JEEVAN JYOTI CHARITABLE TRUST, ALLAHABAD V. PR. COMMISSIONER OF INCOME TAX (CENTRAL), LUCKNOW

ITA 73/ALLD/2019

• Counselvise Citation: [NaN] 107 COUNSELVISE.COM (IT) 1763 (ITAT-ALLAHABAD)
• Duration Of Justice: 3 year(s) 6 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 03-06-2022
• Appeal Filed By: Assessee
• Order Result: PartlyAllowed
• Bench Allotted: Allahabad
• Assessment Year: 2007-2008
• Appeal Filed On: 28-05-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: NIDHI VERMA SINGH
• Keywords: Capital asset; Business income; Search and seizure; Charitable institution; Opportunity of being heard; Principle of natural justice; Retrospective amendment; Difference of opinion; Accommodation entries; Benefit of exemption; Cancellation of registration; Capital expenditure; Set aside
• Section: 132; 12; 2; 11; 143(3); 133A; 153A; 260A; 80G; 12A; 12AA; 13(2); 13; 255(4); 10(23C)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL ALLAHABAD BENCH, ALLAHABAD (THROUGH VIRTUAL COURT), BEFORE SHRI.VIJAY PAL RAO, JUDICIAL MEMBER AND SHRI. RAMIT KOCHAR, ACCOUNTANT MEMBER ITA No.73/ALLD/2019 Assessment Years: 2007-08 Jeevan Jyoti Charitable Trust, 162, Bai Ka Bagh, Allahabad, U.P. TAN/PAN: AAATJ4359H v. Pr. Commissioner of Income Tax, Central, Lucknow (Appellant) (Respondent) Appellant by: Mr. Gaurav Bansal, C.A. Respondent by: Ms. Nidhi Verma Singh, CIT DR Date of hearing: 15.09.2021 Date of pronouncement: .10.2021 O R D E R VIJAY PAL RAO, JM: This appeal by the assessee is directed against the order dated 29 th March, 2019 passed by the Pr. CIT (Central Lucknow) under section 12AA(3) and Section 80G(5) of the Income Tax Act. Though the assessee filed total thirteen appeals against the single impugned order passed by the Pr. CIT (Central Lucknow) however, at the time of hearing, the twelve appeals in ITA Nos. 74 to 85/Alld/2019 were de-clubbed and tagged separately as those appeals were found not maintainable being repeated and nonest appeals and dismissed by this Tribunal vide separate order dated 16.09.2021. Accordingly the appeal in ITA No. 73/Alld/2019 is taken as an appeal against the impugned order and is being disposed of by this order. 2. The brief facts leading to the controversy emanate from the record are that the assessee trust was formed vide trust deed dated 01 st April, 1990 with the main object to provide education and set up research centers in the field of medical science. The assessee trust was granted registration under section 12A on 29.01.1999 and was also ITA No. 73/ALLD/2019 Jeevan Jyoti Charitable Trust 2 granted approval under section 80G(5) on 13.10.2009. Thereafter a search and seizure action under section 132 of the Act was carried out in respect of Jeevan Jyoti Group and assessee trust was also claimed to have been covered under the said search and seizure action. Pursuant to the search and seizure action under section 132 of the Act, the Assessing Officer issued notice under section 153A for the assessment years 2007- 08 to 2013-14. In response to the notices issued under section 153A, the assessee filed return of income. Thereafter, the assessee also filed an application under section 245(C) of the Act before Income Tax Settlement Commission (in short ‘ITSC’) on 24 th February, 2015 disclosing income of Rs. 65,00,000/- on account of anonymous donations and invested in the building and offered the same to tax under section 115BBC. The application filed by the assessee under section 245C was rejected by the ITSC and consequently the assessments were completed under section 143(3) read with section 153A on 8.8.2017. Though the assessee has challenged the validity of the assessments and additions made by the Assessing Officer in the separate proceedings however, the same is not a subject matter of the present appeal or having any relevance to the present appeal filed against the order passed under section 12AA(3) and section 80G of the Income Tax Act. Thereafter, the Pr. CIT (Central Lucknow) issued show cause notice dated 13 th /18 th July, 2017 and asked the assessee to show cause as to why the registration granted under section 12A may not be cancelled. Another show cause notice dated 20.12.2018 was also issued by the Pr. CIT. The assessee replied both the show cause notices issued by the Pr. CIT. After considering the reply of the assessee as well as the subsequent submissions the Pr. CIT found that the assessee’s activities were not genuine and they were not carried out as per the objects of the trust but the assessee trust was in the receipt of the cash which was not recorded in the books of accounts and the activities of the trust were carried out for the personal benefits of the trustees and their family members as well as related entities. Finally, the Pr. CIT noted that as per the latest information, the assessee already sold all the educational institutions in the month of September, 2017 and the ITA No. 73/ALLD/2019 Jeevan Jyoti Charitable Trust 3 sale proceeds were utilized for repayment of outstanding bank loans of group concerns of the trustees and not utilized for the object of the trust. Hence, it was observed by the Pr. CIT that the activities of the trust were not being genuinely carried as per the objects of the trust besides violating conditions of section 11(3) of the Income Tax Act. Accordingly, the Pr. CIT vide impugned order has cancelled the registration granted 12A w.e.f. 01.04.2006 as well as approval under section 80G(5) of the Act w.e.f. 13.10.2009. 3. Aggrieved by the impugned order of the Pr. CIT passed under section 12AA(3) and 80G(5), the assessee has filed the present appeal and raised the following grounds: 1. Proceedings for cancellation of registration under Section 12AA(3) got concluded with the submissions made by the appellant on 01.08.2017 (in compliance with the notice dated 13.07.2017 issued by predecessor ‘ Pr CIT’ , and re-initiation of the same by the successor “ Pr. CIT” by virtue of 2 nd notice dated 20.12.2018 (and that too on the ground that were similar to the issues raised in 1 st show cause notice dated 123.07.2019)are wholly vitiated; 2. Order dated 29.03.2019 passed by the Pr. CIT, cancelling the registration granted to the appellant earlier under section1 2 A and withdrawal of notification (approving donations for exemption under section 80G (5) in the hands of the donors) based on the assumption that appellant had been a person subjected to search and seizure action’ within the meaning of section 132(1) of the Act, is wholly misplaced as is evident from the particulars of Panchnamas and other relevant information given in Annexure – I hereto; 3. The appellant had maintained ‘books of account as defined in section 2 (12A) of the Act, as had been brought on the statute books by the Finance Act 2001, w.e.f. 1.6.2001, and utilization as had been found to be recorded there, for construction of school building and improvement of infrastructure incidental thereto, meant solely ‘education purposes’ and, view to the contrary as has been taken by the “Pr. CIT is wholly erroneous, uncalled for ad unjustified; 4. The “Pr. CIT” has erred in law and on facts in passing the impugned order dated 29.03.2019, on the allegations to the following effect, that a. The appellant was in receipt of unaccounted/unrecorded donations as admitted by it in its application filed before the Hon’ble income Tax Settlement Commission under section 245C; ITA No. 73/ALLD/2019 Jeevan Jyoti Charitable Trust 4 b. Owning to non-availability/non-maintenance of details of donors/donations, the receipts shown under the head ‘donation’ were unproved’ C. Such unaccounted/unproved receipts, amounted to profiteering, resulting into diversion of funds for the benefit of Trustees; d. The extent of application for ‘charitable purposes’ and also the ceiling of accumulation of less than 15% of such receipts that are exempt from taxation, could not be subjected to verification, owning to non-availability of relevant details; and e. In case the provisions are interpreted to mean that the same were applicable with retrospective effect (as per inference said to have been drawn by the appellant in the impugned order), it would means undue advantage to the appellant, which is not intended by law): 5. The “Pr. CIT” has erred in law and on facts in holding that decision of the Frist Appellate Authority on the issue of exemption, was conclusive and on that basis, in holding that activities of the Trust were not being carried on, for the purposes of education and attainment of its objects; 6. The appellant had been imparting education and it existed solely ‘for the purposes of education’ as envisaged in section 2(15) of the Act, and view to the contrary 9as has been taken by the “Pr. CIT) is wholly unfounded and inconsistent with the facts of the case; 7. In any case, the order dated 29.3.2019 having been passed by the Pr. CIT, in gross violation of the principles of natural justice, owning to the reason that notice dated 12.03.2019 (issued from F. No. Pr. CIT© LKo./12AA-Jeevan Jyoti Trust/20178-18/1955) fixing the date of hearing as 19.03.2019 had been served on the appellant on 20.03.2019 i. e. after the expiry of the date fixed for compliance, the appellant could not get a due and effective opportunity of being heard; 8. The order appealed against is contrary to the facts, law and principles of natural justice. 9. The order is contested in appeal on every cogent grounds and the appellant craves for the indulgence of the Hon’ble ITAT, to allow it (the appellant) to take such additional grounds and/or to delete the grounds as had been taken hereinbefore.” 4. The ground no. 1 is regarding validity of the impugned order passed by the Pr. CIT due to two show cause notices were issued. The learned AR of the assessee has submitted that the Pr. CIT issued two show cause notices dated 13.07.2017 and ITA No. 73/ALLD/2019 Jeevan Jyoti Charitable Trust 5 20.12.2018. The assessee has duly replied the first show cause notice dated 13.07.2017 vide letter dated 01.08.2017 and thereafter no action was taken for cancellation of registration on the basis of the first show cause notice dated 13.07.2017. He has thus pleaded that it is deemed to be withdrawn. The subsequent show cause notice dated 20.12.2018 for the cancellation of registration is not valid when the first show cause notice issued on the same grounds deemed to have been withdrawn. Therefore, the impugned order passed by the Pr. CIT is not valid as there was no valid show cause notice. 5. On the other hand, learned DR has submitted that the first show cause notice was issued on 13 th July, 2017 and thereafter there was a change of the incumbent at the post of Pr. CIT which necessitated the second show cause notice granting opportunity to the assessee. The learned CIT DR has pointed out that this issue was also raised by the assessee during the proceedings under section 12AA(3) and the Pr. CIT has decided the same. She has relied upon the impugned order of the Pr. CIT. 6. We have considered the relevant submissions as well as relevant material on record. There is no dispute that after the search and seizure action under section 132 of the Income Tax Act. The Assessing Officer initiated the proceedings under section 153A of the Income Tax Act pursuant to the search and seizure action initiated. During the pendency of the assessment proceedings under section 153A, the assessee approached to the ITSC by filing an application under section 245C on 24 th February, 2015 which was rejected by the ITSC and remanded the matter to the Assessing Officer for completion of the assessments. The facts as revealed during the course of search and seizure action as well as the disclosure made by the assessee in the application under section 245C led to initiation of proceedings by the Pr. CIT for cancellation of registration granted under section 12A of the Act. It is manifest from record that there was a change of incumbent at the post of Pr. CIT (Central Lucknow), and a second show cause notice was also issued on 20.12.2018. When there is no substantial change in the contents of the show cause notices then the second show cause notice issued on ITA No. 73/ALLD/2019 Jeevan Jyoti Charitable Trust 6 20.12.2018 is at the most amounts to fresh initiation of proceedings under section 12AA(3) for cancellation registration granted under section 12A as well as approval under section 80G(5) of the Income Tax Act. It is evident from the record and particularly from the impugned order passed under section 12AA(3) of the Income Tax Act that the Pr. CIT has proceeded on the basis of the show cause notice dated 20.12.2018 which has been reproduced in the impugned order in para 3.1. 7. Though the Pr. CIT has given background facts including the first show cause notice dated 13.07.2017 and reply thereto by the assessee however, the impugned order is passed based on the show cause notice dated 20.12.2018. Therefore, the issuance of the second show cause notice would not vitiate the proceedings under section 12AA(3) or the impugned order. The Pr. CIT has dealt with this issue in para 5 of the impugned order as under:- “5. In the reply the assessee trust, instead of replying as how the assessee trusts fulfills for registration u/s 12A, has been more harping on irrelevant issues by picking some lines here and there out of context or raising the technical issues of validity of search or assessments u/s 153A in case of trust or restrictions for use of material facts admitted by applicant before ITSC or that in view of earlier reply given on 1.8.2017, there was no scope of issue of fresh show cause notice u/s 12AA93), etc. as regards the contention that the earlier show cause notice dated 18/7/2017 was earlier concluded in view of show cause on 20/12/2018, the same is totally incorrect. The reply dated 1/8/2017 was submitted but thereafter no order whatsoever was passed by the then incumbent, who got transferred on 25/8/2017, since there was a change in incumbent, it was necessary to issue the fresh show cause notice granting opportunity to the assessee. This fact was duly communicated to assessee also on 29/1/2019. Hence the presumption that the next show cause notice was beyond the scope, is fallacious. The facts which are being used to decide the validity of registration u/s 12A are only the undisputed facts admitted by assessee trust in its own application before the ITSC filed after the notices issued u/s 153A in case of trust. Without prejudice, the assessee had gone upto High court challenging the validity of notices u/s 153A but failed to succeed. The issue of limitation of assessment u/s 153A cannot have any implication on deciding the question whether the trust was carrying its activities as per the object for which it was granted the registration. The CIT(A), it filed an appeal to ITAT. The ITAT has now set aside the matter to CIT(A)for passing fresh orders. The very fact that the assessee carried the matter to ITAT which has not yet held the orders to be null void as claimed by assessee, there is no merit in these ITA No. 73/ALLD/2019 Jeevan Jyoti Charitable Trust 7 issues raised now at least on validity of search assessment u/s 153A, more so when these are not at all relevant for the purposes of these proceedings u/s 12AA which are independent. As regards the contention that in view of challenge on validity of 153A proceedings, no view can be taken for 12AA registration, the same is unacceptable. The outcome of challenge to proceedings u/s153A are completed now and pending before CIT(A), has in no way any implication on the issue of eligibility of registration u/s 12AA because even if it were held (without admitting it) that the AO were not to make assessment u/s 153A, the material collected during search or otherwise could be still used for any other proceedings under the Act and it will not dispute the test which are required to decide whether the trust is eligible for registration u/s 12AA in view of the facts evidencing receipt of unaccounted money by the trust. It is well settled principle that even where the search is quashed, there is no bar in using the material gathered in search for purposes of any other proceedings under the Act. This view supported by decision of apex court in Dr. Pratap Singh and Anr. Vs. Enforcement and ors (1985) 155 ITR 166 (SC). [Emphasis supplied by us] 8. Accordingly, in view of the facts and circumstances of the case, we do not find any substance or merits in the ground no. 1 of the assessee’s appeal, the same is dismissed. 9. Ground no. 2 is regarding challenging the impugned order as on the ground that the assessee was not subjected to search and seizure action within the meaning of section 132(1) of the Act. 10. We have heard the learned AR as well as learned DR and considered the relevant material on record. The validity of the search is not an issue to be considered and decided in the present appeal filed against the order under section 12AA(3) of the Act. The assessee has already approached the Hon'ble High Court against the notices issued under section 153A but could not succeed. Further the matter was carried to this Tribunal against the assessment orders passed under section 153A which were set aside to the record of the CIT(A) for passing the fresh order. Therefore, the objections of the assessee against the validity of the proceedings initiated under section 153A is irrelevant so far as the order passed under section 12AA(3) and 80G(5) is concerned. The Pr. CIT has referred and considered the facts and material ITA No. 73/ALLD/2019 Jeevan Jyoti Charitable Trust 8 detected as a result of search and seizure action under section 132(1) of the Income Tax Act and consequent application of the assessee filed under section 145C before the ITSC. The evidentiary value of the material found during the search and seizure action revealing unaccounted money received by the assessee trust cannot be affected by the reason of the search and seizure action challenged by the assessee. Further certain material and facts as considered by the Pr. CIT while passing the impugned order are otherwise admitted by the assessee in the application filed under section 245C as well as the same are the part of the books of accounts of the assessee so far as the violation of the provisions of section 13(3) of the Income Tax Act. Accordingly, we do not find any merit or substance in the ground no. 2 of the assessee’s appeal. 11. The ground nos. 3 to 9 are regarding challenging the impugned order on the merits and particularly on the issue that the points raised by the Pr. CIT would not amount to the activity of the assessee trust are not genuine or are not carried out in accordance with objects of the trust. The learned AR has submitted that the Pr. CIT has raised various issues including more than one PAN number issued in the name of Jeevan Jyoti Charitable Trust whereas the assessee trust was filing its return of income under one PAN only till date. Even for the assessment year 20018-19 the assessee trust filed the return of income showing the capital gain on sale of property (School). The another PAN was allotted on 26.11.2017 for the society registered on 21 st June, 2001 under the Societies Act 1816. He has referred to the separate PAN numbers for the assessee’s trust and the other institution which is a society registered under the Societies Act. Therefore, the learned AR has submitted that the Pr. CIT has assumed that the assessee trust has got two PAN numbers whereas the other PAN were allotted to the different entity / institution and not to the assessee charitable trust which is formed on 1 st April, 1990. Therefore, the impugned order is passed based on assumption of incorrect facts. He has further submitted that the another major ground for cancellation of the registration is regarding an amount of Rs. 65 Lac received as donation from various persons which was offered to tax in the application under ITA No. 73/ALLD/2019 Jeevan Jyoti Charitable Trust 9 section 145C of the Income Tax Act. Though the said amount was offered to tax under section 15BBC of the Act however, it would only lead to the consequences of denial of exemption under section 11 and 12 of the Act to the extent of the said amount. The learned AR has further submitted that though the amount was not found recorded in the books but the same was utilized for the charitable purpose only in construction of building. Therefore, the said transaction of receipt of donation of Rs. 65 Lac would not amount to render the activity of the assessee not genuine or not being carried out in accordance with the objects of the trust. As regards, the allegation of granting benefit or working for the benefit of the trustees of the assessee trust namely Dr. Ashwani Kumar Bansal and Dr. Vandana Bansal as well as their family members, the said observation of the Pr. CIT is not based on correct facts. He has submitted that certain transactions of payments to the companies owned by the trustees of the assessee on duly recorded in the books of accounts however, these transactions are only repayment of the amounts received by the assessee trust and therefore it is not the transaction for giving the benefit or advances to the concerns of the trustees of the assessee but it is only the repayment of the money received from these entities. He has referred to balance-sheet as on 31 st March, 2013 and submitted that though as per Schedule 9, the assessee has given loans and advances to the two trustees total amounting to Rs. 1,35,74,709/- however, at the same time, the assessee trust has also taken loan and advances from the same group and having closing balance from Jyoti Medi Services Ltd., Navjeevan Pediatric & Vandana Women Hospital total amounting to Rs. 1,43,62,411/-. Therefore, the amount of loan and advances received by the assessee from the group entities is more than the amount paid by the assessee. He has then referred to the certain amounts paid by the Jyoti Hospital Nursing School to Jyoti Hospital Pvt. Ltd to the tune of Rs. 33,26,382/- during the financial year 2010-11 and submitted that the Pr. CIT took this as amount paid by the assessee trust to the companies owned by the trustees of the assessee whereas this amount is not the loan and advance given to the company but it is only a repayment of the earlier advance ITA No. 73/ALLD/2019 Jeevan Jyoti Charitable Trust 10 received from this company. He has thus submitted that there is no benefit granted to either the trustee or the entities owned by the trustees. The trustees had neither derived any benefit from the activities of the trust nor has it been so found or established from the seized material. All the activities of the assessee trust were directed for imparting education and no benefit whatsoever has been derived either directly or indirectly by persons covered under section 13(3) of the Act. Further from the activities of the assessee’s trust, it is clear that the assessee was not involved in any business activity with profit motive or for the benefit of the trustees or their family members. The incidence as pointed out by the learned Pr. CIT are not based on the correct and complete facts. He has further submitted that the sale proceeds of the property sold by the assessee in September, 2017 was utilized for repayment of loan and therefore, it cannot be said that this amount was not utilized for the purpose of the Trust. He has relied upon the judgment of Hon'ble Delhi High Court in the case of the DIT(Exemption) vs. Span Foundation 178 taxman 436. He has also relied upon the following judgments:- 1. C.I.T. v. Janmabhumi Press Trust (2000) 242 ITR 457&703 (Karnataka) – page No. 157 to 158 of the Case Laws PB. 2. C.I.T. v. Kannaika Paramesari Devasthanam & Charities (1982) 133 ITR 779 (Madras) 3. C.I.T. v. St. George Forana Church (1988) 170 ITR 62 (Ker.) 12. Therefore, repayment of loan originally taken by the trust to fulfil its object will amount to an application of income for charitable and religious purpose within the meaning of section 11(1)(a) of the Income Tax Act. The learned AR has further contended that the Pr. CIT has referred and relied upon the newly introduced section 115 TD w.e.f. 1.6.2016 for the purpose of taxing the accredited income due to conversion into for not eligible for registration under section 12AA from the date on which the registration was granted till the date of cancellation of registration. He has submitted that the said section is introduced for the purpose of levy of exit tax where ITA No. 73/ALLD/2019 Jeevan Jyoti Charitable Trust 11 the charitable institution ceases to exist or convert into non charitable organization whereas in the case of the assessee there is no such conversion or cessation of trust. The trust is still in existence. Hence this section is not applicable in the case of the assessee. The learned AR has also raised an issue that the Pr. CIT has cancelled the registration with retrospective effect from 1.4.2006 which is not valid in view of the various binding precedents on this issue. He has relied upon the following decisions as under:- 1. ACIT Vs. Agra Development Authority (2018) 90 taxman.com 282 (Allahabad)/[2018]407 ITR 562. 2. Indian Medical Trust Vs. Pr. CIT, Jaipur (2019) 108 taxman.com 93 (Rajasthan) 414 ITR 296. 