Batanagar Education and Research Trust, Kolkata V. THE CIT(Exemptions), Kolkata, Kolkata

ITA 756/KOL/2016

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 1542 (ITAT-KOLKATA)
• Duration Of Justice: 1 year(s) 4 month(s) 22 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 13-09-2017
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: C
• Next Hearing Date: 30-05-2017
• Assessment Year: misc
• Appeal Filed On: 21-04-2016
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: G MALLIKARJUNA
• Keywords: Accommodation entries; Cancellation of registration; Capital expenditure
• Section: 133A; 80G; 12A; 12AA

Judgement Text

ITA NOS. 756 & 912/KOL/2016 BATANAGAR EDUCATION & R ESEARCH TRUST 1 IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH : KOLKATA [BEFORE HONBLE SRI N.V.VASUDEVAN, JM & SHRI J.SU DHAKAR REDDY, AM ] I.T.A NOS.756 & 912/K OL/2016 ASSESSMENT YEAR : 2013-1 4 BATANAGAR EDUCATION & RESEARCH TRUST. -VS.- C.I.T. (EXEMPTIONS) KOLKATA KOLKATA [PAN : AABTB 3024 G] (APPELLANT) (RESPONDENT) FOR THE APPELLANT : SHRI SUBASH AGARWA L, ADVOCATE FOR THE RESPONDENT : SHRI G.MALLIKARJUNA, CI T(DR) DATE OF HEARING : 11.09.2017. DATE OF PRONOUNCEMENT : 13.09.2017. ORDER PER SHRI N.V.VASUDEVAN, JM THESE ARE APPEALS BY THE ASSESSEE AGAINST TWO ORDER S BOTH DATED 25.02.2016 OF C.I.T. (EXEMPTIONS), KOLKATA (I) PASSED U/S 12A A(3) OF THE INCOME TAX ACT, 1961 WITHDRAWING/CANCELLING THE REGISTRATION W.E.F. 01.0 4.2012 GRANTED TO THE ASSESSEE U/S 12A OF THE ACT AND (II) WITHDRAWING THE APPROVAL GR ANTED TO THE ASSESSEE U/S.80G(5) OF THE ACT. 2. THE ASSESSEE IS A TRUST. THE OBJECTS OF THE TRUST WERE PROVIDING RELIEF TO THE POOR AND NEEDY, MEDICAL RELIEF, EDUCATION AND ADVANCEMEN T OF ANY OTHER OBJECTS OF GENERAL PUBLIC UTILITY. THE FACT THAT THE OBJECTS OF THE T RUST ARE CHARITABLE IN NATURE IS NOT DISPUTED, AS THE REVENUE HAS IN AN ORDER DATED 6.8. 2010 OF DIT(E), KOLKATA GRANTED REGISTRATION TO THE ASSESSEE U/S 12A OF THE ACT AND BY ANOTHER ORDER DATED 31.8.2010 ALSO GRANTED APPROVAL U/S 80G(5) OF THE ACT TO THE ASSESSEE. 3. THE C.I.T.(EXEMPTIONS), KOLKATA ISSUED A SHOW CAUSE NOTICE DT. 04.12.2015 TO THE ASSESSEE PROPOSING TO CANCEL THE REGISTRATION GRANT ED TO THE ASSESSEE U/S 12A OF THE ACT FOR THE REASON THAT IN A SURVEY CONDUCTED U/S 133A OF THE ACT, ON AN ENTITY BY NAME SCHOOL OF HUMAN GENETICS AND POPULATION HEALTH, KOL KATA (SHG AND PH) BY THE ITA NOS. 756 & 912/KOL/2016 BATANAGAR EDUCATION & R ESEARCH TRUST 2 INVESTIGATION WING OF KOLKATA ON 27.01.2015 IT TRAN SPIRED THAT THE OBJECTS OF THE ASSESSEE WERE NOT GENUINE AND THE TRUST IS NOT CARR YING OUT ITS ACTIVITIES IN ACCORDANCE WITH THE OBJECTS OF THE TRUST. IT HAS FURTHER BEEN MENTIONED IN THE SHOW CAUSE