TOTAL INCOME OF TH E PREVIOUS YEAR, EVEN IF SUCH INCOME IS OTHERWISE LIABLE TO BE EXCLUDED UNDER ANY OF THE CLAUSES OF SECTION 11 OF THE ACT. THUS, IN A CASE WHERE REGISTRATION I S REFUSED, THE TRUST OR THE INSTITUTION WOULD NOT BE ALLOWED TO CLAIM ANY SUCH EXEMPTION OR EXCLUSION OF ITS INCOME FROM THE TOTAL INCOME OF THE PREVIOUS YE AR. THE INCOME-TAX ACT THROUGH SECTION 12AA HAS MADE IT OBLIGATORY FOR CHA RITABLE TRUSTS AND INSTITUTIONS TO GET THEMSELVES REGISTERED WITH THE INCOME-TAX AUTHORITIES FAILING WHICH THE BENEFIT OF EXEMPTION FROM INCOME-TAX WOUL D BE DENIED. THE REQUIREMENT OF REGISTRATION BEING PROCEDURAL IS PRE SCRIBED U/S 12AA OF THE ACT WHICH READS AS UNDER:- PROCEDURE FOR REGISTRATION . 12AA. (1) THE [***] [PRINCIPAL COMMISSIONER OF] COMMISSI ONER, ON RECEIPT OF AN APPLICATION FOR REGISTRATION OF A TRUST OR INSTI TUTION MADE UNDER CLAUSE (A) [OR CLAUSE (AA) OF SUB-SECTION (1)] OF SECTION 12A , SHALL- (A) CALL FOR SUCH DOCUMENTS OR INFORMATION FROM THE TRUST OR INSTITUTION AS HE THINKS NECESSARY IN ORDER TO SATISFY HIMSELF ABOUT THE GENUINENESS OF ACTIVITIES OF THE TRUST OR INSTITUTION AND MAY ALSO MAKE SUCH INQUIRIES AS HE MAY DEEM NECESSARY IN THIS BEHALF; AND (B) AFTER SATISFYING HIMSELF ABOUT THE OBJECTS OF T HE TRUST OR INSTITUTION AND THE GENUINENESS OF ITS ACTIVITIES, HE- (I) SHALL PASS AN ORDER IN WRITING REGISTERING THE TRUST OR INSTITUTION; (II) SHALL, IF HE IS NOT SO SATISFIED, PASS AN ORDE R IN WRITING REFUSING TO REGISTER THE TRUST OR INSTITUTION, AND A COPY OF SUCH ORDER SHALL BE SENT TO THE APPL ICANT; FROM THE ABOVE PROVISIONS, IT IS CLEAR THAT THE LD CIT(EXEMPTION) BEFORE GRANTING THE REGISTRATION CERTIFICATE SHALL CONDUCT NECESSARY ENQUIRIES AS HE THINKS FIT IN ORDER TO SATISFY HIMSELF ABOUT THE GE NUINENESS OF ACTIVITIES OF THE TRUST. ONCE THE LD CIT(EX) IS SATISFIED WITH THE GE NUINENESS OF THE ACTIVITIES THEN HE WILL GRANT THE REGISTRATION CERTIFICATE. IN THE INSTANT CASE BEFORE US, WE FIND THAT THE ACTIVITIES OF THE TRUST HAVE NOT BEEN DOUBTED EXCEPT THE DONATION RECEIVED BY THE ASSESSEE FROM TWO PARTIES. THUS IN OUR VIEW AT THE MOST THE ITA NO.431/KOL/2017 A.Y. 2012-13 BALLARAM HANUMANDAS CHARITABLE TRUST VS. CIT (EX) KOL. PAG E 16 EXEMPTION U/S 11 OF THE ACT WILL BE DENIED TO SUCH DONATION. THUS, IN SUCH CIRCUMSTANCES THE REGISTRATION U/S 12A OF THE ACT C ANNOT BE CANCELLED. IN THIS REGARD, WE RELY IN THE PRINCIPLES LAID DOWN BY THE HONBLE ALLAHABAD HIGH COURT IN THE CASE OF CIT VS. RED ROSE SCHOOL (2007) 212 CTR 394 (ALL). THE RELEVANT EXTRACT OF THE JUDGMENT IS EXTRACTED BELOW :- A READING OF PROVISIONS OF SUB-CLS. (A) AND (B) OF S. 12AA MAKES IT CLEAR THAT THE CIT HAS TO SATISFY HIMSELF ABOUT THE GENUINENES S