3. Oxford Academy for Career Development Vs. CCIT [2019] 315 ITR 382 (Allahabad). 13. On the other hand, the learned CIT DR has submitted that the assessee itself has admitted the receipt of unexplained donations not recorded in the books of accounts which is an activity not for achieving the objects of the assessee trust rather for the benefits of the trustees of the assessee. The unaccounted and anonymous donations surrendered by the assessee in the application under section 145C before the ITSC and offer to tax under section 115BBC itself established the fact that the activity of the assessee are not genuine and are not being carried out in accordance with the objects of the assessee. Rather the assessee was involved in receiving unaccounted donations and siphoning of the fund for the benefits of the trustees. In the year 2017, the assessee has already sold all educational institutions run by it. Therefore, the charitable activities seized to exist and consequently the registration of the assessee is liable to be cancelled. The learned CIT DR has further contended that the number of charity has given a well-reasoned and elaborate decision and finding in the impugned order considering all the relevant facts which established that the assessee’s activities were not genuine and were also not carried out in accordance with the objects of the ITA No. 73/ALLD/2019 Jeevan Jyoti Charitable Trust 12 assessee but these activities were carried out by the assessee only for the benefit of the trustees. There are multiple transactions of the giving loan and advances directly and indirectly to the trustees of the assessee which itself shows that even on the record, the assessee is passing the benefit to the trustees. This fact was detected only as a result of search and seizure action that the assessee use to receive unaccounted donations which means the amounts received by the assessee not recorded in the books of accounts were taken away by the trustees of the assessee. All these facts lead to the conclusion that the activities of the assessee were not carried out in accordance with the objects but for the benefit of the trustees and their family members as well as the institution owned by the trustees. She has relied upon the impugned order of the Pr. CIT. 14. We have considered the rival submissions as well as the relevant material on record. Two issues arise in ground nos. 3 to 9 of the appeals. First issue is whether the conditions as prescribed under sub section 3 of section 12AA did exist to satisfy the Pr. CIT to pass the impugned order cancelling the registration of the assessee trust. The second issue arises is whether the cancellation of registration shall be applicable retrospective or prospective. As regards the conditions as prescribed under sub section 3 of section 12AA of the Act, the Pr. CIT has cited number of transactions and activities of the assessee which he considered as not being carried out in accordance with the objects of the assessee trust but in his view the activities of the assessees are being carried out for the benefit of the specified persons as given in section 13(3) and specifically the trustees of the assessee trust as well as the concerns in which the trustees are having substantial interest. Basically these two grounds are referred by the Pr. CIT for cancellation. The Pr. Commissioner has also cited the reason for cancellation as the assessee trust has sold all its educational institutions and consequently the activities of the assessee trust cease to exist. The Pr. CIT has held that the assessee admitted in the application filed before ITSC that voluntary donation received from public have not been accounted for in the books of accounts of the trust. ITA No. 73/ALLD/2019 Jeevan Jyoti Charitable Trust 13 Therefore, the surrender of this amount of Rs. 65 Lac and offered to tax under section 115BBC led the Pr. CIT to reach the conclusion of Pr. CIT that the assessee trust has earned unaccounted receipts, profiteering and allowing the income of the trust for personal uses of the trustees. It is pertinent to note that so long the trust was running the educational institutions and imparting education through the various institutions the main activity of the assessee trust remains charitable in nature though there are certain violations on account of unanimous unaccounted donations received by the assessee which were surrendered before the Income Tax Settlement Commission and offered to tax under section 115BBC. Therefore, this is purely a matter of assessment and does not fall in the ambit of the activities of the assessee not being carried out in accordance with the objects of the assessees trust or the activities of the assessee trust are not genuine. This is only one incident and not a regular practice as the Pr. CIT has referred only the admission of the assessee in the application under section 145C before the Income Tax Settlement Commission. The case of the assessee trust would have been different if this was a regular practice of receiving unaccounted unanimous donations and siphoning of the same by the trustees. Therefore, this transaction itself cannot lead to the conclusion that the activities of the assessee trust are not genuine or are not being carried out in accordance with the objections of the trust so long the assessee was running various institutions and imparting the education. 15. The second ground for cancellation of the registration is cited by the Pr. CIT as giving advance or transfer of fund by the assessee trust to the trustees namely Dr. A.K Bansal and Dr. Vandana Bansal through Jyoti Hospital Pvt. Ltd. The assessee has not disputed the transactions of advance to Dr. A.K. Bansal and Dr. Vandana Bansal as these amounts of Rs. 13,20,26,382/- were transferred by the assessee trust to Jyoti Hospital Pvt. Ltd. Similarly a sum of Rs. 1,35,74,790/- were also treated the benefit given to the trustees through the concerns in which they have substantial interest. The assessee has not disputed these transactions of transfer of funds or advance given to the trustees however the explanation of the assessee is that the assessee trust has ITA No. 73/ALLD/2019 Jeevan Jyoti Charitable Trust 14 received loans and advances from those concerns which is more than the repayment amount as cited by the Pr. CIT. We find that there are loan and advances received by the assessee trust from the group concerns in which the trustees of the assessee trust are having substantial interest and the details of the amount of loans and advances received by the trust as per the balance-sheet as on 31 st March, 2013 as under:- Jyoti Mediservices Limited Rs. 82,30,350/- Navjeevan Pediatrics Pvt Ltd Rs. 49,42,061/- Vandana Women Hospital Rs. 11,90,000/- Total Rs. 1,43,62,411/- 16. Thus it is a matter of record that the assessee trust received loan and advance from the group concerns total amounting to Rs. 1,43,62,411/- which were subsequently repaid by the assessee to the tune of Rs. 1,35,74,709/-. Therefore, the payment made by the assessee to that extent is nothing but repayment of earlier loan and advances and this would not even amount to violation of provisions of section 11(5) or 13 of the Income Tax Act. Therefore, these transactions cannot be regarded as the activities of the assessee are only for the benefit of the trustees of the assessee trust. The Pr. CIT then referred to the fact that the assessee sold the Jeevan Jyoti Public School and Jeevan Jyoti Nursing School in the month of September, 2017 and the sale proceedings were utilized for repayment of outstanding bank loans of the group concerns in which the trustees are having substantial interest and consequently it violates the conditions of section 11(3). Though the assessee has contended that repayment of the loan utilized for the construction of the building of these educational institutions is nothing but application of the income / fund for charitable purpose however, even if the assessee has violated the provisions of section 11(3) the consequences of the same would be that the said amount would not be eligible for exemption under section 11 and 12 of the Income Tax Act and will be assessed to tax. Therefore, this is again a subject matter of assessment and cannot be regarded as the ITA No. 73/ALLD/2019 Jeevan Jyoti Charitable Trust 15 activities of the assessee are not genuine or are not being carried out in accordance with the objections of the assessee trust. Therefore, to the extent of these transactions and incidents as discussed above, we do not find that any of these transactions would fall in the ambit of section 12AA(3) of the Income Tax Act so as to invite the cancellation of registration. However, when the assessee has sold all its educational institutions in the year 2017 itself then it would amount to cessation of the charitable activities of the assesse trust and therefore, the assessee trust would no longer be entitled for the benefit of section 11 and 12 of the Income Tax Act. Once the charitable activity of the assessee are ceased to exist, the same would fall in the category that the activities are not being carried out in accordance with the objects of the trust. Hence the undisputed fact of sale of all the educational institutions by the assessee trust would definitely lead to disentitlement of benefit under section 11 and 12 of the Act and consequently cancellation of registration granted under section 12A of the Income Tax Act. The Pr. CIT has also cited the fact that multiple PANs were taken in the same name as of the assessee trust however, the fact is not disputed that the assessee trust right from the beginning is filing its return of income under one PAN. Though the other PANs were taken in the same name but nothing has been alleged that assessee has misused the other PANs allotted to the assessee. Therefore, if there is a violation of the provisions of the law by taking multiple PANs, the consequences of such violation are provided under the Act itself but so long there is no misuse of those PANs it cannot be presumed that the activities of the assessee are not genuine. In view of the above facts and circumstances of the case, we uphold the cancellation of the registration as well as granted under section 12A as well as approval granted under section 80G(5). 17. As regards the second issue whether the cancellation shall have with retrospective effect w.e.f. 1.4.2006 as held by the Pr. CIT or would be retrospective. The assessee has relied upon the various decisions which are relevant on this point. The Hon'ble jurisdiction High Court in the case of ACIT vs. Agra Development Authority (supra) has held in para 50 to 52 as under:- ITA No. 73/ALLD/2019 Jeevan Jyoti Charitable Trust 16 “50. Then, there is nothing in the language of Section 12AA(3) of the Act that may suggest registration of the assessee may be cancelled with retrospective effect. The use of the words or have obtained registration at any time under Section 12-a of the Act’ added by amendment w.e.f. 01.06.2010 only indicate that the Commissioner was vested with the power to cancel a registration that may have been granted to an assessee at any time prior to the aforesaid amendment itself. However, it does not indicate that thereby the Commission had been empowered to cancel the registration of the assessee with retrospective effect i.e. with effect from a date prior to the date of issuance of the order/notice to cancel the registration. 51. Clearly, the act of cancellation of registration has serious civil consequences. In absence of any legislative intent expressed to suggest that the legislature had empowered the Commissioner to cancel the assessee’s registration under Section 12-A of the Act with retrospective effect, such power could not be deemed to exist or arise or be exercised to unsettle closed/part transactions especially because in this case the ground for cancellation has not arising out of allegation of fraud, collusion or misrepresentation. 52. Therefore, we are of the view that the cancellation of the assessee’s registration under Section 12-a of the Act, if at all, could be done only prospectively and not retrospectively as had been done by the Commissioner in this case. Thus, question no.1 is answered in the negative that is in favour of the assessee and against the revenue.” 18. The Hon'ble High Court has held that the cancellation of the registration could be done only prospectively and not retrospectively. A similar view has been taken by the Hon'ble Rajasthan High Court in the case of Indian Medical Trust vs. Pr. CIT (supra) in para 28 and 29 as under:- “28. Indisputably, the order dated 16th Jan, 2018, made by the Commissioner of Income Tax thereby canceling the registration granted under Section 12A and withdrawing the approval given under Section 10(23C) (v) & 10(23A) (via) of the Act of 1961, to the petitioner Trust with retrospective effect from the date of 01st April, 2006, was arbitrary in the face of the provisions of the Act of 1961: and therefore, cannot be deemed to the in consonance with any possible interpretation to be valid or legal. This court is of the opinion that the provisions of section 12AA (3) of the Act of 1961, empowers the Commissioner of Income Tax to initiate steps for giving the said ITA No. 73/ALLD/2019 Jeevan Jyoti Charitable Trust 17 provision, a retrospective effect, for in such a situation, the same would have been clearly specified in the said provision Interpretation of the said provision has to be harmonious rather than being prejudicial to the institutions as it would instigate and create a fear of the income Tax Department. I find support in my opinion from the following cases with reference to the issue of cancellation or withdrawal of registration with retrospective effect: A. In the case of Oxford Academy for Career Development (supra), it was thus observed that: 16.In the instant case, the petitioner is a registered society, which was earlier granted registration under Section 12A on 1-4-1999. A survey was conducted at the business premises on 20-09-2002, from where documents were impounded. The registration was cancelled from the assessment years 2000-01 and 2001-02 for the reasons that the surplus was quite heavy. In the impugned order, it was mentioned by the CIT that there was an unusual huge margin and the petitioner was engaged in the commercial activities rather than charitable. As per the balance-sheet, huge amount from the student was charged. The profit margin embodied in the charges taken from the students are so huge and it proves the profit motive of the petitioner. The funds were misused by the president and his family members of the petitioner. 20. The expression “charitable purposes” is defined in Section 2(15) of the IT Act, 1961. It is of the inclusive nature as revealed in the language. Earlier the words “the advancement of any other object of general public utility” in this definition were succeeded by the words “not involving the carrying on of any activity for profit”. These words were omitted by the Finance Act, 1983, w.e.f. 1st April, 1984 26. In the light of the above discussion and by considering the totally of the facts and circumstances of the case, we hold that the order dt. 9th march, 2004, passed by the CIT (Annexure No. 15 to the writ petition) as per the then law is without power and jurisdiction and therefore, it is liable to be set quashed. 27. Accordingly, the impugned order dt. 9th march, 2004, passed by the opposite party No. 2 withdrawing/rescinding the order granting registration on 1St April, 1999, to the petitioner’s society under Section 12A of the Act, is quashed. Consequently, the registration granted to the ITA No. 73/ALLD/2019 Jeevan Jyoti Charitable Trust 18 petitioner’s society on 1st April, 1999, stands restored for the assessment years under consideration.” B. In the case of Agra Development Authority (supra) it was observed thus: ’50. In the context of the IT Act, 1961, it’s undisputed that the grant of registration is a onetime affair. The assessee is required to apply for registration under S. 12A of the Act. Once the assessee has been registered under S. 12A of the Act, by a specific order passed by the CIT, it stands established from the purpose of the Act that activity being pursued by that assessee is for a “charitable purposes” under S. 2(15) of the Act. 51. Then, there is nothing in the language of S. 12AA (3) of the Act that may suggest registration of the assessee may be cancelled with retrospective effect. The use of the words or have obtained registration at any time under s. 12A of the Act added by amendment w.e.f. 1st June, 2010 only indicate that the CIT was vested with the power to cancel a registration that may have been granted to an assessee at any time prior to the aforesaid amendment itself. However, it does not indicate that thereby the CIT had been empowered to cancel the registration of the assessee with retrospective effect i.e. w.e.f. a date prior to the date of issuance of the order/notice to cancel the registration. 52. Clearly, the act of cancellation of registration has serious civil consequences. In absence of any legislative intent expressed to suggest that the legislature had empowered the CIT to cancel the assessee’s registration under s. 12A of the Act with retrospective effect,, such power could not be deemed to exist or arise or be exercised to unsettle closed/part transactions especially because in this case the ground for cancellation has not arisen out of allegation of fraud, collusion or misrepresentation. 53. Therefore, we are of the view that the cancellation of the assessee’s under s. 12A of the Act, if at all, could be done only prospectively and not retrospectively as had been done by the CIT in this case, thus, question No.1 is answered in the negative that is in favour of the assessee and against the Revenue. 29. Thus, it is more than clear that section 12AA(3) of the Act of 1961, doesn’t suggest or in any way contemplate that the registration of the assessee may be cancelled with retrospective effect. And therefore, this court is of the view that the cancellation of registration can only be prospective.” ITA No. 73/ALLD/2019 Jeevan Jyoti Charitable Trust 19 19. Accordingly, in the facts and circumstances of the case and following the binding precedents as cited above, we modify the impugned order of the Pr. CIT so far as the cancellation of the registration with retrospective effect from 1.4.2006 and cancellation of the approval under section 80G w.e.f. 13.10.2009 and hold that the cancellation would be with effect from the previous year in which the assessee has sold the education institutions and the activities of the assessee cease to exist and therefore not being carried out in accordance with the objects of the assessee trust. In conclusion, the cancellation of registration under section 12A as well as withdrawal of approval under section 80G(5) are upheld but with effect from the financial year in which the activity of the assessee ceased to exist. 20. In the result, the appeal filed by the assessee is partly allowed. Order pronounced in the open Court on .10.2021 through video conferencing at Allahabad. Sd/- 20/10/21 [RAMIT KOCHAR] [VIJAY PAL RAO] ACCOUNTANT MEMBER JUDICIAL MEMBER Dated: /10/2021 Allahabad As per separate Dissenting order. sh Sd/- Copy forwarded to: 26/10/2021 1. Appellant (RAMIT KOCHAR) 2. Respondent ACCOUNTANT MEMBER 3. CIT(A), Allahabad 4. CIT 5. DR By order Assistant Registrar ITA No. 73/ALLD/2019 Jeevan Jyoti Charitable Trust 20 I.T.A. NO. 73/Alld./2019(Assessment Year : NA) in the case of Jeevan Jyoti Charitable Trust, 162, Bai Ka Bagh, Lowther Road, Allahabad(U.P.) (PAN AAATJ4359H) v. Pr. Commissioner of Income-tax, Central , Lucknow. PER RAMIT KOCHAR, ACCOUNTANT MEMBER: Unable to agree with findings and conclusion reached by my learned Brother(J.M.) , I proceed to write my separate order. I have gone through the order of my ld. Brother(JM) and given my deep thought to the reasoning , view and findings of my ld. Brother(JM). However, I am not able to agree and concur with the reasoning , view and finding of ld. Brother (JM) on the issues which are discussed by me in later part of this order. 2. The brief facts of the case are that the assessee was granted registration u/s 12A of the Income-tax Act, 1961 (hereinafter called “the Act”) by Revenue, vide Commissioner of Income-tax , Allahabad order registration number 1/98-99 dated 29.01.1999 , and the assessee was also granted approval u/s 80G(5) of the 1961 Act , vide orders dated 13.10.2009. The assessee was created on 01.04.1990 and as part of its educational activities , it has claimed to be engaged in running various institutions and schools, i.e.- (i) Jyoti Hospital Nursing School (ii) Jeevan Jyoti Institute of Paramedical Sciences (iii) Jeevan Jyoti Public School (iv) Ascent Institute of Management & Technology As claimed by Revenue, there was a search and seizure operations conducted u/s 132 of the 1961 Act in the case of the assessee along with other cases of the Jeevan Jyoti Group on 29.05.2012 at the registered office of the assessee at 162, Bai-ka- Bagh, Allahabad, U.P.. The cases of the group were centralized with Central Circle by ITA No. 73/ALLD/2019 Jeevan Jyoti Charitable Trust 21 Revenue u/s 127 of the 1961 Act. The assessee was registered u/s 12A of the 1961 Act and had since been claiming exemption u/s 11 and 12 of the 1961 Act, on the strength of registration granted by ld. CIT , Allahabad on 29.01.1999 , u/s 12A of the 1961 Act. Pursuant to search and seizure operations conducted by Revenue u/s 132 of the 1961 Act, the assessee was issued notices by AO u/s 153A of the 1961 Act. In response to notice issued u/s 153A by Revenue , the assessee filed its return of income claiming exemption u/s 11 and 12 of the 1961 Act. The Revenue has claimed that several incriminating documents pertaining to assessee-trust were also found and seized during the aforesaid search and seizure operations conducted by Revenue. While assessment proceedings were in progress, the assessee filed application before the Income Tax Settlement Commission(ITSC) , New Delhi on 24.02.2015, wherein additional income of Rs. 65,00,000/- was disclosed by the assessee-trust for the assessment years’ 2007-08 to 2014-15, as detailed hereunder: S.No. Assessment Year Additional Income declared before ITSC (In Rs.) Tax Paid (In Rs.) 1. 2007-08 10,00,000 6,31,000 2. 2008-09 10,00,000 5,94,000 3. 2009-10 10,00,000 5,57,000 4. 2010-11 10,00,000 5,20,000 5. 2011-12 10,00,000 4,83,000 6. 2012-13 5,00,000 2,25,000 7. 2013-14 5,00,000 2,07,500 8. 2014-15 5,00,000 1,80,000 ITA No. 73/ALLD/2019 Jeevan Jyoti Charitable Trust 22 So far as sources of the said additional income offered by assesse before ITSC, the assessee has claimed that the said additional income offered by it in settlement application filed before ITSC has arisen out of variety of sources, one such sources being donation received from public at large. The assessee further claimed that these donations so received by it were meant for construction of school building and other infrastructure as also for other educational activities, and the same were directly invested in such activities, without recording in the books of accounts of the appellant trust and such utilization in educational activities were spread over in the ay’s : 2007-08 to 2014-15 and worked out to be Rs. 65 lacs in aggregate. The Revenue on its part filed Report in Rule 9 in the case of the assessee before ITSC , and total additions to the income of the assessee to the tune of Rs. 10,37,96,184/- were proposed by Revenue , as in view of Revenue the assessee was not engaged in charitable activities, rather it was engaged in the business activities for the benefit of its main trustees, namely Dr. Ashwani Kumar Bansal and Dr. Vandana Bansal or entities related to the trustees. The ITSC on its part passed an order dated 17.08.2016, u/s 245D(4) of the 1961 Act abating the applications before ITSC and restored the proceedings back to the file of the AO. The assessee filed Miscellaneous Application before ITSC against the order of ITSC dated 17.08.2016, but the M.A. stood rejected by ITSC, vide order dated 20.01.2017, passed u/s 245D(6B) of the 1961 Act by ITSC. Thereafter , the AO completed assessment for ay: 2007-08 to 2014- 15 and the income assessed in the hands of the assessee for ay: 2007-08 to 2013-14, were to the tune of 34,43,24,119/-, as detailed hereunder:- S.No. Assessment Year Income declared (In Rs.) Income Assessed (in Rs.) Date of Assessment Order Assessment Order passed u/s 1. 2007-08 Nil 51,95,230/- 08.08.2017 153A read with ITA No. 73/ALLD/2019 Jeevan Jyoti Charitable Trust 23 Section 143(3) 2. 2008-09 Nil 2,81,70,980/- 08.08.2017 153A read with Section 143(3) 3. 2009-10 Nil 1,40,62,700/- 08.08.2017 153A read with Section 143(3) 4. 2010-11 Nil 2,25,97,490/- 08.08.2017 153A read with Section 143(3) 5. 2011-12 Nil 12,55,72,780/- 08.08.2017 153A read with Section 143(3) 6. 2012-13 Nil 9,01,24,550/- 08.08.2017 153A read with Section 143(3) 7. 