NOTICE THAT DURING THE SURVEY OPERATION STATEMENT OF SMT. MOUMITA RAGHAVAN, TREASURER OF SHG AND PH WAS RECORDED UNDER OATH AND IN HER STATE MENT SHE ADMITTED THAT SHG AND PH WAS IN THE BUSINESS OF PROVIDING BOOK ENTRY OF DONATIONS TO DIFFERENT INDIVIDUALS AND ORGANIZATIONS. IT HAS FURTHER BEEN MENTIONED IN THE SHOW CAUSE NOTICE THAT THE ASSESSEE HAS RECEIVED DONATION OF RS.1,23,87,550/- IN A.Y.2013-14 FROM THE AFORESAID ORGANIZATION AND SINCE IT TRANSPIRED THAT THE SAID ORGANISATION WAS PROVIDING ACCOMMODATION ENTRIES OF DONATIONS, RECEIVED, TH E DONATION OF RS.1,23,87,550 RECEIVED BY THE ASSESSEE FROM THE SAID ORGANIZATION WAS ALSO BOGUS. THE CIT(EXEMPTIONS) ACCORDINGLY PROPOSED TO INVOKE HIS POWERS U/S 12AA(3) OF THE ACT TO CANCEL THE REGISTRATION GRANTED TO THE ASSESSEE. 4. THE CIT(E), IN HIS IMPUGNED ORDER HAS MADE A REFERENCE TO THE STATEMENT RECORDED IN THE COURSE OF SURVEY U/S 133A OF THE AC T OF SMT. SAMADRITA MUKHERJEE SARDAR, SECRETARY OF SCHOOL OF HUMAN GENETICS AND P OPULATION HEALTH (SHG&PH) AND THE STATEMENT OF SMT. MOUMITA RAGHAVAN, TREASUR ER OF SHG&PH. THESE STATEMENTS ARE REPRODUCED IN PARA 3.1 AND 3.2 OF TH E IMPUGNED ORDER OF THE CIT(EXEMPTIONS). THE GIST OF THE STATEMENT OF SMT. MOUMITA RAGHAVAN IS THAT SHG&PHS SOURCE OF INCOME WAS THE MONEY RECEIVED IN THE FORM OF DONATIONS FROM CORPORATE BODIES AS WELL AS FROM INDIVIDUALS. SHE I N HER STATEMENT 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 RETURNE D BY ISSUE OF CHEQUE/RTGS IN THE NAME OF COMPANIES OR ORGANIZATION SPECIFIED BY THE NINE BROKERS. THE ASSESSEE WOULD RECEIVE 7 OR 8% OF THE DONATIONS AMOUNT. HER FURTHER STATEMENT WAS THAT SINCE THE ASSESSEE WAS ENTITLED TO EXEMPTION U/S 80G AND U/S 35 OF THE ACT THEIR ORGANIZATION WAS CHOSEN BY THE BROKERS FOR GIVING DONATIONS TO S HG AND PH AS WELL AS FOR GIVING DONATIONS BY SHG AND PH. THE GIST OF THE STATEMENT OF SMT. SAMADRITA MUKHERJEE SARDAR, SECRETARY OF SHG&PH WAS ALSO IDENTICAL. IN REPLY TO QUESTION NO.13 AS TO HOW THE MONEY RECEIVED AS DONATIONS ARE GIVEN BACK, SHE EXPLAINED THAT CHEQUES ARE ITA NOS. 756 & 912/KOL/2016 BATANAGAR EDUCATION & R ESEARCH TRUST 3 ISSUED IN THE NAMES OF VARIOUS COMPANIES/ORGANIZATI ONS SPECIFIED BY THE BROKERS AND THE SUMS SO RETURNED ARE SHOWN AS EXPENSES IN THE B OOKS OF SHG&PH. 5. PURSUANT TO THE SURVEY IN THE CASE OF SHG & P H PROCEEDINGS FOR CANCELLATION OF REGISTRATION U/S 12A OF THE ACT GRANTED TO THEM WER E INITIATED. IN SUCH PROCEEDINGS, SMT. SAMADRITA MUKHERJEE SARDAR (IN A LETTER DATED 24.8.2015) HAD GIVEN A LIST OF DONATIONS AND THE SOURCE OF THOSE DONATIONS WERE GI VEN BY HER AS FOLLOWS :- THIS IS TO CONFIRM THAT DONATIONS PAID BY OUR SOCI ETY TO VARIOUS TRUSTS/SOCIETIES UNDER THE HEAD RESEARCH & DEVELOPMENT EXPENSES IN O UR INCOME & EXPENDITURE ACCOUNT FOR THE RESPECTIVE YEARS. HOWEVER, WHILE PR EPARING THE REVISED ACCOUNT FILED BEFORE THE HONBLE SETTLEMENT COMMISSION, KOL KATA THESE DONATIONS HAVE BEEN SHOWN AS PARTS OF REFUND MADE AGAINST DONATION S RECEIVED. 