Jagannath Gupta Family Trust, Kolkata V. THE CIT(Exemptions), Kolkata, Kolkata

ITA 597/KOL/2016

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 1906 (ITAT-KOLKATA)
• Duration Of Justice: 1 year(s) 5 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 10-04-2017
• Appeal Filed By: Assessee
• Bench Allotted: B
• Assessment Year: misc
• Appeal Filed On: 05-04-2016
• Court: TRIBUNAL
• Keywords: Gift; Charitable institution; Opportunity of being heard; Principle of natural justice; Opportunity of cross examination; Question of law; Accommodation entries; Cancellation of registration
• Section: 133A; 133(6); 80G; 12A; 12AA; 12; 11

Judgement Text

ITA NO. 597/KOL/2016 M/S.JAGANNATH GUPTA FAMILY TRUST 1 IN THE INCOME TAX APPELLATE TRIBUNAL, KOLKATA B B ENCH, KOLKATA BEFORE : SHRI S.S. VISWANETHRA RAVI, JUDICIAL MEMBER AND SHRI DR. A.L. SAINI, ACCOUNTANT MEMBER I.T.A NO. 597/KOL/2016 JAGANNATH GUPTA FAMILY TRUST PAN: AAATJ9833G 26 GANESH CHANDRA AVENUE, 1 ST FLOOR, KOLKATA-13 .APPELLANT -VS- C.I.T(EXEMPTIONS), KOLKATA .RESPOND ENT APPEARANCES BY: SHRI N.K. PODDAR, SENIOR ADVOCATE, LD. AR FOR T HE ASSESSEE DR. AMLAN TRIPATHY, CIT, LD.DR FOR THE REVENUE DATE OF HEARING : 10-01- 2017 DATE OF PRONOUNCEMENT : 1 0-04-2017 ORDER SHRI. S.S.VISWANETHRA RAVI, JM: THIS APPEAL BY THE ASSESSEE IS AGAINST THE ORDER DT : 15-03-2016 PASSED BY THE COMMISSIONER OF INCOME TAX-(EXEMPTIONS), KOL KATA U/S. 12 AA(3) OF THE INCOME-TAX ACT 1961 HEREINAFTER THE ACT CANCELLING THE REGISTRATION GRANTED U/S. 12AA OF THE ACT W.E.F 01-04-2008. 2. INITIALLY THE ASSESSEE HAS RAISED AS MANY AS NIN E GROUNDS OF APPEAL. SUBSEQUENTLY, THE ASSESSEE FILED SUCH GROUNDS OF AP PEAL IN CONCISE FORM, WHICH ITA NO. 597/KOL/2016 M/S.JAGANNATH GUPTA FAMILY TRUST 2 ARE PLACED AT PAGE 5 AND 6 OF THE PAPER BOOK. THE ASSESSEE VIDE A LETTER DATED: 22-08-2016 REQUESTED THE TRIBUNAL TO TAKE ON FILE AND CONSIDER THE SAID GROUNDS OF APPEAL IN CONCISE FORM FOR ADJUDICATION. THEREFORE, WITH THE CONSENT OF THE BOTH THE PARTIES, WE PROCEED TO HEAR AND DIS POSE OF THE APPEAL ON THE BASIS OF CONCISE GROUNDS OF APPEAL, WHICH ARE REPRO DUCED HEREIN BELOW:- GROUNDS OF APPEAL IN CONCISE FORM 1. THAT THE LEARNED COMMISSIONER OF INCOME TAX (EXE MPTIONS), KOLKATA ERRED IN WRONGLY AND ARBITRARILY CANCELLING / WITHDRAWING THE REGISTRATI ON GRANTED TO THE APPELLANT TRUST UNDER SECTION 12AA OF THE INCOME TAX ACT, 1961 WITH EFFECT FROM P T APRIL, 2008. 2. THAT THE LEARNED COMMISSIONER OF INCOME TAX (EXE MPTIONS), KOLKATA FAILED TO APPRECIATE THAT THE CONDITIONS PRECEDENT FOR THE EXERCISE OF POWERS VESTED IN HIM UNDER SUB-SECTION (3) OF SECTION 12AA OF THE SAID ACT WERE NOT SATISFIED IN THE INST ANT CASE OF THE APPELLANT TRUST. 3. THAT THE LEARNED COMMISSIONER OF INCOME TAX (EXE MPTIONS), KOLKATA ERRED IN WRONGLY AND ARBITRARILY ALLEGING ON MERE SUSPICIONS, SURMISES A ND CONJECTURES, WITHOUT ANY MATERIAL EVIDENCE ON RECORD TO THE EFFECT THAT THE ACTIVITIES OF THE APPELLANT TRUST WERE EITHER NOT GENUINE AND/OR THAT SUCH ACTIVITIES WERE NOT BEING CARRIED OUT IN ACCORDANCE WITH THE OBJECTS OF THE APPELLANT TRUST, AS SET OUT IN ITS TRUST DEED DATED DT OCTOBE R, 2007. 4. THAT THE IMPUGNED ORDER DATED 15TH MARCH, 2016 P ASSED BY THE LEARNED COMMISSIONER OF INCOME TAX (EXEMPTIONS), KOLKATA UNDER SECTION 12AA (3) OF THE INCOME TAX ACT, 1961 IS WHOLLY ILLEGAL, INVALID, ARBITRARY, AGAINST THE FACTS AND EVIDENCES ON RECORD, AGAINST THE PRINCIPLES OF NATURAL JUSTICE, UNREASONABLE AND/OR OTHERWISE PERV ERSE. 3. THE ONLY ISSUE THAT ARISES FOR CONSIDERATION I N THIS APPEAL IS AS TO WHETHER THE IMPUGNED ORDER OF THE CIT(EXEMPTIONS) CANCELLIN G THE REGISTRATION GRANTED TO ASSESSEE TRUST BY INVOKING THE PROVISIONS OF SEC .12AA(3) OF THE ACT IS ILLEGAL UNSUSTAINABLE AND ARBITRARY IN THE FACTS AND CIRCUM STANCES OF THE CASE. 4. BEFORE US THE LD.AR FILED A DETAILED PAPER BOOKS IN FOUR VOLUMES CONTAINING PAGES 1 TO 431 IN SUPPORT OF HIS CONTENT IONS. THE LD.AR OF THE ASSESSEE HAS RAISED TWO POINTS FOR OUR CONSIDERATIO N. FIRSTLY , WHETHER ON THE BASIS OF SURVEY OPERATION CONDUCTED ON OTHER SIMILA R SOCIETIES THE REGISTRATION GRANTED TO THE ASSESSEE U/S. 12AA BE CANCELLED. SECONDLY , WHETHER ON THE ITA NO. 597/KOL/2016 M/S.JAGANNATH GUPTA FAMILY TRUST 3 ALLEGATION OF PAYMENT OF RS.25,000/- TOWARDS COMMIS SION OUT OF BOOKS OF ASSESSEE BE A GROUND FOR CANCELLATION OF REGISTRATI ON U/S. 12AA OF THE ACT. 5. FOR THE FIRST POINT THE LD.AR FOR THE ASSESSEE SUBMITS THAT THE ASSESS EE RECEIVED DONATIONS FROM VARIOUS PERSONS AND CONCERN S TOTALING TO RS.1,90,33,000/- FOR THE YEAR 2012-2013 AND REFERR ED TO PAGE NOS 132 AND 134 OF THE PAPER BOOK. THE LD.AR SUBMITS THAT THE S CHOOL OF HUMAN GENETICS AND POPULATION HEALTH DONATED RS.17,00,000/- ON 25- 02-2013 THROUGH RTGS AND THE ASSESSEE RECEIVED THE SAME UNDER CORPUS FUN D. AGAIN, SAID INSTITUTION DONATED AN AMOUNT OF RS.20,00,000/- ON 4-3-2013 THR OUGH RTGS AND THE ASSESSEE TREATED THE SAME TOTALING TO RS.37,00,000/ - AS CORPUS FUND. THE LD.AR SUBMITS THAT THE CIT (E) BASING ON THE STATEM ENT GIVEN BY SMT. MOUMITA RAGHAVAN DURING THE SURVEY OPERATION U/S. 132 OF TH E ACT ON THE SAID SCHOOL OF HUMAN GENETICS AND POPULATION HEALTH AND ALSO ON TH E STATEMENT GIVEN BY SMT. SAMADRITA MUKHERJEE SARDAR DURING THE COURSE OF PROCEEDINGS BEFORE THE SETTLEMENT COMMISSION CONDUCTED SURVEY ON ASSESSEE AND SHOW CAUSED SEEKING EXPLANATION WHY THE REGISTRATION GRANTED U/ S. 12AA OF THE ACT SHOULD NOT BE CANCELLED. 6. THE LD.AR FURTHER SUBMITS THAT THE REGISTRATION CAN BE CANCELLED ONLY UNDER THE PROVISIONS AS CONTEMPLATED IN SECTION 12A A(3) OF THE ACT, THAT IF THE ACTIVITIES OF THE TRUST ARE NOT GENUINE AND THE ACT IVITIES ARE NOT BEING CARRIED OUT IN CONSONANCE WITH THE OBJECTS OF THE TRUST. HE ARGUED UNLESS THE CIT(E) SATISFIES THE CONDITIONS AS CONTEMPLATED IN SECTION 12AA(3) OF THE ACT, THE REGISTRATION CANNOT BE CANCELLED BASING ON THE STAT EMENTS AS GIVEN BY SMT. MOUMITA RAGHAVAN IN SURVEY OPERATION AND SMT. SAMAD RITA MUKHERJEE SARDAR BEFORE THE SETTLEMENT COMMISSION. ITA NO. 597/KOL/2016 M/S.JAGANNATH GUPTA FAMILY TRUST 4 7. THE LD.AR ALSO ARGUED THAT THERE WAS NO BASIS TO IMPLICATE THE ASSESSEE INVOLVED IN THE PROCESS OF MAKING ANY BLACK MONEY O F THE GROUP CONCERN INTO WHITE MONEY IN THE HANDS OF THE TRUST. HE SUBMITS T HAT THE OBSERVATION OF THE CIT (E) IS WRONG THAT THE ASSESSEE RECEIVED DONATIO NS IN THE FORM OF CORPUS FUND TO GIVE BENEFIT OF SECTION 80G OF THE ACT TO T HE ALLEGED DONORS. THE LD. AR ALSO ARGUED THAT THE SAID OBSERVATION OF THE CIT (E ) DOES NOT CONSTITUTE TO SAY THAT THE ASSESSEE IS INVOLVED IN INGENUINE ACTIVITI ES AND MISUSED THE PROVISIONS OF THE ACT. IN SUPPORT OF HIS CONTENTION HE PLACED RELIANCE ON THE DECISION OF THE HONBLE HIGH COURT OF ALLAHABAD IN THE CASE OF CIT VS RED ROSE SCHOOL REPORTED IN (2007) 163 TAXMAN 19 (ALL). HE REFERRED TO PARA NO- 34 AND ARGUED THAT THE SCOPE FOR CONDUCTING ENQUIRY BY THE CIT(E ) U/SEC 12AA (3) OF THE ACT, THAT CIT(E) HAS TO SATISFY THAT THE ACTIVITIES OF T HE ASSESSEE ARE GENUINE AND BEING CARRIED OUT IN CONSONANCE WITH THE OBJECTS OF THE TRUST OR INSTITUTION AND THE ENQUIRY REGARDING GENUINENESS OF THE ACTIVITIES CANNOT BE STRETCHED BEYOND THE CONDITIONS AS CONTEMPLATED U/S. 12AA(3) OF THE ACT. RELEVANT FINDINGS OF THE IN THE CASE SUPRA ARE REPRODUCED HEREIN BELOW:- 34. SECTION 12AA, WHICH LAYS DOWN THE PROCEDURE FO R REGISTRATION, DOES NOT SPEAK ANYWHERE THAT THE COMMISSIONER, WHILE CONSIDERING THE APPLIC ATION FOR REGISTRATION, SHALL ALSO SEE THAT THE INCOME DERIVED BY THE TRUST OR THE INSTITUTION IS E ITHER NOT BEING SENT FOR CHARITABLE PURPOSE OR SUCH INSTITUTION IS EARNING PROFIT. THE LANGUAGE US ED IN THE SECTION ONLY REQUIRES THAT ACTIVITIES OF THE TRUST OR THE INSTITUTION MUST BE GENUINE, WH ICH ACCORDINGLY WOULD MEAN, THEY ARE IN CONSONANCE WITH THE OBJECTS OF THE TRUST/INSTITUTIO N, 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 ITS CHARITAB LE ACTIVITIES, MAY BE A GROUND FOR REFUSING EXEMPTION ONLY WITH RESPECT TO THAT PART OF THE INC OME BUT CANNOT BE TAKEN TO BE A SYNONYM TO THE GENUINENESS OF THE ACTIVITIES OF THE TRUST OR T HE INSTITUTION. 35. THIS IS MORE EVIDENT IF WE SEE THE PROVISIONS O F SECTION 11, WHICH, WHILE EXEMPTING THE INCOME GIVEN IN ITS VARIOUS SUB-CLAUSES FROM BEING INCLUDED IN THE TOTAL INCOME OF THE PREVIOUS YEAR OF THE PERSON IN RECEIPT OF THE INCOME, FOR EX AMPLE, IN SUB-CLAUSE (1) SAYS INCOME DERIVED FROM PROPERTY HELD UNDER TRUST WHOLLY FOR C HARITABLE OR RELIGIOUS PURPOSES, TO THE EXTENT TO WHICH SUCH INCOME IS APPLIED TO SUCH PURPOSES IN INDIA; AND WHERE ANY SUCH INCOME IS ACCUMULATED OR SET APART FOR APPLICATION TO SUCH PU RPOSES IN INDIA, TO THE EXTENT TO WHICH THE INCOME SO ACCUMULATED OR SET APART IS NOT IN EXCESS OF FIFTEEN PER CENT OF THE INCOME FROM SUCH PROPERTY. 36. THE AFORESAID PROVISION THUS, CLARIFIES THAT AL L THAT INCOME, WHICH IS DERIVED FROM THE PROPERTY HELD UNDER THE TRUST WHOLLY FOR CHARITABLE PURPOSES OR RELIGIOUS PURPOSES, SHALL STAND EXEMPTED TO THE EXTENT TO WHICH SUCH INCOME IS APPL IED TO SUCH PURPOSES IN INDIA BUT IF THE INCOME IS ACCUMULATED OR SET APART FOR APPLICATION TO SUCH PURPOSES IN INDIA, THE SAME SHALL NOT BE IN EXCESS OF FIFTEEN PER CENT OF THE INCOME FROM SUCH PROPERTY. ITA NO. 597/KOL/2016 M/S.JAGANNATH GUPTA FAMILY TRUST 5 37. SUB-SECTION (2) OF SECTION 11 STATES ABOUT A SI TUATION WHERE EIGHTY FIVE PER CENT OF THE INCOME REFERRED TO IN CLAUSE (A) OR CLAUSE (B) OF S UB-SECTION (1) READ WITH THE EXPLANATION TO THAT SUB-SECTION IS NOT APPLIED, OR IS NOT DEEMED T O HAVE BEEN APPLIED, TO CHARITABLE OR RELIGIOUS PURPOSES IN INDIA DURING THE PREVIOUS YEAR BUT IS A CCUMULATED OR SET APART, EITHER IN WHOLE OR IN PART, FOR APPLICATION TO SUCH PURPOSES IN INDIA, AN D SAYS THAT IN SUCH A SITUATION, SUCH INCOME SO ACCUMULATED OR SET APART SHALL NOT BE INCLUDED IN T HE TOTAL INCOME OF THE PREVIOUS YEAR OF THE PERSON IN RECEIPT OF THE INCOME, PROVIDED THE CONDI TIONS GIVEN IN SUB-CLAUSES (A) AND (B) ARE COMPLIED WITH. 38. THIS ALSO MEANS THAT EVEN THAT INCOME, WHICH CO ULD NOT BE EXEMPTED UNDER SUB- CLAUSE (A) OR (B) OF SUB-SECTION (1), CAN STILL BE EXEMPTED, I F THE CONDITIONS ATTACHED TO SUB- SECTION (2) IN ITS SUB-CLAUSES (A) AND (B) ARE COMPLIED WITH. 39. SUB-SECTION (3) AGAIN SAYS THAT IF ANY INCOME R EFERRED TO IN SUB-SECTION (2) IS APPLIED TO PURPOSES OTHER THAN CHARITABLE OR RELIGIOUS PURPOSE S AS AFORESAID OR CEASES TO BE ACCUMULATED OR SET APART FOR APPLICATION THERETO, OR CEASES TO REMAIN INVESTED OR DEPOSITED IN ANY OF THE FORMS OR MODES SPECIFIED IN SUB-SECTION (5), OR IS NOT UTILISED FOR THE PURPOSE FOR WHICH IT IS SO ACCUMULATED OR SET APART DURING THE PERIOD REFERRED TO IN CLAUSE (A) OF THAT SUB-SECTION OR IN THE YEAR IMMEDIATELY FOLLOWING THE EXPIRY THEREOF, OR I S CREDITED OR PAID TO ANY TRUST OR INSTITUTION REGISTERED UNDER SECTION 12AA OR TO ANY FUND OR INS TITUTION OR TRUST OR INSTITUTION REGISTERED UNDER SECTION 12AA OR TO ANY FUND OR INSTITUTION OR TRUST OR ANY UNIVERSITY OR OTHER EDUCATIONAL INSTITUTION OR ANY HOSPITAL OR OTHER MEDICAL INSTIT UTION REFERRED TO IN SUB-CLAUSE (IV) OR SUB- CLAUSE (V) OR SUB-CLAUSE (VI) OR SUB-CLAUSE ( VIA) OF CLAUSE (23C) OF SECTION 10, SHALL BE DEEMED TO BE THE INCOME OF SUCH PERSON OF THE PREVIOUS YEA R IN WHICH IT IS SO APPLIED OR CEASES TO BE ACCUMULATED OR SET APART OR CEASES TO REMAIN SO INV ESTED OR DEPOSITED OR CREDITED OR PAID OR, AS THE CASE MAY BE, OF THE PREVIOUS YEAR IMMEDIATELY F OLLOWING THE EXPIRY OF THE PERIOD AFORESAID. 40. SECTION 12 ALSO ONLY SAYS THAT ANY VOLUNTARY CO NTRIBUTIONS RECEIVED BY A TRUST CREATED WHOLLY FOR CHARITABLE OR RELIGIOUS PURPOSES OR BY A N INSTITUTION ESTABLISHED WHOLLY FOR SUCH PURPOSES, SHALL FOR THE PURPOSES OF SECTION 11 BE D EEMED TO BE INCOME DERIVED FROM PROPERTY HELD UNDER TRUST WHOLLY FOR CHARITABLE OR RELIGIOUS PURPOSES AND THE PROVISIONS OF THAT SECTION AND SECTION 13 SHALL APPLY ACCORDINGLY. 41. THE PROVISION THUS, EMPHASIZES UPON THE INCOME OF THE TRUST CREATED WHOLLY FOR CHARITABLE OR RELIGIOUS PURPOSES OR AN INSTITUTION ESTABLISHED WH OLLY FOR SUCH PURPOSES AND SO IS THE CASE IN SUB-SECTION (2) OF THE AFORESAID SECTION. THE PROVI SIONS OF SECTION13 EXCLUDES THE APPLICABILITY OF SECTION 11 IN CERTAIN CASES. 42. A CUMULATIVE READING OF THE AFORESAID PROVISION S LEAVES NO MANNER OF DOUBT THAT EXEMPTION UNDER THE AFORESAID PROVISIONS CAN BE CLAIMED WITH RESPECT TO THE INCOME DERIVED BY THE TRUST OR THE INSTITUTION, WHICH IS BEING RUN FOR A CHARITABL E PURPOSE AND, THEREFORE, WHILE CONSIDERING THE REGISTRATION UNDER SECTION 12AA, THE SCOPE OF ENQUI RY OF THE COMMISSIONER, WOULD BE LIMITED TO THE AFORESAID EXTENT. 43. SINCE IN THE ABSENCE OF SUCH REGISTRATION, THE TRUST OR THE INSTITUTION WOULD NOT BE ENTITLED TO CLAIM ANY EXEMPTION OF THE INCOME DERIVED, THOUGH I T IS BEING RUN FOR CHARITABLE PURPOSES, THE REGISTRATION HAS TO BE CONSIDERED IN THE LIGHT OF T HE SPECIFIC PROVISIONS AFORESAID AND IN THE MANNER THAT IT FURTHERS THE OBJECT OF THE SCHEME OF REGISTRATION AND, OF COURSE, EXEMPTION OF THE ENTIRE INCOME OR THE PART OF THE INCOME, AS THE CASE MAY BE, OF A CHARITABLE TRUST OR INSTITUTION HAS TO BE CONSIDERED DURING ASSESSMENT PROCEEDINGS. 