2013-14 Nil 5,86,00,389/- 08.08.2017 Section 143(3) Total Nil 34,43,24,119/- 2.2 The assessee filed first appeal before ld. CIT(A) for all these ay’s , which stood dismissed by ld. CIT(A), vide separate appellate orders all dated 10.07.2018, passed ITA No. 73/ALLD/2019 Jeevan Jyoti Charitable Trust 24 by ld. CIT(A) for ay’s: 2007-08 to 2013-14. The assessee filed second appeal with Division Bench of Income Tax Appellate Tribunal, Allahabad, wherein tribunal restored the matter back to the file of ld. CIT(A) for fresh adjudication, vide composite order dated 21.12.2018 passed by tribunal in ITA No. 322 to 328/Alld/2018 for ay’s : 2007-08 to 2013-14. The ld. Pr. CIT(E) has recorded in his order dated cancelling registration of the assessee u/s 12AA(3) of the 1961 Act that presently the aforesaid appeals of the assessee for ay: 2007-08 to 2013-14 are lying pending before ld. CIT(A) for fresh adjudication , in pursuance to directions of tribunal vide appellate orders dated 21.12.2018. 2.3 Based on incriminating material found during search operations and the facts admitted by the assessee in its application before ITSC, the Revenue was of the view that the activities of the assessee are not genuine nor are they carried out as per objects of the trust deed , which led to issuance of Show Cause Notice(SCN) by ld. Pr. CIT(Central), Lucknow for cancellation of registration u/s 12AA(3) , dated 13/18.07.2017. The assessee filed its reply before ld. Pr. CIT(Central) through a paper book, dated 01.08.2017 and requested to vacate the notice dated 13.07.2017, as in the opinion of the assessee, the conditions for cancellation of registration u/s 12AA viz. firstly the activities of the trust are not genuine and secondly that the activities are not being carried out in accordance with the object of the trust , are not met. Another SCN , dated 20.12.2018 was also issued by ld. Pr. CIT(Central), Lucknow, to assessee for compliance. The main crux of the aforesaid SCN issued by ld. Pr. CIT(Central) , was that the assessee had deviated in performing any work for charitable cause and its activities are not being carried out in accordance with the objects of the trust. That the search and seizure operations u/s 132 of the 1961 Act was carried out by Revenue and in pursuance to search , assessments were framed by AO, who reported that during assessment proceedings the assessee has not given any details of donations received such as name and address of donors, amount of donation etc. which can prove the genuineness of donation of receipts, and which as ITA No. 73/ALLD/2019 Jeevan Jyoti Charitable Trust 25 per the AO indicates that these donations or receipts are not genuine and are part of undisclosed taxable income of the trustees, the AO had further reported that the assessee has during settlement proceedings declared total additional undisclosed income of Rs. 65,00,000/- for ay: 2007-08 to 2014-15, which itself reveals that the group is involved in concealment of taxable income, which was utilized for investments in properties and other investments, thirdly the AO reported that as per return of income of the assessee, huge receipts of the trust running in crores are shown as ‘ Amount applied for charitable purposes’ in each year , but no details of such charitable purposes are furnished during assessment proceedings for verification. The ld. Pr. CIT(Central) further observed in the said SCN that as per Balance Sheet of the assessee for ay: 2013-14, the assessee has given advance of Rs. 89,50,000/- to Dr. A K Bansal through Jyoti Hospital Private Limited , and an advance of Rs. 46,24,790/- to Dr. Vandana Bansal through Jyoti Hospital Private Limited, which evidences that the trust is diverting funds for the benefits of the trustee. It was further observed by ld. Pr. CIT(Central) in the SCN that the assessee has diverted the sale proceeds of assets of the trust for repayment of outstanding bank loans of the trustee’s group concern and not utilized for betterment of charitable trust. The assessee had sold Building of Jeevan Jyoti Public School at Bheerpur , and Building of Jeevan Jyoti Nursing School at Apna-gaon , Rewa Road , Allahabad in September, 2017, and sale proceeds utilized for payment of bank loans of trustee’s group concern. The ld. Pr. CIT(Central) further observed in SCN that in ay: 2011-12 , on several occasions , Jyoti Hospital Nursing School made payment to trustee’s company , (i) Rs. 13,00,000/- to Jyoti Hospital Private Limited (amount transferred) (ii) Rs. 20,26,382/- to M/s Jyoti Hospital Private Limited(amount advanced), which reveals that the assessee is diverting funds for the benefits of the trustees’ group concerns/companies. The ld. Pr. CIT(Central) further observed that ld. CIT(A) against assessment framed by AO u/s 143(3) read with Section 153A for ay:2007-08 to 2013-14, has observed that during the course of assessment proceedings , the ITA No. 73/ALLD/2019 Jeevan Jyoti Charitable Trust 26 assessee was provided with sufficient opportunity to show cause why the exemption u/s 11 of the 1961 Act , as claimed by assessee, be not withdrawn and the profit shown by it may not be assessed as business income of the assessee. The ld. CIT(A) had observed that assessee had failed to show any reasons for denying the contention of the AO. The ld. CIT(A) has observed that the assessee is engaged in generating business income for its trustees and had disclosed additional income of Rs. 65,00,000/- for ay’s: 2007-08 to 2014-15 and offered the same for taxation before ITSC. Thus, the ld. CIT(A) concluded that the denial of exemption u/s 11 of the 1961 Act by the AO was held to be justified, and the ld.CIT(A) upheld the additions as were made by AO, in the first round of litigation. The ld. Pr. CIT(Central) then observed in his order dated 29.03.2019 that observation of ld. CIT(A) in first round of litigation strengthens the fact that the assessee is not doing any charitable activities, and is diverting funds for trustee’s benefits. The ld. Pr. CIT(Central) observed that the activities of the trust was not involved wholly in charitable activities; moreover the assessee was involved in business profits for the benefit of Dr. Ashwani Kumar Bansal and Dr. Vandana Bansal(Wife) and their family members, who are trustees of the assessee, and the assessee is involved in such activities which are contrary to the objective of the assessee-trust. 2.4 The assessee submitted before ld. Pr. CIT(Central) that since inception, it is engaged in charitable purposes and is engaged in imparting education , through various institutions set up by it , from time to time. The assessee also claimed that it was never searched u/s 132(1) of the 1961 Act by Revenue, as there was no warrant of authorization (as per particulars given in the Panchnama’s prepared by the Authorized Officers) where name of the assessee appeared. The assessee claimed that it had already objected before the AO as to framing of assessment u/s 153A of the 1961 Act, because as per assessee it was never searched by Revenue u/s 132(1) of the 1961 Act. The assessee also submitted before ld. Pr. CIT(Central) in response to SCN, that notwithstanding the inherent illegality of proceedings u/s 153A of the ITA No. 73/ALLD/2019 Jeevan Jyoti Charitable Trust 27 1961 Act, the assessee has filed an application for settlement before ITSC on 24.02.2015 and sum of Rs. 65 lacs were declared as an additional income for ay’s: 2007-08 to 2014-15. The assessee also submitted that disclosure of this additional income of Rs. 65 lacs was primarily made with reference to seized material which indicated investment in construction of school building and other infrastructure of the assessee-trust, exclusively used for the purposes of imparting education. It was claimed that such seized material already formed part of the report prepared by the AO under Rule 9 filed with ITSC. The assessee also claimed that the assessee’s case has been abated by ITSC vide order dated 17.08.2016 by invoking provisions of Section 245HA of the 1961 Act, and it was claimed that the AO did not completed the assessment after abatement of the assessee application with ITSC, within the time provided under the statute and hence all the assessments are time barred. The assessee also claimed that the seized material itself shows that there was utilization for the purposes of setting up/improving infrastructure of the assessee as was required for carrying on educational activities of the assessee-trust for which the assessee came into existence and for which registration was granted u/s 12AA of the 1961 Act and also approval for donation u/s 80G(5) of the 1961 Act was granted. The assessee also submitted that these seized material reflect investment in /improvement of infrastructure that had been set up by assessee for education and these investment / utilization have been classified as income under the head ‘anonymous donation’ calling for taxation u/s 115BBC which has been offered for taxation in the application filed for settlement of case before ITSC. The assessee also claimed before ld. Pr. CIT(Central) that registration once granted u/s 12AA cannot be cancelled , at least it cannot be cancelled with retrospective effect. So far as specific issues raised by ld. Pr. CIT(Central) in his SCN concerning diversion of funds of assessee for benefit of trustees and/or group entities , as well diversion of sale proceeds of assets of the assessee for repayment of loans of group entities, the ITA No. 73/ALLD/2019 Jeevan Jyoti Charitable Trust 28 assessee chose not to reply despite several opportunities granted by ld. Pr. CIT(Central). 2.5 The ld. Pr. CIT(Central) considered the submissions filed by the assessee in response to the aforesaid SCN . The ld. Pr. CIT(Central) observed that sufficient opportunity was given to the assessee. The ld. Pr. CIT(Central) observed that the assessee was in receipt of cash money , which was not recorded in books of accounts of the assessee. The ld. Pr. CIT(Central) observed that the assessee has admitted in settlement application that voluntary donation were received from public which has not been accounted for in books of accounts of the assessee trust. The ld. Pr. CIT(Central) also observed that names of donors, addresses or the amounts of donation received from such persons have not been given by assessee before AO during assessment proceedings nor the same were given in application filed before ITSC. The ld. Pr. CIT(Central) observed that the assessee was approved u/s 80G(5) and it was obligated to issue proper receipts to donors under clause (c) of Section 80G(5)(i) so as to enable donors to claim deduction under the 1961 Act. It was further observed that the assessee was under obligation to maintain separate books of accounts for receipts as per clause (iv) of Section 80G(5) and also account for such receipts in such books of accounts to fulfill the conditions for applying such receipts for charitable purposes as per objects of the trust and also clause (b) of Section 12A(1) of the 1961 Act which deals with conditions for registration. It was further observed by ld. Pr. CIT(Central) that cash donations were not recorded in the books of accounts and hence it could not be said that true and correct books of accounts were maintained by assessee. It was further observed that one of the condition of registration is that the accounts are to be audited and since the assessee is not recording its receipts in its books of accounts, it could not be said that the accounts reflect true and correct state of affairs and hence the assessee has violated conditions of registration u/s 12A of the 1961 Act. It was further observed that the assessee’s income was exempt u/s 11 of the 1961 Act and hence there was no need to keep such ITA No. 73/ALLD/2019 Jeevan Jyoti Charitable Trust 29 donations out of books. The assessee has not furnished the names and addresses of donors , date and amount received from donors were also not given by the assessee .The ld. Pr. CIT(Central) observed that these cash donations cannot be said to be received out of genuine activities in the absence of details furnished by assessee. The ld. Pr. CIT(Central) also rejected the contentions of the assessee that these cash donations can be taxed as anonymous donations u/s 115BBC without cancelling registration of the assessee. It was observed that Section 115BBC deals with taxability of anonymous donations which are otherwise accounted for in books of accounts and not with the receipts/ donations which are not at all accounted for in books of accounts. It was observed by ld. Pr. CIT(Central) that by not giving details of donations or by not recording the cash receipts in books of accounts, genuineness of such activities resulting in receipt of such donation is unproved. It was further observed that such unaccounted receipts do not partake the character of income having being derived income from property held under trust for the purposes of exemption u/s 11 and such unaccounted receipts are not of the nature as specified un Section 11(1)(a) of as well as in Section 12(1) of the 1961 Act, and hence consequently it could not be said that the said amounts were utilized for the purposes and objects of the trust nor it could be said that the activities of the assesee- trust were genuine or being carried out as per objects of the trust deed. The ld. Pr. CIT(Central) further held that the assessee has applied its funds for the benefit of trustees and their family members or related entities. The ld. Pr. CIT(Central) quoted some instances of diversion of funds in its order dated 29.03.2019 at para 4.3 at page 14/15, as under: “ i) In trust balance sheet at schedule-9 of advance of A.Y. 2013-14 the assessee has given loan & advance to trustee as under:- Rs. 89,50,000/- to Dr. A.K.Bansal through Jyoti Hospital Pvt. Ltd. Rs. 46,24,790/- to Dr. Vandana Bansal through Jyoti Hospital Pvt. Ltd. ITA No. 73/ALLD/2019 Jeevan Jyoti Charitable Trust 30 In A.Y. 2011-12, on several occasions , Jyoti Hospital Nursing School made payment to trustee’s company as under:- Rs. 13,00,000/- to M/s Jyoti Hospital Pvt. Ltd. (amount transferred) Rs. 20,26,382/- to M/s Jyoti Hospital Pvt. Ltd.(amount advanced) From the above facts it is evident that the trust is diverting fund for the benefits of trustees or related entities of the trustees and hence the activities of the trust are not being genuinely carried as per the objects of the trust and also violating the conditions of clause (ii) of 80G(5). (ii) Further as per schedule-5 of fixed assets the assessee has transferred the funds for investment in assets as capital expenditure. The details of transaction in trust is as under:- Building under construction at Bheerpur Rs. 2,77,98,129/- Building under construction for Aapna Gaon Rs. 5,25,69,129/- However, as per the latest information, the Jeevan Jyoti Public Scholl building at Bheerpur and Jeevan Jyoti Nursing School building Apnagaon, Rewa Road , Allahabad are already sold in September 2017 and sale proceeds are utilized for repayment of outstanding bank loans of the trustee’s group concerns and not utilized for the purposes of the trust of the charitable trust. The capital assets of the trust have therefore been transferred and the funds therefrom have not been utilized for purposes of the trust’s object and hence the activities of the trust are not being genuinely carried as per the objects of the trust beside violating condition of section 11(3). There is also violation of the conditions of clause(ii) of 80G(5).” The ld. Pr. CIT(Central) further observed that the assessee instead of replying as to how the assessee fulfills conditions as stipulated u/s 12A, has been more harping on irrelevant and technical issues. The ld. Pr. CIT(central ) observed that first SCN was issued on 18.07.2017 and the assessee submitted reply on 01.08.2017, but no order was passed by previous incumbent who got transferred on 25.08.2017. Since, there was a change in incumbent , fresh SCN was issued on 20.12.2018. The ld. Pr. CIT(Central) also observed that facts which are undisputedly admitted by the assessee in its own application filed with ITSC after the notices were issued u/s 153A, which are being used to decide the validity of registration u/s 12A . The ld. Pr. CIT(Central) further observed , without prejudice, that the assessee has gone upto Hon’ble High ITA No. 73/ALLD/2019 Jeevan Jyoti Charitable Trust 31 Court challenging the validity of notices issued u/s 153A, but failed to succeed. The ld. Pr. CIT(Central) further observed that issue of limitation of assessment u/s 153A cannot have any implication on deciding the question whether the assessee trust was carrying on its activities as per the objects of the trust for which it was granted registration. The ld. Pr. CIT( Central) further observed that the appeal filed by assessee before ld. CIT(A) was dismissed. The assessee then filed second appeal with tribunal , and now the matter is set aside by tribunal to the file of ld. CIT(A) for passing fresh orders. It was observed by ld. Pr. CIT(Central) that tribunal has not held the order the appellate order passed by ld. CIT(A) in first round of litigation to be null and void, there is no merit on the issue raised by assessee on validity of search assessment u/s 153A, more so when these are not relevant for the purposes of these proceedings u/s 12AA which are independent. The ld. Pr. CIT(Central) further observed that even if search assessment are held to be bad in law, still material which was collected during search or otherwise, could still be used for any other proceedings under the 1961 Act. The reference was drawn by ld. Pr. CIT(Central) to the decision of Hon’ble Apex Court in the case of Dr. Pratap Singh & Anr. v. Director of Enforcement & ors. (1985) 155 ITR 166(SC). The ld. Pr. CIT(Central) also rejected the contentions of the assessee that the admission of additional income by assessee before ITSC cannot be used in any other proceedings, as in the opinion of ld. Pr. CIT(Central) admission of additional income by assessee in an application filed before ITSC will bind the assessee and it cannot now retract from its own admission merely because its application before ITSC had abated, in the proceedings conducted for cancellation of registration u/s 12AA of the 1961 Act. The ld. Pr. CIT(Central) also rejected the contentions of the assessee that source of receipts is not relevant and what is relevant is only utilization of receipts as contended by assessee before ld. Pr. CIT(Central). It was observed by ld. Pr. CIT(Central) that if sources are not to be seen , then provisions of Section 2(15) would be rendered otiose. It was observed that test of utilization would come into play only when the test of source is not under question. The ld. Pr. CIT(Central) observed that the source of ITA No. 73/ALLD/2019 Jeevan Jyoti Charitable Trust 32 unaccounted receipts under the garb of anonymous donations itself is under grave suspicion , as also genuineness of the activity during which such unaccounted cash was received. It was observed that manner of earning unaccounted receipts would lead to commercial profiteering , which is impermissible u/s 2(15). It was observed that if income was in violation of objects of the trust or any law or socially acceptable standards , such activity cannot remain as charitable per se . The ld. Pr. CIT(Central) referred to provisions of Section 2(15) of the 1961 Act. The ld. Pr. CIT(Central) held that the these receipts are not recorded in the books of accounts nor the expenses out of such receipts are recorded in the books of accounts, and hence the argument of the assessee that the same were utilized for the objects of the assessee trust were rejected by ld. Pr. CIT(Central). It was held that such cash receipts which are not recorded in books of accounts cannot be said to be derived from property held under the trust or as per objects of the trust. The ld. Pr. CIT(Central) further observed that the action of not recording the receipts in books of accounts cannot also be said to be an activity genuinely carried as per authorization under the trust deed. It was further observed by ld. Pr. CIT(Central) that test prescribed u/s 11 regarding application of such receipts/income to charitable purposes also fails in the case of assessee. It was observed that Section 11(1)(a) stipulates that ‘to extent of such income applied to such purposes in India’ and also ‘to extent to which the income so accumulated or set apart is not in excess of 15% of the income from such property’ , would impliedly require maintenance of accounts comprising of all receipts and expenses pertaining to the objects/purposes of the trust. It was observed that when receipts or expenses are not recorded in books of accounts maintained by assessee, the test of the income applied for such purposes and computation of limit of 15% of income for accumulation would also fail. Thus, it could not be said that the activities of the trust were carried genuinely as per the charitable objects of the trust deed. The ld. Pr. CIT(Central) also rejected the contentions of the assessee that registration u/s 12A cannot be withdrawn retrospectively. The ld. Pr. CIT(Central) observed that the facts admitted by assessee ITA No. 73/ALLD/2019 Jeevan Jyoti Charitable Trust 33 in its SOF filed before ITSC indicates that the assessee-trust was receiving cash which was unaccounted for the period commencing from financial year 2006-07 relevant to ay: 2007-08 till ay:2014-15. The ld. Pr. CIT(Central) held that cancellation of registration u/s 12AA(3) is to be given effect retrospectively from the date from which the assessee-trust was found to be violating conditions of 12A registration i.e. 01.04.2006. The ld. Pr. CIT(Central) referred to Constitution Bench of Hon’ble Supreme Court decision in the case of Commissioner of Custom(Import) v. Dilip Kumar and Company (2018) 95 taxmann.com 327(SC), to hold that provisions of Section 12AA(3) is to be interpreted strictly.He also referred to decision of Hon’ble Karnataka High Court in the case of Navodaya Education Trust v. UOI, w.p. no. 3468- 3472/2018. The decision of Bangalore-tribunal in the case of Vidya Sewa Sangathna v. CIT, Hubli 71 taxmann.com 152 was also referred by ld. Pr. CIT(Central) , to hold that registration granted u/s 12A can be cancelled with retrospective effect subject to specified conditions as specified in Section 12AA(3). The ld. Pr. CIT(Central) also referred to Hon’ble Supreme Court having admitted SLP in the case of PCIT v. JIS Foundation 257 Taxman 261 (SC). It was also observed by Ld. Pr. CIT(Central) that Hon’ble Supreme Court has admitted SLP against decision of Hon’ble Allahabad High Court decision in the case of Rama Education Society 259 Taxman 368(SC), wherein Hon’ble High Court had held that withdrawal of registration u/s 12AA(3) of the 1961 Act cannot be retrospective. The ld. Pr. CIT(Central) further held that not only conditions for grant of registration u/s 12A were violated, but also that conditions of sub-clause (c) of clause(i) of 80G(5) and clause (ii) and (iv) of 80G(5) are also violated as the assessee had failed to maintain books of accounts in respect of so called cash donations, nor have produced any evidence of having issued any receipts for such donations and the funds of the assessee-trust have been transferred for purposes other than charitable purposes. The ld. Pr. CIT(Central) also observed that the assessee has obtained multiple PAN numbers and also had obtained multiple registration u/s 12AA of the 1961 Act. It was also observed that ld. CIT(E) has already ITA No. 73/ALLD/2019 Jeevan Jyoti Charitable Trust 34 cancelled registration granted u/s 12AA of the 1961 Act, vide cancellation order dated 08.02.2019. Thus, the ld. Pr. CIT(Central) being satisfied held that the assessee-trust does not exist solely for charitable purposes and that the activities of the assessee trust were not being carried genuinely as per the charitable objects of the trust deed. Thus, the registration granted u/s 12A by ld. CIT, Allahabad order granting registration No. 1/98-99 dated 29.01.1999, was cancelled by ld. Pr. CIT(Central) w.e.f. from 01.04.2006 by invoking provisions of Section 12AA(3) of the 1961 Act, vide orders dated 29.03.2019 . Further ld. Pr. CIT(Central) was pleased to cancel registration granted u/s 80G(5) of the 1961, w.e.f. date when it was granted on 13.10.2009, vide orders dated 29.03.2019. 3. Aggrieved by the orders dated 29.03.2019 passed by ld. Pr. CIT(Central) u/s 12AA(3) and 80G(5) of the 1961 Act, the assessee filed first appeal with tribunal. This appeal was heard by Division Bench of the tribunal through video conferencing through virtual court. My ld. Brother Hon’ble Judicial Member has reproduced grounds of appeal raised by assessee in memo of appeal filed with the tribunal , and for sake of brevity, the same are not reproduced by me in this order. My ld. Brother Hon’ble Judicial Member has recorded in his order the contentions raised by both the rival parties during the course of hearing , and hence for the sake of brevity the same are not repeated. 