6. IT IS NOT DISPUTED THAT THE NAME OF THE ASSES SEE FIGURES IN THE SAID LIST AND THE FACT THAT SHG & PH HAS ADMITTED THAT DONATIONS GIVEN BY SHG AND PH TO THE ASSESSEE WERE AGAINST CASH RECEIVED FROM THEM IN FINANCIAL Y EAR 2012-13 OF A SUM OF RS.1,23,87,550/-. 7. BASED ON THE SURVEY IN THE CASE OF SHG & PH AN D THE ADMISSION OF SHG & PH THAT THE ASSESSEE WAS ALSO A PERSON WHO GAVE CASH A ND GOT DONATIONS IN RETURN, A SURVEY U/S.133A OF THE ACT WAS CONDUCTED ON 3.9.201 5 IN THE CASE OF THE ASSESSEE ALSO. IN THE COURSE OF SUCH SURVEY THE STATEMENT O F SHRI RABINDRANATH LAHIRI, MANAGING TRUSTEE OF THE ASSESSEE WAS RECORDED. HE IN HIS STATEMENT ADMITTED THAT THE ASSESSEE PAID CASH AND GOT DONATIONS IN RETURN. TH E FOLLOWING WERE THE RELEVANT QUESTION & ANSWER IN THE STATEMENT RECORDED ON THE ASPECT OF BOGUS DONATIONS: Q.11 PLEASE CONFIRM THE AUTHENTICITY OF THE ABOVE MENTIO NED CORPUS DONATION. ANS. A MAJOR PART OF THE DONATIONS THAT WERE CLAIME D .EXEMPTION U/S.11 (1) (D) WERE NOT-GENUINE. THE DONATION RECEIVED IN F.Y.S 20 08-09, 2009-10 AND 2010-11 WERE GENUINE CORPUS DONATION RECEIVED EITHER FROM T HE TRUSTEES OR PERSONS WHO WERE CLOSE TO THE TRUSTEES OR PERSONS WHO WERE CLOS E TO THE TRUSTEES. IN F.Y. 2011-12 AND 2012-13 A PART OF THE-DONATION WERE GEN UINE LIKE THE EARLIER YEARS. HOWEVER, A MAJOR PART OF THE DONATIONS RECEIVED IN THESE TWO F. Y.S VIZ. 2011-12 AND 2012-13, SHOWN AS CORPUS DONATION, WERE IN THE NATURE OF ACCOMMODATION ENTRIES TO FACILITATE TWO THINGS - ITA NOS. 756 & 912/KOL/2016 BATANAGAR EDUCATION & R ESEARCH TRUST 4 A) TO PROCURE LOANS FROM THE BANK WE HAD TO SHOW SU BSTANTIAL AMOUNT OF CAPITAL RESERVE IN OUR BALANCE SHEET. B) WE REQUIRED FUNDS FOR THE EXPANSION OF OUR COLLE GE. 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 DONATIO NS 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 T HROUGH INTERMEDIARIES. Q.13. WHO WERE THE INTERMEDIARIES AND WHAT WERE THE MODES OF RETURNING THE MONEY ? ANS. WE WERE INSTRUCTED TO TRANSFER FUNDS THROUGH R TGS TO THE FOLLOWING SEVEN (7) PERSONS : I. 