OF THE ACTIVITIES OF THE TRUST OR INSTITUTION AND ALSO ABOUT THE OBJECTS OF THE TRUST OR THE INSTITUTION. ON BEING SATISFIED ABOUT THE GENUINENESS OF THE ACTIVI TIES OF THE TRUST OR THE INSTITUTION AND ALSO ABOUT ITS OBJECTS, THE CIT WOU LD EITHER GRANT THE CERTIFICATE OR WOULD REJECT THE PRAYER. IN ORDER TO SATISFY HIM SELF ABOUT THE GENUINENESS OF THE ACTIVITIES OF THE TRUST OR THE INSTITUTION, HE CAN CALL FOR SUCH DOCUMENTS OR INFORMATION FROM THE TRUST OR THE INSTITUTION, AS H E THINKS NECESSARY AND HE IS ALSO EMPOWERED TO MAKE SUCH ENQUIRIES AS HE MAY DEE M NECESSARY IN THIS BEHALF. THE OBJECTS OF THE TRUST CAN BE HAD FROM TH E BYE-LAWS OR THE DEED OF TRUST, AS THE CASE MAY BE AND UNLESS, OF COURSE, TH E OBJECTS OF THE TRUST APPARENTLY MAKE OUT THAT THEY WERE NOT IN CONSONANC E WITH THE PUBLIC POLICY OR THAT THEY WERE NOT THE OBJECTS OF ANY CHARITABLE PURPOSE, REGISTRATION CANNOT BE REFUSED ACCORDINGLY ON THIS GROUND. IN REGARD TO THE GENUINENESS OF THE ACTIVITIES OF THE TRUST OR THE INSTITUTION, WHOSE O BJECTS DO NOT RUN CONTRARY TO PUBLIC POLICY AND ARE, IN FACT, RELATED TO CHARITAB LE PURPOSES, THE CIT IS AGAIN EMPOWERED TO MAKE ENQUIRIES AS HE THINKS FIT. IN CA SE THE ACTIVITIES ARE NOT GENUINE AND THEY ARE NOT BEING CARRIED OUT IN ACCOR DANCE WITH THE OBJECTS OF THE TRUST/SOCIETY OR THE INSTITUTION, OF COURSE, TH E REGISTRATION CAN AGAIN BE REFUSED. BUT ON MERE PRESUMPTIONS AND ON SURMISES T HAT INCOME DERIVED BY THE TRUST OR THE INSTITUTION IS BEING MISUSED OR TH AT THERE IS SOME APPREHENSION THAT THE SAME WOULD NOT BE USED IN THE PROPER MANNE R AND FOR THE PURPOSES RELATING TO ANY CHARITABLE PURPOSE, REJECTION CANNO T BE MADE. SEC. 12AA, WHICH LAYS DOWN THE PROCEDURE FOR REGISTRATION, DOE S NOT SPEAK ANYWHERE THAT THE CIT, WHILE CONSIDERING THE APPLICATION FOR REGI STRATION, SHALL ALSO SEE THAT THE INCOME DERIVED BY THE TRUST OR THE INSTITUTION IS EITHER NOT BEING SPENT FOR CHARITABLE PURPOSE OR SUCH INSTITUTION IS EARNING P ROFIT. THE LANGUAGE USED IN THE SECTION ONLY REQUIRES THAT ACTIVITIES OF THE TR UST OR THE INSTITUTION MUST BE GENUINE, WHICH ACCORDINGLY WOULD MEAN, THEY ARE IN CONSONANCE WITH THE OBJECTS OF THE TRUST/INSTITUTION, AND ARE NOT MERE CAMOUFLAGE BUT ARE REAL, PURE AND SINCERE, NOR AGAINST THE PROPOSED OBJECTS. THE PROFIT EARNING OR MISUSE OF THE INCOME DERIVED BY CHARITABLE INSTITUTION FROM I TS CHARITABLE ACTIVITIES, MAY BE A GROUND FOR REFUSING EXEMPTION ONLY WITH RESPEC T TO THAT PART OF THE INCOME BUT CANNOT BE TAKEN TO BE A SYNONYM TO THE GENUINEN ESS OF THE ACTIVITIES OF THE TRUST OR THE INSTITUTION. IT IS SIGNIFICANT TO MENTION THAT REGISTRATION UNDER S. 12AA DOES NOT NECESSARILY ENTITLE THE ASSESSEE TO G ET THE INCOME