4. So far as ground number 1 and 2 raised by the assessee in memo of appeal filed with tribunal, which concerns itself with raising challenge to second notice issued by ld. Pr. CIT(Central) proposing to cancel registration u/s 12AA(3) , and also raising challenge to legality of search conducted by Revenue u/s 132 (1) against the assessee , I am in agreement with decision of my ld. Brother Hon’ble Judicial Member , and there is no divergence of my view on the same vis-à-vis view of my ld. Brother Hon’ble Judicial Member. Thus, accepting the view of my ld. Brother Hon'ble Judicial Member as discussed in para 4 to 10 of his order dated 20.10.2021, I dismiss ground number 1 and 2 raised by assessee in memo of appeal filed with tribunal. I order accordingly. ITA No. 73/ALLD/2019 Jeevan Jyoti Charitable Trust 35 5. So far as ground number 3 to 9 are concerned, my ld. Brother Hon’ble Judicial Member has given his findings and conclusion in para 14 to 19 of his order dated 20.10.2021. In nut-shell, my ld. Brother Hon’ble Judicial Member has upheld cancellation of registration u/s 12A and withdrawal of approval u/s 80G(5) with effect from the financial year in which the assessee has sold its educational institutions and the activities of the assessee had ceased to exist and therefore not carried out in accordance with the object of the assessee trust, while the ld. Pr. CIT(Central) cancelled registration u/s 12AA(3) retrospectively w.e.f. 01.04.2006, while the approval granted u/s 80G(5) was cancelled by ld. Pr. CIT(Central) w.e.f date of grant of approval viz. 13.10.2009. My ld. Brother has also held that cancellation of registration u/s 12AA(3) and withdrawal of approval u/s 80G(5) cannot be done with retrospective effect. 5.2 As I have already stated in preceding para’s of this order that I differ from the decision of my ld. Brother Hon’ble Judicial Member , and hence I am proceeding to write my own order . I am of the view that the matter needs to be set aside and restored to the file of ld. Pr. CIT for denovo consideration of issue of cancellation of registration u/s 12AA(3) and withdrawal of approval u/s 80G(5) of the 1961 Act, for the reasons cited below by me in this order. 6. The brief facts of the case are that the assessee was granted registration u/s 12A of the Income-tax Act, 1961 by Revenue, vide Commissioner of Income-tax , Allahabad order registration number 1/98-99 dated 29.01.1999 , and the assessee was also granted approval u/s 80G(5) of the 1961 Act , vide orders dated 13.10.2009. The assessee was created on 01.04.1990 and as part of its educational activities , it has claimed to be engaged in running various institutions and schools, i.e.- (i) Jyoti Hospital Nursing School ITA No. 73/ALLD/2019 Jeevan Jyoti Charitable Trust 36 (ii) Jeevan Jyoti Institute of Paramedical Sciences (iii) Jeevan Jyoti Public School (iv) Ascent Institute of Management & Technology As claimed by Revenue, there was a search and seizure operations conducted u/s 132 of the 1961 Act in the case of the assessee along with other cases of the Jeevan Jyoti Group on 29.05.2012 at the registered office of the assessee at 162, Bai-ka- Bagh, Allahabad, U.P.. The cases of the group were centralized with Central Circle by Revenue u/s 127 of the 1961 Act. The assessee has on the other hand disputed that the assessee was never searched by Revenue. The assessee was registered u/s 12A of the 1961 Act and had since been claiming exemption u/s 11 and 12 of the 1961 Act, on the strength of registration granted by ld. CIT , Allahabad on 29.01.1999 , u/s 12A of the 1961 Act. Pursuant to search and seizure operations as claimed to be conducted by Revenue u/s 132 of the 1961 Act which is although disputed by the assessee, the AO issued notices to the assessee, u/s 153A of the 1961 Act. In response to notices issued u/s 153A by Revenue , the assessee filed its return of income claiming exemption u/s 11 and 12 of the 1961 Act. The Revenue has claimed that several incriminating documents pertaining to assessee-trust were also found and seized during the aforesaid search and seizure operations conducted by Revenue. While assessment proceedings were in progress, the assessee filed application before ITSC , New Delhi on 24.02.2015 u/s 245C, wherein additional income of Rs. 65,00,000/- was disclosed by the assessee-trust for the assessment years’ 2007-08 to 2014-15 in SOF filed with ITSC, as detailed hereunder: S.No. Assessment Year Additional Income declared before ITSC (In Rs.) Tax Paid (In Rs.) ITA No. 73/ALLD/2019 Jeevan Jyoti Charitable Trust 37 1. 2007-08 10,00,000 6,31,000 2. 2008-09 10,00,000 5,94,000 3. 2009-10 10,00,000 5,57,000 4. 2010-11 10,00,000 5,20,000 5. 2011-12 10,00,000 4,83,000 6. 2012-13 5,00,000 2,25,000 7. 2013-14 5,00,000 2,07,500 8. 2014-15 5,00,000 1,80,000 So far as sources of the said additional income offered by assesse before ITSC, the assessee has claimed that the said additional income offered by it in settlement application filed before ITSC has arisen out of variety of sources, one such sources being donation received from public at large. The assessee further claimed that these donations so received by it were meant for construction of school building and other infrastructure as also for other educational activities, and the same were directly invested in such activities, without recording in the books of accounts of the appellant trust and such utilization in educational activities were spread over in the ay’s : 2007-08 to 2014-15 and worked out to be Rs. 65 lacs in aggregate. Proceeding further, the Revenue on its part filed Report in Rule 9 in the case of the assessee before ITSC , and total additions to the income of the assessee to the tune of Rs. 10,37,96,184/- were proposed by Revenue , as in view of Revenue the assessee was not engaged in charitable activities, rather it was engaged in the business activities for the benefit of its main trustees, namely Dr. Ashwani Kumar Bansal and Dr. Vandana Bansal or entities related to the trustees. It is pertinent to mention that these additions to income vide Report in Rule 9 were , inter-alia, proposed to be made to income of the assessee by Revenue based on disclosures of Rs. 65 lacs made by the assessee before ITSC as well based on incriminating material seized during the course of search and seizure operations conducted by Revenue u/s 132 of the ITA No. 73/ALLD/2019 Jeevan Jyoti Charitable Trust 38 1961 Act. The ITSC on its part passed an order dated 17.08.2016, u/s 245D(4) of the 1961 Act abating the applications before ITSC and restored the proceedings back to the file of the AO. The assessee filed Miscellaneous Application before ITSC against the order of ITSC dated 17.08.2016, but the M.A. stood rejected by ITSC, vide order dated 20.01.2017, passed u/s 245D(6B) of the 1961 Act by ITSC. It is also pertinent to mention at this stage that additional income offered before ITSC by various persons/ entities of the group(including assessee) were to the tune of Rs. 6,47,84,610/- , while so far as assessee is concerned the additional income offered for taxation by assessee before ITSC was in aggregate to the tune of Rs. 65 lacs for ay’s; 2007-08 to 2014-15 . Thereafter , the AO completed assessment for ay: 2007- 08 to 2014-15 and the income assessed in the hands of the assessee for ay: 2007-08 to 2013-14, were to the tune of 34,43,24,119/-, as detailed hereunder:- S.No. Assessment Year Income declared (In Rs.) Income Assessed (in Rs.) Date of Assessment Order Assessment Order passed u/s 1. 2007-08 Nil 51,95,230/- 08.08.2017 153A read with Section 143(3) 2. 2008-09 Nil 2,81,70,980/- 08.08.2017 153A read with Section 143(3) 3. 2009-10 Nil 1,40,62,700/- 08.08.2017 153A read with Section 143(3) ITA No. 73/ALLD/2019 Jeevan Jyoti Charitable Trust 39 4. 2010-11 Nil 2,25,97,490/- 08.08.2017 153A read with Section 143(3) 5. 2011-12 Nil 12,55,72,780/- 08.08.2017 153A read with Section 143(3) 6. 2012-13 Nil 9,01,24,550/- 08.08.2017 153A read with Section 143(3) 7. 2013-14 Nil 5,86,00,389/- 08.08.2017 Section 143(3) Total Nil 34,43,24,119/- As could be seen that the income in aggregate assessed by AO in the hands of the assessee for ay’s: 2007-08 to 2013-14 were aggregating to the tune of Rs.34.43 crores, as against income declared by assessee of Rs. Nil for each of these assessment years. It is pertinent to mention that additions to the income of the assessee for ay’s: 2007-08 to 2013-14 were made by AO while framing aforesaid assessments , mainly , inter-alia, on ground of (i) declaration made by assessee before ITSC of additional income of Rs. 65 lacs ,(ii) income based on incriminating material seized during the course of search and seizure operations conducted by Revenue u/s 132 of the 1961 Act, and (iii) denial of exemption u/s 11 and 12 of the 1961 Act by bringing to tax income declared by assessee in its return of income which was claimed exempt by the assessee . It is also pertinent to mention here that the assessee did not furnish details called for by the AO during the course of assessment proceedings conducted by AO, and hence the AO was ITA No. 73/ALLD/2019 Jeevan Jyoti Charitable Trust 40 constrained to frame assessments based on material on record, despite several opportunities granted by AO to assessee to furnish the details /explanations/evidences etc. during the course of assessment proceedings . While framing assessment pursuant to search, the AO reported that during assessment proceedings the assessee has not given any details of donations received such as name and address of donors, amount of donation etc. which can prove the genuineness of donation of receipts, and which as per the AO indicates that these donations or receipts are not genuine and are part of undisclosed taxable income of the trustees, the AO had further reported that the assessee has during settlement proceedings declared total additional undisclosed income of Rs. 65,00,000/- for ay: 2007-08 to 2014-15, which itself reveals that the group is involved in concealment of taxable income, which was utilized for investments in properties and other investments, thirdly the AO reported that as per return of income of the assessee, huge receipts of the trust running in crores are shown as ‘ Amount applied for charitable purposes’ in each year , but no details of such charitable purposes are furnished during assessment proceedings for verification. The assessee thus, did not gave details, such as name and address of the donors as well amount of donation and purpose of donation. The ld. Pr. CIT(Central) also observed that names of donors, addresses or the amounts of donation received from such persons have not been given by assessee before AO during assessment proceedings nor the same were given in application filed before ITSC. The ld. Pr. CIT(Central) observed that the assessee was approved u/s 80G(5) and it was obligated to issue proper receipts to donors under clause (c) of Section 80G(5)(i) so as to enable donors to claim deduction under the 1961 Act. It was further observed by ld. Pr. CIT(Central) that the assessee was under obligation to maintain separate books of accounts for receipts as per clause (iv) of Section 80G(5) and also account for such receipts in such books of accounts to fulfill the conditions for applying such receipts for charitable purposes as per objects of the trust and also clause (b) of Section 12A(1) of the 1961 Act which deals with conditions for registration. It was ITA No. 73/ALLD/2019 Jeevan Jyoti Charitable Trust 41 further observed by ld. Pr. CIT(Central) that cash donations were not recorded in the books of accounts and hence it could not be said that true and correct books of accounts were maintained by assessee. It was further observed by ld. Pr. CIT(Central) that one of the condition of registration is that the accounts are to be audited and since the assessee is not recording its receipts in its books of accounts, it could not be said that the accounts reflect true and correct state of affairs and hence the assessee has violated conditions of registration u/s 12A of the 1961 Act. It was further observed that the assessee’s income was exempt u/s 11 of the 1961 Act and hence there was no need to keep such donations out of books. The assessee has not furnished the names and addresses of donors , date and amount received from donors were also not given by the assessee .The ld. Pr. CIT(Central) observed that these cash donations cannot be said to be received out of genuine activities in the absence of details furnished by assessee. The ld. Pr. CIT(Central) also rejected the contentions of the assessee that these cash donations can be taxed as anonymous donations u/s 115BBC without cancelling registration of the assessee. It was observed that Section 115BBC deals with taxability of anonymous donations which are otherwise accounted for in books of accounts and not with the receipts/ donations which are not at all accounted for in books of accounts. It was observed by ld. Pr. CIT(Central) that by not giving details of donations or by not recording the cash receipts in books of accounts, genuineness of such activities resulting in receipt of such donation is unproved. It was further observed that such unaccounted receipts do not partake the character of income having being derived income from property held under trust for the purposes of exemption u/s 11 and such unaccounted receipts are not of the nature as specified un Section 11(1)(a) of as well as in Section 12(1) of the 1961 Act, and hence consequently it could not be said that the said amounts were utilized for the purposes and objects of the trust nor it could be said that the activities of the assesee-trust were genuine or being carried out as per objects of the trust deed. Thus, it is one of the main grievance of the Revenue in all the proceedings be it for framing assessment or proceedings ITA No. 73/ALLD/2019 Jeevan Jyoti Charitable Trust 42 conducted for cancellation of Registration u/s 12AA(3) of the 1961 Act, that the assessee has not provided details of donations or sum received by it to prove its genuineness , as no details of name and address of the persons , purpose of donation etc. was provided by assessee to Revenue, which concerns both with these donations of Rs. 65 lacs which are not recorded in its books of accounts as well other sum received which stood recorded in assessee’s books of accounts . It is a matter of record that the assessee has not given any details of these receipts before any of the authorities , including us. The assessee on the other hand is advancing arguments, that there is no relevance of seeing the sources of receipts. This argument of the assessee is fallacious and is hereby rejected. I have observed while going through the audited accounts of the assessee and institution run by it, for the financial year 2006-07 onwards, which are placed in paper book(s) at page number 254 to 524 and page 730- 732 , that the assessee has received large sums of money towards Donations, Corpus funds, Building fund , Development fund etc. which stood credited in its books of accounts. It is not uncommon that educational institutions in India illegally demand capitation fee and other forced amount of money by way of Corpus fund, Building fund, Development fund, Donations etc. from students/parents of the students, while admitting students in the institution, which sum(s) of money so raised are much in excess of fees and other charges as approved by Government or AICTE etc. and are illegal receipts causing wreckage at the very fundamental of education system in our country and hence by no stretch of imagination, these ill-gotten receipts can be allowed to be recovered and educational institutions who are engaged in raising these ill-gotten money cannot be allowed to be given benefit of exemption u/s 11 and 12 of the 1961 Act . Since, I am setting aside the order dated 29.03.2019 passed by ld. Pr. CIT(Central) for denovo consideration and passing of fresh order(s) regarding cancellation of registration u/s 12AA(3) and withdrawal of approval u/s 80G(5) after considering entire material on record , the assessee is directed to produce all the relevant details of the donations and all other sums so received in the form of Building ITA No. 73/ALLD/2019 Jeevan Jyoti Charitable Trust 43 Fund, Corpus Fund, Development Fund, Donations etc. to prove that these are genuine receipts , and are neither bogus nor have any nexus/co-relation with the admission of students in the institutions run by the assessee. The ld. Pr. CIT(Central) shall verify whether there exists any nexus of these receipts with the admission of students in the institution run by the assessee, and also whether the fees charged by institutions run by assessee is in accord with the fees approved by Government or AICTE etc.. Reference is drawn to decision of Hon’ble Kerala High Court decision in the case of Travancore Education Society v. CIT reported in (2016) 66 taxmann.com 362(Ker. HC ), wherein Hon’ble Kerala High Court held that wherein the trust was receiving capitation fee in addition to fee , it could not be said that the said trust is anymore carrying out its objects for charitable purposes. The order of Hon’ble Kerala High Court was confirmed by Hon’ble Supreme Court in Civil Appeal No 1955 of 2015, vide orders dated 21.01.2021( reported in (2021) 126 taxmann.com 21(SC). If the assessee hands are clean , then it should come forward with all the details and there is no reasons to withheld such details. If the assessee does not furnish these details, then presumption will be drawn against the assessee. Reference is drawn to provisions of Section 114(g) of the Indian Evidence Act, 1872. It is also one of the contentions of the Revenue that the assessee has given advance of Rs. 89,50,000/- to Dr. A K Bansal through Jyoti Hospital Private Limited , and an advance of Rs. 46,24,790/- to Dr. Vandana Bansal through Jyoti Hospital Private Limited, which evidences that the trust is diverting funds for the benefits of the trustee. It is also the grievance of Revenue that in ay: 2011-12, on several occasions , Jyoti Hospital Nursing School made payment to trustee’s company as under:- Rs. 13,00,000/- to M/s Jyoti Hospital Pvt. Ltd. (amount transferred) Rs. 20,26,382/- to M/s Jyoti Hospital Pvt. Ltd.(amount advanced) ITA No. 73/ALLD/2019 Jeevan Jyoti Charitable Trust 44 It is contended by Revenue that from the above facts it is evident that the trust is diverting fund for the benefits of trustees or related entities of the trustees and hence the activities of the trust are not being genuinely carried as per the objects of the trust and also violating the conditions of clause (ii) of 80G(5). The assessee has given a balled and general statement before the Bench that from the other group entities , the sum received by assessee was higher and hence there is no net amount advanced by the assessee to trustee. This arguments is also fallacious, as every entity is a separate entity and hence all the transactions with inter-related parties who are hit by Section 13(2) and 13(3) of the 1961 Act are to be separately explained vis-à-vis- reference to books of accounts and flow of money. The assessee has claimed itself to be a charitable entity and there is a prohibition that trustees and their relatives, concerns in which they or their relatives are interested shall not derive any benefit from the charitable trust. Reference is drawn to Section 13(2) and 13(3) of the 1961 Act. I have gone through the audited financial statements of the assessee for the financial year 2006- 07 to 2017-18, which are placed in paper book(s) at page 254 to 524 and 730-741, and I have observed that several transaction of substantial amounts have been conducted by assessee, with Jyoti Hospitals Private Limited, Dr. Ashwani Kumar Bansal and Dr Vandana Bansal. The assessee has claimed exemption of income u/s 11 and 12 , by getting itself registered u/s 12A of the 1961 Act and the onus is on the assessee to prove by cogent evidences that no benefit was derived by trustees , their relatives or concerns in which they are interested etc. and provisions of Section 13(2) and 13(3) are not hit, and merely making balled and general statement is not sufficient nor is it sufficient to say that group entities have advanced more sum of money to assessee than what is advanced by the assessee to the trustees , their relatives or concerns in which trustees are interested , and hence consequently Section 13(2) and 13(3) are not hit. The onus is on the assessee to bring on record cogent evidences in its defense. On the part of Revenue , it has to do in-depth analysis of financial records and other relevant material to arrive at decision whether or not any benefit was derived by ITA No. 73/ALLD/2019 Jeevan Jyoti Charitable Trust 45 trustees or their relatives or entities associated with them to see whether there were or were not violation of Section 13(2) and 13(3) of the 1961 Act and in case of violations consequences will follow. The onus is on the assessee to bring on record all cogent material in connection therewith in its defense , to explain all the transactions entered into by it with its trustees, their relatives and /or entities associated/connected therewith, as provided u/s 13(2) and 13(3) of the 1961 Act. The Revenue has also alleged that assessee has diverted the sale proceeds of assets of the trust for repayment of outstanding bank loans of the trustee’s group concern and not utilized for betterment of charitable trust. The assessee had sold Building of Jeevan Jyoti Public School at Bheerpur , and Building of Jeevan Jyoti Nursing School at Apna- gaon , Rewa Road , Allahabad in September, 2017, and sale proceeds utilized for payment of bank loans of trustee’s group concern. These are again serious allegations levelled by Revenue as to diversion of funds to group entities. The onus is on assessee to bring on record all cogent material in its defense. The assessee had filed first appeal before ld. CIT(A) against assessment orders passed by AO pursuant to search for all these ay’s , which stood dismissed by ld. CIT(A) in first round of litigation , vide separate appellate orders all dated 10.07.2018, passed by ld. CIT(A) for ay’s: 2007-08 to 2013-14. The assessee filed second appeal with Division Bench of Allahabad- tribunal, who restored the matter back to the file of ld. CIT(A) for fresh adjudication, vide composite order dated 21.12.2018 passed by tribunal in ITA No. 322 to 328/Alld/2018 for ay’s : 2007-08 to 2013-14. These appeals for ay: 2007-08 to 2013- 14 are stated to be presently lying pending before ld. CIT(A) for fresh adjudication , in pursuance to directions of tribunal vide appellate orders dated 21.12.2018. Almost three years had since been passed , when the tribunal passed the appellate order dated 21.12.2018 and restored the matter back to the file of ld. CIT(A) and in my considered view the adjudication of these appeals by ld. CIT(A) and its outcome has direct bearing on the adjudication of cancellation of registration of the assessee u/s 12AA(3) and 80G(5) of the 1961 Act . In the interest of justice, it will be important that ld. CIT(A) ITA No. 73/ALLD/2019 Jeevan Jyoti Charitable Trust 46 expeditiously adjudicate all the appeals of the assessee which are pending before it , as the outcome of these appeals has in my considered view direct bearing on the decision regarding cancellation of registration u/s 12AA(3) and 80G(5) of the 1961 Act . In any case, the ld. Pr. CIT while denovo deciding the cancellation of registration u/s 12AA and 80G(5) of the 1961 Act will consider all the aspects covered by AO while framing assessment against the assessee for the relevant ay’s, as it is well settled that material seized or collected by Revenue can be utilized for framing assessment or in any other proceedings conducted against the tax-payer. The decision of Hon’ble Supreme Court in the case of Dr. Pratap Singh v. Director of Enforcement (1985) 155 ITR 166(SC) is relevant .It is pertinent to mention by availing a status wherein registration u/s 12A and 80G is granted, the tax-payer enjoys exemption from tax u/s 11 and 12 of the 1961 Act and it is incumbent on the part of the tax-payer that it strictly complies with the conditions attached with the grant of exemption , and any misuse will lead to cancellation/withdrawn of exemption. It is pertinent to mention that the exemption provisions are to be strictly construed and any ambiguity shall accrue to the benefit of Revenue. The tax-payer has to strictly comply with the condition attached with grant of exemption and onus squarely lies on the tax-payer. The decision of Constitution Bench of Hon’ble Supreme Court in the case of Commissioner of Custom(Import) v. Dilip Kumar and Company (2018) 95 taxmann.com 327(SC) is relevant. It is pertinent to mention here that cancellation of registration u/s 12AA(3) and 80G(5) of the 1961 Act as was done by Ld. Pr. CIT(Central) and that too with retrospective effect has serious and wide ramifications/implications causing severe prejudice to the tax-payer , thus it become all the more important that before cancelling registration u/s 12AA(3) and 80G(5) of the 1961 Act , all the issues/aspects which has bearing on continuation of registration u/s 12A and approval u/s 80G shall be considered and confronted to the tax-payer by giving proper opportunity of being heard in view of principles of natural justice, so that if so warranted based on facts and circumstance of the case , a comprehensive order