Income Tax Appellate Tribunal - Agra
Babu Mohan Lal Arya Smarak Educational ... vs Assessee on 14 May, 2013
IN THE INCOME TAX APPELLATE TRIBUNAL,
AGRA BENCH, AGRA
BEFORE : SHRI BHAVNESH SAINI, JUDICIAL MEMBER AND
SHRI A.L. GEHLOT, ACCOUNTANT MEMBER
ITA No. 128/Agra/2013
Sharda Educational Trust, vs. Commissioner of
10, Jawahar Nagar, Income-tax (Central)
Khandari, Agra. Kanpur.
(PAN: AAATS 5294 C).
ITA No. 127/Agra/2013
Babu Mohan Lal Arya Smarak Educational Trust, vs. Commissioner of
22, Jawahar Nagar, Khandari, Agra. Income-tax (Central),
Kanpur.
(PAN: AAATB 4622 M)
(Appellant) (Respondent)
Appellants by : Shri Pankaj Gargh, Advocate
Respondent by : Shri Waseem Arshad, Sr. D.R.
Date of hearing : 14.05.2013
Date of pronouncement of order : 24.05.2013
ORDER
Per Bhavnesh Saini, J.M.:
Both the appeals by the different assessees are directed against different orders of ld. CIT, Central, Kanpur dated 28.03.2013, canceling the registration u/s. 12AA(3) of the IT Act. Both the parties submitted that issue is same in both the appeals and mainly argued ITA No. 128/Agra/2013. Therefore, for the purpose of disposal of both the appeals, the appeals are decided as under : 2 ITA Nos.128 & 127/Agra/2013 ITA No. 128/Agra/2013 (Sharda Educational Trust) :
2 The facts of the case are that M/s. Sharda Educational Trust was granted registration u/s. 12A of the IT Act by the ld. CIT, Agra vide registration dated 01.09.1997 w.e.f. 16.12.1995. The assessee subsequently amended the trust deed also. The main aims and objectives of assessee trust are educational and charitable to promote the education in all its branches and to serve the society particularly the poor people as well. A search and seizure operation was carried out at the premises of the assessee trust on 17.09.2010 and during the course of search, certain documents were found and seized which inter alia indicated the following :
(i). Seizure / detection of unaccounted cash
(ii). Unexplained cash deposit in bank account.
(iii). Total capitation fees received accommodation entries.
(iv). Receipt of on money from students towards admission. The AO gave his report to the ld. CIT, explaining therein that from the residence of Shri Y.K. Gupta, one of the trustees and key person of the group at 10, Jawahar Nagar, Khandari, Agra during the search and seizure operation on 17.09.2010, some computerized papers were recovered. This is a list (Annexure-1) containing the details of students, names, father's name, admission number, received amount
(a), Due amount (A), received amount (B), Due amount (B), balance and authorized person. The list pertains to Hindustan College of Science and 3 ITA Nos.128 & 127/Agra/2013 Technology, HIDs and HIT, running under the Sharda Educational Trust. The amount of balance of Rs.3,42,00,950/- has been derived on this paper which contained the details of due amount, received amount. The word "B" indicated unaccounted donation / capitation fees and Shri Ashok Darayani was authorized to collect it. These papers contained list of approximately 150 students, which clearly indicates that (B) was due and received in respect of 42 students. According to the AO, this fact was confronted to Shri Y.K. Gupta, but he could not give any explanation and stated that he would reply later on and when he was summoned later on, he did not appear personally for explaining the discrepancies. The AO was, therefore, of the view that it is a clinching fact that the amount of on money received from students is not entered into regular books of account. The explanation of the assessee was found afterthought and it was found by the AO that the assessee has been taking capitation fees, which was recorded in the annexure found in search. The assessee has not been true to his objects that are charitable in nature. The AO issued show cause notice to the assessee during the assessment proceedings as to why the amount (B) may not be treated as unaccounted donation from the students seeking admission in various courses. The assessee produced books of account before the AO, but the reply of assessee was not found acceptable because the amount reflected in the seized paper was not reflected in the books of account maintained by the assessee. The assessee submitted before the AO that a 4 ITA Nos.128 & 127/Agra/2013 complaint was received alleging that some amount over and above the amount of fees have been paid by few number of students being charged by the person named Shri Ashok Darayani mentioning the amount of alleged donation. This complaint was forwarded to the Director of HIDs, Dr. Jagdish HG with the specific instruction to seriously investigate the matter and, if required, a committee be constituted taking some senior staff members to ascertain the correctness of the complaint. A committee was constituted under the Chairmanship of Shri Jagdish HG and other senior faculty members, who have investigated the matter and report was forwarded submitting therein that after detailed examination including verification from the students and staff members, the allegations as mentioned in this complaint as regards the amount mentioned as "B" is far from the truth. Neither any student has given any amount over and above the amount of fees nor has the college charged any such amount. According to the report of Dr. Jagdish HG, the complaint was totally fabricated. Even then, in order to take pre-caution for future, Mr. Ashok Darayani was shifted from admission cell. The assessee submitted that college has never received any amount of donation towards admission. It was further submitted that colleges are running in highly competitive environment offering the similar courses. The assessee has to incur expenditure on advertisements in order to secure presence and place of Institution in educational scenario. Therefore, it is not possible to receive any donation or capitation fees. 5 ITA Nos.128 & 127/Agra/2013 The AO did not accept the reply of assessee genuine and rejected the same. The report of the AO was forwarded by JCIT Central Range, Kanpur, who has also made similar observations of receipt of on money/capitation fees from the students. It was stated that it is in violation of grant of registration u/s. 12A of the IT Act. The ld. CIT, therefore, issued show cause to the assessee dated 18.03.2013 requiring him to explain the receipt of on money/donations/capitation fees as per seized annexure-I and was directed to explain as to why their registration be not cancelled. The show cause notice is reproduced in the impugned order.
3. The ld. CIT, considering the explanation of the assessee cancelled the registration u/s. 12A of the IT Act and did not follow the order of ITAT, Agra Bench in the case of Agra Development Authority vs. CIT-I, Agra (141 ITD 336). The findings of the ld. CIT in para 7 to 13 of the impugned order are reproduced as under :
"7. The above reply of the assessee was considered and also the seized material was perused. It is seen that Annexure A-1 of party P-1 seized computer printout documents from the residential premises of Shri Y.K. Gupta, Managing Trustee, Containing details of students name, Fathers name, College, Program and also Due amount (A) & Received amount (A), Due amount (B) & Received amount (B) and Balance. The A.O. has in the course of examination the documents, informed that through the receipt amount due is reflected in the books of account of the assessee trust but the amount due (B) mentioned in the list has not been found credited in the books of account of the assessee trust. A copy of Annexure A-1 (page 11to 15) have been seen and these clearly indicate that the amount (B) shown as "Due amount" has been systematically mentioned and received apparently in cash form and has not been found credited in the books of account of the Trust. Even in the list of confirmed admission due amount 6 ITA Nos.128 & 127/Agra/2013 (B) has been very clearly mentioned which is enclosed as Annexure "A" to this order.