44. IT IS SIGNIFICANT TO MENTION THAT REGISTRATION UNDER SECTION 12AA, DOES NOT NECESSARILY ENTITLE THE ASSESSEE TO GET THE INCOME EXCLUDED FROM THE IN COME OF THE PREVIOUS YEAR FOR THE PURPOSE OF DETERMINATION OF TAX LIABILITY BUT IT ONLY ENTIT LES THE ASSESSEE TO CLAIM SUCH EXEMPTION, WHICH OTHERWISE COULD NOT BE CLAIMED IN THE ABSENCE OF RE GISTRATION. THE ENQUIRY BY THE COMMISSIONER SHALL REMAIN RESTRICTED TO THE EXAMINATION, AS TO W HETHER THE ASSESSEE, WHO HAS MOVED THE APPLICATION FOR REGISTRATION UNDER SECTION 12A, IS ACTUALLY IN THE ACTIVITIES WHICH ARE GENUINE. GENUINENESS OF THE ACTIVITIES OF THE TRUST OR THE I NSTITUTION HAS TO BE SEEN, KEEPING IN MIND THE OBJECTS THEREOF, WHICH NECESSARILY MEANS THAT THE COMMISSIONER SHALL SATISFY HIMSELF ABOUT THE FACT THAT THE ACTIVITIES ARE QENUINE AND IN CONSONA NCE WITH THE OBJECTS OF THE TRUST OR THE INSTITUTION. IN OTHER WORDS, IF ESTABLISHING AND RU NNING 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 ITA NO. 597/KOL/2016 M/S.JAGANNATH GUPTA FAMILY TRUST 6 EDUCATION IS BEING IMPARTED AS PER RULES AND THE FA CTUM OF ESTABLISHMENT AND RUNNING SCHOOL IS A GENUINE ACTIVITY. THE ENQUIRY REGARDING GENUINENE SS OF THE ACTIVITIES CANNOT BE STRETCHED BEYOND THIS. 45. SUFFICIENT SAFEGUARDS HAVING BEEN GIVEN IN SECT IONS 11, 12 AND 13 FOR ASSESSING THE INCOME WHICH HAS NOT BEEN APPLIED TO THE PURPOSE OF THE TR UST OR THE INSTITUTION, THE INTENTION OF THE LAW MAKER AND THE SCOPE AND PURPORT OF THE PROVISION IS APPARENT WHILE CONSIDERING THE QUESTION OF REGISTRATION. 46. THE OBJECTS OF THE PRESENT SOCIETY, WHICH HAVE BEEN REPRODUCED IN THE ORDER OF THE ITAT, ARE BEING REPRODUCED HEREUNDER:- 1.BAALAKON KA MAANSIK, SAMAJIK, CHARITRIK TATHA NAI TIK VIKAS KARNA. 2.POORV PRATHMIK, JUNIOR HIGH SCHOOL, HIGH SCHOOL, INTERMEDIATE VA DEGREE STAR TAK KI SIKSHA KI VYAVASTHA KARNA, JAISA KI SAMAY-SAMAY PAR SHASAN DW ARA UCHIT SAMJHA JAEGA. 3.SAMAJIK DRISHTI SE ANAATH, NIRASHRIT, HARIJAN, PI CHHDI JAATI AUR APANG BAALAKON KE SANRAKSHAN VA PUNARVAS KI VYAVASTHA KARNA. 4 BAALAKON KE SHARIRIK VIKAS HETU VYAYAM, KHELKOOD AADI KI VYAVASTHA KARNA. 5.BAALAKON KE MAANSIK VIKAS HETU PUSTAKALAYA AUR VA CHNALAYA KI STHAPNA KARNA. 6.UPROKT UDDESHYON KI POORTI HETU EVAM INSE SAMBAND HIT ANYA AAVASHYAK KARYA JO SOCIETIES ACT KI DHARA 20 KE ANTARGAT HONGE EVAM ANY AAKASMIK KAR YON KE LIYE PRABANDH KARNA. 47. THE TRIBUNAL HAS RIGHTLY FOUND THAT THE OBJECTS AFORESAID SHOW THAT NONE OF THE OBJECTS WERE AGAINST PUBLIC POLICY AND THE MAIN ACTIVITY OF THE SAID SOCIETY WAS TO PROVIDE EDUCATION TO CHILDREN FROM PRIMARY SECTION TO DEGREE LEVEL AND T O IMPROVE THE MENTAL, SOCIAL AND OTHER DEVELOPMENT OF THE STUDENTS. 8. THE LD.AR FURTHER ARGUED THAT THE CIT (E) DID N OT FIND ANY ADVERSE INFERENCE THAT THE ACTIVITIES OF THE ASSESSEE TRUST ARE NOT GENUINE AND THE SAID ACTIVITIES ARE NOT BEING CARRIED OUT IN CONSONANCE WITH THE OBJECTS OF THE TRUST OR INSTITUTION. THE LD. AR SUBMITS THAT THE ASSESSE E RUNNING AN ENGINEERING COLLEGE PROVIDING GRADUATION COURSE IN B-TECH AND M ASTER DEGREE COURSE IN BUSINESS ADMINISTRATION. THE ASSESSEE ALSO MADE COR PUS DONATION TO URMILA DEVI JAGANNATH TRUST IN THE AGGREGATE OF RS.11,10,0 0,000/- FOR SETTING UP A MEDICAL COLLEGE AND HOSPITAL AT BUDGE BUDGE AND ARG UED THAT THE ASSESSEE CONDUCTING ITS AFFAIRS IN CONSONANCE WITH THE OBJEC TS OF THE TRUST AND ARE GENUINE. ITA NO. 597/KOL/2016 M/S.JAGANNATH GUPTA FAMILY TRUST 7 9. THE LD.AR ARGUED THAT THE ASSESSEE IS CONDUCTING ITS AFFAIRS OF TRUST FOR THE PURPOSE OF CHARITABLE AND AS SUCH REGISTRATION CANNOT BE CANCELLED ON THE REASON AS SET OUT BY THE CIT (E) IN HIS SHOW CAUSE NOTICE. IN SUPPORT OF WHICH, HE RELIED ON THE DECISION DT:09-09-2014 OF HONBLE HIGH COURT OF KARNATAKA IN THE CASE OF CIT VS. M/S. ISLAMIC ACADEMY EDUCATION IN ITA NO. 805/2008 AND REFERRING TO PARA NOS 7 & 8 AND ARGUED THAT UNLESS THE CIT(E) SATISFIES THAT THE ACTIVITIES OF THE TRUST ARE NOT GENUINE AND NOT BEI NG CARRIED OUT IN CONSONANCE WITH THE OBJECTS OF THE TRUST, THEN REGISTRATION CA NNOT BE CANCELLED FOR ANY OTHER REASONS EXCEPT THE TWO CONDITIONS AS CONTEMPL ATED IN SECTION 12AA(3) OF THE ACT AND THE RELEVANT PORTION OF THE SAME ARE RE PRODUCED HEREIN BELOW:- '7. SECTION 12AA PROVIDES FOR PROCEDURE FOR CANCELL ATION OF REGISTRATION OF THE TRUST OR INSTITUTION BY THE COMMISSIONER OF INCOME TAX. THE POWER OF CANCELLATION OF REGISTRATION FLOWS FROM THE POWER TO REGISTER. HOWE VER, THERE HAS BEEN UNNECESSARY LITIGATION ON THIS ISSUE. UNDER WHAT CIRCUMSTANCES, THE REGISTRATION OF A TRUST OR INSTITUTION GRANTED UNDER SECTION 12A COULD BE CANC ELLED BY THE COMMISSION OF INCOME TAX WAS THE SUBJECT MATTER OF VARIOUS INTERPRETATIO N BY THE VARIOUS HIGH COURTS. IN ORDER TO AVOID SUCH UNNECESSARY LITIGATIONS, THE PA RLIAMENT INTRODUCED SUB-SECTION (3) TO SECTION 12AA BY FINANCE (NO.2) ACT OF 2004 WITH EFFECT FROM 1.10.2004 WHICH READS AS UNDER: SECTION 12AA(3): WHERE A TRUST OR AN INSTITUTION HAS BEEN GRANTED REGISTRATION 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 FINAN CE (NO.2) ACT, 1996 (33 OF 1996) AND SUBSEQUENTLY THE COMMISSIONER IS SATISFIED THAT THE ACTIVITIES OF SUCH TRUST OR INSTITUTION ARE NOT GENUINE OR ARE NOT BEING CARRIE D OUT IN ACCORDANCE WITH THE OBJECTS OF THE TRUST OR INSTITUTION, AS THE CASE MAY BE, HE SHALL PASS AN ORDER IN WRITING CANCELLING THE REGISTRATION OF SUCH TRUST OR INSTITUTION: PROVIDED THAT NO ORDER UNDER THIS SUB-SECTION SHALL BE PASSED UNLESS SUCH TRUST OR INSTITUTION HAS BEEN GIVEN A REASONABLE OPPORTUNITY OF BEING HEARD.]' AS IS CLEAR FROM THE CIRCULAR NO.5 OF 2005 DATED 15 .7.2005 ISSUED BY THE CENTRAL BOARD OF DIRECT TAXES, THE AFORESAID SECTION WAS AMENDED SO AS TO SPECIFICALLY PROVIDE THAT IF THE COMMISSIONER OF INCOME TAX IS SATISFIED THAT TH E ACTIVITIES OF ANY TRUST OR INSTITUTION ARE NOT GENUINE OR ARE NOT BEING CARRIE D OUT IN ACCORDANCE WITH THE OBJECTS OF THE TRUST OR INSTITUTION, HE SHALL, AFTER GIVING REASONABLE OPPORTUNITY OF BEING HEARD TO THE CONCERNED TRUST OR INSTITUTION, PASS AN ORDE R IN WRITING CANCELLING THE REGISTRATION GRANTED UNDER THE SAID SECTION. THEREF ORE, IN VIEW OF THE AFORESAID EXPRESS PROVISION, REGISTRATION GRANTED TO A TRUST COULD BE CANCELLED UNDER TWO CIRCUMSTANCES NAMELY, (1) WHEN THE ACTIVITIES OF THE TRUST OR INSTITUTIO N ARE NOT GENUINE; AND (2) THE ACTIVITIES OF THE TRUST OR INSTITUTION ARE NOT BEING CARRIED OUT IN ACCORDANCE WITH THE OBJECTS OF THE TRUST OR INSTITUTION. ONLY IF THE COMMISSIONER IS SATISFIED THAT ANY ONE OF THESE CONDITIONS EXISTS, THEN HE SHALL PASS AN ORDER IN WRITING CANCELLING THE REGIS TRATION OF SUCH TRUST OR INSTITUTION. ITA NO. 597/KOL/2016 M/S.JAGANNATH GUPTA FAMILY TRUST 8 THEREFORE WHAT FOLLOWS IS, EXCEPT THE AFORESAID TWO GROUNDS AND ON NO OTHER GROUND, AN ORDER CANCELLING REGISTRATION OF THE TRUST COULD BE PASSED. 