covering all aspects/issues ITA No. 73/ALLD/2019 Jeevan Jyoti Charitable Trust 47 having bearing on cancellation of Registration u/s 12AA(3) and approval u/s 80G(5) of the 1961 Act need be passed, covering all the instances of infringement of conditions attached to registration u/s 12A. This would require detailed analysis of the financial statements and the other relevant material by the authorities. The assessee on its part is directed to file all relevant details and co-operate in the proceedings, otherwise presumption will be drawn against the assessee. Reference is once again drawn to provision of Section 114(g) of The Indian Evidence Act, 1872. Since, I am setting aside matter back to the file of ld. Pr. CIT for denovo determination of the matter, the issue of multiple PAN and registration u/s 12A obtained by assessee shall also be looked into by ld. Pr. CIT to see whether it was inadvertently obtained or was any misuse of multiple PAN and registration u/s 12A was made or attempted by assessee to derive undue benefits. It is also pertinent to mention here that a letter dated 10.02.2020 was received by tribunal (copy annexed to this order) , in which one Mr. Amresh Kumar Singh S/o Shri Vijay Bahadur Singh Residence of Village Tikaria Khurd, Post Khemipur, District Pratapgarh,U.P. , current address 16G/53G , Kazipur, Naini , Praygraj(U.P.) Phone No. 7355738401, has stated that he was former employee of Jeevan Jyoti Hospital and in his name businesses were shown by the assessee and he is facing huge tax demand. He has stated in the letter that entire information to this effect was already given to department. It is further stated by said Mr. Amrish Kumar Singh in the said letter that the assessee is not a charitable institution as is claimed by assessee. This letter dated 10.02.2020 was forwarded by Division Bench of the tribunal to both the rival parties for filing their response , in the hearing held by Division Bench of Allahabad-tribunal , on 11.02.2020. The Division Bench passed following interim order dated 11.02.2020 which stood recorded in order sheet entry: “11/2/2020 Present: Sh. Gaurav Bansal, CA Sh. S.K. Madhuk, CIT(DR) The contents of letter dated 11.02.2020 , written to the Tribunal by one Sh. Amrish Kumar Singh, have been made available to the ITA No. 73/ALLD/2019 Jeevan Jyoti Charitable Trust 48 representative of both the parties . This letter is placed on the record. Both the ld. Representatives have been required to file their response to the letter. As such, adjourned sine die. Sd/- Sd/- AM VP” Both the rival parties have chosen not to file their response to the aforesaid directions of the Division , dated 11.02.2020. This complaint dated 10.02.2020 filed by one Mr. Amrish Kumar Singh shall also be considered and taken into cognizance by ld. Pr. CIT(Central) while adjudicating the cancellation of registration of the assessee, u/s 12AA(3) of the 1961 Act, as in my considered view if the evidence brought in by the complainant have substance, then obviously it will also have important bearing on decision to cancel registration u/s 12AA and 80G. I have already stated that cancellation of registration u/s 12AA and 80G has serious and wide ranging ramification and hence composite and comprehensive order, if facts so warrant, is required to be passed considering all aspects which evidences and establishes misuse of status of registration u/s 12AA and 80G of the 1961 Act, need to be passed and of course after giving proper opportunity of being heard to the assessee. At the same time, needless, to say that filing of frivolous complaint also lead to serious prejudice , harassment and inconvenience to the person against whom such frivolous complaint is filed, and such frivolous complaints also have its own legal consequences against the person who has filed such frivolous complaint. Now , coming to the contentions of the assessee that the registration granted u/s 12A of the 1961 Act cannot be cancelled with retrospective effect, in my considered view, this argument cannot be accepted as , in case it is found that the assessee has infringed the conditions of registration and misused the registration u/s 12A of the 1961 Act from earlier period , the Revenue shall be within its power to cancel registration u/s 12AA(3) from the earlier date from which misuse of the registration or infringement of conditions of registration u/s 12A took place. The Recent decision of Hon’ble Supreme Court in the case of CIT(E) v. Batanagar Education and Research Trust , ITA No. 73/ALLD/2019 Jeevan Jyoti Charitable Trust 49 reported in (2021) 129 taxmann.com 30(SC) is relevant, wherein Hon’ble Supreme Court held as under: “This appeal challenges the judgment and order dated 9-10-2018 passed by the High Court at Calcutta in ITA No. 116 of 2018 setting aside (i) the order dated 25-2-2016 passed by Commissioner of Income Tax (Exemption) ("CIT" for short) cancelling registration of the respondent Trust ("Trust", for short) under section 12AA of the Income-tax Act, 1961 ("the Act" for short); and (ii) the order dated 13-9-2017 passed by the Income Tax Appellate Tribunal ("the Tribunal", for short) dismissing appeals arising therefrom. 2. The Trust was registered under section 12AA of the Act vide order dated 6-8-2010 and was also accorded approval under section 80G(vi) of the Act. 3. In a survey conducted on an entity named School of Human Genetics and Population Health, Kolkata under section 133A of the Act, it was prima facie observed that the Trust was not carrying out its activities in accordance with the objects of the Trust. A show cause notice was, therefore, issued by the CIT on 4-12-2015. 4. In answer to the questionnaire issued by the Department, Shri Rabindranath Lahiri, Managing Trustee of the Trust gave answers to some of the questions as under: "Q.11. Please confirm the authenticity of the abovementioned Corpus Donation. Ans. A major part of the donations that were claimed exemption u/s 11(1)(d) were not-genuine. The donation received in F.Ys. 2008-09, 2009-10 and 2010-11 were genuine Corpus Donation received either from the Trustees or persons who were close to the Trustees or persons who were close to the Trustees. In F.Ys. 2011-12 and 2012-13 a part of the donation were genuine like the earlier years. However, a major part of the donations received in these two F.Ys. viz. 2011-12 and 2012-13, shown as Corpus Donation, were in the nature of accommodation entries to facilitate two things- (a) To procure loans from the Bank we had to show substantial amount of Capital Reserve in our Balance Sheet. (b) We require funds for the expansion of our college. The fees received from the students along with genuine donations from the Trustees and their contacts were not sufficient to run the institution. Q.12. Why are you saying that a major part of the donations received were not genuine? Ans. In those cases, which I admit as accommodation entries, a part of the donation received was returned back to the donors through intermediaries. Q. 13. Who were the intermediaries and what were the modes of returning the money? Ans. We were instructed to transfer funds through RTGS to the following seven (7) persons: ITA No. 73/ALLD/2019 Jeevan Jyoti Charitable Trust 50 1. Santwana Syndicate 2. P.C. Sales Corporation 3. Kalyani Enterprises 4. Riya Enterprises 5. Laxmi Narayan Traders 6. Hanuman Traders 7. Rani Sati Trade-cum-Pvt. Limited These payments were booked as capital expenditure under the head Building. Q. 14. In response to the earlier question you have stated that you were "instructed". Who gave you the instruction? Ans. I can remember only one name right now, that is Shri Gulab Pincha, Mob No. 9831015157. He was the key person for providing a large part of bogus donation received which was immediately returned back to the different parties in the guise of payments towards capital expenditure in building. We do now know any details in respect of the donors on behalf of whom Shri Gulab Pincha acted as a middleman. Shri Pincha provided us with the details of the donors, cheque of the donations, letters of corpus donations etc. He also provided us with the names and bank a/c. details of the seven (7) persons, mentioned in Answer 13 to whom money has to be returned back through RTGS. He also collected the money receipts/80G certifications on behalf of the donors. Q. 19. The ledger copy for the period from 1-4-2014 to 4-9-2014 in respect of "General Fund" of your trust having details of the donors is being shown to you to identify the bogus donations along with bogus donors. Ans. After going through the list of the donors appeared in such ledger it is understood that the Donors whose names are written in capital letters under the sub-head "Donation-13", "Donation-I" and "Donations-II" having total amount of Rs. 6,03,07,550/- is bogus and out of which Rs. 5,96,29,973/- was returned back through RTGS to the above mentioned seven (7) persons following the instructions of the mediators." 5. On the basis of the material on record, the CIT came to the following conclusions: "6.1. The intention of the legislature to grant registration u/ss 12AA and 80G, to give the benefit u/s 11 to encourage medical relief to the poor and needy persons, promote education among masses and support to the poor section of the society. But time and again these provisions have been misused for personal need and for benefit of trustees/members of the trusts and societies. Survey u/s. 133A conducted in the case of assessee elaborates the nature and volume of transactions in the alleged activities. 6.2. Looking at the volume and depth of the illegal activities performed and indulged by the society to use the provisions of the I.T. Act providing support and ITA No. 73/ALLD/2019 Jeevan Jyoti Charitable Trust 51 encouragement to the organizations for doing the benevolent activities, assessee society not only opened the pandora's box defying the sole benevolent purpose of provisions as per the I.T. Act, but also challenged the cause of the constitutional provisions by maintaining certain well-needed objectives as per the Act and performing the reverse in reality. 6.3 Based on the facts and circumstantial evidences as discussed in Paras 1 to 5, it can be inferred: - (a) Assessee trust has received a sum of Rs. 1,23,87,550/- as bogus donation from M/s. School of Human Genetics & Population Health and voluntarily offered as income. SHG & PH has admitted their bogus transactions by filing application before the Hon'ble Settlement Commission, Kolkata and through confirmation filed. (b) They have received bogus corpus donation not only from SGHG & PH but also from various parties in different years. (c) Society/Trust has grossly misused the provision of sections 12AA and 80G(5) (vi). (d) They have violated the objects of the trust as converting cheque received through corpus donation in cash beyond-the-objects. The society was found to be involved in hawala activities. (e) Corpus donation received is not voluntary, merely an accommodation entry and fictitious. (f) Activities of the trust are not genuine as well as not being carried out in accordance with its declared objects. Assessee's case is covered within the 60th limb of Section 12AA(3). (g) Even ingenuine and illegal activities carried on by assessee through money laundering do not come within the conceptual framework of charity vis-a- vis activity of general public utility envisaged the Income Tax Act as laid down in section 2(15)." The CIT, therefore, invoked the provisions of section 12AA(3) of the Act and cancelled the registration granted under section 12AA of the Act w.e.f. 1-4-2012. Consequently, the approval granted to the Trust under section 80G of the Act was also cancelled. 6. The matter was carried in appeal by the Trust by filing Income Tax Appeal Nos.756 & 912/Kol/2016 before the Tribunal. After considering the entire material on record, the Tribunal concluded as under: "13. We have given a very careful consideration to the rival submissions. It is clear from the statements of Secretary and Treasurer of SHG and PH that they were accepting cash and giving bogus donations. In the statement recorded in the survey conducted in the case of SHG and PH on 27-1-2015, it was explained that SHG & PH's source of income was the money received ITA No. 73/ALLD/2019 Jeevan Jyoti Charitable Trust 52 in the form of donations from corporate bodies as well as from individuals. In the said statement it was explained that there were about nine brokers who used to bring donations in the form of cheque/RTGS to SHG and PH. The Donations received would be returned by issue of cheque/RTGS in the name of companies or organization specified by the nine brokers. SHG and PH would receive 7 or 8% of the donations amount. It was also stated in such statement since the assessee was entitled to exemption u/s 80G and u/s 35 of the Act their organization was chosen by the brokers for giving donations to SHG and PH as well as for giving donations by SHG and PH. Till now the Assessee's name did not figure in the statement recorded on 27- 1-2015. However, pursuant to the Survey in the case of SHG & PH proceedings for cancellation of registration u/s 12A of the Act granted to them were initiated. In such proceedings, Smt. Samadrita Mukherjee Sardar (in a letter dated 24-8-2015) had given a list of donations which were given by them after getting cash of equivalent amount. It is not disputed that the name of the assessee figures in the said list and the fact that SHG & PH to the Assessee were against cash received from them in Financial Year 2012- 13 of a sum of Rs. 1,23,87,550/-. Even at this stage all admissions were by third parties and the same were not binding on the Assessee. However, in a survey conducted in the case of the Assessee on 24-8-2015, the Managing Trustee of the Assessee admitted that it gave cash and got back donations. We have already extracted the statement given by the Managing Trustee. Even in the proceedings for cancellation of registration, the Assessee has not taken any stand on all the evidence against the Assessee. In such circumstances, we are of the view that the conclusions drawn by the CIT(E) in the impugned order which we have extracted in the earlier part of the order are correct and calls for no interference. It is clear from the evidence on record that the activities of the Assessee were not genuine and hence their registration is liable to be cancelled u/s. 12AA(3) of the Act, and was rightly cancelled by the CIT(E). We therefore, uphold his orders and dismiss both the appeals by the Assessee." With this view, the appeals preferred by the Trust were dismissed. 7. The Trust being aggrieved, filed Income Tax Appeal No. 116 of 2018 before the High Court. By its order dated 4-7-2018, following questions were framed as substantial questions of law: "(i) Whether the Tribunal and the Commissioner of Income Tax (Exemptions) were right in law in directing the cancellation of registration of the Appellant granted under section 12AA to the Appellant Trust on the ground that the Trust had received bogus donation from School of Human Genetics and Population Health? (ii) Whether statement recorded in the course of survey under section 133A of the Act has any probative or evidentiary value?" 8. It was submitted on behalf of Trust that it had received donations from various donors and the Trust was under no obligation to verify the source of the funds of the donor or whether those funds were acquired by performance of any unlawful activity. It was further ITA No. 73/ALLD/2019 Jeevan Jyoti Charitable Trust 53 submitted that the funds were applied for the purposes of trust and that there was no evidence to suggest that those funds were applied for any illegal or immoral purposes or that the Trust was a namesake and some other activities were being carried out. 9. After considering rival submissions, the High Court allowed the appeal with following observations: "On the basis of the evidence and the authorities cited before the adjudicating bodies below, we say that the respondent revenue has not been able to establish the case so as to warrant cancellation of the registration of the appellant trust under section 12AA(3) of the Act. The respondent also has not been able to prove any complicity of the appellant trust in any illegal, immoral or irregular activity of the donors. In that view of the matter, we answer the question (i) in the order dated 4th July 2018 in the negative and in favour of the assessee. We have not found it necessary to go into the issue raised in question (ii). The order of cancellation of the registration of the trust is set aside. The respondent is directed to restore its registration within three weeks of communication of this order. However, this will not bar any action against the appellant in respect of any future activities. The appeal is hereby allowed to the extent above." 10. In this appeal, we have heard Mr. N. Venkataraman, learned ASG in support of the appeal and Mr. Rana Mukherjee, learned Senior Advocate for the Trust. It is submitted by the learned ASG that the answers given to the questionnaire clearly show a definite tendency on part of the Trust to return in cash, the donation it received from several entities. Mr. Mukherjee, learned Senior Advocate appearing for the Trust submitted that the conclusions drawn by the High Court were quite correct and did not call for any interference. 11. The answers given to the questionnaire by the Managing Trustee of the Trust show the extent of misuse of the status enjoyed by the Trust by virtue of registration under section 12AA of the Act. These answers also show that donations were received by way of cheques out of which substantial money was ploughed back or returned to the donors in cash. The facts thus clearly show that those were bogus donations and that the registration conferred upon it under sections 12AA and 80G of the Act was completely being misused by the Trust. An entity which is misusing the status conferred upon it by section 12AA of the Act is not entitled to retain and enjoy said status. The authorities were therefore, right and justified in cancelling the registration under sections 12AA and 80G of the Act. 12 The High Court completely erred in entertaining the appeal under Section 260A of the Act. It did not even attempt to deal with the answers to the questions as aforesaid and whether the conclusions drawn by the CIT and the Tribunal were in any way incorrect or invalid. In our view, this appeal, therefore, deserves to be allowed. ITA No. 73/ALLD/2019 Jeevan Jyoti Charitable Trust 54 13. Setting aside the judgment and order presently under challenge, we allow this appeal and restore the order passed by the CIT and the Tribunal. No costs.” In the above case before Hon’ble Supreme Court, the trust was registered u/s 12AA of the 1961 Act vide order dated 06.08.2010 and it was also accorded approval u/s 80G(vi) of the 1961 Act, the survey u/s 133A of the 1961 Act took place on the entity namely School of Human Genetics and Population Health, Kolkata , and SCN was issued by CIT on 04.12.2015 proposing cancellation of registration . The CIT cancelled registration u/s 12AA and 80G with effect from 01.04.2012 , as it transpired that for financial year 2011-12 and onwards , the aforesaid tax-payers was engaged in accepting bogus donation which were by way of accommodation entries. The Hon’ble Supreme Court reversed the decision of Hon’ble High Court and held that the aforesaid tax-payer completely misused the registration granted u/s 12AA and 80G of the 1961 Act and Hon’ble Supreme Court held that an entity which is misusing the status conferred upon it by Section 12AA of the 1961 Act is not entitled to retain and enjoy said status. The Hon’ble Supreme Court held that the authorities were therefore, right and justified in cancelling the registration u/s 12AA and 80G of the 1961 Act. Thus, in view of authoritative decision of Apex Court in Batanagar Education and Research Trust(supra), this contention of the assessee that registration u/s 12AA cannot be cancelled with retrospective effect stood rejected. It will all depend based on evidence brought on record that since when the assessee misused its status conferred u/s 12AA and 80G, accordingly the registration can be cancelled with effect therefrom when the assessee started misusing its status conferred u/s 12AA of the 1961 Act. Thus, based on detailed reasoning as outlined above in my order in preceding para, I am setting aside the order dated 29.03.2019 passed by ld. Pr. CIT(Central) , Lucknow cancelling registration u/s 12AA(3) w.e.f. 01.04.2006 and withdrawal of approval u/s 80G(5) of the 1961 Act and restoring the matter back to file of ld. Pr. CIT for considering afresh issue of cancellation of registration u/s 12AA(3) and withdrawal of ITA No. 73/ALLD/2019 Jeevan Jyoti Charitable Trust 55 approval u/s 80G(5) of the 1961 Act. Needles of say that ld. Pr. CIT shall give proper and adequate opportunity of being heard to the assessee in set aside remand proceedings , and evidences/explanations submitted by assessee in its defense shall be admitted by ld. Pr. CIT in the in the interest of justice and adjudicated on merits in accordance with law. I order accordingly. 7. In the result, the appeal filed by assessee is partly allowed for statistical purposes. I order accordingly. Order pronounced in the open Court on .10.2021 at Allahabad Sd/- 26.10.2021 [RAMIT KOCHAR] ACCOUNTANT MEMBER DATED: /10/2021 Annexure: Letter dated 10/2/2020 of Mr. Amresh Kumar Singh along with envelop enclosed/Annexed. Copy forwarded to: 1. Appellant –Jeevan Jyoti Charitable Trust, 162, Bai Ka Bagh, Allahabad, U.P. 2. Respondent – The Pr. CIT(Central), Lucknow, U.P. 3. Pr. CIT (Central), Allahabad/Lucknow(U.P.) 4. CIT, Allahabad, U.P. 5. CIT-DR –Allahabad, U.P. By order Assistant Registrar ITA No. 73/ALLD/2019 Jeevan Jyoti Charitable Trust 56 IN THE INCOME TAX APPELLATE TRIBUNAL BENCH :ALLAHABAD BEFORE SHRI N. V. VASUDEVAN, VICE PRESIDENT (THIRD MEMBER) ITA No.73/ALLD/2019 Assessment Year :2007-08 M/s. Jeevan Jyoti Charitable Trust, 162, Lowther Road, Bai Ka Bagh, Allahabad. PAN : AAAJJ 4359 H Vs. The Principal Commissioner of Income-Tax (Central), Lucknow. APPELLANT RESPONDENT Assesseeby : Shri. Gourav Bansal,CA Revenue by : Shri. Ramendra Kumar,CIT(DR) Date of hearing : 04.05.2022 Date of Pronouncement : 20.05.2022 O R D E R The Hon’ble President vide order dated 31.1.2022 has nominated me as a Third Member on the point of difference between the members of the division Bench, under section 255(4) of the Income Tax Act, 1961 (Act). 2. The appeal by the Assessee before the Tribunal was against an order dated 29.3.2019 passed by the Pr.CIT(Central) (PCIT) cancelling registration granted to the Assessee u/s.12AA(3) w.r.e.f 1.4.2006 withdrawing approval granted to the Assessee u/s. 80G(5) of the Act, w.r.e.f. from the date on which the approval was granted i.e., 13.10.2009. The Hon’ble JM took the view that registration u/s.12AA(3) and approval u/s.80G(5) was rightly cancelled by the PCIT. The Hon’ble JM held that the registration/approval can be cancelled only prospectively i.e., from the previous year in which the Assessee sold the educational institutions and the activities of the Assessee ceased to exist. The Hon’ble Accountant Member however took the view that the order cancelling of registration u/s.12A and withdrawing approval u/s.80G(5) has to be set aside ITA No. 73/ALLD/2019 Jeevan Jyoti Charitable Trust 57 remand to the CIT(E) for consideration de novo. The Hon’ble AM also took the view that the CIT(E) has powers to cancel registration with retrospective effect i.e., from the period from which the Assessee infringes conditions subject to which registration u/s.12A is granted and misuses the status of a registered trust. The Hon’ble Accountant member did not uphold the order of PCIT withdrawing registration/approval u/s.12A and 80G(5) of the Act with retrospective effect but set aside the order of the PCIT and remanded for de novo consideration of the issue of cancellation of registration and withdrawal of approval u/s.12AA(3) and 80G(5) of the Act, respectively. The reasons for setting aside the impugned orders and remanding to the PCIT have been stated thus by the Hon’ble AM : “It is pertinent to mention here that cancellation of registration u/s 12AA(3) and 80G(5) of the 1961 Act as was done by Ld. Pr. CIT(Central) and that too with retrospective effect has serious and wide ramifications/implications causing severe prejudice to the tax-payer , thus it become all the more important that before cancelling registration u/s 12AA(3) and 80G(5) of the 1961 Act , all the issues/aspects which has bearing on continuation of registration u/s 12A and approval u/s 80G shall be considered and confronted to the tax-payer by giving proper opportunity of being heard in view of principles of natural justice, so that if so warranted based on facts and circumstance of the case , a comprehensive order covering all aspects/issues having bearing on cancellation of Registration u/s 12AA(3) and approval u/s 80G(5) of the 1961 Act need be passed, covering all the instances of infringement of conditions attached to registration u/s 12A. This would require detailed analysis of the financial statements and the other relevant material by the authorities. The assessee on its part is directed to file all relevant details and co-operate in the proceedings, otherwise presumption will be drawn against the assessee. Reference is once again drawn to provision of Section 114(g) of The Indian Evidence Act, 1872. Since, I am setting aside matter back to the file of ld. Pr. CIT for denovo determination of the matter, the issue of multiple PAN and registration u/s 12A obtained by assessee shall also be looked into by ld. Pr. CIT to see whether it was inadvertently obtained or was any misuse of multiple PAN and registration u/s 12A was made or attempted by assessee to derive undue benefits.” 