It can be seen from this Annexure in the case of students from Sl. No. 1 to 19, various amounts have been mentioned which clearly indicate that due Amount (B) has been systematically received from students but has not found credited in the books of account of the assessee trust. Another interesting list as per Annexure A-2 (Page No. 1 to 4, 6 to 15) which were seized from the office of Sharda University, Sharda Hospital, 32-34, Knowledge Park -III, Greater Noida which indicate the list of AIEEE paid candidates for Session 2010-11. On page 35 is a list of total paid candidates for session 2010-11 where at Sl. No. 1 in remark col. It is written AIEEE, Enter Fake PCM & Agg. Percentage, at Sl. No. 8, it is written AIEEE, mentioned fake 60% in 12th, Origin, at Sl. No. 22, it is written AIEEE, PCM % fake, actual is 51% at Sl. No. 33, it is written, AIEEE, Fake percentage is to entered, at Sl. No. 55, it is written AIEEE, Entered fake 60%age in 12th Origin and again of these students, the amount of case are also mentioned. These amounts also have not been found credited in the books of account.
8. From the above, it is very clearly seen that there are clear cut evidence of receipt of "on money" from the students for grant him admission from Managing Quota. Not only that the Investigation Wing has also found out certain students have given admission as evidence from Annexure despite the fact that their percentage is not up to the mark and / incorrect percentages were entered.
9. At this point, it is clear that the assessee trust which has been established for imparting education and has been recognized of the University by State Government and approved by UGC and maintain high standard of integrity and financial discipline with regard to the function of the trust and income generated from the property held under the trust. The trust property which utilized for the purpose of education. This consists of the entire infrastructure and the property rights in the form of various approvals granted by the State Government as well as UGC. All these taken together constitute trust property.
10. The facts of the case, however, indicate that the trustees have used this property of the trust for personal enrichment i.e. taking money in the form of premium/donation/on money (whatever name can be given) for granting admission in this respect. The students/candidates give this money for recoming education through the property of the trust which includes, as indicated above, the entire infrastructure of the trust, rights granted by the State Government to run a University as well as the approval given by the UGC. This may also include the professors/ teachers and other staff which are hired by the trust for importing education. This money, however, do not 7 ITA Nos.128 & 127/Agra/2013 find way into the funds of the trust and is not included in the books of account and is accordingly not applied for the purpose of the trust. Thus, it is clear cut case where the income derived from the property held under the trust is systematically applied for the benefit of the trustees and not for the purpose of the trust.
11. it is also noted, as indicated above, that this act of taking "on money" is carried out in a systematic manner and all the trustees who are responsible for the conduct of the business are not only more of it but also beneficiary of this income which is derived from the property held under the trust, and they have not taken any action to prevent this.
12. In his response, the assessee has tried to make out the case that on money was taken from some staff members. Dr. Jagdish HG had carried out an investigation and two staff persons were terminated on recommendation of Shri Ashok Daryani is mentioned. This explained of the assessee is not found acceptable as in the list in Annexure A-1 (page 11& 12) very clearly indicates that these amounts have been authorized by Shri Ashok Daryani himself and in the list of Column under the head ' authorised' the name of Sri Ashok Daryani is mentioned. It is further to be noted that this list have been found from the residence of Managing Trustee as well as from the office premises of the Trust and is terms of section 292C of the IT Act, these documents are presumed to be belonging to the Managing Trustee and the Trust and that contents of such documents are true. The assessee trust on being given opportunity has not been able to explain if when and where the amount (B) mentioned in the name of various students so systematically has been credited in the books of account of the trust. That these amounts relate as consideration for grant of admission is also evident from the computer printout which cannot be ignored for the above reasons. The evident found during the course of search very clearly indicate that the trust is not being run in accordance to the object and it is evident that the income from the property held under the trust has been systematically applied for the benefit of the trustees which was never the object of the trust. It is, thus, very clear that the activities of the trust are not being carried out in accordance with the objects of the trust. At this point, it can be seen that the facts of this case are different from the case of Agra Development Authorities decided by the Hon'ble Jurisdictional ITAT Bench. In that case the Hon'ble ITAT has held that CIT has not been able to make out a case that the trust is not being run in accordance with the objects of the trust. It is a clear cut case where, the evidence very clearly indicates that the income from the property held under the trust is not only applied for the purpose of the trust but has been systematically utilized by the trustees for their personal enrichment.
13. Accordingly, the registration of the Trust 12AA of the Act is hereby cancelled and according, the A.O. shall compute the income of the trust as if there is no registration u/s 12A of it Act 1961."
8 ITA Nos.128 & 127/Agra/2013
4. The ld. counsel for the assessee reiterated the submissions made before the ld. CIT. He has also filed detailed written submissions to explain each and every point in issue and also filed paper book containing 170 documents to show that cancellation of registration is unjustified in the matter. He has also filed list of cases upon which assessee placed reliance and the report of DVO to show that there was no unaccounted money found invested in any of the property of the trust. His main arguments are that the assessee exists solely for educational purpose and has been working for that purpose as per objects of the assessee-trust. Therefore, cancellation of registration is not justified. All the allegations in the impugned order are explained through material on record and submitted that Annexure -1, found during the course of search is not admissible at all against the assessee. He has also filed all the assessment orders u/s. 153A/143(3) passed in the case of assessee trust and its three trustees.
5. On the other hand, the ld. DR relied upon the impugned order and submitted that addition of unaccounted donations was made in the assessment year 2009-10. There is sufficient evidence available on record that the assessee received on money/donations/capitation fees. Therefore, the registration is rightly cancelled in 9 ITA Nos.128 & 127/Agra/2013 the matter. Shri Y.K. Gupta could not explain the seized paper in his statement recorded u/s. 132(4) of the IT Act.