8. IN THE INSTANT CASE, THE MATERIAL ON RECORD SHO WS THAT THE TRUST HAS ESTABLISHED EDUCATIONAL INSTITUTION AND IMPARTING M EDICAL EDUCATION. EVERY YEAR, STUDENTS ARE ADMITTED. HUGE INVESTMENT IS MADE FOR CONSTRUCTION OF BUILDINGS FOR HOUSING THE COLLEGE, HOSTEL AND TO PROVIDE OTHER FA CILITIES TO THE STUDENTS WHO ARE STUDYING IN THE COLLEGE. THE COLLEGE IS RECOGNIZED BY THE MEDICAL COUNCIL OF INDIA, STATE OF KARNATAKA AND ALL OTHER STATUTORY AUTHORITIES. T HEREFORE, IT CANNOT BE SAID THAT THE TRUST IS NOT GENUINE. ADMITTEDLY, THE STUDENTS ARE BEING ADMITTED EVERY YEAR. STUDENTS ARE STUDYING IN ALL COURSES. THUS THE OBJECT OF THE CONSTITUTION OF THE TRUST NAMELY IMPARTING OF EDUCATION IS GOING ON UNINTERRUPTEDLY. THEREFORE, IT CANNOT BE SAID THAT THE ACTIVITIES OF THE TRUST ARE NOT BEING CARRIED OUT I N ACCORDANCE WITH THE OBJECTS OF THE TRUST. WHEN THE AFORESAID TWO CONDITIONS ARE FULLY SATISFIED, ON THE GROUND THAT THE TRUSTEES ARE MISAPPROPRIATING THE FUNDS OF THE TRUS T THE REGISTRATION OF THE TRUST CANNOT BE CANCELLED. IF THE TRUSTEES ARE MISAPPROPRIATING THE FUNDS, IF THEY ARE MAINTAINING FALSE ACCOUNTS, IT IS OPEN TO THE AUTHORITIES TO DE NY THE BENEFIT UNDER SECTION 11 OF THE INCOME TAX ACT, BUT THAT IS NOT A GROUND FOR CANCEL ATION OF REGISTRATION ITSELF. THAT IS PRECISELY WHAT THE TRIBUNAL HAS HELD. THEREFORE, TH E SUBSTANTIAL QUESTION OF LAW IS ANSWERED IN FAVOUR OF THE ASSESSEE AND AGAINST THE REVENUE. THERE IS NO MERIT IN THIS APPEAL. 10. THE LD.AR ALSO RELIED ON THE DECISION OF THE HO NBLE HIGH COURT OF PUNJAB & HARYANA IN THE CASE OF CIT VS. APEEJAY EDUCATION SOCIETY REPORTED IN (2015) 232 TAXMAN 619 (P&H) AND ARGUED THAT THE LANGUAGE U SED IN SECTION 12AA REQUIRES THAT THE ACTIVITIES OF THE TRUST MUST BE G ENUINE AND BEING CONDUCTED IN CONSONANCE WITH THE OBJECTS OF THE TRUST. THE LD .AR OF THE ASSESSEE DREW OUR ATTENTION TO PAGE NO-419 OF THE PAPER BOOK AND ARGUED THAT THE HONBLE HIGH COURT OF PUNJAB & HARYANA WHILE DISPOSING OF T HE ISSUE IN HAND RELIED ON THE DECISION OF THE HONBLE ALLAHABAD HIGH COURT IN THE CASE OF RED ROSE SCHOOL SUPRA. 11. THE LD.AR SUBMITS THAT IN THE PRESENT CASE THE CIT(E) WENT BEYOND THE SCOPE OF ENQUIRY AS CONTEMPLATED U/S. 12AA(3) OF TH E ACT AND WITHOUT THERE BEING ANY ADVERSE INFERENCE AGAINST THE SAID TWO CO NDITIONS AND CANCELLING THE REGISTRATION AS GRANTED U/SEC 12AA IS ARBITRARY AND IS ILLEGAL. 12. ON THE OTHER HAND, THE LD. DR ARGUED THAT THE R ESPONDENT CONDUCTED SURVEY OPERATION U/S. 133A OF THE ACT IN THE CASE O F SCHOOL OF HUMAN GENETICS ITA NO. 597/KOL/2016 M/S.JAGANNATH GUPTA FAMILY TRUST 9 & POPULATION HEALTH AND FOUND BOGUS DONATIONS OF RS .9.7 CRORES FROM THE FYS 2011-12 TO 2014-15. DURING THE PROCEEDINGS U/SEC 12 A OF THE ACT THE SAID INSTITUTION WAS ASKED TO EXPLAIN THE GENUINENESS OF THE DONATIONS. DURING SUCH PROCEEDINGS SMT MOUMITA RAGHAVAN, TREASURER GIVEN S TATEMENT ADMITTING THE BUSINESS OF PROVIDING ACCOMMODATION ENTRY TO DIFFER ENT INDIVIDUALS AND ORGANISATIONS WHICH WAS CONFIRMED BY SMT. SAMADRITA MUKHERJEE SARDAR, SECRETARY SUBMITTED REPLY ON 24-10-2015 STATING THA T ALL THE DONATIONS PAID BY HER SOCIETY RECORDED UNDER THE HEAD RESEARCH AND D EVELOPMENT EXPENSES IN THEIR INCOME AND EXPENDITURE ACCOUNT. THE LD. DR S UBMITS THAT THE SAID INSTITUTION FILED REVISED ACCOUNTS BEFORE THE SETTL EMENT COMMISSION STATING THAT THE DONATIONS HAVE BEEN SHOWN AS PARTS OF REFU ND MADE AGAINST DONATIONS RECEIVED. BASING ON WHICH THE CIT (E) CONDUCTED SUR VEY OPERATION ON 07-10- 2015 ON THE ASSESSEE AND RECORDED THE STATEMENT OF SHRI KRISHNA KR. GUPTA, TRUSTEE AND SECRETARY OF JAGANNATH GUPTA FAMILY TRU ST AND VICE CHAIRMAN OF BUDGE BUDGE INSTITUTE OF TECHNOLOGY HEREAFTER FOR SHORT AS BBIT . 13. THE LD.DR SUBMITS THAT IN THE SAID OPERATION TH E CIT (E) IMPOUNDED DOCUMENTS AND BOOKS OF ACCOUNT AND MARKED AS BBIT-1 TO BBIT-4 AND BBIT/PD/1. THE LD. DR REFERRED TO PAGE NO-15 OF THE PAPER BOOK AND ARGUED THAT THE SAID SECRETARY DID NOT GIVE ANY SATISFACTO RY EXPLANATION. THE LD. DR ALSO SUBMITS THAT THE SAID STATEMENT FROM PAGES 13 TO 30 OF THE PAPER BOOK WAS RECORDED ON OATH AND THE SAID SHRI KRISHNA KUMA R GUPTA DEPOSED HIS STATEMENT VOLUNTARILY. IN SUPPORT OF HIS CONTENTION REFERRED TO PAGES 18, 19 AND 28 AND HE SUPPORTED THE IMPUGNED ORDER OF THE C IT(E) IN CANCELLING THE REGISTRATION U/S. 12AA(3) OF THE ACT. THE LD.DR SUB MITS THAT THE DECISIONS AS RELIED BY THE ASSESSEE ARE NOT APPLICABLE TO THE PR ESENT CASE FOR THE REASON THAT THE FACTS AND CIRCUMSTANCES THEREIN ARE DIFFER ENT FROM THE PRESENT CASE. ITA NO. 597/KOL/2016 M/S.JAGANNATH GUPTA FAMILY TRUST 10 14. THE LD.DR FURTHER SUBMITS THAT THE HONBLE HIGH COURTS DECIDED THE ISSUES INVOLVING PROCEEDINGS U/SEC 12AA OF THE ACT AND WHEREAS IN THE PRESENT CASE, THE CIT(E) INITIATED THE PROCEEDINGS AGAINST THE BASING ON THE ADMISSIONS MADE BY THE SIMILAR TRUST THAT IT INVOLVED IN ACCOM MODATION ENTRY TO DIFFERENT INDIVIDUALS AND ORGANISATIONS. THE SECRETARY REPRES ENTING THE ASSESSEE DID NOT OFFER ANY EXPLANATION REBUTTING THE ADMISSIONS MADE BY THE TREASURER AND SECRETARY OF SCHOOL OF HUMAN GENETICS & POPULATION HEALTH AND SUPPORTING HIS CONTENTION RELIED ON THE DECISION OF HYDERABAD TRIB UNAL REPORTED IN 20 SOT 353 (HYD), EXCEPT RELIANCE THE LD.DR DID NOT PLACE ON R ECORD THE COPY OF SUCH DECISION. 15. HEARD RIVAL SUBMISSIONS AND PERUSED THE MATERIA L AVAILABLE ON RECORD. THE BRIEF FACTS ARE THAT THE ASSESSEE IS A FAMILY T RUST UNDER THE NAME AND STYLE M/S. JAGANNATH GUPTA FAMILY TRUST, WHICH WAS REGISTERED U/S. 12AA OF THE ACT VIDE ORDER DATED 15-05-2008 AND WAS APPROVE D U/S. 80G(VI) OF THE ACT VIDE ORDER DATED 16-08-2010. THE SAID TRUST WAS EST ABLISHED WITH AN OBJECT OF CHARITABLE PURPOSES FOR PUBLIC PARTICULARLY TO GIVE RELIEF TO POOR AND NEEDY, WHICH PROVIDES MEDICAL RELIEF, EDUCATION AND ADVANC EMENT OF ANY OTHER OBJECTS OF GENERAL PUBLIC UTILITY. THE TRUST IS RUNNING ENG INEERING INSTITUTE. THE RESPONDENT FOUND THAT THE ASSESSEE HAS BEEN INDULGI NG IN THE PRACTICE OF MONEY LAUNDERING THROUGH BOGUS DONATIONS. A SHOW CA USE NOTICE DT. 04-12- 2015 FOR CANCELLATION OF REGISTRATION WAS ISSUED SE EKING EXPLANATION. 16. ACCORDING TO CIT(E) A SURVEY WAS CONDUCTED ON 2 7-01-2015 U/S. 133A OF THE ACT BY THE INVESTIGATION WING OF KOLKATA ON SCH OOL OF HUMAN GENETICS AND POPULATION HEALTH, KOLKATA. ON AN EXAMINATION OF S MT. MOUMITA RAGHAVAN, TREASURER OF ABOVE SAID SCHOOL, THE CIT-E FOUND THA T THE ASSESSEE HAVE ITA NO. 597/KOL/2016 M/S.JAGANNATH GUPTA FAMILY TRUST 11 RECEIVED DONATION AMOUNTING TO RS.37,00,000/- FOR T HE A.Y 2013-14 FROM SAID SCHOOL. ACCORDING TO HIM, THE ASSESSEE INVOLVED IN THE PROCESS OF MAKING BLACK MONEY INTO WHITE MONEY BY MAKING BOGUS DONATIONS AN D THEREBY, THE ASSESSEE HAVE INDULGED IN MONEY LAUNDERING, WHICH I S ILLEGAL, NOT GENUINE AND NOT AT PAR WITH THE OBJECTS OF THE ASSESSEE. WHEREB Y, THE ASSESSEE WAS ASKED TO EXPLAIN WHY THE REGISTRATION U/S. 12A/12AA OF TH E ACT WILL NOT GET CANCELLED BY INVOKING THE PROVISION OF SECTION 12AA(3) OF THE ACT. 17. THE RESPONDENT ALSO FOUND THAT UNDER THE GUISE OF SCIENTIFIC RESEARCH ACTIVITIES, THE THREE SOCIETIES NAMELY A) SCHOOL OF HUMAN GENETICS AND POPULATION HEALTH , KOLKATA, B) HERBICURE HEALTHCARE BIO HERBAL RESEARCH FOUNDATION , KOLKATA AND C) MATRIVANI INSTITUTE OF EXPERIMENTAL RESEARCH & EDUCATION , KOLKATA ARE FOUND TO BE INVOLVED IN SUCH MONEY LA UNDERING THROUGH SUMS RECEIVED AS SCIENTIFIC RESEARCH CONTRIBUTION U /S. 35(1)(II) FROM VARIOUS CORPORATE, FIRMS AND INDIVIDUALS SITUATED ALL OVER INDIA AND RETURNING THE SAME IN CASH. THE SAID KIND OF MODUS OPERANDI CAME TO LI GHT AFTER A SURVEY WAS CONDUCTED ON 27-01-2015 BY INVESTIGATION WING, KOLK ATA ON SUCH THREE SOCIETIES. 