3. There was a difference of opinion on the question framed projecting the point of difference between the Hon’ble JM and the Hon’ble AM. At the time of hearing before me, ITA No. 73/ALLD/2019 Jeevan Jyoti Charitable Trust 58 the parties agreed that the following question, can be considered as reflecting the point of difference between the Hon’ble JM and Hon’ble JM: “Whether in the facts and circumstances of the case and in law, the order passed by ld. Principal Commissioner of Income-tax, Central, Lucknow cancelling registration of the assessee u/s 12AA(3) w.e.f. 01.04.2006 and withdrawing approval granted u/s 80G with effect from 13.10.2009 is liable to be upheld but prospectively with effect from the date when the assessee sold its educational institution and consequently activities are claimed to have ceased to exist viz. financial year 2017-18(assessment year 2018-19) , or is liable to be set aside to the file of ld. Principal Commissioner of Income-tax for deciding afresh the entire issue of cancellation of registration u/s 12AA(3) and approval granted u/s 80G(5) of the Income-tax Act, 1961 retrospectively from the date since when the assessee misused its status of charitable trust conferred upon it by Section 12A of the Income-tax Act,1961? 4. I have heard both the parties. It is necessary for me to briefly give a background of facts that led to the passing of the impugned order. The Assessee was granted registration u/s 12A of the Income-tax Act, 1961 (hereinafter called “the Act”), vide Commissioner of Income-tax, Allahabad order registration number 1/98-99 dated 29.01.1999, and the assessee was also granted approval u/s 80G(5) of the 1961 Act , vide orders dated 13.10.2009. The assessee was created on 01.04.1990 and as part of its educational activities, it was engaged in running various institutions and schools, i.e.- (i) Jyoti Hospital Nursing School (ii) Jeevan Jyoti Institute of Paramedical Sciences (iii) Jeevan Jyoti Public School (iv) Ascent Institute of Management & Technology 5. There was a search and seizure operations conducted u/s 132 of the Act in the case of the assessee along with other cases of the Jeevan Jyoti Group, on 29.05.2012 at the registered office of the assessee at 162, Bai-ka-Bagh, Allahabad, U.P. Pursuant to search and seizure operations, notices u/s 153A of the Act was issued by the Assessing Officer ITA No. 73/ALLD/2019 Jeevan Jyoti Charitable Trust 59 (AO). In response to the said notice, the assessee filed its return of income claiming exemption u/s 11 and 12 of the Act. While assessment proceedings were in progress, the assessee filed application before the Income Tax Settlement Commission (ITSC), New Delhi on 24.02.2015, wherein additional income of Rs. 65,00,000/- was disclosed by the assessee-trust for the assessment years 2007-08 to 2014-15, as detailed hereunder: S.No. Assessment Year Additional Income declared before ITSC (In Rs.) Tax Paid (In Rs.) 1. 2007-08 10,00,000 6,31,000 2. 2008-09 10,00,000 5,94,000 3. 2009-10 10,00,000 5,57,000 4. 2010-11 10,00,000 5,20,000 5. 2011-12 10,00,000 4,83,000 6. 2012-13 5,00,000 2,25,000 7. 2013-14 5,00,000 2,07,500 8. 2014-15 5,00,000 1,80,000 6. So far as sources of the said additional income offered by assesse before ITSC, the assessee has claimed that the said additional income offered by it in settlement application filed before ITSC has arisen out of variety of sources, one such sources being donation received from public at large. The assessee further claimed that these donations so received by it were meant for construction of school building and other infrastructure as also for other educational activities, and the same were directly invested in such activities, without recording in the books of accounts of the appellant trust and such utilization in educational activities were spread over in the Assessment Years : 2007-08 to 2014-15 and worked out to be Rs. 65 lacs in aggregate. The Revenue on its part filed Report in Rule 9 in ITA No. 73/ALLD/2019 Jeevan Jyoti Charitable Trust 60 the case of the assessee before ITSC, and total additions to the income of the assessee to the tune of Rs. 10,37,96,184/- were proposed by Revenue, as in view of Revenue the assessee was not engaged in charitable activities, rather it was engaged in the business activities for the benefit of its main trustees, namely Dr. Ashwani Kumar Bansal and Dr. Vandana Bansal or entities related to the trustees. 7. The ITSC on its part passed an order dated 17.08.2016, u/s 245D(4) of the Act abating the applications before ITSC and restored the proceedings back to the file of the AO. The assessee filed Miscellaneous Application before ITSC against the order of ITSC dated 17.08.2016, but the M.A. stood rejected by ITSC, vide order dated 20.01.2017, passed u/s 245D(6B) of the 1961 Act by ITSC. 8. Thereafter, the AO completed assessment for ay: 2007-08 to 2014-15 and the income assessed in the hands of the assessee for ay: 2007-08 to 2013-14, were to the tune of 34,43,24,119/-, as detailed hereunder:- S.No. Assessment Year Income declared (In Rs.) Income Assessed (in Rs.) Date of Assessment Order Assessment Order passed u/s 1. 2007-08 Nil 51,95,230/- 08.08.2017 153A read with Section 143(3) 2. 2008-09 Nil 2,81,70,980/- 08.08.2017 153A read with Section 143(3) 3. 2009-10 Nil 1,40,62,700/- 08.08.2017 153A read with Section 143(3) 4. 2010-11 Nil 2,25,97,490/- 08.08.2017 153A read with Section 143(3) ITA No. 73/ALLD/2019 Jeevan Jyoti Charitable Trust 61 5. 2011-12 Nil 12,55,72,780/- 08.08.2017 153A read with Section 143(3) 6. 2012-13 Nil 9,01,24,550/- 08.08.2017 153A read with Section 143(3) 7. 2013-14 Nil 5,86,00,389/- 08.08.2017 Section 143(3) Total Nil 34,43,24,119/- 9. The assessee filed first appeal before ld. CIT(A) for all these ay’s , which stood dismissed by ld. CIT(A), vide separate appellate orders all dated 10.07.2018, passed by ld. CIT(A) for Assessment Years: 2007-08 to 2013-14. The assessee filed second appeal with Division Bench of Income Tax Appellate Tribunal, Allahabad, wherein tribunal restored the matter back to the file of ld. CIT(A) for fresh adjudication, vide composite order dated 21.12.2018 passed by tribunal in ITA No. 322 to 328/Alld/2018 for Assessment Years : 2007-08 to 2013-14. 10. It is the aforesaid background of facts, the PCIT issued Show Cause Notice(SCN) for cancellation of registration u/s 12AA(3) , dated 13/18.07.2017. After considering the reply of the assessee to the show cause notice, the PCIT passed the order dated 29.3.2019, impugned in the appeal, cancelling registration granted to the assesee u/s 12AA(3) w.e.f. 01.04.2006 and withdrawing approval granted u/s 80G with effect from 13.10.2009. 11. Though number of instances have been cited by the PCIT in the impugned order for cancelling registration, three reasons have been cited as principal reasons for cancelling registration. The first reason was that the activities of the assessees are being carried out for the benefit of the specified persons as given in section 13(3) and specifically the trustees of the assessee trust as well as the concerns in which the trustees are having substantial interest. The second reason given was that the assessee admitted in the ITA No. 73/ALLD/2019 Jeevan Jyoti Charitable Trust 62 application filed before ITSC that voluntary donation received from public have not been accounted for in the books of accounts of the trust. Therefore, the surrender of this amount of Rs. 65 Lac and offered to tax under section 115BBC led the Pr. CIT to reach the conclusion that the assessee trust has earned unaccounted receipts, profiteering and allowing the income of the trust for personal uses of the trustees. The third reason cited by the PCIT was that the assessee trust has sold all its educational institutions and consequently the activities of the assessee trust ceased to exist. 12. In the appeal filed by the assessee against the order of the PCIT, the Hon’ble JM took the view that the surrender of a sum of Rs. 65 Lac and offered to tax under section 115BBC before the ITSC was not relevant to cancel registration granted to the assessee because, so long as the trust was running educational institutions and imparting education through the various institutions the main activity of the assessee trust remains charitable in nature though there are certain violations on account of unanimous unaccounted donations received by the assessee which were surrendered before the Income Tax Settlement Commission and offered to tax under section 115BBC. Therefore, this is purely a matter of assessment and does not fall in the ambit of the activities of the assessee not being carried out in accordance with the objects of the assessees trust or the activities of the assessee trust are not genuine. 13. With regard to the second ground for cancellation of the registration is cited by the Pr. CIT viz., giving advance or transfer of fund by the assessee trust to the trustees namely Dr. A.K Bansal and Dr. Vandana Bansal through Jyoti Hospital Pvt. Ltd., the Hon’ble JM took the view that the assessee has not disputed the transactions of advance to Dr. A.K. Bansal and Dr. Vandana Bansal as these amounts of Rs. 13,20,26,382/- were transferred by the assessee trust to Jyoti Hospital Pvt. Ltd. Similarly, a sum of Rs. 1,35,74,790/- were also treated as the benefit given to the trustees through the concerns in which they have substantial interest. The assessee has not disputed these transactions of transfer of funds or advance given to the trustees. However, the explanation of the assessee was that the ITA No. 73/ALLD/2019 Jeevan Jyoti Charitable Trust 63 assessee trust has received loans and advances from those concerns which is more than the repayment amount as cited by the PCIT. the Hon’ble JM held that there are loan and advances received by the assessee trust from the group concerns in which the trustees of the assessee trust were having substantial interest and the details of the amount of loans and advances received by the trust as per the balance-sheet as on 31 st March, 2013 as under:- Jyoti Mediservices Limited Rs. 82,30,350/- NavjeevanPediatrics Pvt Ltd Rs. 49,42,061/- Vandana Women Hospital Rs. 11,90,000/- Total Rs. 1,43,62,411/- The Hon’ble JM therefore held that it was a matter of record that the assessee trust received loan and advance from the group concerns total amounting to Rs. 1,43,62,411/- which were subsequently repaid by the assessee to the tune of Rs. 1,35,74,709/-. Therefore, the payment made by the assessee to that extent is nothing but repayment of earlier loan and advances and this would not even amount to violation of provisions of section 11(5) or 13 of the Income Tax Act. Therefore, these transactions cannot be regarded as the activities of the assessee are only for the benefit of the trustees of the assessee trust. On the PCIT action in making reference to the fact that the assessee sold the Jeevan Jyoti Public School and Jeevan Jyoti Nursing School in the month of September, 2017 and the sale proceeds were utilized for repayment of outstanding bank loans of the group concerns in which the trustees are having substantial interest and consequently it violates the conditions of section 11(3). Though the assessee has contended that repayment of the loan utilized for the construction of the building of these educational institutions is nothing but application of the income / fund for charitable purpose however, even if the assessee has violated the provisions of section 11(3) the consequences of the same would be that the said amount would not be eligible for exemption under section 11 and 12 of the Income Tax Act and will be assessed to tax. Therefore, the Hon’ble JM held ITA No. 73/ALLD/2019 Jeevan Jyoti Charitable Trust 64 that the this is again a subject matter of assessment and cannot be regarded as the activities of the assessee are not genuine or are not being carried out in accordance with the objects of the assessee trust. Therefore, to the extent of these transactions and incidents as discussed above, the Hon’ble JM held that these transactions would fall in the ambit of section 12AA(3) of the Income Tax Act so as to invite the cancellation of registration. 14. However, the Hon’ble JM held that when the assessee has sold all its educational institutions in the year 2017 itself then it would amount to cessation of the charitable activities of the assesse trust and therefore, the assessee trust would no longer be entitled for the benefit of section 11 and 12 of the Income Tax Act. Once the charitable activity of the assesseeare ceased to exist, the same would fall in the category that the activities are not being carried out in accordance with the objects of the trust. Hence the undisputed fact of sale of all the educational institutions by the assessee trust would definitely lead to disentitlement of benefit under section 11 and 12 of the Act and consequently cancellation of registration granted under section 12A of the Income Tax Act. In view of the above facts and circumstances of the case, the Hon’ble JM upheld the order of cancellation of the registration as well as granted under section 12A as well as approval granted under section 80G(5). 15. As regards the second issue whether the cancellation shall have with retrospective effect w.e.f. 1.4.2006 as held by the Pr. CIT or would be retrospective, the Hon’ble JM held relied on the decision of the Hon’ble Jurisdiction High Court in the case of ACIT vs. Agra Development Authority (2018) 90 taxman.com 282 (All) 407 ITR 562(All) wherein it was held in para 50 to 52 as under:- “50. Then, there is nothing in the language of Section 12AA(3) of the Act that may suggest registration of the assessee may be cancelled with retrospective effect. The use of the words or have obtained registration at any time under Section 12-a of the Act’ added by amendment w.e.f. 01.06.2010 only indicate ITA No. 73/ALLD/2019 Jeevan Jyoti Charitable Trust 65 that the Commissioner was vested with the power to cancel a registration that may have been granted to an assessee at any time prior to the aforesaid amendment itself. However, it does not indicate that thereby the Commission had been empowered to cancel the registration of the assessee with retrospective effect i.e. with effect from a date prior to the date of issuance of the order/notice to cancel the registration. 51. Clearly, the act of cancellation of registration has serious civil consequences. In absence of any legislative intent expressed to suggest that the legislature had empowered the Commissioner to cancel the assessee’s registration under Section 12-A of the Act with retrospective effect, such power could not be deemed to exist or arise or be exercised to unsettle closed/part transactions especially because in this case the ground for cancellation has not arising out of allegation of fraud, collusion or misrepresentation. 52. Therefore, we are of the view that the cancellation of the assessee’s registration under Section 12-a of the Act, if at all, could be done only prospectively and not retrospectively as had been done by the Commissioner in this case. Thus, question no.1 is answered in the negative that is in favour of the assessee and against the revenue.” 16. He also referred to similar view expressed by the Hon’ble Allahabad High Court and Hon’ble Rajasthan High Court rendered in the case of Oxford Academy for Career Development Vs. CCIT (2019) 315 ITR 382 (All) in the case of Indian Medical Trust vs. Pr. CIT 414 ITR 296 (Raj). Accordingly, the Hon’ble JM modified the order of the PCIT in so far as the cancellation of the registration with retrospective effect from 1.4.2006 and cancellation of the approval under section 80G w.e.f. 13.10.2009 and held that the cancellation would be with effect from the previous year in which the assessee has sold the education institutions and the activities of the assessee cease to exist and therefore not being carried out in accordance with the objects of the assessee trust. In conclusion, the cancellation of registration under section 12A as well as withdrawal of approval under section 80G(5) were upheld but with effect from the financial year in which the activity of the assessee ceased to exist. ITA No. 73/ALLD/2019 Jeevan Jyoti Charitable Trust 66 17. The Hon’ble AM took the view in paragraph 5.2 of his order that he differs from the decision of the Hon’ble JM for the reason that the matter needs to be set aside and resorted to the file of the PCIT for denovo consideration of issue of cancellation of registration u/s.12AA(3) and withdrawal of approval u/s.80G(5) of the Act. The first reason given by him for doing so are that in the application filed by the assessee before the ITSC it had admitted receipt of donations but in assessment proceedings as well as in the proceedings for cancellation of registration u/s.12AA(3), the assessee did not provide details of donations or sums received but to prove its genuineness, like name and address of the person, purpose of donation etc. According to the Hon’ble AM there is evidence of the assessee having received, from FY 2006-07 onwards, large sums of money towards, donations, corpus funds, building fund, Development fund etc., which stood credited in its books of accounts. Educational institutions in India illegally demand capitation fee and other forced amount of money by way of corpus fund, building fund, development fund, donations etc., from students/parents of students, while admitting students in the institution. These receipts are illegal causing wreckage and very fundamental of education system in our country. Therefore, the matter should be set aside for de novo consideration by the PCIT. The Hon’ble AM further directed the assessee to provide the relevant details of the donations and all other sums so received in the form of building fund, corpus fund, development fund, donations etc., to prove that these are genuine receipts, and are neither bogus nor have any nexus/co-relation with the admission of students i the institutions run by the assessee. He also directed the PCIT to verify whether there exists any nexus of these receipts with the admission of students in the institution run by the Assessee and also whether the fees charged by institutions, run by assessee is in accord with the fees approved by Government. 18. The second reason given by the Hon’ble AM for setting aside the matter to the PCIT for de novo consideration is on the aspect of Advances/loans given to the Trustees by the ITA No. 73/ALLD/2019 Jeevan Jyoti Charitable Trust 67 Trust through Jyothi Hospital. The conclusions of the Hon’ble AM on this aspect was as follows: “It is also one of the contentions of the Revenue that the assessee has given advance of Rs. 89,50,000/- to Dr. A K Bansal through Jyoti Hospital Private Limited , and an advance of Rs. 46,24,790/- to Dr. Vandana Bansal through Jyoti Hospital Private Limited, which evidences that the trust is diverting funds for the benefits of the trustee. It is also the grievance of Revenue that in ay: 2011-12, on several occasions, Jyoti Hospital Nursing School made payment to trustee’s company as under:- Rs. 13,00,000/- to M/s Jyoti Hospital Pvt. Ltd. (amount transferred) Rs. 20,26,382/- to M/s Jyoti Hospital Pvt. Ltd.(amount advanced) It is contended by Revenue that from the above facts it is evident that the trust is diverting fund for the benefits of trustees or related entities of the trustees and hence the activities of the trust are not being genuinely carried as per the objects of the trust and also violating the conditions of clause (ii) of 80G(5). The assessee has given a balled and general statement before the Bench that from the other group entities , the sum received by assessee was higher and hence there is no net amount advanced by the assessee to trustee. This arguments is also fallacious, as every entity is a separate entity and hence all the transactions with inter-related parties who are hit by Section 13(2) and 13(3) of the 1961 Act are to be separately explained vis-à-vis- reference to books of accounts and flow of money. The assessee has claimed itself to be a charitable entity and there is a prohibition that trustees and their relatives, concerns in which they or their relatives are interested shall not derive any benefit from the charitable trust. Reference is drawn to Section 13(2) and 13(3) of the 1961 Act. I have gone through the audited financial statements of the assessee for the financial year 2006-07 to 2017-18, which are placed in paper book(s) at page 254 to 524 and 730-741, and I have observed that several transaction of substantial amounts have been conducted by assessee, with Jyoti Hospitals Private Limited, Dr. Ashwani Kumar Bansal and Dr Vandana Bansal. The assessee has claimed exemption of income u/s 11 and 12 , by getting itself registered u/s 12A of the 1961 Act and the onus is on the assessee to prove by cogent evidences that no benefit was derived by trustees , their relatives or concerns in which they are interested etc. and provisions of Section 13(2) and 13(3) are not hit, and merely making balled and general statement is not sufficient nor is it sufficient to say that group entities have advanced more sum of money to assessee than what is advanced by the assessee to the trustees , their relatives or concerns in which trustees are interested , and ITA No. 73/ALLD/2019 Jeevan Jyoti Charitable Trust 68 hence consequently Section 13(2) and 13(3) are not hit. The onus is on the assessee to bring on record cogent evidences in its defense. On the part of Revenue , it has to do in-depth analysis of financial records and other relevant material to arrive at decision whether or not any benefit was derived by trustees or their relatives or entities associated with them to see whether there were or were not violation of Section 13(2) and 13(3) of the 1961 Act and in case of violations consequences will follow. The onus is on the assessee to bring on record all cogent material in connection therewith in its defense , to explain all the transactions entered into by it with its trustees, their relatives and /or entities associated/connected therewith, as provided u/s 13(2) and 13(3) of the 1961 Act.” (emphasis supplied) 19. The third reason given by the Hon’ble AM is the allegation with regard to the diverting sale proceeds of assets of the trust for repayment of outstanding bank loans of the trustee’s group concern and not utilizing the same for the betterment of charitable objects of trust. According to the Hon’ble AM these allegations are serious allegations and the onus was on the Assessee to bring on record cogent material in its defence. 