6. We have considered the rival submissions, perused the findings in the impugned order and considered the material available on record. Section 12A of the IT Act provides as under :
12A. (1) The provisions of section 11 and section 12 shall not apply in relation to the income of any trust or institution unless the following conditions are fulfilled, namely:--
(a) the person in receipt of the income has made an application for registration of the trust or institution in the prescribed form and in the prescribed manner to the Commissioner before the 1st day of July, 1973, or before the expiry of a period of one year from the date of the creation of the trust or the establishment of the institution, whichever is later and such trust or institution is registered under section 12AA :
Provided that where an application for registration of the trust or institution is made after the expiry of the period aforesaid, the provisions of sections 11 and 12 shall apply in relation to the income of such trust or institution,--
(i) from the date of the creation of the trust or the establishment of the institution if the Commissioner is, for reasons to be recorded in writing, satisfied that the person in receipt of the income was prevented from making the application before the expiry of the period aforesaid for sufficient reasons;
(ii) from the 1st day of the financial year in which the application is made, if the Commissioner is not so satisfied:
Provided further that the provisions of this clause shall not apply in relation to any application made on or after the 1st day of June, 2007;10 ITA Nos.128 & 127/Agra/2013
(aa) the person in receipt of the income has made an application for registration of the trust or institution on or after the 1st day of June, 2007 in the prescribed form30 and manner to the Commissioner and such trust or institution is registered under section 12AA;
(b) where the total income of the trust or institution as computed under this Act without giving effect to the provisions of section 11 and section 12exceeds the maximum amount which is not chargeable to income-tax in any previous year], the accounts of the trust or institution for that year have been audited by an accountant as defined in the Explanation below sub-section (2) of section 288 and the person in receipt of the income furnishes along with the return of income for the relevant assessment year the report of such audit in the prescribed form duly signed and verified by such accountant and setting forth such particulars as may be prescribed.
(2) Where an application has been made on or after the 1st day of June, 2007, the provisions of sections 11 and 12 shall apply in relation to the income of such trust or institution from the assessment year immediately following the financial year in which such application is made.
6.1 Section 12AA of the IT Act provides as under :
12AA. (1) The Commissioner, on receipt of an application for registration of a trust or institution made under clause (a) or clause (aa) of sub-section (1)] of section 12A, shall--
(a) call for such documents or information from the trust or institution as he thinks necessary in order to satisfy himself about the genuineness of activities of the trust or institution and may also make such inquiries as he may deem necessary in this behalf; and
(b) after satisfying himself about the objects of the trust or institution and the genuineness of its activities, he--
(i) shall pass an order in writing registering the trust or institution;11 ITA Nos.128 & 127/Agra/2013
(ii) shall, if he is not so satisfied, pass an order in writing refusing to register the trust or institution, and a copy of such order shall be sent to the applicant :
Provided that no order under sub-clause (ii) shall be passed unless the applicant has been given a reasonable opportunity of being heard.
(1A) All applications, pending before the Chief Commissioner on which no order has been passed under clause (b) of sub-section (1) before the 1st day of June, 1999, shall stand transferred on that day to the Commissioner and the Commissioner may proceed with such applications under that sub-section from the stage at which they were on that day.
(2) Every order granting or refusing registration under clause (b) of sub-
section (1) shall be passed before the expiry of six months from the end of the month in which the application was received under clause (a) or clause (aa) of sub-section (1) of section 12A.
(3) Where a trust or an institution has been granted registration under clause (b) of sub-section (1) 40[or has obtained registration at any time under section 12A [as it stood before its amendment by the Finance (No.
2) Act, 1996 (33 of 1996) and subsequently the Commissioner is satisfied that the activities of such trust or institution are not genuine or are not being 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.
6.2 Section 2(15) of the IT Act provides as under :
2(15) "charitable purpose" includes relief of the poor, education, medical relief, [preservation of environment (including watersheds, forests and wildlife) and preservation of monuments or places or objects of artistic or historic interest, and the advancement of any other object of general public utility:12 ITA Nos.128 & 127/Agra/2013
Provided that the advancement of any other object of general public utility shall not be a charitable purpose, if it involves the carrying on of any activity in the nature of trade, commerce or business, or any activity of rendering any service in relation to any trade, commerce or business, for a cess or fee or any other consideration, irrespective of the nature of use or application, or retention, of the income from such activity:
Provided further that the first proviso shall not apply if the aggregate value of the receipts from the activities referred to therein is twenty-five lakh rupees or less in the previous year;
6.3 It is not in dispute that the assessee has been granted registration u/s. 12A vide order dated 01.09.1997 w.e.f. 16.12.1995. It is also not in dispute that the assessee is an educational trust solely exists for educational purpose for imparting education. According to the assessee, the assessee trust started its educational activities from the year 1996 and thereafter educational activities were further extended. The details of the same are filed in paper book. The ld. CIT has reproduced the aims and objectives of the assessee trust in the impugned order and there is no objection to the aims and objectives of assessee trust, which are admittedly charitable and educational in nature. The ld. CIT in para 9 of the impugned order has specifically found that the assessee trust has been established for imparting education and has been recognized of University by the State Government and approved by UGC and maintained high standard of integrity and financial discipline with regard to the function of the trust and income generated from the property held under the trust. The ld. CIT also noted in the same para that 13 ITA Nos.128 & 127/Agra/2013 the trust property, which is utilized for the purpose of education, consists of entire infrastructure and the property rights in the form of various approvals granted by the State Government as well as UGC. All these taken together constitute trust property. The ld. CIT attached the impugned papers found during the course of search with the impugned order. The first list contains the names of about 150 students out of which in front of about 42 students, the amount "B" is mentioned.
