Case Law Details
M/s Urmila Devi Charitable Trust Vs CIT (Exemptions) (ITAT Delhi)
Conclusion: If the genuineness of a donation in one year is doubted, the addition, if any, can be made in the assessment of the relevant assessment year in accordance with law. However, that, by itself, would not be sufficient to withdraw the registration under Section 12AA(3).
Held:
CIT cancelled the registration granted under Section 12AA(1) on the ground that the trust had received the donation of Rs. 85 lakhs from HHBRF in lieu of cash. On the basis of above, CIT held that the activities of the society could not be said to be carried out in accordance with the objects of the society. Assessee had repeatedly requested for the supply of any material in the possession of the Department on the basis of which the allegation had been made against assessee. However, no such material was supplied to assessee. It was held the material collected behind the back of assessee could not be utilized against assessee unless the copy of the same was supplied to the assessee and he was given an opportunity to rebut the same. There remained no material for the Department to hold that assessee received the donation from HHBRF in lieu of cash. Further, merely because the genuineness of one donation in one year was doubted, it could not be a ground to draw the inference that the activities of the assessee society were not being carried out in accordance with the objects of the society or that no genuine activities were being carried out by assessee. That if the genuineness of a donation in one year is doubted, the addition, if any, can be made in the assessment of the relevant assessment year in accordance with law. However, that, by itself, would not be sufficient to withdraw the registration under Section 12AA(3). If the genuineness of a donation was doubted, at the most, it could be a ground to examine deep into the activities of the society so as to ascertain whether the activities of the society were being carried out in accordance with the objects of the society. However, a conclusion could not be drawn that the activities of the society were not being carried out in accordance with the objects of the society or that no genuine activity was being carried out by assessee merely because the genuineness of one donation in one year was doubted.
Section 12AA(3) does not authorize the Commissioner to cancel charitable registration with retrospective effect
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