20. On the question whether registration can be cancelled with retrospective effect, the Hon’ble AM was of the view that in the light of the decision of the Hon’ble Supreme Court in the case of CIT(E) Vs. Batanagar Education and Research Trust, 129 Taxmann.com 30(SC). In that case the assessee trust enjoyed registration u/s.12A of the Act vide order dated 6.8.2010. Consequent to a Survey u/s133A of the Act by the revenue on 24.8.2015, it transpired that the trust did not carry out its activities in accordance with objects of the Trust. A show cause notice u/s.12AA(3) of the Act for cancellation of registration was issued by the CIT(E) dated 4.12.2015 and by an order dated 25.2.2016 the CIT(E) cancelled the registration granted to the trust w.e.f 1.4.2012. On appeal by the Assessee to the Tribunal against the said order, the Tribunal upheld the same. On appeal against the order of the Tribunal, the Hon’ble Calcutta High Court reversed the order of the Tribunal. On further appeal by the Revenue to the Hon’ble Supreme Court, the order of the CIT(E) was upheld and the order of the High Court was reversed. ITA No. 73/ALLD/2019 Jeevan Jyoti Charitable Trust 69 21. According to the Hon’ble AM, the above decision of Hon’ble Supreme Court has to be read as conferring power on the revenue to cancel registration with retrospective effect for the following reasons: “In the above case before Hon’ble Supreme Court, the trust was registered u/s 12AA of the 1961 Act vide order dated 06.08.2010 and it was also accorded approval u/s 80G(vi) of the 1961 Act, the survey u/s 133A of the 1961 Act took place on the entity namely School of Human Genetics and Population Health, Kolkata , and SCN was issued by CIT on 04.12.2015 proposing cancellation of registration . The CIT cancelled registration u/s 12AA and 80G with effect from 01.04.2012 , as it transpired that for financial year 2011-12 and onwards, the aforesaid tax-payers was engaged in accepting bogus donation which were by way of accommodation entries. The Hon’ble Supreme Court reversed the decision of Hon’ble High Court and held that the aforesaid tax-payer completely misused the registration granted u/s 12AA and 80G of the 1961 Act and Hon’ble Supreme Court held that an entity which is misusing the status conferred upon it by Section 12AA of the 1961 Act is not entitled to retain and enjoy said status. The Hon’ble Supreme Court held that the authorities were therefore, right and justified in cancelling the registration u/s 12AA and 80G of the 1961 Act. Thus, in view of authoritative decision of Apex Court in Batanagar Education and Research Trust(supra), this contention of the assessee that registration u/s 12AA cannot be cancelled with retrospective effect stood rejected. It will all depend based on evidence brought on record that since when the assessee misused its status conferred u/s 12AA and 80G, accordingly the registration can be cancelled with effect therefrom when the assessee started misusing its status conferred u/s 12AA of the 1961 Act. Thus, based on detailed reasoning as outlined above in my order in preceding para, I am setting aside the order dated 29.03.2019 passed by ld. Pr. CIT(Central) , Lucknow cancelling registration u/s 12AA(3) w.e.f. 01.04.2006 and withdrawal of approval u/s 80G(5) of the 1961 Act and restoring the matter back to file of ld. Pr. CIT for considering afresh issue of cancellation of registration u/s 12AA(3) and withdrawal of approval u/s 80G(5) of the 1961 Act. Needles of say that ld. Pr. CIT shall give proper and adequate opportunity of being heard to the assessee in set aside remand proceedings , and evidences/explanations submitted by assessee in its defense shall be admitted by ld. Pr. CIT in the in the interest of justice and adjudicated on merits in accordance with law. I order accordingly.” ITA No. 73/ALLD/2019 Jeevan Jyoti Charitable Trust 70 22. I have heard the submissions of the learned counsel for the Assessee and the learned DR. Their submissions were in support of the order of the learned JM and learned AM, respectively. The submissions went to the extent of even questioning the validity of the order passed by the CIT(E) u/s.12AA(3) of the Act. Section 255 (4) of the Act provides as follows: “(4) If the members of a Bench differ in opinion on any point, the point shall be decided according to the opinion of the majority, if there is a majority, but if the members are equally divided, they shall state the point or points on which they differ, and the case shall be referred by the President of the Appellate Tribunal for hearing on such point or points by one or more of the other members of the Appellate Tribunal, and such point or points shall be decided according to the opinion of the majority of the members of the Appellate Tribunal who have heard the case, including those who first heard it.” 23. As a third member, I have to confine myself to the point of difference between the members who constituted the Division Bench. The point of difference is firstly on the question whether the order of CIT(E) cancelling registration u/s.12AA(3) of the Act has to be upheld as was the opinion of the Hon’ble JM or the impugned order has to be set aside to the CIT(E) for examining de novo serious allegations made against the assessee and calling upon the assessee to divulge all information to CIT(E) to enable CIT(E) to pass a comprehensive order, as proposed by the Hon’ble AM. The second point of difference is as to whether the registration granted u/s.12A can be cancelled with retrospective effect as was opined by the learned AM or can be cancelled only prospectively, as was held by the learned JM. 24. On the first point of difference, I may first refer to the provisions of Sec.12AA(3) of the Act, which reads thus: “(3) Where a trust or an institution has been granted registration under clause (b) of sub-section (1) and subsequently the Commissioner is satisfied that the activities of such trust or institution are not genuine or are not being carried 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: ITA No. 73/ALLD/2019 Jeevan Jyoti Charitable Trust 71 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.” 25. The above provision was inserted by the Finance (No.2) Act, 2004 w.e.f. 1.10.2004. The scope of the power under the aforesaid provision is limited to only cancellation of registration granted u/s.12A. The learned AM has not expressed opinion that the facts brought out in the impugned order are incorrect or insufficient to cancel registration granted u/s.12A of the Act and that further probe is necessary to bring out facts so that a comprehensive order can be passed covering all aspects. I am of the view that the conclusion of the learned JM that because of sale of the educational institution in the year 2017, the assessee can no longer be considered as trust existing for the purpose of carrying out charitable activities and hence not entitled to the benefits of Sec.11 and 12 of the Act, is sufficient to uphold the impugned order of the CIT(E) and no useful purpose will be served by bringing in facts on the other conclusions in the impugned order of the CIT(E) viz., receipt of bogus donations and use of trust funds for the personal benefit of the trustees. As I have already stated the scope of the powers u/s.12AA(3) of the Act are limited and even if on one ground the order is sustained, there is no necessity to go into other grounds on which the grant of registration was cancelled by the CIT(E). Therefore, no purpose will be served by setting aside the order and remanding the same to CIT(E) to pass a more comprehensive order. The apprehensions expressed by the learned AM in his order are all matters which may not be germane to the question of cancellation of registration as the cancellation of registration is upheld on one ground viz., sale of the very institution which was to carry out the charitable activities. In this regard, the main aspect which has to be taken note of is the principle that the grant of registration u/s12A of the Act, does not automatically enable an assessee to claim exemption u/s 11 & 12 of the Act. The AO even in a case, where a trust or charitable organization for which registration u/s 12A of the Act subsists has to go in to the question, as to whether the income has been applied for charitable purposes and to the extent contemplated by Sec.11 & 12 of the Act. Even in a case, where the trust or charitable organization applies its income for charitable ITA No. 73/ALLD/2019 Jeevan Jyoti Charitable Trust 72 purposes, but does not have registration u/s 12A of the Act, such trust or charitable organization cannot claim the benefit of Sec.11 & 12 of the Act. The apprehensions expressed by the learned AM have to be addressed or looked into in accordance with law and the parties should be left to explore remedies open to the them in law. Therefore, I agree with the learned JM that the impugned order cancelling registration has to be upheld and there is no necessity to set aside the impugned order and remand the issue for de novo examination by the CIT(E). 26. On the question whether the registration already granted can be cancelled retrospectively, I find that the decisions referred to by the Hon’ble JM rendered by the Hon’ble Allahabad High Court in the case of Agra Development Authority (supra) and the Hon’ble Rajasthan High Court in the case of Indian Medical Trust Vs. PCIT (supra) are decisions rendered in cases where the question before the Hon’ble Court was as to whether registration granted u/s.12A of the Act can be cancelled u/s.12AA(3) of the Act, with retrospective effect. The Hon’ble Courts have expressed the view that u/s.12AA of the Act, registration granted cannot be cancelled with retrospective effect. The learned AM has however placed reliance on decision of Hon’ble Supreme Court in the case of CIT(E) Vs. Batanagar Education and Research Trust (supra). In that case as we have already noticed, the Assessee trust enjoyed registration u/s.12A of the Act vide order dated 6.8.2010. Consequent to a Survey u/s133A of the Act by the revenue on 24.8.2015, it transpired that the trust did not carry out its activities in accordance with objects of the Trust. A show cause notice u/s.12AA(3) of the Act for cancellation of registration was issued by the CIT(E) dated 4.12.2015 and by an order dated 25.2.2016 the CIT(E) cancelled the registration granted to the trust w.e.f 1.4.2012. It is no doubt true that in that case the registration was cancelled with retrospective effect. The question whether registration granted can be cancelled with retrospective effect was never an issue, as the Assessee in that case never challenged or contended that registration cannot be cancelled with retrospective effect. Therefore it cannot be said that the ratio laid down in the ITA No. 73/ALLD/2019 Jeevan Jyoti Charitable Trust 73 aforesaid decision is to the effect u/s.12AA(3) of the Act, registration granted can be cancelled with retrospective effect. Ratio Decidendi ordinarily means the ‘reason for deciding’ the case. It must come from disputes of law, not disputes of fact. Ratio Decidendi must be argued in court and the facts of the precedent case shape the level of generality to which the later courts decide the level of generality. The law in this regard is very clear as would be evident from the observations of the Hon’ble Supreme Court (in para 37 of its judgment) in the case of Commissioner of Income-Tax vs M/s. Sun Engineering Works (P.) Ltd. 1992 Supp 1 SCR 732 “.....It is neither desirable nor permissible to pick out a word or a sentence from the judgment of this Court, divorced from the context of the question under consideration and treat it to be the complete 'law' declared by this Court. The judgment must be read as a whole and the observations from the judgment have to be considered in the light of the questions which were before this Court. A decision of this Court takes its colour from the questions involved in the case in which it is rendered and while applying the decision to a later case, the courts must carefully try to ascertain the true principle laid down by the decision of this Court and not to pick out words or sentences from the judgment, divorced from the context of the questions under consideration by this Court, to support their reasonings. In Madhav Rao Jiwaji Rao Scindia Bahadur and Ors. v. Union of India this Court cautioned: It is not proper to regard a word, a clause or a sentence occurring in a judgment of the Supreme Court, divorced from its context, as containing a full exposition of the law on a question when the question did not even fall to be answered in that judgment....” 27. I, therefore, agree with the view of the learned JM that under section 12AA(3) of the Act, registration granted under section 12A of the Act cannot be cancelled with retrospective effect. 28. The appeal will now be listed before the Division Bench for passing orders in accordance with the majority opinion. ITA No. 73/ALLD/2019 Jeevan Jyoti Charitable Trust 74 Pronounced in the open court on the date mentioned on the caption page. Sd/- Bangalore, Dated: 20.05.2022. /NS/* Copy to: 1. Appellants 2. Respondent 3. CIT 4. CIT(A) 5. DR 6. Guard file By order Assistant Registrar, ITAT, Bangalore. (G. MANJUNATHA) (N. V. VASUDEVAN) Accountant Member Vice President ITA No. 73/ALLD/2019 Jeevan Jyoti Charitable Trust 75 IN THE INCOME TAX APPELLATE TRIBUNAL ALLAHABAD BENCH, ALLAHABAD BEFORE SHRI.VIJAY PAL RAO, JUDICIAL MEMBER AND SHRI. RAMIT KOCHAR, ACCOUNTANT MEMBER ITA No.73/ALLD/2019 Assessment Years: 2007-08 Jeevan Jyoti Charitable Trust, 162, Bai Ka Bagh, Allahabad, U.P. TAN/PAN: AAATJ4359H v. Pr. Commissioner of Income Tax, Central, Lucknow (Appellant) (Respondent) Appellant by: Sh. Gaurav Bansal, C.A. Respondent by: Sh. Ramendra Kumar Vishwakarma, CIT DR Date of hearing: 03.06.2022 Date of pronouncement: 03.06.2022 ORDER GIVING EFFECT OF THIRD MEMBER VIJAY PAL RAO, JUDICIAL MEMBER: This appeal by the assessee is directed against the order dated 29 th March, 2019 passed by the Pr. CIT (Central Lucknow) under section 12AA(3) and Section 80G(5) of the Income Tax Act. Though the assessee filed total thirteen appeals against the single impugned order passed by the Pr. CIT (Central Lucknow) however, at the time of hearing, the twelve appeals in ITA Nos. 74 to 85/Alld/2019 were de-clubbed and tagged separately as those appeals were found not maintainable being repeated and nonest appeals and dismissed by this Tribunal vide separate order dated 16.09.2021. Accordingly the appeal in ITA No. 73/Alld/2019 is taken as an appeal against the impugned order and the hearing was concluded by Division Bench on 15.09.2021. 2. Since, there was a difference of opinion between the Members of the Division Bench as the Judicial Member took a view that registration under section 12A and approval under section 80G(5) was rightly cancelled by the Pr. CIT(E) however, the ITA No. 73/ALLD/2019 Jeevan Jyoti Charitable Trust 76 cancellation of registration / approval would be treated only prospectively i.e. from the previous year in which the assessee sold the educational institutions and the activity of the assessee ceased to exist. Learned Accountant Member, however, took a view that the order cancelling the registration under section 12A and withdrawing approval under section 80G(5) has to be set aside and the matter be remanded to the record of the Pr. CIT(Exemption) for consideration de novo. The learned Accountant Member also took a view that the Pr. CIT(Exemption) has powers to cancel registration with retrospective effect i.e. from the date when the assessee infringes conditions subject to which registration under section 12A was granted and misused the status of the registered trust. Accordingly the question of difference was referred by the Hon'ble President, vide order dated 31.01.2022 to the Third Member (Hon'ble Vice President, Bangalore Zone, Bangalore). As the Members of Division Bench framed separate question of difference the Hon'ble Third Member framed the question / point of difference and decided the same vide order dated 20.5.2022 as under:- “3. There was a difference of opinion on the question framed projecting the point of difference between the Hon’ble JM and the Hon’ble AM. At the time of hearing before me, the parties agreed that the following question, can be considered as reflecting the point of difference between the Hon’ble JM and Hon’ble JM: “Whether in the facts and circumstances of the case and in law, the order passed by ld. Principal Commissioner of Income-tax, Central, Lucknow cancelling registration of the assessee u/s 12AA(3) w.e.f. 01.04.2006 and withdrawing approval granted u/s 80G with effect from 13.10.2009 is liable to be upheld but prospectively with effect from the date when the assessee sold its educational institution and consequently activities are claimed to have ceased to exist viz. financial year 2017-18(assessment year 2018-19) , or is liable to be set aside to the file of ld. Principal Commissioner of Income-tax for deciding afresh the entire issue of cancellation of registration u/s 12AA(3) and approval granted u/s 80G(5) of the Income-tax Act, 1961 retrospectively from the date since when the assessee misused its status of charitable trust conferred upon it by Section 12A of the Income-tax Act,1961? 4. I have heard both the parties. It is necessary for me to briefly give a background of facts that led to the passing of the impugned order. The Assessee was granted registration u/s 12A of the Income-tax Act, 1961 (hereinafter called ITA No. 73/ALLD/2019 Jeevan Jyoti Charitable Trust 77 “the Act”), vide Commissioner of Income-tax, Allahabad order registration number 1/98-99 dated 29.01.1999, and the assessee was also granted approval u/s 80G(5) of the 1961 Act , vide orders dated 13.10.2009. The assessee was created on 01.04.1990 and as part of its educational activities, it was engaged in running various institutions and schools, i.e.- (i) Jyoti Hospital Nursing School (ii) Jeevan Jyoti Institute of Paramedical Sciences (iii) Jeevan Jyoti Public School (iv) Ascent Institute of Management & Technology 5. There was a search and seizure operations conducted u/s 132 of the Act in the case of the assessee along with other cases of the Jeevan Jyoti Group, on 29.05.2012 at the registered office of the assessee at 162, Bai-ka-Bagh, Allahabad, U.P. Pursuant to search and seizure operations, notices u/s 153A of the Act was issued by the Assessing Officer (AO). In response to the said notice, the assessee filed its return of income claiming exemption u/s 11 and 12 of the Act. While assessment proceedings were in progress, the assessee filed application before the Income Tax Settlement Commission (ITSC), New Delhi on 24.02.2015, wherein additional income of Rs. 65,00,000/- was disclosed by the assessee-trust for the assessment years 2007-08 to 2014-15, as detailed hereunder: S.No. Assessment Year Additional Income declared before ITSC (In Rs.) Tax Paid (In Rs.) 1. 2007-08 10,00,000 6,31,000 2. 2008-09 10,00,000 5,94,000 3. 2009-10 10,00,000 5,57,000 4. 2010-11 10,00,000 5,20,000 5. 2011-12 10,00,000 4,83,000 6. 2012-13 5,00,000 2,25,000 7. 2013-14 5,00,000 2,07,500 8. 2014-15 5,00,000 1,80,000 6. So far as sources of the said additional income offered by assesse before ITSC, the assessee has claimed that the said additional income offered by it in settlement application filed before ITSC has arisen out of variety of sources, one ITA No. 73/ALLD/2019 Jeevan Jyoti Charitable Trust 78 such sources being donation received from public at large. The assessee further claimed that these donations so received by it were meant for construction of school building and other infrastructure as also for other educational activities, and the same were directly invested in such activities, without recording in the books of accounts of the appellant trust and such utilization in educational activities were spread over in the Assessment Years : 2007-08 to 2014-15 and worked out to be Rs. 65 lacs in aggregate. The Revenue on its part filed Report in Rule 9 in the case of the assessee before ITSC, and total additions to the income of the assessee to the tune of Rs. 10,37,96,184/- were proposed by Revenue, as in view of Revenue the assessee was not engaged in charitable activities, rather it was engaged in the business activities for the benefit of its main trustees, namely Dr. Ashwani Kumar Bansal and Dr. Vandana Bansal or entities related to the trustees. 7. The ITSC on its part passed an order dated 17.08.2016, u/s 245D(4) of the Act abating the applications before ITSC and restored the proceedings back to the file of the AO. The assessee filed Miscellaneous Application before ITSC against the order of ITSC dated 17.08.2016, but the M.A. stood rejected by ITSC, vide order dated 20.01.2017, passed u/s 245D(6B) of the 1961 Act by ITSC. 8. Thereafter, the AO completed assessment for ay: 2007-08 to 2014-15 and the income assessed in the hands of the assessee for ay: 2007-08 to 2013-14, were to the tune of 34,43,24,119/-, as detailed hereunder:- S.No. Assessment Year Income declared (In Rs.) Income Assessed (in Rs.) Date of Assessment Order Assessment Order passed u/s 1. 2007-08 Nil 51,95,230/- 08.08.2017 153A read with Section 143(3) 2. 2008-09 Nil 2,81,70,980/- 08.08.2017 153A read with Section 143(3) 3. 2009-10 Nil 1,40,62,700/- 08.08.2017 153A read with Section 143(3) 4. 2010-11 Nil 2,25,97,490/- 08.08.2017 153A read with Section 143(3) 5. 2011-12 Nil 12,55,72,780/- 08.08.2017 153A read with Section 143(3) 6. 2012-13 Nil 9,01,24,550/- 08.08.2017 153A read with Section 143(3) 7. 2013-14 Nil 5,86,00,389/- 08.08.2017 Section 143(3) ITA No. 73/ALLD/2019 Jeevan Jyoti Charitable Trust 79 Total Nil 34,43,24,119/- 9. The assessee filed first appeal before ld. CIT(A) for all these ay’s , which stood dismissed by ld. CIT(A), vide separate appellate orders all dated 10.07.2018, passed by ld. CIT(A) for Assessment Years: 2007-08 to 2013-14. The assessee filed second appeal with Division Bench of Income Tax Appellate Tribunal, Allahabad, wherein tribunal restored the matter back to the file of ld. CIT(A) for fresh adjudication, vide composite order dated 21.12.2018 passed by tribunal in ITA No. 322 to 328/Alld/2018 for Assessment Years : 2007-08 to 2013-14. 10. It is the aforesaid background of facts, the PCIT issued Show Cause Notice (SCN) for cancellation of registration u/s 12AA(3) , dated 13/18.07.2017. After considering the reply of the assessee to the show cause notice, the PCIT passed the order dated 29.3.2019, impugned in the appeal, cancelling registration granted to the assessee u/s 12AA(3) w.e.f. 01.04.2006 and withdrawing approval granted u/s 80G with effect from 13.10.2009. 11. Though number of instances have been cited by the PCIT in the impugned order for cancelling registration, three reasons have been cited as principal reasons for cancelling registration. The first reason was that the activities of the assessees are being carried out for the benefit of the specified persons as given in section 13(3) and specifically the trustees of the assessee trust as well as the concerns in which the trustees are having substantial interest. The second reason given was that the assessee admitted in the application filed before ITSC that voluntary donation received from public have not been accounted for in the books of accounts of the trust. Therefore, the surrender of this amount of Rs. 65 Lac and offered to tax under section 115BBC led the Pr. CIT to reach the conclusion that the assessee trust has earned unaccounted receipts, profiteering and allowing the income of the trust for personal uses of the trustees. The third reason cited by the PCIT was that the assessee trust has sold all its educational institutions and consequently the activities of the assessee trust ceased to exist. 12. In the appeal filed by the assessee against the order of the PCIT, the Hon’ble JM took the view that the surrender of a sum of Rs. 65 Lac and offered to tax under section 115BBC before the ITSC was not relevant to cancel registration granted to the assessee because, so long as the trust was running educational institutions and imparting education through the various institutions the main activity of the assessee trust remains charitable in nature though there are certain violations on account of unanimous unaccounted donations received by the assessee which were surrendered before the Income Tax Settlement Commission and offered to tax under section 115BBC. Therefore, this is purely a matter of assessment and does not fall in the ambit of the activities of the assessee not being carried out in ITA No. 73/ALLD/2019 Jeevan Jyoti Charitable Trust 80 accordance with the objects of the assessees trust or the activities of the assessee trust are not genuine. 13. With regard to the second ground for cancellation of the registration is cited by the Pr. CIT viz., giving advance or transfer of fund by the assessee trust to the trustees namely Dr. A.K Bansal and Dr. Vandana Bansal through Jyoti Hospital Pvt. Ltd., the Hon’ble JM took the view that the assessee has not disputed the transactions of advance to Dr. A.K. Bansal and Dr. Vandana Bansal as these amounts of Rs. 13,20,26,382/- were transferred by the assessee trust to Jyoti Hospital Pvt. Ltd. Similarly, a sum of Rs. 1,35,74,790/- were also treated as the benefit given to the trustees through the concerns in which they have substantial interest. The assessee has not disputed these transactions of transfer of funds or advance given to the trustees. However, the explanation of the assessee was that the assessee trust has received loans and advances from those concerns which is more than the repayment amount as cited by the PCIT. the Hon’ble JM held that there are loan and advances received by the assessee trust from the group concerns in which the trustees of the assessee trust were having substantial interest and the details of the amount of loans and advances received by the trust as per the balance-sheet as on 31st March, 2013 as under:- Jyoti Mediservices Limited Rs. 82,30,350/- NavjeevanPediatrics Pvt Ltd Rs. 49,42,061/- Vandana Women Hospital Rs. 11,90,000/- Total Rs. 1,43,62,411/- The Hon’ble JM therefore held that it was a matter of record that the assessee trust received loan and advance from the group concerns total amounting to Rs. 1,43,62,411/- which were subsequently repaid by the assessee to the tune of Rs. 1,35,74,709/-. Therefore, the payment made by the assessee to that extent is nothing but repayment of earlier loan and advances and this would not even amount to violation of provisions of section 11(5) or 13 of the Income Tax Act. Therefore, these transactions cannot be regarded as the activities of the assessee are only for the benefit of the trustees of the assessee trust. On the PCIT action in making reference to the fact that the assessee sold the Jeevan Jyoti Public School and Jeevan Jyoti Nursing School in the month of September, 2017 and the sale proceeds were utilized for repayment of outstanding bank loans of the group concerns in which the trustees are having substantial interest and consequently it violates the conditions of section 11(3). Though the assessee has contended that repayment of the loan utilized for the construction of the building of these educational institutions is nothing but application of the income / fund for charitable purpose however, even if the assessee has violated the provisions of section 11(3) the consequences of the same would be that the said amount would not be eligible for exemption under section 11 and 12 of the Income Tax Act and ITA No. 73/ALLD/2019 Jeevan Jyoti Charitable Trust 81 will be assessed to tax. Therefore, the Hon’ble JM held that this is again a subject matter of assessment and cannot be regarded as the activities of the assessee are not genuine or are not being carried out in accordance with the objects of the assessee trust. Therefore, to the extent of these transactions and incidents as discussed above, the Hon’ble JM held that these transactions would fall in the ambit of section 12AA(3) of the Income Tax Act so as to invite the cancellation of registration. 