The second list is of the students getting admission from AIEEE (All India Engineering Entrance Examination), Central Counseling Board. On the top of the list, AIEEE is also mentioned. As regards the list of students getting admission through AIEEE, the ld. counsel for the assessee demonstrated before us that the ld. CIT has wrongly mentioned in the order that the amount mentioned in the list in front of names of students, have not been found credited in the books of account of the assessee. The ld. counsel for the assessee submitted that AIEEE list of students are the students who got admission branch-wise from Central Counseling Board. The students bring branch-wise allotment letters from AIEEE. Therefore, the assessee trust was bound to give admission to those students in their respective branches which they got allotted from AIEEE. In the said list in some cases, in front of names of students, fake percentage is mentioned for the reason that the student getting admission from AIEEE and has lesser percentage than what is fixed in the system of assessee trust for that particular branch, then to get the student 14 ITA Nos.128 & 127/Agra/2013 enrolled in that branch percentage is noted and is accordingly mentioned in the list. The ld. counsel for the assessee also submitted that the fees received from these students as mentioned in the enclosed list is duly accounted for in the books of account of the assessee and is also accounted for in the respective ledger account of the student. The ld. counsel for the assessee filed copies of allotment letters of such students getting admission from AIEEE from pages 63 to 154, which are allotment letters and student fee ledger and credited in the books of account. The ld. counsel for the assessee, therefore, submitted that the finding of the ld. CIT in para 7 is factually incorrect. The ld. counsel for the assessee got tallied the names of those students from allotment letters filed in the paper book and the details mentioned in the seized papers. On going through the allotment letters issued by AIEEE and students ledger account and the same got tallied with the seized paper, we find that the amount received from the students, who got admission through AIEEE have been accounted for in the books of account of the assessee. Therefore, the finding of ld. CIT in para 7 is factually incorrect that the amounts have not been credited in the books of account of the assessee. The issue of percentage is also explained by the assessee satisfactorily. Therefore, this is not incriminating in nature against the assessee for the purpose of cancellation of registration. The ld. CIT in para 2 of the impugned order has mentioned that during the course of search, there was indication of seizure / detection of unaccounted cash and 15 ITA Nos.128 & 127/Agra/2013 unexplained cash deposits in bank account. However, no such fact has been stated by the AO in the assessment orders of the trust or the trustees respectively and even in the report submitted to the ld. CIT for cancellation of registration, no such facts have been mentioned. The ld. CIT also in his findings, has not mentioned anything if any unaccounted cash or unexplained bank deposits were found against the assessee during the course of search. Therefore, such facts mentioned in the impugned order are also factually incorrect. The sole reason given in the order of cancellation of registration is the alleged receipt of on money/donation/capitation fee received from the students as per seized Annexure-A. The authorized Officer connected with the search, the AO and the ld. CIT have, however, did not examine any student or their parents mentioned in the seized list for payment of any on money/donation/capitation fees to the trust at the time of admission of student in different branches. In the absence of any examination of any student or their parent by the officers of the Revenue Department, there appears no justification to take any adverse view against the assessee. The assessee has filed copies of undertaking given by the students at the time of taking of admission in different courses that no capitation money have been paid. Same is also signed by their respective parents. Copies of some of the undertakings are filed in the paper book page 41 to 62. No corroborative evidences have been found during the course of search to prove receipt of any on money/donation/capitation fees from the students in any form. No 16 ITA Nos.128 & 127/Agra/2013 evidence of any cash or property accumulated by the assessee trust was found on receipt of any on money. Even one of the properties was referred to the DVO for estimating the cost of construction and the DVO has given report dated 08.03.2013, stating that the assessee has declared total cost of construction at Rs.2.12 crores and the DVO has estimated the cost of construction at Rs.2.24 crores. There is no much difference in the cost of construction reported by the assessee and estimated by the DVO. The difference is ignorable. Therefore, same would also indicate that the assessee has not received any on money from the students at the time of admission. The seized list is computerized paper which did not find signature of any person and no traces of the same were found as to whether the same was prepared or printed in institution of assessee trust. The Revenue department did not make any efforts to obtain any CSFL report on the same about the authenticity of the computerized paper prepared in any of the institution of assessee trust. The ld. CIT relied upon these seized papers by relying upon section 292C of the IT Act. Section 292C of the Act provides presumption as to assets/books of account against the person who was found in possession or control of any books of account or other documents during the course of search to be belonging to such person and the contents of documents to be correct and true. It is admitted fact that during the course of search on 17.09.2010 seized computerized papers/list of students was not found in possession or control of the 17 ITA Nos.128 & 127/Agra/2013 assessee trust. It was found from the residence of Shri Y.K. Gupta, one of the trustees of the group and no addition have been made against Shri Y.K. Gupta, trustee on recovery of such computerized papers from his residence. Therefore, such list cannot be relied upon in evidence against the assessee with the help of section 292C of the IT Act. Further, the presumption u/s. 292C is rebuttable presumption and the assessee has explained before the authorities below that such computerized list was received by Shri Y.K. Gupta, making certain allegations against the employees upon which matter was referred to Director of Institution Shri Jagdish HG, who had constituted a committee to look into the matter and all the committee members looked after the individual student's files. None of the students have reported payment of any on money/donations to any staff member at the time of taking admissions. All the relevant papers in this regard are filed at page 35 to 40 of the paper book. When such facts were pleaded before the AO and the ld. CIT, even at that stage, the Revenue Department should have investigated the students whose names were appearing in the seized papers to verify if they paid any on money at the time of their admission. In the absence of any proper investigation into the matter, we are of the view that the provisions of section 292C could not have been applied against the assessee. In the absence of any recovery of incriminating material against the assessee and any corroborative evidences during the course of search, we are of the view that the various papers/list annexed with 18 ITA Nos.128 & 127/Agra/2013 the impugned order is not admissible in evidence against the assessee trust. Therefore, the sole basis of the ld. CIT to cancel the registration on the basis of recovery of various papers is wholly unjustified and the impugned order, therefore, cannot be sustained in law.
7. Considering the provisions of section 12AA(3) of the IT Act, it is clear that sub-section (3) of section 12AA was inserted in the Act w.e.f. 01.10.2004. Prior to that, there was no provision for cancellation of registration once granted till the enactment of sub-section (3) w.e.f. 01.10.2004. Therefore, the provision for cancellation of registration has been introduced in the Act w.e.f. 01.10.2004 u/s. 12AA(3) of the IT Act. This sub-section provides that when a trust or an institution has been granted registration under sub-clause (b) of sub-sec. (1) and subsequently, the Commissioner is satisfied that the activities of such trust or institution are not genuine or 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. From the combined reading of sub-section (1) clause (b) and sub-sec. (3) of section 12AA, it would be seen that the cancellation of registration was provided where the registration was granted under sub-clause (b) of sub-sec.(1). Further, cancellation of registration under sub-sec. (3) was also provided where the registration was obtained at any time u/s. 12A 19 ITA Nos.128 & 127/Agra/2013 (may be under clause (a) or clause (aa) of sub-sec. (1) of sec. 12A). But this power of cancellation of registration u/s. 12A came to be introduced by way of amendment by Finance Act, 2010 w.e.f. 01.06.2010. That being the interpretation of sub-sec. (3), it is amply clear that the power to cancel the registration once granted was only confined to the registration granted under clause (b) of sub-sec. (1) of section 12AA till before 01.06.2010. Now, w.e.f. 01.06.2010, the power vests with the Commissioner even to cancel the registration granted under any of the clauses of sub-section (1) of section 12A. Thus, for exercising the powers u/s. 12AA(3) of cancellation of registration u/s. 12A/12AA of the IT Act by the ld. CIT, following conditions have to be satisfied :
(i). That the trust or society has already been granted registration u/s.
