Subhas Harilal Doshi Charitable Trust, Kolkata v. CIT(EXEMPTIONS), KOLKATA, Kolkata

ITA 566/KOL/2016 | misc
Pronouncement Date: 26-10-2016 | Result: Allowed

Appeal Details

RSA Number 56623514 RSA 2016
Assessee PAN AAETS1899P
Bench Kolkata
Appeal Number ITA 566/KOL/2016
Duration Of Justice 6 month(s) 26 day(s)
Appellant Subhas Harilal Doshi Charitable Trust, Kolkata
Respondent CIT(EXEMPTIONS), KOLKATA, Kolkata
Appeal Type Income Tax Appeal
Pronouncement Date 26-10-2016
Appeal Filed By Assessee
Order Result Allowed
Bench Allotted B
Tribunal Order Date 26-10-2016
Assessment Year misc
Appeal Filed On 31-03-2016
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL KOLKATA BENCH B KOLKATA BEFORE SHRI WASEEM AHMED ACCOUNTANT MEMBER AND SHRI K.NARSIMHA CHARY JUDICIAL MEMBER ITA NO.566/KOL/2016 SUBHAS HARILAL DOSHI CHARITABLE TRUST C/O. S.L. KOCHAR ADVOCATE 86 CANNING STREET KOLKATA-700 001 [ PAN NO.AAETS 1899 P ] / V/S . CIT(EXEMP.) KOLKATA 10 MIDDLETON ROW KOLKATA /APPELLANT .. /RESPONDENT /BY APPELLANT SHRI S.L.KOCHAR ADVOCATE & SHRI ANIL KOCHAR ADVOCATE /BY RESPONDENT SHRI NIRAJ KUMAR CIT-DR /DATE OF HEARING 15-09-2016 /DATE OF PRONOUNCEMENT 26-10-2016 /O R D E R PER WASEEM AHMED ACCOUNTANT MEMBER:- THIS APPEAL BY THE ASSESSEE IS AGAINST THE ORDER OF COMMISSIONER OF INCOME TAX (EXEMPTIONS) KOLKATA VIDE M.NO. CIT(E)/KOL/12A A(3)2015-16/4518-20 DATED 19.01.2016 U/S 12A(3) OF THE INCOME TAX ACT 1961 ( HEREINAFTER REFERRED TO AS THE ACT) SHRI S.L. KOCHAR AND SHRI ANIL KOCHAR LD. ADVOCATE S APPEARED ON BEHALF OF ASSESSEE AND SHRI NIRAJ KUMAR LD. DEPARTMENTAL REPRESENTATI VE APPEARED ON BEHALF OF REVENUE. ITA NO.566/KOL/2016 SUBHAS HARLAL DOSHI CHARITABLE TRUST VS. CIT (E) KOL. PAGE 2 2. THE ONLY ISSUE RAISED BY ASSESSEE IN THIS APPEAL IS THAT THE LD CIT (EXEMPTION) ERRED IN CANCELLING THE REGISTRATION CERTIFICATE U/ S 12 AA(3) OF THE ACT. 3. BEFORE COMING TO THE SPECIFIC ISSUE OF THE CASE LET US HAVE A BRIEF NOTE ON THE FACTUAL HISTORY OF THE CASE. A SEARCH WAS CONDUCTE D U/S 132 OF THE ACT ON 15.06.2010 AT THE PREMISE OF M/S PRATHIBA CONSTRUCTIONS ENGINE ERS AND CONSTRUCTIONS PRIVATE LIMITED (FOR SHORT PCEC) AT KOLHAPUR. DURING THE SE ARCH IT WAS FOUND THAT THE DIRECTOR OF PCEC HAS PAID CASH OF RS. 65 LACS TO VA RIOUS PERSONS DURING THE FINANCIAL YEAR 2009-10. THESE PERSONS FURTHER DONATED THE SAI D SUM OF MONEY TO AN EDUCATIONAL SOCIETY LOCATED AT KARNATAKA BELGAUM KARNATAKA TH ROUGH CHEQUES/ DRAFTS. THE NAME OF THE SOCIETY IS KARNATAKA LINGAYAT EDUCATIONAL SO CIETY (FOR SHORT KLES). THE PURPOSE OF MAKING THE PAYMENT BY THE COMPANY-PCEC I S TO SECURE THE ADMISSION OF THE DIRECTORS DAUGHTER IN KLES IN POST GRADUATE CO URSE. THE LIST OF THE PERSONS THROUGH WHOM THE PAYMENT OF RS.65 LACS ROUTED STAND AS UNDER:- SL NO. NAME OF THE TRUST CHEQUE /DD NO. DATE OF CHEQUE AMOUNT (RS) FUNDS CHANNELIZED THROUGH KOLKATA 1 SARALABEN BHANSALI CHARITIES TRUST 231834 OF STANDARD CHARTERED BANK 14.12.09 15 00 000 2 MUKESH BHANSALI CHARITIES TRUST 92588 OF STANDARD