14. However, the Hon’ble JM held that when the assessee has sold all its educational institutions in the year 2017 itself then it would amount to cessation of the charitable activities of the assesse trust and therefore, the assessee trust would no longer be entitled for the benefit of section 11 and 12 of the Income Tax Act. Once the charitable activity of the assessee are ceased to exist, the same would fall in the category that the activities are not being carried out in accordance with the objects of the trust. Hence the undisputed fact of sale of all the educational institutions by the assessee trust would definitely lead to disentitlement of benefit under section 11 and 12 of the Act and consequently cancellation of registration granted under section 12A of the Income Tax Act. In view of the above facts and circumstances of the case, the Hon’ble JM upheld the order of cancellation of the registration as well as granted under section 12A as well as approval granted under section 80G(5). 15. As regards the second issue whether the cancellation shall have with retrospective effect w.e.f. 1.4.2006 as held by the Pr. CIT or would be retrospective, the Hon’ble JM held relied on the decision of the Hon’ble Jurisdiction High Court in the case of ACIT vs. Agra Development Authority (2018) 90 taxman.com 282 (All) 407 ITR 562(All) wherein it was held in para 50 to 52 as under:- “50. Then, there is nothing in the language of Section 12AA(3) of the Act that may suggest registration of the assessee may be cancelled with retrospective effect. The use of the words or have obtained registration at any time under Section 12- a of the Act’ added by amendment w.e.f. 01.06.2010 only indicate that the Commissioner was vested with the power to cancel a registration that may have been granted to an assessee at any time prior to the aforesaid amendment itself. However, it does not indicate that thereby the Commission had been empowered to cancel the registration of the assessee with retrospective effect i.e. with effect from a date prior to the date of issuance of the order/notice to cancel the registration. 51. Clearly, the act of cancellation of registration has serious civil consequences. In absence of any legislative intent expressed to suggest that the legislature had empowered the Commissioner to cancel the assessee’s registration under Section 12-A of the Act with retrospective effect, such power could not be deemed to exist or arise or be exercised to unsettle closed/part transactions especially because in ITA No. 73/ALLD/2019 Jeevan Jyoti Charitable Trust 82 this case the ground for cancellation has not arising out of allegation of fraud, collusion or misrepresentation. 52. Therefore, we are of the view that the cancellation of the assessee’s registration under Section 12-a of the Act, if at all, could be done only prospectively and not retrospectively as had been done by the Commissioner in this case. Thus, question no.1 is answered in the negative that is in favour of the assessee and against the revenue.” 16. He also referred to similar view expressed by the Hon’ble Allahabad High Court and Hon’ble Rajasthan High Court rendered in the case of Oxford Academy for Career Development Vs. CCIT (2019) 315 ITR 382 (All) in the case of Indian Medical Trust vs. Pr. CIT 414 ITR 296 (Raj). Accordingly, the Hon’ble JM modified the order of the PCIT in so far as the cancellation of the registration with retrospective effect from 1.4.2006 and cancellation of the approval under section 80G w.e.f. 13.10.2009 and held that the cancellation would be with effect from the previous year in which the assessee has sold the education institutions and the activities of the assessee cease to exist and therefore not being carried out in accordance with the objects of the assessee trust. In conclusion, the cancellation of registration under section 12A as well as withdrawal of approval under section 80G(5) were upheld but with effect from the financial year in which the activity of the assessee ceased to exist. 17. The Hon’ble AM took the view in paragraph 5.2 of his order that he differs from the decision of the Hon’ble JM for the reason that the matter needs to be set aside and resorted to the file of the PCIT for denovo consideration of issue of cancellation of registration u/s. 12AA(3) and withdrawal of approval u/s.80G(5) of the Act. The first reason given by him for doing so are that in the application filed by the assessee before the ITSC it had admitted receipt of donations but in assessment proceedings as well as in the proceedings for cancellation of registration u/s.12AA(3), the assessee did not provide details of donations or sums received but to prove its genuineness, like name and address of the person, purpose of donation etc. According to the Hon’ble AM there is evidence of the assessee having received, from FY 2006-07 onwards, large sums of money towards, donations, corpus funds, building fund, Development fund etc., which stood credited in its books of accounts. Educational institutions in India illegally demand capitation fee and other forced amount of money by way of corpus fund, building fund, development fund, donations etc., from students/parents of students, while admitting students in the institution. These receipts are illegal causing wreckage and very fundamental of education system in our country. Therefore, the matter should be set aside for de novo consideration by the PCIT. The Hon’ble AM further directed the assessee to provide the relevant details of the donations and all other sums so received in the form of building fund, corpus fund, development fund, donations etc., to prove that these are genuine receipts, and are ITA No. 73/ALLD/2019 Jeevan Jyoti Charitable Trust 83 neither bogus nor have any nexus/co-relation with the admission of students i the institutions run by the assessee. He also directed the PCIT to verify whether there exists any nexus of these receipts with the admission of students in the institution run by the Assessee and also whether the fees charged by institutions, run by assessee is in accord with the fees approved by Government. 18. The second reason given by the Hon’ble AM for setting aside the matter to the PCIT for de novo consideration is on the aspect of Advances/loans given to the Trustees by the Trust through Jyothi Hospital. The conclusions of the Hon’ble AM on this aspect was as follows: “It is also one of the contentions of the Revenue that the assessee has given advance of Rs. 89,50,000/- to Dr. A K Bansal through Jyoti Hospital Private Limited, and an advance of Rs. 46,24,790/- to Dr. Vandana Bansal through Jyoti Hospital Private Limited, which evidences that the trust is diverting funds for the benefits of the trustee. It is also the grievance of Revenue that in ay: 2011-12, on several occasions, Jyoti Hospital Nursing School made payment to trustee’s company as under:- Rs. 13,00,000/- to M/s Jyoti Hospital Pvt. Ltd. (amount transferred) Rs. 20,26,382/- to M/s Jyoti Hospital Pvt. Ltd.(amount advanced) It is contended by Revenue that from the above facts it is evident that the trust is diverting fund for the benefits of trustees or related entities of the trustees and hence the activities of the trust are not being genuinely carried as per the objects of the trust and also violating the conditions of clause (ii) of 80G(5). The assessee has given a balled and general statement before the Bench that from the other group entities, the sum received by assessee was higher and hence there is no net amount advanced by the assessee to trustee. This arguments is also fallacious, as every entity is a separate entity and hence all the transactions with inter- related parties who are hit by Section 13(2) and 13(3) of the 1961 Act are to be separately explained vis-à-vis- reference to books of accounts and flow of money. The assessee has claimed itself to be a charitable entity and there is a prohibition that trustees and their relatives, concerns in which they or their relatives are interested shall not derive any benefit from the charitable trust. Reference is drawn to Section 13(2) and 13(3) of the 1961 Act. I have gone through the audited financial statements of the assessee for the financial year 2006-07 to 2017-18, which are placed in paper book(s) at page 254 to 524 and 730-741, and I have observed that several transaction of substantial amounts have been conducted by assessee, with Jyoti Hospitals Private Limited, Dr. Ashwani Kumar Bansal and Dr Vandana Bansal. The assessee has claimed exemption of income u/s 11 and 12 , by getting itself registered u/s 12A of the 1961 Act and the onus ITA No. 73/ALLD/2019 Jeevan Jyoti Charitable Trust 84 is on the assessee to prove by cogent evidences that no benefit was derived by trustees , their relatives or concerns in which they are interested etc. and provisions of Section 13(2) and 13(3) are not hit, and merely making balled and general statement is not sufficient nor is it sufficient to say that group entities have advanced more sum of money to assessee than what is advanced by the assessee to the trustees , their relatives or concerns in which trustees are interested , and hence consequently Section 13(2) and 13(3) are not hit. The onus is on the assessee to bring on record cogent evidences in its defense. On the part of Revenue, it has to do in-depth analysis of financial records and other relevant material to arrive at decision whether or not any benefit was derived by trustees or their relatives or entities associated with them to see whether there were or were not violation of Section 13(2) and 13(3) of the 1961 Act and in case of violations consequences will follow. The onus is on the assessee to bring on record all cogent material in connection therewith in its defense, to explain all the transactions entered into by it with its trustees, their relatives and /or entities associated/connected therewith, as provided u/s 13(2) and 13(3) of the 1961 Act.” (emphasis supplied) 19. The third reason given by the Hon’ble AM is the allegation with regard to the diverting sale proceeds of assets of the trust for repayment of outstanding bank loans of the trustee’s group concern and not utilizing the same for the betterment of charitable objects of trust. According to the Hon’ble AM these allegations are serious allegations and the onus was on the Assessee to bring on record cogent material in its defence. 20. On the question whether registration can be cancelled with retrospective effect, the Hon’ble AM was of the view that in the light of the decision of the Hon’ble Supreme Court in the case of CIT(E) Vs. Batanagar Education and Research Trust, 129 Taxmann.com 30(SC). In that case the assessee trust enjoyed registration u/s.12A of the Act vide order dated 6.8.2010. Consequent to a Survey u/s133A of the Act by the revenue on 24.8.2015, it transpired that the trust did not carry out its activities in accordance with objects of the Trust. A show cause notice u/s.12AA(3) of the Act for cancellation of registration was issued by the CIT(E) dated 4.12.2015 and by an order dated 25.2.2016 the CIT(E) cancelled the registration granted to the trust w.e.f 1.4.2012. On appeal by the Assessee to the Tribunal against the said order, the Tribunal upheld the same. On appeal against the order of the Tribunal, the Hon’ble Calcutta High Court reversed the order of the Tribunal. On further appeal by the Revenue to the Hon’ble Supreme Court, the order of the CIT(E) was upheld and the order of the High Court was reversed. 21. According to the Hon’ble AM, the above decision of Hon’ble Supreme Court has to be read as conferring power on the revenue to cancel registration with retrospective effect for the following reasons: ITA No. 73/ALLD/2019 Jeevan Jyoti Charitable Trust 85 “In the above case before Hon’ble Supreme Court, the trust was registered u/s 12AA of the 1961 Act vide order dated 06.08.2010 and it was also accorded approval u/s 80G(vi) of the 1961 Act, the survey u/s 133A of the 1961 Act took place on the entity namely School of Human Genetics and Population Health, Kolkata , and SCN was issued by CIT on 04.12.2015 proposing cancellation of registration . The CIT cancelled registration u/s 12AA and 80G with effect from 01.04.2012 , as it transpired that for financial year 2011-12 and onwards, the aforesaid tax-payers was engaged in accepting bogus donation which were by way of accommodation entries. The Hon’ble Supreme Court reversed the decision of Hon’ble High Court and held that the aforesaid tax-payer completely misused the registration granted u/s 12AA and 80G of the 1961 Act and Hon’ble Supreme Court held that an entity which is misusing the status conferred upon it by Section 12AA of the 1961 Act is not entitled to retain and enjoy said status. The Hon’ble Supreme Court held that the authorities were therefore, right and justified in cancelling the registration u/s 12AA and 80G of the 1961 Act. Thus, in view of authoritative decision of Apex Court in Batanagar Education and Research Trust(supra), this contention of the assessee that registration u/s 12AA cannot be cancelled with retrospective effect stood rejected. It will all depend based on evidence brought on record that since when the assessee misused its status conferred u/s 12AA and 80G, accordingly the registration can be cancelled with effect therefrom when the assessee started misusing its status conferred u/s 12AA of the 1961 Act. Thus, based on detailed reasoning as outlined above in my order in preceding para, I am setting aside the order dated 29.03.2019 passed by ld. Pr. CIT(Central) , Lucknow cancelling registration u/s 12AA(3) w.e.f. 01.04.2006 and withdrawal of approval u/s 80G(5) of the 1961 Act and restoring the matter back to file of ld. Pr. CIT for considering afresh issue of cancellation of registration u/s 12AA(3) and withdrawal of approval u/s 80G(5) of the 1961 Act. Needles of say that ld. Pr. CIT shall give proper and adequate opportunity of being heard to the assessee in set aside remand proceedings , and evidences/explanations submitted by assessee in its defense shall be admitted by ld. Pr. CIT in the in the interest of justice and adjudicated on merits in accordance with law. I order accordingly.” 22. I have heard the submissions of the learned counsel for the Assessee and the learned DR. Their submissions were in support of the order of the learned JM and learned AM, respectively. The submissions went to the extent of even questioning the validity of the order passed by the CIT(E) u/s.12AA(3) of the Act. Section 255 (4) of the Act provides as follows: “(4) If the members of a Bench differ in opinion on any point, the point shall be decided according to the opinion of the majority, if there is a majority, but if the members are equally divided, they shall state the point or points on which they differ, and the case shall be referred by the President of the Appellate Tribunal for ITA No. 73/ALLD/2019 Jeevan Jyoti Charitable Trust 86 hearing on such point or points by one or more of the other members of the Appellate Tribunal, and such point or points shall be decided according to the opinion of the majority of the members of the Appellate Tribunal who have heard the case, including those who first heard it.” 23. As a third member, I have to confine myself to the point of difference between the members who constituted the Division Bench. The point of difference is firstly on the question whether the order of CIT(E) cancelling registration u/s.12AA(3) of the Act has to be upheld as was the opinion of the Hon’ble JM or the impugned order has to be set aside to the CIT(E) for examining de novo serious allegations made against the assessee and calling upon the assessee to divulge all information to CIT(E) to enable CIT(E) to pass a comprehensive order, as proposed by the Hon’ble AM. The second point of difference is as to whether the registration granted u/s.12A can be cancelled with retrospective effect as was opined by the learned AM or can be cancelled only prospectively, as was held by the learned JM. 24. On the first point of difference, I may first refer to the provisions of Sec. 12AA(3) of the Act, which reads thus: “(3) Where a trust or an institution has been granted registration under clause (b) of sub-section (1) and subsequently the Commissioner is satisfied that the activities of such trust or institution are not genuine or are not being carried 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.” 25. The above provision was inserted by the Finance (No.2) Act, 2004 w.e.f. 1.10.2004. The scope of the power under the aforesaid provision is limited to only cancellation of registration granted u/s.12A. The learned AM has not expressed opinion that the facts brought out in the impugned order are incorrect or insufficient to cancel registration granted u/s.12A of the Act and that further probe is necessary to bring out facts so that a comprehensive order can be passed covering all aspects. I am of the view that the conclusion of the learned JM that because of sale of the educational institution in the year 2017, the assessee can no longer be considered as trust existing for the purpose of carrying out charitable activities and hence not entitled to the benefits of Sec.11 and 12 of the Act, is sufficient to uphold the impugned order of the CIT(E) and no useful purpose will be served by bringing in facts on the other conclusions in the impugned order of the CIT(E) viz., receipt of bogus donations and use of trust funds for the personal benefit of the trustees. As I have already stated the scope of the powers u/s. ITA No. 73/ALLD/2019 Jeevan Jyoti Charitable Trust 87 12AA(3) of the Act are limited and even if on one ground the order is sustained, there is no necessity to go into other grounds on which the grant of registration was cancelled by the CIT(E). Therefore, no purpose will be served by setting aside the order and remanding the same to CIT(E) to pass a more comprehensive order. The apprehensions expressed by the learned AM in his order are all matters which may not be germane to the question of cancellation of registration as the cancellation of registration is upheld on one ground viz., sale of the very institution which was to carry out the charitable activities. In this regard, the main aspect which has to be taken note of is the principle that the grant of registration u/s12A of the Act, does not automatically enable an assessee to claim exemption u/s 11 & 12 of the Act. The AO even in a case, where a trust or charitable organization for which registration u/s 12A of the Act subsists has to go in to the question, as to whether the income has been applied for charitable purposes and to the extent contemplated by Sec.11 & 12 of the Act. Even in a case, where the trust or charitable organization applies its income for charitable purposes, but does not have registration u/s 12A of the Act, such trust or charitable organization cannot claim the benefit of Sec.11 & 12 of the Act. The apprehensions expressed by the learned AM have to be addressed or looked into in accordance with law and the parties should be left to explore remedies open to them in law. Therefore, I agree with the learned JM that the impugned order cancelling registration has to be upheld and there is no necessity to set aside the impugned order and remand the issue for de novo examination by the CIT(E). 26. On the question whether the registration already granted can be cancelled retrospectively, I find that the decisions referred to by the Hon’ble JM rendered by the Hon’ble Allahabad High Court in the case of Agra Development Authority (supra) and the Hon’ble Rajasthan High Court in the case of Indian Medical Trust Vs. PCIT (supra) are decisions rendered in cases where the question before the Hon’ble Court was as to whether registration granted u/s.12A of the Act can be cancelled u/s.12AA(3) of the Act, with retrospective effect. The Hon’ble Courts have expressed the view that u/s.12AA of the Act, registration granted cannot be cancelled with retrospective effect. The learned AM has however placed reliance on decision of Hon’ble Supreme Court in the case of CIT(E) Vs. Batanagar Education and Research Trust (supra). In that case as we have already noticed, the Assessee trust enjoyed registration u/s.12A of the Act vide order dated 6.8.2010. Consequent to a Survey u/s133A of the Act by the revenue on 24.8.2015, it transpired that the trust did not carry out its activities in accordance with objects of the Trust. A show cause notice u/s.12AA(3) of the Act for cancellation of registration was issued by the CIT(E) dated 4.12.2015 and by an order dated 25.2.2016 the CIT(E) cancelled the registration granted to the trust w.e.f 1.4.2012. It is no doubt true that in that case the registration was cancelled with retrospective effect. The question whether registration granted can be cancelled with retrospective effect was never an issue, as the Assessee in that case never ITA No. 73/ALLD/2019 Jeevan Jyoti Charitable Trust 88 challenged or contended that registration cannot be cancelled with retrospective effect. Therefore it cannot be said that the ratio laid down in the aforesaid decision is to the effect u/s. 12AA(3) of the Act, registration granted can be cancelled with retrospective effect. Ratio Decidendi ordinarily means the ‘reason for deciding’ the case. It must come from disputes of law, not disputes of fact. Ratio Decidendi must be argued in court and the facts of the precedent case shape the level of generality to which the later courts decide the level of generality. The law in this regard is very clear as would be evident from the observations of the Hon’ble Supreme Court (in para 37 of its judgment) in the case of Commissioner of Income-Tax vs M/s. Sun Engineering Works (P.) Ltd. 1992 Supp 1 SCR 732 “.....It is neither desirable nor permissible to pick out a word or a sentence from the judgment of this Court, divorced from the context of the question under consideration and treat it to be the complete 'law' declared by this Court. The judgment must be read as a whole and the observations from the judgment have to be considered in the light of the questions which were before this Court. A decision of this Court takes its colour from the questions involved in the case in which it is rendered and while applying the decision to a later case, the courts must carefully try to ascertain the true principle laid down by the decision of this Court and not to pick out words or sentences from the judgment, divorced from the context of the questions under consideration by this Court, to support their reasonings. In Madhav Rao Jiwaji Rao Scindia Bahadur and Ors. v. Union of India this Court cautioned: It is not proper to regard a word, a clause or a sentence occurring in a judgment of the Supreme Court, divorced from its context, as containing a full exposition of the law on a question when the question did not even fall to be answered in that judgment....” 27. I, therefore, agree with the view of the learned JM that under section 12AA(3) of the Act, registration granted under section 12A of the Act cannot be cancelled with retrospective effect. 28. The appeal will now be listed before the Division Bench for passing orders in accordance with the majority opinion.” 3. Now this appeal is listed before the Division Bench for passing the order in accordance with majority opinion. Hon'ble Third Member concurred with the view of the Judicial Member and thereby as per the majority view, the impugned order of the Pr. CIT(Exemption) cancelling the registration granted under section 12A as well as withdrawing approval under section 80G(5) is upheld but the cancellation would be ITA No. 73/ALLD/2019 Jeevan Jyoti Charitable Trust 89 with effect from the previous year in which the assessee sold the educational institutions i.e. the previous year 2017-18. 4. In the result, the appeal of the assessee is partly allowed. Order pronounced in the open Court on conclusion of hearing on 03.06.2022. Sd/- Sd/- [RAMIT KOCHAR] [VIJAY PAL RAO] ACCOUNTANT MEMBER JUDICIAL MEMBER Dated: 03/06/2022 sh Copy forwarded to: 1. Appellant 2. Respondent 3. CIT(A), Allahabad 4. CIT 5. DR By order Sr. P.S.