EXCLUDED FROM THE INCOME OF THE PREVIOUS YEAR FOR THE PURPOS E OF DETERMINATION OF TAX LIABILITY BUT IT ONLY ENTITLES THE ASSESSEE TO CLAI M SUCH EXEMPTION, WHICH OTHERWISE COULD NOT BE CLAIMED IN THE ABSENCE OF RE GISTRATION. THE ENQUIRY BY THE CIT SHALL REMAIN RESTRICTED TO THE EXAMINATION, AS TO WHETHER THE ASSESSEE, WHO HAS MOVED THE APPLICATION FOR REGISTR ATION UNDER S. 12A, IS ITA NO.431/KOL/2017 A.Y. 2012-13 BALLARAM HANUMANDAS CHARITABLE TRUST VS. CIT (EX) KOL. PAG E 17 ACTUALLY IN THE ACTIVITIES WHICH ARE GENUINE. GENUI NENESS OF THE ACTIVITIES OF THE TRUST OR THE INSTITUTION HAS TO BE SEEN, KEEPIN G IN MIND THE OBJECTS THEREOF, WHICH NECESSARILY MEANS THAT THE CIT SHALL SATISFY HIMSELF ABOUT THE FACT THAT THE ACTIVITIES ARE GENUINE AND IN CONSONANCE WITH T HE OBJECTS OF THE TRUST OR THE INSTITUTION. IN OTHER WORDS, IF ESTABLISHING AN D RUNNING A SCHOOL IS THE OBJECT OF THE SOCIETY, AS GIVEN IN ITS BYE-LAWS, IT HAS TO BE SATISFIED THAT THE SOCIETY HAS ESTABLISHED THE SCHOOL, WHERE EDUCATION IS BEIN G IMPARTED AS PER RULES AND THE FACTUM OF ESTABLISHMENT AND RUNNING SCHOOL IS A GENUINE ACTIVITY. THE ENQUIRY REGARDING GENUINENESS OF THE ACTIVITIES CAN NOT BE STRETCHED BEYOND THIS. SUFFICIENT SAFEGUARDS HAVING BEEN GIVEN IN SS . 11, 12 AND 13 FOR ASSESSING THE INCOME WHICH HAS NOT BEEN APPLIED TO THE PURPOSE OF THE TRUST OR THE INSTITUTION, THE INTENTION OF THE LAW MAKER AND THE SCOPE AND PURPORT OF THE PROVISION IS APPARENT WHILE CONSIDERING THE QUE STION OF REGISTRATION. IN VIEW OF ABOVE PRECEDENT, WE FIND THAT THE ACTIVI TIES OF THE TRUST IN RELATION TO ITS EDUCATION ACTIVITIES HAVE NOT BEEN DOUBTED AND ON THE BASIS OF SAME ACTIVITIES REGISTRATION U/S 12AA OF THE ACT WAS AWA RDED TO THE ASSESSEE. SIMPLY THE ASSESSEE HAS RECEIVED DONATION FROM SOME PARTIES WHICH ARE INVOLVED IN THE BOGUS TRANSACTIONS CANNOT BE THE BA SIS FOR THE DENIAL OF THE REGISTRATION CERTIFICATES AS DISCUSSED ABOVE. IN VIEW OF ABOVE, WE HAVE NO HESITATION IN REVERSIN G THE ORDER OF LD. CIT(E) AND ACCORDINGLY THE APPEAL OF THE ASSESSEE IS ALLOW ED. 8. IN THE RESULT, APPEAL OF ASSESSEE STANDS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT 15/ 09/2017 SD/- SD/- (ABY. T. VARKEY) (WASEEM AHMED) (JUDICIAL MEMBER) (ACCOUNTANT MEMBER) KOLKATA, *DKP #$%&- 15 / 09 /201 7 / COPY OF ORDER FORWARDED TO:- 1. /APPELLANT-BALLARAM HANUMANDAS CHARITABLE TRUST, 1 OL D COURT HOUSE, CORNER, 4 TH FLOOR, TOBACCO HOUSE, KOLKATA-001 2. /RESPONDENT-CIT(EX),KOLKATA, 10B, MIDDLETON ROW, 6 TH FLOOR, KOLKATA-71 3.%.%/ 0 / CONCERNED CIT KOLKATA 4. 0- / CIT (A) KOLKATA 5.34566/ , / , / DR, ITAT, KOLKATA 6.589:; / GUARD FILE. BY ORDER/ $, /TRUE COPY/ SR. PRIVATE SECRETARY, HEAD OF OFFICE/DDO / ,