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 U NDER 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 I S SHRI GULAB PINCHA, MOB NO. 98310 15157. HE WAS THE KEY PERSON FOR PROVIDIN G A LARGE PART OF BOGUS DONATION RECEIVED WHICH WAS IMMEDIATELY RETURNED B ACK TO THE DIFFERENT PARTIES IN THE GUISE OF ,PAYMENTS TOWARDS CAPITAL EXPENDITU RE IN BUILDING. WE DO NOT KNOW ANY DETAILS IN RESPECT OF THE DONORS ON BEHAL F OF WHOM SHRI GULAB PINCHA ACTED AS A MIDDLE MAN. SHRI PINCHA PROVIDED US WI TH THE DETAILS OF THE DONORS, CHEQUE OF THE DONATIONS, LETTERS OF CORPUS DONATIO NS 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 TH ROUGH RTGS. HE ALSO COLLECTED THE MONEY RECEIPTS/80G CERTIFICATIONS ON BEHALF OF THE DONORS. Q.19. THE LEDGER COPY FOR THE PERIOD FROM 01.04.2014 TO 0 4.09.2014 IN RESPECT OF 'GENERAL FUND' OF YOUR-TRUST HAVING DETA ILS OF THE DONORS IS BEING SHOWN TO YOU TO IDENTIFY THE BOGUS DONATIONS ALONG WITH BOGUS DONORS. ITA NOS. 756 & 912/KOL/2016 BATANAGAR EDUCATION & R ESEARCH TRUST 5 ANS. AFTER GOING THROUGH THE LIST OF THE DONORS APP EARED 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 'DONATION- II' HAVING TOTAL AMOUNT OF RS. 6, 03, 07, 550/- IS BOGUS AND OUT OF WHICH S.5, 96,28,973/- WAS RETURNED BACK THROUGH RTGS TO THE ABOVE MENTIONED SEVEN (7) PERS ONS FOLLOWING THE INSTRUCTIONS OF THE MEDIATORS. ' 8. ON THE BASIS OF THE ABOVE MATERIAL, THE CIT(E ) CAME TO THE FOLLOWING CONCLUSION: 6.1. THE INTENTION OF THE LEGISLATURE TO -GRANT RE GISTRATION U/S 12AA AND 80G, TO GIVE THE BENEFIT U/S 1 L TO ENCOURAGE MEDICAL RELIE F TO THE POOR AND NEEDY PERSONS, PROMOTE EDUCATION AMONG MASSES AND SUPPORT TO THE P OOR SECTION OF THE SOCIETY. BUT TIME AND AGAIN THESE PROVISIONS HAVE BEEN MISUS ED FOR PERSONAL NEED AND FOR BENEFIT OF TRUSTEES/MEMBERS OF THE TRUSTS AND SOCIE TIES. SURVEY U/S.133A CONDUCTED IN THE CASE OF ASSESSEE ELABORATES THE NA TURE 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 TH E I.T.ACT PROVIDING SUPPORT AND ENCOURAGEMENT TO THE ORGANIZATIONS FOR DOING THE BE NEVOLENT ACTIVITIES, ASSESSEE SOCIETY NOT ONLY OPENED THE PANDORA'S BOX DEFYING T HE 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 OBJEC TIVES AS PER THE ACT AND PERFORMING THE REVERSE IN REALITY. 6.3. BASED ON THE FACTS AND CIRCUMSTANTIAL EVIDENCE S AS DISCUSSED IN PARA 1 TO 5, IT CAN BE INFERRED:- A) ASSESSEE TRUST HAS RECEIVED A SUM OF RS..L ,23,8 7,550/- AS BOGUS DONATION FROM M/S. SCHOOL OF HUMAN GENETICS & POPULATION HEALTH A ND VOLUNTARILY OFFERED AS INCOME. SHG&PH HAS ADMITTED THEIR BOGUS TRANSACTION S BY FILING APPLICATION BEFORE THE HON'BLE SETTLEMENT COMMISSION, KOLKATA A ND THROUGH CONFIRMATION FILED. B) THEY HAVE RECEIVED BOGUS CORPUS DONATION NOT ONL Y FROM SHG&PH BUT ALSO FROM VARIOUS PARTIES IN DIFFERENT YEARS. C) SOCIETY/TRUST HAS GROSSLY MISUSED THE PROVISION OF SECTION 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, MEREL Y AN ACCOMMODATION ENTRY AND FICTITIOUS. ITA NOS. 756 & 912/KOL/2016 BATANAGAR EDUCATION & R ESEARCH TRUST 6 F) ACTIVITIES OF THE TRUST ARE NOT GENUINE AS WELL AS NOT BEING' CARRIED OUT IN ACCORDANCE WITH ITS DECLARED OBJECTS. ASSESSEE'S CA SE IS COVERED WITHIN THE 60 TH LIMB OF SECTION 12AA(3). G) EVEN INGENUINE AND ILLEGAL ACTIVITIES' CARRIED O N BY ASSESSSEE THOROUGH MONEY LAUNDERING DO NOT COME WITHIN THE CONCEPTUAL FRAMEW ORK OF CHARITY VIS-A-VIS ACTIVITY OF GENERAL PUBLIC UTILITY ENVISAGED THE IN COME TAX ACT AS LAID DOWN IN SECTION- 2( 15). 