12AA(1)(b) of the Act; or
(ii). With effect from 01.06.2010, registration has been granted at any time u/s. 12A as stood before its amendment by the Finance Act No. 2 of 1996.
(iii). The CIT subsequently found and satisfied with -
(a). activities of such trust or institution are not genuine or
(b). are not being carried out in accordance with the objects of the trust or institution.
7.1 Hon'ble Orissa High Court in the case of Kalinga Institute of Industrial Technology vs. CIT, 336 ITR 389, held as under :
"The power under section 12AA(3) of the Income-tax Act, 1961, is exercisable by the Commissioner only on recording his satisfaction 20 ITA Nos.128 & 127/Agra/2013 of the circumstances that may warrant the exercise of such power. The Commissioner has to record in the notice the basis, if at all for the initiation of such proceedings.
A search and seizure had been conducted against the petitioner-institute on August 9, 2005. Without waiting for the conclusion of the assessment proceeding based on documents seized and information recovered in the course of such search and seizure an order dated December 15, 2006 was passed by the Commissioner under section 12AA(3) of the Act directing cancellation of the registration of the petitioner-institution. This order was quashed by the Tribunal. Notice was again issued for cancellation of registration. On a writ petition contending that while there had been search and seizure operation carried out against the petitioner-institute on August 9, 2005, assessment proceedings followed and were completed but no adverse finding had been recorded against the petitioner- institution to form any fresh ground for issue of notice."
7.2 ITAT Ahmedabad Bench in the case of Ajit Education Trust vs. CIT, 134 TTJ (Ahd) 483 held as under :
"Amendment of sub-s. 12AA w.e.f. 1st June, 2010 should not be applicable retrospectively and its operation has to be effective from the date it was introduced and onwards and therefore CIT was not justified in cancelling the registration granted to the assessee under s. 12A, by invoking provisions of s. 12AA(3); further, the trust being an educational institution and undisputedly imparting education, cancellation of registration was not in accordance with law."
7.3. ITAT Pune Bench in the case of Maharashtra Academy of Engineering & Educational Research (MAEER) vs. CIT, 133 TTJ 706 held as under :
"If CIT had an information of some wrongful means of earning fees in the form of a donation or about excessive charging of fees in the investigation process, the CIT can only pass on the information to the concerned regulator authorities of the educational institution 21 ITA Nos.128 & 127/Agra/2013 within his rights, and when there was no evidence of misutilization of funds and the prescribed activity of education was found to be carried on by the assessee, CIT had no jurisdiction to cancel registration under s. 12AA(3)."
7.4 Hon'ble Madras High Court in the case of CIT vs. Sarvodaya Ilakkiya Pannai 343 ITR 300 held -
"The assessee was granted registration under section 12A(1)(a) of the Income-tax Act, 1961. When the returns filed for the assessment years 2008-09 to 2010-11 were scrutinized, it was found that the assessee was engaged in purchase and sale of books. On the ground that the activities of the assessee could not be considered to be charitable activities, a show cause notice was issued by the Commissioner under section 12AA(3) and thereafter, the Commissioner revoked the registration on the ground that the assessee did not deserve exemption under section 11(1)(a). The Tribunal found that the order of the Commissioner was not justified as the power to cancel could be only traced to section 12AA(3) and in the absence of any activity carried on by the assessee contrary to the objects, the registration could not be revoked. On appeal :
Held, that under section 12AA, the Commissioner is empowered to grant or refuse the registration and after granting registration, would be empowered to cancel it, but only on the two conditions laid down under section 12AA(3). Whether the income derived from such transaction would be assessed to tax and whether the trust would be entitled to exemption under section 11 are entirely the matters left to the Assessing Officer to decide. The Tribunal had allowed the case of the assessee with the finding that none of the conditions under section 12AA(3) were violated and, therefore, the satisfaction which was arrived at by the Commissioner was not justified. Therefore, there was no reason to interfere with the order of the Tribunal."
7.5 ITAT, Agra Bench in the case of Agra Development Authority vs. CIT, 141 ITD 336 in paras 19 to 22 held as under :
22 ITA Nos.128 & 127/Agra/2013
"19. The heading of section 12A 'Conditions for applicability of sections 11 and 12' was substituted with effect from 01.06-2007 in place of previous title 'Conditions as to registration of the Trusts etc. It means that prior to 01.06.2007, this section itself provided conditions regarding registration of trust etc. It is noted here because with the substitution of the present title, this section no longer provides for registration of trust etc. A special provision has been enacted in section 12AA providing for procedure for registration of trust etc., with effect from 01.04.1997. It is also noted that section 12A was inserted in the statute book by the Finance Act, 1972 with effect from 01.04.1973. It was omitted and was again restored with effect from 01.04.1989. Section 12A, as it stood at the time when it provided for registration of trust, nowhere provided for cancellation of the registration once granted. It is also pertinent to note that the words 'such trust or institution is registered under section 12AA' were also substituted in this section with effect from 01.04.1997. In fact, this section even now nowhere stipulates about the cancellation or withdrawal of the registration, once granted under the said section. It is only under section 12AA, which came in the statute book with effect from 01.04.1997 that a fresh procedure for registration of the trust or institution is prescribed. Even under this section 12AA, there was no provision for cancellation of registration once granted till the enactment of sub-section (3) with effect from 01.10-2004. There is no dispute with regard to this fact that the provision regarding cancellation of registration came to be introduced for the first time by virtue of sub-section (3) in section 12AA with effect from 1-10-2004. This sub-section (3) provides that when 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. From the conjoint reading of sub-section (1) clause (b) and sub-section (3) of section 12AA, it would be seen that the cancellation of the registration was provided where the registration was granted under clause (b) of sub-section (1). Further cancellation under sub-section (3) was also provided where the registration was obtained at any time under section 12A [may be under clause (a) or clause (aa) of sub-section (1) of section 12A]. But this power of cancellation of registration obtained under section 12A 23 ITA Nos.128 & 127/Agra/2013 came to be incorporated by way of amendment introduced by the Finance Act, 2010 with effect from 01.06.2010. That being the interpretation of sub-section (3), it is amply clear that the power to cancel the registration once granted was only confined to the registration granted under clause (b) of sub-section (1) of section 12AA till before 01.06.2010. Of course, now with effect from 01.06.2010, the power vests with the Commissioner even to cancel the registration granted under any of the clauses of sub-section (1) of section 12A. Thus, for exercising power of cancellation of registration under section 12A/12AA and under section 12AA(3) of the Act by the CIT only on the following conditions:-
i) That the trust or society has already been granted registration under section 12AA(1)(b) of the Act. Or
ii) W .e .f. 01.06.2010 - registration has been granted at any time under section 12A as stood before its amendment by the (Finance No.2) Act 1996
iii) The CIT subsequently found and satisfied that :-
a) activities of such trust or institution are not genuine, or
b) are not being carried out in accordance with the objects of the trust or institution.