18. ON PERUSAL OF THE RECORD IT SHOWS THAT THE INVE STIGATION WING CONDUCTED A SURVEY U/S. 133A OF THE ACT ON SCHOOL OF HUMAN GE NETICS AND POLLUTION HEALTH ON 27-01-2015. THEREAFTER, ON 07-10-2015 A S URVEY WAS CONDUCTED AT THE PREMISES OF BBIT BELONGING TO ASSESSEE TRUST. D URING THE SURVEY A STATEMENT OF SHRI KRISHNA KUMAR GUPTA, TRUSTEE AND SECRETARY, OF ASSESSEE TRUST AND VICE CHAIRMAN OF BBIT WAS RECORDED AND DO CUMENTS AND BOOKS OF ACCOUNT WERE IMPOUNDED. ON PERUSAL OF THE SHOW CAUS E NOTICE DT. 04-12-2015, IT CLEARLY SHOWS THE CIT (E) ISSUED SUCH NOTICE BAS ING ON THE SURVEY CONDUCTED ITA NO. 597/KOL/2016 M/S.JAGANNATH GUPTA FAMILY TRUST 12 ON SCHOOL OF HUMAN GENETICS AND POPULATION HEALTH A ND ON A STATEMENT OF SMT. MOUMITA RAGHAVAN WHEREIN SHE ADMITTED THAT THE SAID CONCERN IS ENGAGED IN THE BUSINESS OF PROVIDING ACCOMMODATION ENTRIES IN RESPECT OF DIFFERENT INDIVIDUALS AND ORGANIZATION. ON VERIFICA TION THE CIT (E) FOUND THAT THE ASSESSEE TRUST RECEIVED DONATION OF RS.37,00,00 0/- FOR THE A.Y 2013-14 WHICH IS BOGUS. WE FIND THAT ON 07-10-2015 THE RESP ONDENT EXAMINED SAID SHRI KRISHNA KUMAR GUPTA AND WAS CONFRONTED HIM REG ARDING THE DETAILS OF INCOME OF TRUST AND SOURCES OF CORPUS FUND AND DONA TION AND ITS AUTHENTICITY AND GENUINENESS, IDENTITY OF DONORS AND MORE PARTIC ULARLY REGARDING THE LETTER DT. 28-09-2015 ISSUED BY SCHOOL OF HUMAN GENETICS A ND POPULATION HEALTH IN RESPONSE TO NOTICE ISSUED U/S. 133(6) OF THE ACT IN ASSESSMENT PROCEEDINGS FOR THE A.Y 2013-14. 19. WE FIND THAT SAID SECRETARY SOUGHT REASONABLE T IME TO ANSWER ALL THE QUESTIONS AS CONFRONTED TO HIM. WE ALSO FIND THAT T HE RESPONDENT CONFRONTED THE SAID LETTER TO SHRI KRISHNA KUMAR GUPTA AND HE RESPONDED THAT HE HAS NO KNOWLEDGE ABOUT THEIR INTERNAL AFFAIRS BY REFERRING TO CONTENTS OF THE SAID LETTER DT. 28-09-2015. THEREFORE, WE ARE OF THE VIEW THAT THE CONTENTS OF THE SAID LETTER WAS IN KNOWLEDGE OF SAID SECRETARY TO THE FA CT THAT THEY RECEIVED DONATION FROM THE SAID SCHOOL IS BOGUS AND SOUGHT T EN DAYS TIME TO RESPOND THE SAME IN DETAIL. WE FIND THAT THE RESPONDENT AG AIN EXAMINED THE SAID SHRI KRISHNA KUMAR GUPTA ON 28-10-2015 AT Q.NO. 16 AT PA GE NO-22 OF PAPER BOOK REGARDING OFFERING OF EXPLANATION IN RESPECT OF ADM ISSION BY SCHOOL OF HUMAN GENETICS & POPULATION HEALTH THAT THE DONATIONS GIV EN BY THEM TO ASSESSEE WERE IN THE NATURE OF ACCOMMODATION ENTRIES AND THE SAID SECRETARY DID NOT GIVE ANY SPECIFIC REPLY TO FALSIFY THE ADMISSION AS CONTAINED IN LETTER DT:28-09- 2015, EXCEPT STATING THAT IS THEIR INTERNAL MATTER AND IF ANY NEED ARISES HE IS READY TO CONFRONT THE SAME. WE FIND NO STEP AS SUCH TAKEN BY THE ASSESSEE TO ITA NO. 597/KOL/2016 M/S.JAGANNATH GUPTA FAMILY TRUST 13 REBUT THE ADMISSION AS RIGHTLY POINTED BY THE LD.DR FROM THE RECORDING OF FIRST STATEMENT I.E 07-10-2015 TILL THE PASSING OF IMPUGN ED ORDER I.E 15-03-2016. 20. WE FIND, ON 28-10-2015, AT Q.NO. 17 AT PAGE NO -22 OF PAPER BOOK THE RESPONDENT CONFRONTED THE SECRETARY TO GIVE EXPLANA TION ABOUT THE FACT ADMITTING BEFORE INCOME TAX SETTLEMENT COMMISSION B Y SECRETARY SMT. SAMADRITA MUKHERJEE SARDAR STATING THAT ALL THE DON ATIONS MADE WERE BOGUS. WE FIND THAT THE SAID SECRETARY DID NOT OFFER ANY P ROPER EXPLANATION IN RESPECT OF SAID QUESTION, EXCEPT STATING THAT IS THEIR INTE RNAL MATTER. WE FIND THAT THE CIT(E) WHILE CANCELLING THE REGISTRATION U/S.12AA(3 ) OF THE ACT REFERRED THE SAID ADMISSION AS MADE BY SECRETARY, SMT. SAMADRITA MUKH ERJEE SARDAR VIDE LETTER DT. 24-10-2015 CONFIRMING BEFORE THE INCOME TAX SET TLEMENT COMMISSION THAT THE DONATIONS PAID BY THEIR SOCIETY TO VARIOUS TRUS TS AND SOCIETIES BEFORE THE SETTLEMENT COMMISSION SHOWN AS PART OF REFUNDS MADE AGAINST DONATIONS RECEIVED VIDE PARA 4.4 OF THE CIT(E)S ORDER AT PAG E NO-83 OF THE PAPER BOOK. WE FIND THAT THE STATEMENT OF SAMADRITA MUKHERJEE S ARDAR GOES TO ESTABLISH THAT THEIR SOCIETY HAS BEEN RECEIVING DONATIONS AND RETURNING THE SAME BY KEEPING 30% BEING DONATION. SMT.SMADRITA MUKHERJEE ALSO CONFIRMED THE STATEMENT GIVEN SMT. MOUMITA RAGHAVAN AT PAGE NO-80 OF PAPER BOOK. ALL THE STATEMENTS INCLUDING THE STATEMENT OF SHRI KRISHNA KUMAR GUPTA ESTABLISHES THAT THEY INDULGED ACTIVITY NOT IN CONSONANCE WITH THE OBJECTS OF THE ASSESSEE TRUST BY ACCEPTING THE DONATIONS AND RETURNING THE SAME BY RETAINING THE SAME BEING COMMISSION. 21. WE FIND THAT WITH REGARD TO Q.NOS. 19 & 20 DT. 7-10-2015 AS CONFRONTED TO SHRI KRISHNA KUMAR GUPTA, HE DID NOT GIVE ANY SP ECIFIC ANSWER. REGARDING THE LETTER DT. 28-09-2015 FILED BY SCHOOL OF HUMAN GENETICS AND POPULATION ITA NO. 597/KOL/2016 M/S.JAGANNATH GUPTA FAMILY TRUST 14 HEALTH DURING THEIR ASSESSMENT PROCEEDINGS FOR THE A.Y 2013-14, THE SAID SHRI KRISHNA KUMAR GUPTA DID NOT GIVE ANY SPECIFIC ANSWE R TO Q. NOS. 16 & 17 AS CONFRONTED TO HIM ON 28-10-2015. REGARDING THE FACT OF ADMISSION OF ACCOMMODATION ENTRY BEFORE THE INCOME TAX SETTLEMEN T COMMISSION, IT IS NOTICED THAT SHRI KRISHNA KUMAR GUPTA STATED THAT W HENEVER NEED ARISES HE IS READY TO CONFRONT THEM. BUT, HOWEVER, NO SUCH STEP WAS TAKEN BY HIM SO FAR IN VERIFYING THE CONCERNED PERSONS, WHO DEPOSED AGAINS T THE ASSESSEE DURING THEIR RESPECTIVE ASSESSMENT PROCEEDINGS AND ALSO BE FORE THE SETTLEMENT COMMISSION. WE FIND THAT THE STATEMENTS TOGETHER WI TH THE LETTER OF CONFIRMATION FILED BY THE CONCERNED PERSON OF SCHOO L OF HUMAN GENETICS & POPULATION HEALTH REMAINED NOT REBUTTED TO THE FACT THAT THE ASSESSEE IS INDULGED IN MONEY LAUNDERING AGAINST TO THE OBJECTS OF THE ASSESSEE, IN SUCH CIRCUMSTANCES AND ON AN ANALYSIS OF FINDING IN THE IMPUGNED ORDER AND TAKING INTO CONSIDERATION THE ANSWER OF ASSESSEE TO QUESTI ON NO-16 AT PAGE NO-22 OF PAPER BOOK, THOUGH IT WAS NOT ARGUED BEFORE US AND IN THE INTEREST OF JUSTICE, WE ARE OF THE VIEW THE ISSUE SHALL BE REMANDED TO T HE CIT-E FOR AFFORDING AN OPPORTUNITY TO ASSESSEE FOR CROSS EXAMINATION IN RE SPECT OF ADMISSION MADE BY SCHOOL OF HUMAN GENETICS AND POPULATION HEALTH IN T HE SURVEY OPERATION. WE ALSO DERIVE SUPPORT FROM THE ORDER OF CO-ORDINATE B ENCH OF THIS TRIBUNAL PASSED IN SIMILAR SET OF FACTS IN M/S. DR.B.G.MEMORIAL TRUST -VS.- C.I.T. (EXEMPTION) IS REPRODUCED IN PARA-26 HEREIN BELOW. 