7. KEEPING IN VIEW THE ABOVE, PROVISION OF SECTION 12AA(3) IS INVOKED AND REGISTRATION GRANTED U/S.12AA IS WITHDRAWN/CANCELLE D W.E.F. 01.04.2012 FROM THE STARTING OF FINANCIAL YEAR, THE YEAR THE SOCIETY WA S FOUND TO BE INVOLVED IN MONEY LAUNDERING THROUGH RECEIPT OF BOGUS DONATION, INGEN UINE ACTIVITIES AND NOT CARRYING OUT ACTIVITIES AS PER OBJECT OF THE TRUST. SINCE THE REGISTRATION U/S.12AA(3) WAS CANCELLED AS A CONSEQUENCE, THE APPROVAL GRANTED TO THE ASSESSEE U/S.80G OF THE ACT WAS ALSO CANCELLED. 9. AGGRIEVED BY THE ORDER OF CIT(EXEMPTIONS) CANC ELLING THE REGISTRATION GRANTED U/S 12A OF THE ACT THE ASSESSEE HAS PREFERRED THE PRESE NT APPEAL BEFORE THE TRIBUNAL. THE FOLLOWING ARE THE GROUNDS OF APPEAL RAISED BY THE A SSESSEE. 1. THAT, ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD. COMMISSIONER OF INCOME-TAX ( EXEMPTIONS ) ERRED IN ALLEGING THAT THE ASSESSEE-TRUST HAD VIOLATED THE PROVISIONS OF SEC.12-AA AND SEC.80G(5) (VI) OF THE INCOME-TAX ACT, 1961, AND THAT THE ACTIVITIES OF THE ASSESSEE-TRUST WERE NOT GENUINE AS WELL AS NOT BEING CARRIED OUT IN ACCORDANCE WITH ITS DECLARED O BJECTS, AND ON THE BASIS OF SUCH WHOLLY UNFOUNDED ALLEGATIONS, HE FURTHER ERRED IN WITHDRAWING AND/OR CANCELLING REGISTRATION OF THE ASSESSEE-TRUST, WITH EFFECT FROM 01-04-2012. 2. THAT, IN CONSEQUENCE OF THE UNFOUNDED ORDER WITH DRAWING AND / OR CANCELLING ULS.12-AA(3) REGISTRATION OF THE APPELLANT-TRUST, T HE LD. C.LT. (EXEMPTION) FURTHER ERRED IN WITHDRAWING APPROVAL GIVEN ULS.80- G(5) OF THE ACT WITH EFFECT FROM 01-04-2012 . 3. THAT, THE IMPUGNED ORDER DATED 25-02-2016, PASSE D ULS.12-AA(3) OF THE ACT, IS ARBITRARY, BAD IN LAW AND PERVERSE. 4. THAT, THE APPELLANT-TRUST CRAVES LEAVE TO ADDUCE ADDITIONAL GROUNDS AND/OR TO WITHDRAW OR MODIFY ANY OF THE FOREGOING GROUNDS BEF ORE, OR AT THE TIME OF HEARING OF THE APPEAL. ITA NOS. 756 & 912/KOL/2016 BATANAGAR EDUCATION & R ESEARCH TRUST 7 10. WE HAVE HEARD THE SUBMISSIONS OF THE LD. COU NSEL FOR THE ASSESSEE AND THE LD. DR. THE LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE CONCLUSIONS OF THE CIT(E) IN THE IMPUGNED ORDER ARE PURELY BASED ON SURMISES AND CONJECTURES. THE LD. COUNSEL FOR THE ASSESSEE DREW OUR ATTENTION TO THE STATEMEN T OF SMT. MOUMITA RAGHAVAN AND THAT OF SMT. SAMADRITA MUKHERJEE SARDAR , THE TREASURER AND SECRETARY OF SHG&PH AND POINTED OUT THAT