20. In the light of above discussion, if we consider the facts of the case under consideration as discussed above, we find that the CIT is not correct in cancelling the registration under section 12AA(3) of the Act which has been granted under section 12A of the Act on the following grounds and reasons :-
i) Section 12AA(3) of the Act empowers the CIT to cancel such registration if he satisfy that activities of the trust or institutions are not genuine or are not being carried out in accordance with objects of the trust or institution as the case may be. The combined reading of both the sections makes it clear that before 01.06.2010 registration can be cancelled only on those cases where the registration has been granted under section 12AA(1)(b) of the Act. Before 01.06.2010 this section 12AA(3) nowhere empowers the CIT to cancel or withdraw 24 ITA Nos.128 & 127/Agra/2013 registration under section 12A of the Act. In absence of such power, the registration granted under section 12A cannot be withdrawn or cancelled before 1.6.2010. The power of cancellation of registration under section 12A of the Act came to be incorporated by way of amendment introduced by Finance Act 2010 w.e.f. 01.06.2010. The C.B.D.T. Circular No.1/2011 dated 06.04.2011 explains that this amendment will apply for A.Y. 2011-12 and subsequent years.
Whereas, in the case under consideration, the CIT cancelled registration under section 12A of the Act for A.Y. 2009-10 which is not in accordance with the law. This view is fortified by the judgment of Hon'ble Delhi High Court in the case of DIT(E) vs. Mool Chand Khairati Ram Trust, 339 ITR 622 (Delhi) and order of I.T.A.T. in the case of Director of Income-tax (Exemption), Ahmadabad vs. N.H. Kapadia Education Trust, 136 ITD 111 (Ahd) wherein the I.T.A.T., Ahmedabad has followed the judgment of Hon'ble Delhi High Court.
ii) Even otherwise also, as we notice that registration under section 12A/12AA can be cancelled in the circumstances provided in section 12AA(3) of the Act of which detail has been discussed above in Para no 19 of this order. If we apply the said condition stipulated in section 12AA(3), we find that there is no finding of the CIT that activities of the assessee, Agra Development Authority are non- genuine or not being carried out in accordance with the object of the assessee, Agra Development Authority. Even for the sake of argument if we accept the view of CIT, there may be a case of activities which are not charitable but it cannot be said that those activities of the assessee, Agra Development Authority, are non-genuine or not being carried out in accordance with the object of the assessee. The activities and objects of the assessee, Agra Development Authority are the same which were there at the time of granting registration under section 12A of the Act and at the time when CIT cancelled the registration granted under section 12A w.e.f from 2009-2010. Thus, we find that this condition of cancellation of registration already granted under section12A has not been satisfied. Where the condition stipulated under section 12AA (3) is not satisfied, the CIT cannot cancel or withdraw registration granted under section 12A of the Act. In the case under consideration, the condition stipulated in section 12AA(3), that activities of the assessee, Agra Development Authority are non-genuine or not being carried out in accordance with the object of the assessee, Agra Development Author is not satisfied. The 25 ITA Nos.128 & 127/Agra/2013 CIT by his own motion added one more condition in section 12AA (3) that the object of the assessee, Agra Development Authority is not charitable as per amended provisions of section 2(15) of the Act for which the CIT is not empowered to add such own condition in the statute. Similar view has been taken by the I.T.A.T., Ahmedabad in the case of Ahmadabad Urban Development Authority vs. DIT, ITA No.754/Ahd/ 2010, order dated 21.5.2010.
21. Now we come to the judgments relied upon by the Revenue. The CIT & ld. Departmental Representative relied upon a judgment of Hon'ble Bombay High Court in the case of Sinhagad Technical Education Society vs. CIT - Writ Petition No.2545 of 2011 judgment dated 01.02.2012. The CIT was of the view that as per the said judgment, the CIT can cancel registration under section 12A/12AA of the Act even for earlier years. The CIT is not fully correct in reading the said judgment, firstly the facts and issue before the court was whether powers granted by CIT under section 12AA(3) of the Act was valid as per the constitution. The Court held that power under section 12AA(3) can be exercised by the Commissioner in respect of Trusts registered prior to 01.06.2010. Nowhere has it been held by the Court that said power is applicable to earlier years/assessment years. The Court has also held that amendment does not take away any vested aright nor does it create new obligation in respect of past actions. The Court did not express their opinion on merit of the case. Thus, we find that the CIT wrongly applied the said judgment to the facts of the case under consideration.
21.1. The CIT and ld. Departmental Representative relied upon certain orders of I.T.A.T. where in the issue was different. The issue in those cases were pertaining to grant fresh registration under section 12AA of the Act and not cancellation of registration under section 12A of the Act under section 12AA (3) of the Act. Some of the decisions of I.T.A.T. are contrary to the judgment of Hon'ble Delhi High Court in the case of Director of Income Tax (Exemption) vs. Mool Chand Khairati Ram Trust, 339 ITR 622 (Delhi). Therefore, those decisions are distinguishable on facts and did not help to revenue.
21.2. The ld. Departmental Representative relied upon the Orders of I.T.A.T. in the cases of Jammu Development Authority vs. CIT (ITAT, 26 ITA Nos.128 & 127/Agra/2013 Amritsar Bench), Jalandhar Development Authority vs. CIT. (ITAT, Amritsar Bench), Indore Development Authority vs. CIT. (ITAT, Indore Bench) & Moradabad Development Authority vs. ITO (ITAT, Delhi Bench) after amendment in section 2(15), as per proviso to section 2(15) assessee does not remain charitable w.e.f. 2009-10 does not help to the assessee as we have not expressed any opinion on the issue.