CHARTERED BANK 14.12.09 10 00 000 3 SUHASH HIRALAL DOSHI CHARITABLE TRUST 352488 OF STANDARD CHARTERED BANK 10.12.09 6 00 000 4 SUNIL COLLECTION PVT. LTD. 997783 OF ORIENTAL BAK OF COMMERCE 12.12.09 9 00 000 5 NEELGAUR TRUST 174442 OF VIJAYA BANK 10.12.09 5 00 000 TOTAL FUNDS CHANNELIZED THROUGH KOLKATA 50 00 000 OTHER PERSONS USED TO CHANNELIZE MONEY 6 ASHISH KIRAN SHAH BELGAUN DD NO.3447730 ON SBI 02.02.10 5 00 000 7 BILTUBE INDUSTRIES PUNE 2531452 15.12.09 10 00 000 TOTAL FUNDS CHANNELIZED THROUGH OTHER PERSONS 15 0 0 000 TOTAL MONEY SENT TO KLE 65 00 000 ITA NO.566/KOL/2016 SUBHAS HARLAL DOSHI CHARITABLE TRUST VS. CIT (E) KOL. PAGE 3 THERE WAS A PERSON WHO WAS ACTING AS A CONDUIT BETW EEN THE DONORS PCEC AND KLES. THE NAME OF THE PERSON ACTING AS CONDUIT WAS SHRI J.K. JAIN RESIDENT OF 18 R.N. MUKHERJEE ROAD KOLKATA- 700001. ALL THE ABOVE FACTS WERE ADMITTED BY THE DIRECTOR OF PCEC IN THE STATEMENT RECORDED U/S 132( 4) OF THE ACT ON 16.6.2010. BESIDES THE ABOVE STATEMENT U/S 132(4) OF THE ACT T HE OTHER DOCUMENTS WERE ALSO FOUND SUCH AS THE RECEIPTS ISSUED BY KLES TO THE AF ORESAID DONORS AND TWO LETTERS SIGNED BY SHRI J.K. JAIN CONTAINING THE DETAILS OF THE CHEQUES/ DRAFTS PAN OF THE DONORS REQUEST FOR THE 80G RECEIPTS. 3.1 THE INVESTIGATION REPORT OF INCOME TAX OFFICE O F KOLAHPUR WAS FORWARDED TO THE INCOME TAX OFFICE OF THE KOLKATA WITH REGARD TO THE TRANSACTION OF THE INSTANT ASSESSEE. ACCORDINGLY THE NOTICE WAS ISSUED TO THE ASSESSEE U/S 148 OF THE ACT AND ASSESSMENT WAS FRAMED U/S 147/144 OF THE ACT. DURING THE COURS E OF ASSESSMENT PROCEEDINGS THE STATEMENT OF THE MANAGING TRUSTEE(S) AND SHRI J.K. JAIN WAS ALSO RECORDED. THE AO DURING ASSESSMENT PROCEEDINGS ALSO OBSERVED THAT TH E ACTIVITY OF THE SOCIETY WAS NEGLIGIBLE AND ACCORDINGLY THE ASSESSMENT WAS FRAME D AFTER MAKING THE ADDITION OF RS. 6 LACS TO THE INCOME OF THE ASSESSEE. ON THE BASIS OF THE ABOVE THE LD CIT (EXEMPTION) I SSUED A SHOW CAUSE NOTICE ON 13.05.2014 FOR THE CANCELLATION OF REGISTRATION GRA NTED U/S 12A OF THE ACT. IN COMPLIANCE TO THE NOTICE THE ASSESSEE SUBMITTED THA T DONATION WAS MADE THROUGH CHEQUE AND IT WAS DULY RECORDED IN THE BOOKS OF ACC OUNTS. THE ALLEGATION THAT THE ASSESSEE HAS RECEIVED CASH IN LIEU OF DONATION IS N OT CORRECT. HOWEVER THE LD CIT HAS CANCELLED THE REGISTRATION CERTIFICATE ISSUED U/S 1 2A OF THE ACT BY OBSERVING AS UNDER:- 10. CONSIDERING THE OBSERVATIONS OF ASSESSING OFFI CER AND YOUR SUBMISSION I AM OF THE OPINION THAT A) THE ACTIVITIES OF YOUR ORGANIZATION WAS NOT GENU INE AND DESIGNED TO BYPASS THE LAW OF STATE AND NOT IN ACCORDANCE WITH THE STA TED OBJECTIVES OF YOUR ORGANIZATION. B) YOU HAVE DEFEATED THE PURPOSE FOR WHICH YOUR ORG ANIZATION WAS GRANTED REGISTRATION U/S. 12A OF THE INCOME TAX ACT. C) YOU WERE FOUND TO INDULGE IN THE PRACTICE OF MON EY LAUNDERING THROUGH RECEIPT OF CASH FOR ALLEGED DONATION PAID. D) YOU HAVE NOT MADE ANY VOLUNTARY DONATION. ITA NO.566/KOL/2016 SUBHAS HARLAL DOSHI CHARITABLE TRUST VS. CIT (E) KOL. PAGE 