IN THEIR STATEMENTS THEY HAVE NOT SAID ANYTHING ABOUT THE DONATIONS GIVEN BY SHG&PH AND THAT THEY HAVE ONLY NARRATED ABOUT THE D ONATION GIVEN TO SHG AND PH. HE ALSO BROUGHT TO OUR NOTICE THAT THE CIT(E) IN THE IMPUGNED ORDER HAS PLACED RELIANCE ON A LETTER DATED 24.08.2 015 BY SMT. SAMADRITA MUKHERJEE SARDAR, THE SECRETARY OF SHG&PH, IN THE COURSE OF PROCEEDINGS INITIATED BY C IT(E) FOR CANCELLATION OF REGISTRATION GRANTED U/S 12A OF THE ACT TO SHG&PH WHEREIN SHE HAD ADMITTED THAT SHG&PH HAD RECEIVED INCOME BY PRO VIDING ACCOMMODATION ENTRIES FOR DONATION THROUGH CERTAIN MEDIATORS. THE DONATIO NS RECEIVED WERE REFUNDED BACK AS PER THE INSTRUCTION OF THE MEDIATORS AFTER RETAININ G SERVICE CHARGES. IT IS ALSO CLAIMED BY THE REVENUE THAT IN THE SAID LETTER SHG AND PH ADMITTED THAT THE REFUNDS MADE WERE IN THE FORM OF DONATIONS TO DIFFERENT PARTIES AS PER THE INSTRUCTION OF MIDDLEMEN AND BY DEBITING SUCH DONATIONS AND BOOKING DONATION S AS EXPENSES OF SHG&PH. THERE IS ALSO A REFERENCE TO THE FACT THAT A SETTLE MENT APPLICATION U/S 245C OF THE ACT BEFORE THE HONBLE INCOME TAX SETTLEMENT COMMISSION (INCOME TAX AND WEALTH TAX) FOR A.Y.2012-13 TO 2014-15 HAD BEEN FILED BY S HG&PH. IN SUCH AN APPLICATION THE ENTIRE INCOME INCLUDING THE INCOME ARISING OUT OF ACCOMMODATION ENTRIES FOR DONATION HAVE BEEN OFFERED FOR TAXATION WITHOUT CLA IMING ANY EXEMPTION. THE LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE ABOVE L ETTER DOES NOT ESTABLISH THE FACT THAT DONATIONS OF RS.1,23,87,550 RECEIVED BY THE ASSESSE E FROM SHG&PH WAS A BOGUS DONATION. IT WAS HIS CONTENTION THAT AS FAR AS THE ASSESSEE IS CONCERNED AN APPEAL FOR DONATION WAS MADE AND THE DONATIONS WERE RECEIVED. 11. THE LD. COUNSEL FOR THE ASSESSEE POINTED OUT THAT THE REGISTRATION ALREADY GRANTED TO THE TRUST OR AN INSTITUTION U/S 12A CAN BE CANCE LLED ONLY AFTER FULFILLING THE CONDITIONS LAID DOWN IN SECTION 12AA(3) OF THE ACT VIZ. (A) IF THE COMMISSIONER IS SATISFIED THAT THE ACTIVITIES OF THE TRUST/INSTITUT ION ARE NOT GENUINE AND (B) THE ACTIVITIES ITA NOS. 756 & 912/KOL/2016 BATANAGAR EDUCATION & R ESEARCH TRUST 8 ARE NOT BEING CARRIED OUT IN ACCORDANCE WITH THE OB JECTS OF THE TRUST/INSTITUTION. WITH REGARD TO BOTH THE ABOVE CONDITIONS THERE IS NEITHE R AN ALLEGATION BY CIT(E) IN THE IMPUGNED ORDER NOR FACTS EXIST WHICH CAN JUSTIFY CO MING TO A SATISFACTION REGARDING THE EXISTENCE OF BOTH THE AFORESAID CONDITIONS. IT WAS SUBMITTED THAT EVIDENCE AND MATERIAL GATHERED FROM A THIRD PARTY CAN BE USED AGAINST AN ASSESSEE ONLY AFTER CONFRONTING THE SAME TO THE ASSESSEE AND ALLOWING OPPORTUNITY OF CR OSS EXAMINATION OF THE DEPONENT (IF THE MATERIAL IS ORAL EVIDENCE). IT WAS SUBMITTE D THAT IN THE ABSENCE OF DOING SO, THE ORDER PASSED, PLACING RELIANCE ON SUCH INADMISSIBLE EVIDENCE, SHOULD BE HELD TO BE A NULLITY. 