22. IN VIEW OF THE DISCUSSION ABOVE, WE SET ASIDE THE IMPUGNED ORDER DT:15- 03-2016 AND RESTORE THE ISSUE TO THE FILE OF CIT-E FOR GIVING AN OPPORTUNITY TO ASSESSEE TO PROSECUTE ITS CASE IN ACCORDANCE WITH L AW AS INDICATED ABOVE. ITA NO. 597/KOL/2016 M/S.JAGANNATH GUPTA FAMILY TRUST 15 23. POINT NO.2 AS RAISED BY THE LD.AR OF THE ASSESS EE IS REGARDING THE ALLEGATION OF PAYMENT OF RS.25,000/- MADE TOWARDS C OMMISSION B-TECH SAID TO HAVE BEEN PAID BY ASSESSEE TO SUSANTA VAIDYA A/C B ISWAJIT DAS. THE LD.AR SUBMITS THAT THE SAID AMOUNT OF RS.25,000/- WAS PAI D BY SHRI KRISHNA KUMAR GUPTA INDEPENDENTLY FROM HIS POCKET WHICH IS NOTHIN G TO DO WITH THE AFFAIRS OF THE ASSESSEE TRUST. THE LD. AR SUBMITS THAT DURING THE COURSE OF EXAMINATION OF SAID SHRI KRISHNA KUMAR GUPTA STATED BEFORE THE RESPONDENT THAT THE SAID COMMISSION WAS PAID TO SHRI SUSANTA BAIDYA FOR THE A/C OF SHRI BISWAJIT DAS FOR A WORK RELATED TO LAND DEVELOPMENT AND ALSO REITERA TED THAT THE SAID AMOUNT WAS PAID FROM HIS POCKET. INSPITE OF THE SAME THE R ESPONDENT FOUND IT ILLEGAL AS IT WAS CONTRARY TO RULES OF AICTE. THE LD.AR ARG UED THAT WHEN SUCH AMOUNT WAS NOT ENTERED IN THE BOOKS OF ACCOUNT OF ASSESSEE AND CANCELLING THE REGISTRATION ON THE SAME ALLEGATION AND WITHOUT DRA WING ANY ADVERSE INFERENCE AGAINST THE ASSESSEE IS ILLEGAL AND UNWARRANTED. TH E LD.AR REFERRED TO PAGE NO- 93 OF THE PAPER BOOK AND SUBMITTED THAT HAVING ADMI TTED BY SHRI KRISHNA KUMAR GUPTA BEFORE THE RESPONDENT THAT THE SAID AMO UNT WAS BORNE BY HIM FROM HIS POCKET AND FINDING THEREON AGAINST THE ASS ESSEE IS ARBITRARY AND ILLEGAL. THE LD.AR ALSO SUBMITS THAT THIS ALLEGATIO N ALONE CANNOT CONSTITUTE A GROUND FOR CANCELLATION OF REGISTRATION U/S. 12AA (3) OF THE ACT. 24. ON THE CONTRARY, THE LD.DR SUBMITS THAT SHRI KR ISHNA KUMAR GUPTA ON CONFRONTING WITH THE BUNCH OF LOOSE SHEETS INVENTO RIED AS BBIT-1 CONTAINING VOUCHER DID NOT GIVE ANY SPECIFIC REPLY REGARDING T HE PAYMENT OF RS.25,000/- AND REFERRED TO PAGE NO.17 OF THE PAPER BOOK. THE L D.DR ALSO SUBMITS THAT THE STATEMENTS ON 07-10-2015 AND 28-10-2015 WERE RECORD ED ON OATH AND THE SAID SHRI KRISHNA KUMAR GUPTA PARTICIPATED VOLUNTAR ILY AND DEPOSED HIS STATEMENT WITHOUT ANY THREAT, COERCION OR FORCE AND REFERRED TO PAGES 18,19 ITA NO. 597/KOL/2016 M/S.JAGANNATH GUPTA FAMILY TRUST 16 AND 28 OF THE PAPER BOOK. THE LD.DR ALSO REFERRED T O PAGE NO- 105 OF THE PAPER BOOK ANNEXED HEREWITH AND ARGUED THAT THE ASSESSEE RAISED A VOUCHER ON 19 - 08-2014, WHEREIN IT CLEARLY SHOWS THE PAYMENT OF RS .25,000/- WAS TOWARDS COMMISSION TO SUSANTA BAIDYA A/C BISWAJIT DAS. THE LD. DR SUBMITS THAT THE STATEMENTS AS GIVEN BY SHRI KRISHNA KUMAR GUPTA REG ARDING THE PAYMENT OF RS.25,000/- TOWARDS THE COMMISSION FOR A WORK REL ATED TO LAND DEVELOPMENT IS AWAY FROM TRUTH. THE LD. DR FURTHER SUBMITS THAT THE REGISTRAR, MAULANA ABUL KALAM AZAD UNIVERSITY OF TECHNOLOGY FURNISHED THE LIST OF STUDENTS ADMITTED DURING THE ACADEMIC SESSION 2014-15 IN BBIT, WHEREI N IT WAS REFLECTED THE NAME OF SUSANTA BAIDYA AT SL. NO. 17 OF CIVIL ENGIN EERING. IT CLEARLY ESTABLISHED THAT THE ASSESSEE PAID COMMISSION TO LU RE THE STUDENTS FOR GETTING ADMISSION INTO INSTITUTION I.E BBIT. THE LD. DR ARG UED THAT THE ASSESSEE DID NOT BRING ANY EVIDENCE IN SUPPORT OF ITS CONTENTION THA T THE SAID AMOUNT PAID TOWARDS LAND RELATED WORK AND INSPITE OF HAVING TAK EN AMPLE OPPORTUNITIES. 25. HEARD RIVAL SUBMISSIONS AND PERUSED THE MATERIA L AVAILABLE ON RECORD. DURING THE FINAL STATEMENT THE CIT-E SOUGHT EXPLANA TION FROM ASSESSEE REGARDING THE PAYMENT OF RS.25,000/- AS COMMISSION IN B TECH, WHICH WAS PAID TO SRI SUSANTA BAIDYA AS FOUND FROM PAGE 14 OF LOOSE SHEETS INVENTORISED AS BBIT-1. THE ASSESSEE REPLIED THAT THE COMMISSION WAS PAID TO SRI BISWAJIT DAS THROUGH SRI SUSANTA BAIDYA FOR A WORK RELATED T O LAND DEVELOPMENT. THE ASSESSEE REPLIED THAT IT IS A MERE ALLEGATION MADE ON THE BASIS OF ASSUMPTION WITHOUT THERE BEING NO CONCRETE EVIDENCE AND SUBMIT TED THAT THE REGISTRATION GRANTED U/S. 12AA OF THE ACT CANNOT BE CANCELLED ON SUCH ALLEGATION, IF AT ALL ANY REQUIRED ACTION TO BE TAKEN FOR ANY GROUP CONCE RN AT THE TIME OF ASSESSMENT PROCEEDINGS ON SUCH THREE CONCERNS AND R EITERATED THE OBJECTS OF ITS SOCIETIES AND ALSO DENIED THAT THE ASSESSEE TRU ST RECEIVED DONATIONS FROM SCHOOL OF HUMAN GENETICS AND POPULATION HEALTH IN T HE FORM OF ITA NO. 597/KOL/2016 M/S.JAGANNATH GUPTA FAMILY TRUST 17 ACCOMMODATION ENTRY. THE CIT(E) HAS GIVEN DETAILED DISCUSSION REGARDING CANCELLATION OF REGISTRATION. AFTER CONSIDERING VAR IOUS REPLIES OF ASSESSEE, THE CIT (E) INVOKING THE PROVISIONS OF SECTION 12AA(3) OF THE ACT CANCELLED THE REGISTRATION GRANTED TO ASSESSEE W.E.F 01-04-2008. WE FIND THAT THE RESPONDENT EXAMINED SHRI KRISHNA KUMAR GUPTA ON 07- 10-2015, WHEREIN SAID SHRI KRISHNA KUMAR GUPTA REPLIED THAT HE REQUIRES S UFFICIENT TIME TO ANSWER THE QUESTIONS AND SUBSEQUENTLY HE STATED THAT HE PAID C OMMISSIONS TOWARDS FOR A WORK RELATED TO LAND DEVELOPMENT. IT IS ALSO OBSERV ED FROM THE IMPUGNED ORDER OF THE CIT (E) THAT SHRI KRISHNA KUMAR GUPTA REITER ATED THE SAME BEFORE HIM DURING COURSE OF 12AA(3) OF THE ACT PROCEEDINGS AS MADE IN THE STATEMENTS. WE ALSO FIND THAT ON CONFRONTATION WITH THE ADMISSI ON LIST CONTAINS THE NAME OF ONE PERSON SUSANTA BAIDYA AS PROVIDED BY THE REGIST RAR, MAULANA ABUL KALAM AZAD UNIVERSITY OF TECHNOLOGY TO WHICH SHRI KRISHN A KUMAR GUPTA HAS STATED THAT SUSANTA BAIDYA AND SHRI SUSHANTA BAIDYA ARE TW O DIFFERENT PERSONS AND DENIED THE SAID PAYMENT OF RS.25,000/- TOWARDS COMM ISSION IN CONNECTION WITH THE ADMISSION IN ITS EDUCATIONAL INSTITUTION. IT IS OBSERVED EXCEPT MAKING THE SAID STATEMENTS THE ASSESSEE DID NOT TAKE ANY S TEP TO FALSIFY THE ALLEGATION AS MADE BY THE RESPONDENT REVENUE BY BRINING ANY EV IDENCE TO SHOW THAT THE SAID TWO PERSONS ARE DIFFERENT AND EVIDENCE CONCERN ING THE LAND DEVELOPMENT WORK. THE RELEVANT PORTION OF STATEMENTS DT: 07-10- 2015 AND 28-10-2015 GIVEN BY SHRI KRISHNA KUMAR GUPTA ARE REPRODUCED HE REIN BELOW: STATEMENT DT:07-10-2015 Q.25 PLEASE GO THROUGH THE BUNCH OF LOOSE SHEETS IN VENTORISED AS BBIT-1, CONTAINING VOUCHERS SERIALLY PAGE MARKED AS 16 AND 17 FOUND IN THE LOCK ER, PLACED IN THE ADJACENT AND CONNECTED ROOM WITH THE ROOM OF THE EXECUTIVE DIRECTOR, SMT. SHUBHANGI GUPTA, WHEREIN PAYMENT OF RS.55,000/- WERE MADE ON 31-07-2013 AND 01.08.2013 RESPECTIVELY. FURTHER FROM CASH FLOW STATEMENTS FOR THE PERIOD 30.07.2013 06.08.2013, WHICH HAS BEEN SHOWN TO YOU, THE SAME PAYMENTS ARE NOT ACCOUNTED FOR. PLEASE EXPLAIN. A. 26 PLEASE GIVE ME 10 DAYS TIME TO ANSWER THE QUE STION. Q.27 PLEASE GO THROUGH THE BUNCH OF LOOSE SHEETS IN VENTORISED AS BBIT-1, CONTAINING VOUCHER, SERIALLY PAGE MARKED AS 14 FOUND IN THE LOCKER, PLA CED IN THE ADJACENT AND CONNECTED ROOM WITH THE ROOM OF THE EXECUTIVE DIRECTOR, SMT. SHUBHANGI GUPTA, WHEREIN PAYMENT OF RS.25,000/- WAS ITA NO. 597/KOL/2016 M/S.JAGANNATH GUPTA FAMILY TRUST 18 MADE ON 19.08.2014 AS COMMISSION IN B. TECH AND P AID TO SHRI SUSANTA BAIDYA A/C