21.3. One of the contention of the ld. Departmental Representative that Section 12AA(3) has been amended w.e.f. 01.06.2010 wherein power has been given to cancel registration under section 12A(1) of the Act. In that case the CIT cancelled registration under section 12A of the Act after 01.06.2010, therefore, the fact is different than case under consideration. This contention of the ld. Departmental Representative is not acceptable in the light of above discussions that the CIT cancelled registration under section 12A w.e.f. 2009-10 which is the period prior to 01.06.2010. The C.B.D.T. has also clarified that the amendment in section 12AA(3) is applicable from A.Y. 2011-12.
22. In the light of above discussion, the order of CIT is not in accordance with law. We, therefore, set aside the order of CIT and restore the registration under section 12A of the Act which has been cancelled w.e.f. 2009-10. Since the issue raised in grounds number 1, 2 & 4 have been decided in favour of the assessee on the basis and reasons discussed above, so under the facts and circumstances, the grounds on merit raised in grounds number 3, 5, 6, 7 & 8 wherein the CIT held that the activities of the assessee, Agra Development Authority, is not charitable, we are not expressing any opinion on these grounds of appeal. Grounds number 9 & 10 are general in nature, require no independent finding."
7.6 Hon'ble Allahabad High Court in the case of CIT vs. Manav Vikas Avam Sewa Sansthan, 336 ITR 250 held as under :
"A judicial/quasi-judicial authority cannot review its own order, unless the power of review is expressly conferred on it by the statute under which it derives its jurisdiction.27 ITA Nos.128 & 127/Agra/2013
Section 12AA(3) of the Income-tax Act, 1961, was incorporated with effect from October 1, 2004, to empower the Commissioner to cancel the registration granted to a trust or institution. The provision is not applicable retrospectively.
Held accordingly, that while passing the order dated March 13, 2009, the Commissioner had no power to review or recall the order dated September 29, 2003 by which the assessee was granted registration under section 12A."
7.7 Hon'ble Supreme Court in the case of American Hotel and Lodging Association Educational Institute vs. Central Board of Direct Taxes and Ors., 301 ITR 86 held as under :
"Once an applicant institution came within the phrase "exists solely for educational purposes and not for profit" no other condition like application of income was required to be complied withy. The prescribed authority was only required to examine the nature, activities and genuineness of the Institution. The mere existence of profit/surplus did not disqualify the institution."
7.8 In the light of above discussion and provisions of law, case laws, mentioned above, and the facts of the case under consideration, we find that the ld. CIT was not justified in cancelling the registration u/s. 12AA(3) of the IT Act. Section 12AA(3) of the Act empowers the ld. CIT to cancel such registration if he was satisfied that the activities of the 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. It is not in dispute that the objects of the assessee trust are to carry out the 28 ITA Nos.128 & 127/Agra/2013 educational activities which are charitable in nature and that the assessee trust solely exists for educational purpose. Thus, the ld. CIT was satisfied that the activities of the assessee trust are genuine and that the same educational activities have been carried out as per the objects of the assessee trust. The ld. CIT admitted the same facts in para 9 of the impugned order reproduced above also. Furthermore, it is also not in dispute that in this case registration was granted u/s. 12A on 01.09.1997 w.e.f. 16.12.1995. Before 01.06.2010, section 12AA(3) nowhere empowers the ld. CIT to cancel or withdraw the registration u/s. 12A of the IT Act. In the absence of such power, registration granted u/s. 12A cannot be withdrawn or cancelled before 01.06.2010. In the present case, the ld. CIT in para 13 of the impugned order has cancelled the registration without giving the date from which date the cancellation of registration would be effective. Therefore, in the absence of any date from when the registration would be cancelled, the order of the ld. CIT cannot be sustained in law. We have already held above that the seized computerized papers are not admissible in evidence against the assessee for the reasons mentioned above. Even for the sake of arguments, we may assume that the AO made addition of Rs.65,20,000/- against the assessee of unaccounted donations in assessment year 2009-10, the registration u/s. 12A cannot be cancelled, as the provisions contained in section 12AA(3) are prospectively applicable w.e.f. 01.06.2010, i.e., from assessment year 2011-12. This view is further fortified by 29 ITA Nos.128 & 127/Agra/2013 our order in the case of Agra Development Authority (supra) as well as the judgment of Hon'ble Delhi High Court in the case of DIT(E) vs. Mool Chand Khairati Ram Trust, 199 Taxman 1 and the order of ITAT Ahmedabad Bench in the case of DIT (E) vs. N.H. Kapadia Education Trust, 136 ITD 111. We may also note here that the ld. CIT issued the show cause notice for cancellation of registration on 18.03.2013 for 25.03.2013 and within three days of the date of notice, cancelled the registration on 28.03.2013. The ld. CIT without waiting for conclusion of the assessment proceedings, only on the report of AO cancelled the registration. In the case of Kalinga Institute of Industrial Technology (supra), Hon'ble Orissa High Court reproduced the order of ITAT Cuttack Bench, in which the Tribunal also observed that in all fairness, the Commissioner of Income-tax should have taken pre-caution to complete the assessment expeditiously and then should have arrive at the conclusion of proposed cancellation of registration. The act of the Commissioner of Income-tax was found to be interruption in the assessment proceedings. In the present case, the Assessing Officer passed the assessment orders for the search period u/s. 153A from assessment years 2005-06 to 2011-12 on dated 31.03.2013 and mainly the substantive additions have been made of net surplus of income over expenditure. Therefore, it is clear that the sole reason for cancellation of registration appears to tax the surplus of income over expenditure, otherwise in the absence of cancellation, the AO would not have been 30 ITA Nos.128 & 127/Agra/2013 in a position to make such a huge and substantive additions against the assessee. The ld. CIT, therefore, just to help the AO, cancelled the registration within three days of giving show cause notice to the assessee without waiting for conclusion of assessment proceedings. Therefore, the decision of Hon'ble Orissa High Court in the case of Kalinga Institute of Industrial Technology (supra) squarely apply in favour of the assessee and against the Revenue. We may note that since conditions of grant of registration and cancellation of registration are same and the assessee satisfies that the objects of assessee trust are educational and carried out activities for achieving their objects, therefore, cancellation of registration would not be justified in the matter. No addition could be made against the assessee of unaccounted donation/capitation fees on the basis of seized computerized paper. It may also be noted that in A.Y. 2011-12, the AO in assessment order made addition of Rs.2,40,000/- of receipt of capitation fee on recovery of Annexure A-32 which is connected with other assessee Babu Mohan Lal Arya Smarak Educational Trust and in that case it was found to be dumb document and not admissible in evidence. Therefore, such is not an adverse circumstance against the assessee for cancellation of registration.