12. THE LD. DR PLACED RELIANCE ON THE ORDER OF CI T(E). IN PARTICULAR, HE BROUGHT TO OUR NOTICE THE FACT THAT THE ASSESSEE THE MANAGING TRUSTEE OF THE ASSESSEE IN THE COURSE OF SURVEY ADMITTED THE FACT THAT THE DONATIO NS RECEIVED BY THEM WERE BOGUS. IN THE LIGHT OF SUCH ADMISSION AND THE ABSENCE OF ANY POSSIBLE EXPLANATION TO THE SHOW CAUSE NOTICE ISSUED U/S.12AA(3) OF THE ACT, THE IMP UGNED ORDER HAS TO BE UPHELD AND THE APPEALS OF THE ASSESSEE DISMISSED. 13. WE HAVE GIVEN A VERY CAREFUL CONSIDERATION T O THE RIVAL SUBMISSIONS. IT IS CLEAR FROM THE STATEMENTS OF SECRETARY AND TREASURER OF S HG 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, I T WAS EXPLAINED THAT SHG&PHS SOURCE OF INCOME WAS THE MONEY RECEIVED IN THE FORM OF DONATIONS FROM CORPORATE BODIES AS WELL AS FROM INDIVIDUALS. IN THE SAID STA TEMENT 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 RETURNE D 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 THAT 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 D ONATIONS TO SHG AND PH AS WELL AS FOR GIVING DONATIONS BY SHG AND PH. TILL NOW THE ASSESSEES NAME DID NOT FIGURE IN THE STATEMENT RECORDED ON 27.1.2015. HOWEVER, P URSUANT TO THE SURVEY IN THE CASE ITA NOS. 756 & 912/KOL/2016 BATANAGAR EDUCATION & R ESEARCH TRUST 9 OF SHG & PH PROCEEDINGS FOR CANCELLATION OF REGISTR ATION 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 DONATIO NS WHICH WERE GIVEN BY THEM AFTER GETTING CASH OF EQUIVALENT AMOUNT. IT IS NOT DISPU TED THAT THE NAME OF THE ASSESSEE FIGURES IN THE SAID LIST AND THE FACT THAT SHG & PH HAS ADMITTED THAT DONATIONS GIVEN BY SHG AND PH TO THE ASSESSEE WERE AGAINST CASH REC EIVED 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 TRIUSTEE OF THE ASSESSEE ADMITTED THAT IT GAVE CASH AND GOT BACK DO NATIONS. WE HAVE ALREADY EXTRACTED THE STATEMENT GIVEN BY THE MANAGING TRUST EE. 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 AR E 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 INTE RFERENCE. 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. 14. IN THE RESULT THE APPEALS ARE DISMISSED. ORDER PRONOUNCED IN THE COURT O N 13.09.2017. SD/- SD/- [J.SUDHAKAR REDDY] [ N.V.VASUDEVAN ] ACCOUNTANT MEMBER JUDICIAL MEMBER DATED : 13.09.2017. [RG PS] ITA NOS. 756 & 912/KOL/2016 BATANAGAR EDUCATION & R ESEARCH TRUST 10 COPY OF THE ORDER FORWARDED TO: 1.BATANAGAR EDUCATION AND RESEARCH TRUST, B7-360/N EW WARD NO.30, PUTKHALI, MAHESHTALA, KOLKATA-700 141. 2. C.I.T. (EXEMPTIONS), KOLKATA. 3. CIT(DR), KOLKATA BENCHES, KOLKATA. TRUE COPY BY ORDER SENIOR PRIVATE S ECRETARY HEAD OF OFFICE/D.D.O., ITAT KOLKATA BENCHES, KOLKATA