BISWAJIT DAS. PLEASE EXPLAIN. A. 27. PLEASE GIVE ME 10 DAYS TIME TO ANSWER THIS Q UESTION. STATEMENT DT:28-10-2015 Q. 24. THE FOLLOWING QUESTION WAS ASKED VIDE Q25 OF FINAL STATEMENT DURING SURVEY OPERATION. THE SAME QUESTION IS REPRODUCED AS UNDER: 'PLEASE GO, THROUGH THE BUNCH OF LOOSE SHEETS INVEN TORISED AS BBIT - 1, CONTAINING VOUCHERS SERIALLY PAGE MARKED AS 16 AND 17 FOUND IN THE LOCK ER, PLACED IN THE ADJACENT AND CONNECTED ROOM WITH THE ROOM OF THE EXECUTIVE DIRECTOR, SMT S HUBHANGI GUPTA, WHEREIN PAYMENTS OF RS 55,000/- AND RS 25,000/- WERE MADE ON 31.07.2013 AN D 01.08.2013 RESPECTIVELY. FURTHER FROM CASH FLOW STATEMENTS FOR THE PERIOD 30.07.2013 - 06 .08.2013, WHICH HAS BEEN SHOWN TO YOU, THE SAME PAYMENTS ARE NOT ACCOUNTED F OR. PLEASE EXPLAIN.' A. 24 THE MONEY WAS PAID OUT OF MY OWN POCKET ON AN EMERGENCY BASIS TO MR. N. C. DEY SARKAR WHICH WAS LATER PAID BACK TO ME. FOR RS. 55,000/- V OUCHER WAS MADE BUT THE PAYMENT WAS NOT MADE EVENTUALLY. Q. 25 PLEASE EXPLAIN WHY THE PAPERS WERE KEPT IN T HE LOCKER IN SUCH A SECURED MANNER. PLEASE ALSO EXPLAIN HOW CAN PROFESSOR G. DAS SIGN THE VOUC HER TESTIFYING THAT HE HAS RECEIVED THE MONEY. PLEASE ALSO EXPLAIN EVEN IF YOU HAVE GIVEN M ONEY TO N. C. DEY SARKAR DIRECTLY, WHY THE SAME WAS NOT RECORDED IN THE BOOKS. A25. SINCE THE MONEY WAS PAID TO MR N.C. DEY SARKAR OUT OF MY OWN POCKET THAT IS WHY IT IS NOT REFLECTED IN THE TRUST'S BOOKS OF ACCOUNTS. AS PER USUAL PRACTICE, THE ACCOUNTS DEPARTMENT FIRS T MAKES THE VOUCHER AND GETS IT RECEIVED BY THE RECIPIENT. ONLY AFTER THAT CASHIER RELEASES THE PAYMENT. UNDER THIS INSTANCE THE VOUCHER WAS MADE AND RECEIVED BUT THE CASHIER DID NOT MAKE THE PAYMENT. SINCE IN BOTH THE INSTANCES THE MONEY WAS PAID OR W AS ABOUT TO BE PAID FROM MY OWN POCKET, THEREFORE. IT WAS KEPT SUCH ET SECURED MANNER. Q26.YOU TOLD THAT SINCE THE PAYMENTS WERE MADE OR A BOUT TO POCKET, THOSE WERE NOT RECORDED IN THE TRUST'S BOOKS OF ACCOUNTS. THEN WHY VOUCHERS, W HICH ARE A PART OF THE BOOKS OF ACCOUNTS, WERE MADE FOR THE SAME. A. 26.THE CASHIER, TO KEEP AN EVIDENCE, HAD MADE TH E RECEIPT, ONLY TO SHOW ME, AS A PROOF. SINCE THE PAYMENT WAS MADE OUT OF MY OWN POCKET, IT DID N OT REFLECT IN THE BOOKS OF THE TRUST. Q.27. THE FOLLOWING QUESTION WAS ASKED VIDE Q27 OF FINAL STATEMENT DURING SURVEY OPERATION. THE SAME QUESTION IS REPRODUCED AS UNDER: PLEASE GO THROUGH THE BUNCH OF LOOSE SHEETS INVENTO RISED AS BBIT - 1, CONTAINING VOUCHER SERIALLY PAGE MARKED AS 14 FOUND IN THE LOCKER, PLACED IN TH E ADJACENT AND CONNECTED ROOM WITH THE ROOM OF THE EXECUTIVE DIRECTOR, SMT SHUBHANGI GUPTA , WHEREIN PAYMENT OF RS 25,0001- WAS MADE ON 19.08.2014 AS 'COMMISSION IN B. TECH.' AND PAID TO SHRI SUSANTA BAIDYA A/C BISWAJIT DAS. PLEASE EXPLAIN. A27. COMMISSION WAS PAID TO BISWAJ IT DAS THROUGH S USANTO BAIDYA FOR WORK RELATED TO LAND DEVELOPMENT AND THE MONEY WAS PAID OUT OF MY POCKET . Q28. COMMISSIONS ARE PAID AGAINST RENDERING OF SOME SERVICE. PLEASE SPECIFY WHAT KIND OF SERVICES WERE PROVIDED BY THESE TWO PERSONS? A28. BISWAJIT DAS ARRANGED FOR A CONTRACTOR WHO HAD DONE THE WORK OF THE ROAD AND LAND DEVELOPMENT FOR WHICH COMMISSION WAS PAID. ITA NO. 597/KOL/2016 M/S.JAGANNATH GUPTA FAMILY TRUST 19 Q29. PLEASE PROVIDE THE DETAILS VIZ. ADDRESS, PH NO , PAN OF THE ABOVE SAID TWO PERSONS AND THE CONTRACTOR. A29. SINCE I AM NOT PREPARED FOR THIS I WILL PROVID E THE DETAILS BY 02-11-2015. Q30. YOU ARE UNDER OATH. PLEASE STATE WHETHER THIS COMMISSION WAS PAID TO AN AGENT NAMED SUSANTA BAIDYA FOR BRINGING IN A STUDENT NAMED BISW AJIT DAS FOR THE B. TECH COURSE. A30. NO SIR. Q31. DO YOU HAVE ANY STUDENT IN YOUR INSTITUTE WHO TOOK ADMISSION IN THE ACADEMIC SESSION 2014-15 BY THE NAME BISWAJIT DAS OR SUSANTO BAIDYA? A31. READILY I CANNOT TELL YOU SINCE THERE ARE MORE THAN 3000 STUDENT. I WILL CHECK AND LET YOU KNOW BY 02-11-2015. Q32. YOU HAVE A VERY LARGE GROUP OF BUILDINGS SPREA D OVER A HUGE LAND. PLEASE INFORM, TO ENGAGE CONTRACTORS FOR SUCH CONSTRUCTION HAVE YOU PAID COM MISSION TO ANY ONE? A.32 I CANNOT RECALL AT THIS POINT OF TIME THE BUIL DINGS WERE MADE OVER A PERIOD OF 8 ...............02-11-2015. Q.33 CAN YOU GIVE ANY PLAUSIBLE REASON FOR PAYING C OMMISSION TO ENGAGE A CONTRACTOR. IT IS ALSO NOTED THAT OVER A PERIOD OF 8 YRS YOU HAVE ENGAGED A NO. OF CONTRACTORS FOR SIMILAR JOB AND WHO ARE KNOWN TO YOUR ORGANIZATION. A.33 IT MUST BE BECAUSE OF MY BUSY SCHEDULE. FOR WH ICH I MAY HAVE ASKED SOMEONE TO SUPERVISE THE JOB AND GET THE JOB DONE. Q.34 IT SEEMS FROM THE ANSWER OF Q33 THAT WHILE ENG AGING CONTRACTORS, YOU DEAL WITH THEM DIRECTLY. NAME A FEW OF THEM. A.34 RIGHT NOW I CANNOT TELL YOU ANY NAME. I WILL H AVE TO TAKE HELP OF MY DEPARTMENT. Q.35 IF A COMMISSION WAS PAID TO ENGAGE A CONTRACTO R, THEN WHY THE SAME WAS NOT BOOKED AS A LEGITIMATED EXPENSE. A.35 AS THE EXPENSE WAS MADE OUT OF MY OWN POCKET, THEREFORE IT WAS NOT REFLECTED IN THE BOOKS OF THE TRUST. Q. 36 WHY DID YOU PAY AN EXPENSE OF THE TRUST FROM YOUR OWN POCKET WHICH CANNOT BE BOOKED AS AN EXPENSE IN YOUR INDIVIDUAL INCOME TAX FILE. A. 36 SINCE I HAD THE MONEY IN MY POCKET AND I MAD E THE EXPENSE. Q.37 DO YOU FOLLOW ANY TENDERING PROCEDURE FOR AWAR DING CONTRACTS? A.37 NO. WE DO NOT FOLLOW. FINDING OF CIT-E: 5.6. REBUTTAL OF THE REPLY TO THE SHOW CAUSE NOTICE : A) IN RESPONSE TO THE SI NO 1 ABOVE: THE ASSESSEE R EPEATEDLY TOOK THE ABSURD PLEA OF ENGAGING COMMISSION AGENT AND CLAIMED THAT SHRI SUSANTA BAID YA WAS A CONTRACTOR ENGAGED IN THE WORK OF LAND DEVELOPMENT. BUT THE ASSESSEE: I. COULD NOT TELL SPECIFICALLY FOR WHICH LAND DEVEL OPMENT WORK HE WAS ENGAGED. ITA NO. 597/KOL/2016 M/S.JAGANNATH GUPTA FAMILY TRUST 20 II. COULD NOT TELL THE WHEREABOUTS OF SHRI SUSANTA BAIDYA III. AT TIME OF RECORDING OF STATEMENT OF SHRI K K GUPTA UNDER OATH, THE QUESTIONS WERE ALSO READ OUT BEFORE HIM. SHRI SUSANTA BAIDYA AND SHRL SUSHAN TA BALDYA, THESE TWO NAMES ARE PHONETICALLY SIMILAR NAMES. HE TOOK TIME TO VERIFY WHETHER ANY S TUDENT NAMED SHRI SUSANTA BALDYA WAS ADMITTED IN HIS COLLEGE DURING THE ACADEMIC YEAR 20 14-15. BUT, 'UNDER OATH, HE SUPPRESSED THE FACT THAT A STUDENT WITH PHONETICALLY SIMILAR NAME AND WITH MINOR DIFFERENCE IN THE SPELLING FROM THAT OF WHICH FOUND ON THAT LOOSE SLIP, WAS ADMITTE D IN HIS COLLEGE DURING THAT PERIOD. HE CAME OUT WITH HIS CLAIM OF DUAL ENTITY OF SHRI SUSANTA B AIDYA AND SHRI SUSHANTA BAIDYA, ONLY AFTER THE DEPARTMENT FOUND FROM THE STUDENT LIST COLLECTED, F ROM WBUT, THAT A STUDENT NAMED SHRI SUSHANTA BAIDYA WAS ADMITTED IN THE COLLEGE DURING THE ACADEMIC YEAR 2014-15. FURTHER, HE COULD NOT PRODUCE SHRI SUSANTA BAIDYA OR ANY OF HIS DOCUMENTS BEFORE THE DEPARTMENT TO PROVE THESE TWO NAMES ARE OF TWO DIFFERENT PERSONS. FURTHER, IT IS SEEN THAT THIS PAYMENT HAS NOT BEEN BOOKED IN THE BOOKS OF THE TRUST. SHRI K.K.GUPTA HAD STATED THAT HE HAD