4 E) CONCLUSIVE FINDINGS OF ASSESSING OFFICER AS MENT IONED IN THE ASSESSMENT ORDER CLEARLY ESTABLISHES THAT YOU HAVE RECEIVED CA SH OF RS.6 LAKH AND ISSUED DONATION CHEQUE IN THE NAME OF M/S KLE SOCIETY TO F ACILITATE PAYMENT OF CAPITATION FEE FOR ADMISSION. HENCE REGISTRATION GRANTED TO SUBHAS HARILAL DOSHI CHARITABLE TRUST U/S. 12AA(1) IS HEREBY CANCELLED US. 12AA(3) OF THE INCO ME TAX ACT 191 FROM 01.04.2009 (I.E. FROM THE FINANCIAL YEAR 2009-10) T HE YEAR IN WHICH ACTIVITIES OF YOUR ORGANIZATION WERE FUND TOO BE INGENUINE AND IN DULGED IN MONEY LAUNDERING. 4. AGGRIEVED BY THE ORDER OF LD. CIT(E) ASSESSEE IS IN APPEAL BEFORE US. THE LD. AR BEFORE US FILED A PAPER BOOK COMPRISING OF PAGES 1 TO 7 OF THE PAPER BOOK AND SUBMITTED THAT THE DONATION WAS PAID BY THE ASSESSE E FROM ITS OWN FUND. THE ASSESSEE HAS RECEIVED BACK NO FUND FROM SHRI RAMCHANDRA D. J ADAV IN CASH. THE ALLEGATION OF THE LOWER AUTHORITIES IS BASELESS. THE INFORMATION RECEIVED FROM THE INCOME TAX OFFICE OF KOLHAPUR WAS NOT MADE AVAILABLE TO THE ASSESSEE. THE LD. DIRECTOR EXEMPTION HAS JUST COPIED THE ASSESSMENT ORDER PASSED BY THE AO U NDER SECTION 143(3) OF THE ACT AND HE HAS NOT APPLIED HIS OWN MIND. THE DONATION WAS M ADE TO KLES OUT OF THE CORPUS FUND OF THE ASSESSEE AND THERE WAS NO REPLENISHMENT OF THE FUND IN THE BOOKS OF THE ASSESSEE. ON THE OTHER HAND THE LD. DR SUBMITTED THAT SEVERAL OPPORTUNITIES WERE GIVEN TO THE ASSESSEE BUT HE FAILED TO AVAIL ANY OF THEM FOR THE CROSS EXAMINATION. THERE IS NO CHARITABLE ACTIVITY CARRIED OUT BY THE ASSESSEE FOR THE LAST SEVERAL YEARS. IN VIEW OF ABOVE THE LD. DR VEHEMENTLY SUPPORTED THE ORDER OF THE LD DIT(E). 5. WE HAVE HEARD THE RIVAL CONTENTIONS OF BOTH THE SIDES AND PERUSED THE MATERIALS AVAILABLE ON RECORD. AT THE OUTSET WE FIND THAT THE LD. AR HAS SUBMITTED THAT THE DETAILS RECEIVED FROM THE INCOME TAX OFFICE OF KOLHAPUR HAS NOT BEEN FURNISHED TO THE ASSESSEE FOR THE CROSS EXAMINATION. THE LD. DR IN I TS REJOINDER SUBMITTED THAT SUFFICIENT OPPORTUNITIES WERE FURNISHED TO THE ASSE SSEE BUT HE CHOSE NOT TO AVAIL THE SAME. NOW IN THE INTEREST OF JUSTICE & FAIR PLAY WE ARE INCLINED TO RESTORE THE FILE BACK TO THE LD. CIT(E) FOR FRESH ADJUDICATION AS PER LAW AFTER GIVING REASONABLE OPPORTUNITY ITA NO.566/KOL/2016 SUBHAS HARLAL DOSHI CHARITABLE TRUST VS. CIT (E) KOL. PAGE 5 OF BEING HEARD TO ASSESSEE. HENCE THIS GROUND OF AP PEAL OF THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSE. 6. IN THE RESULT ASSESSEES APPEAL STANDS ALLOWED FOR STATISTICAL PURPOSE. ORDER PRONOUNCED IN OPEN COURT ON 26/10/2016 SD/- SD/- (K.NARSIMHA CHARY) (WASEEM AHMED) JUDICIAL MEMBER ACCOUNTANT MEMBER *DKP ! - 26/10/2016 / KOLKATA / COPY OF ORDER FORWARDED TO:- 1. /APPELLANT-SUBHAS HARILAL DOSHI CHARITABLE TRUST C /O. S.L. KOCHAR ADVOCATE 8 6 CANNING STREET KOLKATA-700 001 2. /RESPONDENT-CIT(E) KOLKATA 10 MIDDLETON ROW KOL KAT 3. '# % / CONCERNED CIT 4. % - / CIT (A) 5. &'( ))'# '# / DR ITAT KOLKATA 6. (*+ / GUARD FILE. BY ORDER/ /TRUE COPY/ / '#