BORNE THE EXPENDIT URE. A SCRUTINY OF SHRI K.K.GUPTA'S RETURN OF INCOME REVEALED THAT SUCH EXPENSES HAVE NOT BEEN CL AIMED BY HIM. THEREFORE, THIS EXPENSE HAS NOT BEEN BOOKED EITHER BY THE TRUST OR SHRI GUPTA. THERE IS ONLY ONE EXPLANATION TO THIS. SUCH PAYMENT WAS ILLEGAL, SO WAS NOT CLAIMED EITHER BY T HE TRUST OR THE TRUSTEE. THEREFORE, IT IS CLEAR FROM THE ABOVE, THAT THE ASS ESSEE IS JUST TRYING TO CONFUSE THE DEPARTMENT BY MERELY CLAIMING THAT SHRI SUSANTA BAI DYA AND SHRI SUSHANTA BAIDYA ARE TWO DIFFERENT PERSONS WITHOUT DISCHARGING ITS ONUS TO P ROVE. MOREOVER, EVEN IF THE ASSESSEE IS CLAIMING THAT THE PAYMENT WAS FOR COMMISSION FOR ENGAGING A CONTRACTOR FOR LAND DEVELOPMENT IT COULD NOT CLARIFY WHY THE SAME WAS RECORDED AS COMMISSION FOR B.TECH!! 26. IN THE AFOREMENTIONED FINDING OF CIT-E, IT IS O BSERVED THAT THE ASSESSEE COULD NOT BRING ON RECORD THE DETAILS IN S UPPORT OF HIS CONTENTION THAT THE DISPUTED AMOUNT WAS PAID IN RELATION TO LA ND DEVELOPMENT WORK, THEREFORE, IN VIEW OF THE DECISION RENDERED ON FIRS T POINT, IN THE INTEREST OF JUSTICE, WE REMAND THE 2 ND POINT TO THE FILE OF CIT-E FOR GIVING AN OPPORTUNIT Y TO THE ASSESSEE TO SUBSTANTIATE ITS CLAIM WITH A LI BERTY FILE ANY EVIDENCE, IF ANY. AS DISCUSSED ABOVE, THE ORDER DT:20-05-2016 OF COORDINATE BENCH OF THIS TRIBUNAL IN I.T.A NO. 366/KOL/2016 IN THE CAS E OF M/S. DR.B.G.MEMORIAL TRUST -VS.- C.I.T. (EXEMPTION) IS REPRODUCED HEREIN BELOW: 16. WE HAVE GIVEN VERY CAREFUL CONSIDERATION TO THE RIVAL SUBMISSIONS. FROM THE STATEMENT OF SHRI DINESH KUMAR AGARWAL OF M/S. QUADEYE SECURITI ES PVT. LTD IT APPEARS THAT THERE IS PRIMA FACIE GROUND TO BELIEVE THAT THE DONATION OF RS.50 ,00,000/- GIVEN BY M/S. QUADEYE SECURITIES PVT. LTD WAS NOT GENUINE. BASED ON THIS STATEMENT A LONE IT CANNOT BE CONCLUSIVE SAID THAT THE DONATION IN QUESTION WAS BOGUS. WHEN THE STATEMENT OF SHRI DINESH KUMAR AGARWAL WAS CONFRONTED TO THE ASSESSEE AND WHEN THE ASSESSEE WA S ASKED TO APPEAR BEFORE THE RESPONDENT, THE ASSESEE CHOSE TO AVOID APPEARING BEFORE THE RES PONDENT. THIS CONDUCT OF THE ASSESSEE WAS NOT JUSTIFIED. IT IS NO DOUBT TRUE THAT THE STATEME NT OF SHRI DINESH KUMAR AGARWAL WITHOUT BEING SUBJECTED TO CROSS EXAMINATION BY THE ASSESSEE AND FURTHER CORROBORATED BY EVIDENCE OF THE PERSONS WHO ARE STATED TO HAVE ARRANGED FOR BOGUS G IFTS CANNOT BE BELIEVED IN TOTO. NEVERTHELESS THE FACT REMAINS THAT THERE ARE GROUNDS TO BELIEVE THAT THE DONATIONS RECEIVED BY THE ASSESSEE HAD TO BE DECIDED WITH REGARD TO IS GENUINENESS. TH E FACT THAT OPPORTUNITY OF CROSS EXAMINATION OF SHRI DINESH KUMAR AGRAWAL AND THE PERSON WHO ARE ALLEGED TO HAVE ARRANGED THE BOGUS GIFTS WAS NOT AFFORDED TO THE ASSESSEE CANNOT BE THE BASI S TO QUASH THE ORDER U/S 12AA(3) OF THE ACT. AS RIGHTLY CONTENDED BY THE LD. DR IF IT IS FOUND T HAT THE ASSESSEE WAS ACCEPTING BOGUS DONATIONS, ITA NO. 597/KOL/2016 M/S.JAGANNATH GUPTA FAMILY TRUST 21 THEN THAT FACT CAN ONLY LEAD TO AN INFERENCE THAT T HE ACTIVITIES OF THE TRUST ARE NOT GENUINE OR ARE NOT CARRIED OUT IN ACCORDANCE WITH THE OBJECTS OF T HE TRUST. WE THEREFORE ARE OF THE VIEW THAT IT WOULD BE PROPER IN THE INTEREST OF JUSTICE TO SET A SIDE THE ORDER OF THE RESPONDENT AND REMAND THE ISSUE OF CANCELLATION OF REGISTRATION TO THE RESPON DENT FOR FRESH CONSIDERATION. 17. THE ASSESSEE WILL PRESENT HIMSELF BEFORE THE R ESPONDENT AND IF THE RESPONDENT DESIRES HE IS AT LIBERTY TO ISSUE SUMMONS U/S.131 OF THE ACT. IF AFTER SUCH INQUIRY BY THE RESPONDENT AND IF THE RESPONDENT SO DESIRES PROCEED FURTHER U/S.12AA(3) O F THE ACT, HE SHALL AFFORD THE RIGHT OF CROSS EXAMINATION OF SHRI DINESH KUMAR AGRAWAL. IF THE RE SPONDENT SO DESIRES HE SHALL ALSO EXAMINE SHRI PRADIP AGARWAL AND SHRI AJAY AGARWAL AND AFFOR D RIGHT OF CROSS EXAMINATION TO THE ASSESSEE. IF THE RESPONDENT AFTER SUCH EXERCISE STILL DESIRES TO CANCEL THE REGISTRATION THEN HE SHALL AFFORD OPPORTUNITY TO THE ASSESSEE OF BEING HEARD AND DECI DE THE ISSUE IN ACCORDANCE WITH LAW. FOR STATISTICAL PURPOSES THE APPEAL OF THE ASSESSEE IS TREATED AS ALLOWED. THE CASE LAWS CITED BY THE LD. COUNSEL FOR THE ASSESSEE BEFORE US ARE NOT CONS IDERED AT THIS STAGE AS IN OUR OPINION THE TRUTH OR OTHERWISE OF THE STATEMENT OF SHRI DINESH KUMAR AGRAWAL IS VERY MATERIAL FOR ASCERTAINING THE TRUE POSITION WITH REGARD TO THE GENUINENESS OF THE DONATION/GIFT. EVEN OTHERWISE THE FACTS OF THE CASE OF THE ASSESSEE AND THAT OF THE CASE LAWS CITE D BY THE LEARNED COUNSEL FOR THE ASSESSEE ARE DISTINGUISHABLE. IN THE CASE OF FATECHAND CHARITAB LE TRUST (SUPRA), IN THE STATEMENT RECORDED OF THE DONOR THE NAME OF THAT ASSESSEE WAS NOT MENTION ED AS A PERSON TO WHOM BOGUS DONATIONS WERE GIVEN, WHEREAS IN THE PRESENT CASE THE DIRECTO R OF QUDEYES SECURTIES PVT.LTD., IN HIS STATEMENT HAS CLEARLY MENTIONED THE NAME OF THE ASS ESSEE AS A RECIPIENT OF BOGUS DONATIONS IN LIEU OF CASH. THE DECISION IN THE CASE OF ISALMIC ACADEMY OF EDUCATION (SUPRA), THE FACTS OF THE CASE WERE THAT THERE WAS MISAPPROPRIATION OF FUNDS BY THE TRUSTEE OF THE TRUST AND IT WAS FOUND THAT OTHERWISE THE TRUST WAS CARRYING ON CHARITABLE ACTIVITIES. IN THE PRESENT CASE, THE FACTS ARE THAT THERE ARE ALLEGATIONS AGAINST THE TRUST THAT I T WAS RECEIVING BOGUS GIFTS IN LIEU OF CASH. THE DECISION RENDERED IN THE CASE OF QUEENS EDUCATIONAL SOCIETY IS ON THE QUESTION OF APPLICATION OF THE TEST OF PREDOMINANT NATURE OF THE OBJECTS OF TH E TRUST WHICH SHOULD BE DECISIVE IN GRANTING EXEMPTION U/S.10(23C) OF THE ACT AND THEREFORE OF N O ASSISTANCE TO THE FACTS OF THE PRESENT CASE. THE DECISION RENDERED IN THE CASE OF M/S.SOORYA EDU CATIONAL TRUST VS. ITO ITA NO.579/MS./2012 BY THE ITAT CHENNAI BENCH WAS A CASE WHERE THE QUES TION WAS WHETHER THE DENIAL OF EXEMPTION U/S.11 OF THE ACT ON THE GROUND THAT THE ASSESSEE W AS ENGAGED IN ACTIVITIES OF COMMERCIAL NATURE WAS CORRECT. THE PARAMETERS FOR DECIDING SUCH CASE S WOULD BE DIFFERENT FROM THE PRESENT CASE. SO ALSO IS THE DECISION OF THE ITAT CHANDIGARH BENC H RENDERED IN THE CASE OF ITO VS. VIKAS EDUCATION SOCIETY ITA NO.884/CHD/2010. 27. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS A LLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 10- 04-2017. SD/- SD/- DR. A.L. SAINI S.S. VISWANETHRA RAVI ACCOUNTANT MEMBER JUDICIAL MEMBER DATED 10-04-2017 ITA NO. 597/KOL/2016 M/S.JAGANNATH GUPTA FAMILY TRUST 22 ITA NO. 597/KOL/2016 M/S.JAGANNATH GUPTA FAMILY TRUST 23 COPIES TO : **PP/SPS (1) APPELLANT/ASSESSEE : M/S. JAGANNATH GUPTA FAMILY TRUST, 26 GANESH CHANDRA AVENUE, 1 ST FLOOR, KOLKATA-700013. (2) RESPONDENT/DEPARTMENT: THE COMMISSIONER OF INCO ME TAX (EXEMPTIONS),KOLKATA 10B. MIDDLETON ROW, 6 TH FLOOR, KOLKATA-700 071. (3)COMMISSIONER OF INCOME-TAX (APPEALS) (4) COMMISSIONER OF INCOME TAX, KOLKATA (5) THE DEPARTMENTAL REPRESENTATIVE (6) GUARD FILE BY ORDER ASSISTANT REGISTRAR ITAT, KOLKATA