8. The ld. counsel for the assessee further submitted that when only addition is made in the assessment year 2009-10 of unaccounted donations for which no 31 ITA Nos.128 & 127/Agra/2013 registration could be cancelled prior to 01.06.2010 and no other material was found against the assessee in other assessment years, therefore, we are of the view that the ld. CIT has taken a very harsh view of cancellation of registration against the assessee. At the most, matter could have been investigated only in the assessment year 2009-10 with regard to whether the assessee would be entitled for benefit of section 11 or the assessee has violated the provisions of section 13 of the IT Act in such circumstances. Therefore, cancellation of registration would not be justified in the matter. The ld. counsel for the assessee also submitted that in the similar circumstances, the ld. CIT, Central Kanpur issued show cause notice of cancellation of registration u/s. 12A in the case of Rajeev Memorial Academy Welfare Society (PB-155), but the ld. CIT did not cancel the registration in their cases. Copy of the assessment order in their case u/s. 153A dated 31.03.2011 is also filed in the paper book at page 156 where addition of Rs.6,64,000/- is made being the payment of rent disallowed u/s. 13 of the IT Act. The ld. DR was directed to verify this fact whether the registration has been cancelled in similar facts in the case of Rajeev Memorial Academy Welfare Society, Mathura The ld. DR, however, did not intimate specifically if registration in their case has been cancelled u/s. 12AA(3) of the Act. The assessment orders u/s. 153A for the assessment year 2005-06 to 2011-12 have been filed to show that in assessment years 2007-08 to 2011-12, the AO disallowed rent u/s. 13 only. The ld. DR also 32 ITA Nos.128 & 127/Agra/2013 filed copy of the order sheet of ld. CIT to show that the proceedings were taken up on 25.03.2013 and registration is cancelled on the next date on 28.03.2013. It would show that the surplus income over expenditure have not been added in assessments u/s. 153A and as such no registration is cancelled in this case u/s. 12AA(3) of the IT Act on the same facts and no reasons have been explained why different view is taken by the ld. CIT in the case of assessee trust. The ld. CIT should have in principle taken a consistent view on the identical cases. This reason also supports our findings that registration should not have been cancelled in this case. Considering the above observations, we are of the view that the cancellation of registration is wholly unjustified in the case of assessee.
9. The ld. CIT on examination of the matter in issue found that the trustees have used property of trust for personal enrichment, i.e. taking on money for granting admission to the students and the same was also found to be incriminating against the assessee for cancellation of registration. However, no evidence is brought on record as to how trustees have got benefit for personal enrichment. The copies of assessment orders u/s. 153A have been filed on record in respect of all the three main trustees and in their cases, no additions have been made by the AO proving any personal enrichment benefit obtained by the trustees. In the absence of any evidence on record against the trustees and in absence of any addition made 33 ITA Nos.128 & 127/Agra/2013 against them in their individual cases on the basis of the computerized papers, we are of the view that the ld. CIT was not justified in taking adverse view of personal enrichment by trustee against the assessee trust. There is no basis, whatsoever, to make allegation against the assessee for cancellation of registration.
10. Considering the above discussion, the order of the ld. CIT in canceling the registration is not in accordance with law. We, therefore, set aside the order of the ld. CIT and restore the registration u/s. 12A of the IT Act since inception. In the result, the appeal of the assessee in ITA No. 128/Agra/2013 is accordingly allowed.
ITA No. 127/Agra/2013 (Babu Mohan Lal Arya Smarak Educational Trust):
11. The ld. representatives of both the parties submitted that the issue is same as have been considered in the case of Sharda Educational Trust (supra) and submitted that the findings in that case may be followed in the case of this assessee as well. However, for the sake of brevity, we briefly note that this assessee was granted registration u/s. 12A by the ld. CIT-I, Agra vide order dated 31.01.2006 w.e.f. 28.08.1998. The objects of the assessee trust are also educational and admittedly, carried out the educational activities. During the course of search, Annexure A-32 and A-33 were recovered from the main office of BMAS 34 ITA Nos.128 & 127/Agra/2013 Engineering College Agra from the seat of Shri Manish Gupta, who was the main counselor of admission cell. The same allegedly indicated receipt of cash against certain admissions. Copies of the same are attached with the impugned order. The ld. CIT on the same reasoning of receipt of on money at the time of admission, cancelled the registration. On going through the seized papers attached with the impugned order, we find that in one of the papers, name of Gautam Budh Technical University, Lucknow is mentioned and the seized papers contained the word cash only. There are some rough calculations therein. No specific amount is mentioned. No name of student of assessee institution is mentioned. It would not be disclosing any cash received by the assessee trust from the students at the time of admission as observed by the ld. CIT. Only on the back of one paper, Chitra Mangala is noted, but no evidence was found of payment of any amount to the assessee trust. It, therefore, appears to be the dumb documents and would not lead anywhere to prove the case of the Revenue Department. The same seized papers, therefore, are not admissible in evidence against the assessee, as also denied by the assessee. The presumption u/s. 292C of the IT Act has been rebutted. No evidence of actual receipt of on money/donations/capitation fee is found in search. No incriminating evidence or corroborative evidence was found in search against the assessee to support that the seized papers pertained to the assessee to prove receipt of any on money by the assessee trust. No person from investigation wing 35 ITA Nos.128 & 127/Agra/2013 examined any of the student or parents to prove the payment of on money. Even the recovered documents have not been sent to any hand writing expert for getting their opinion to prove their nexus with the assessee trust and to put liability upon the assessee. In the absence of any corroborative evidence against the assessee and considering that the issue is same as is considered in the case of Sharda Educational Trust, therefore, following the same reasons for decision, we are of the view that the cancellation of registration is not justified in this case. We accordingly set aside the impugned order of ld. CIT and restore the registration granted u/s. 12A of the IT Act to the assessee since inception. In the result, the appeal in ITA No. 127/Agra/2013 of assessee is allowed.
12. In the result, both the appeals of both the assessees are allowed.
Order pronounced in the open court.
Sd/- Sd/-
(A.L. GEHLOT) (BHAVNESH SAINI)
Accountant Member Judicial Member
*aks/-
Copy of the order forwarded to :
1. Appellant
2. Respondent
3. CIT(A), concerned By order
4. CIT, concerned
5. DR, ITAT, Agra
6. Guard file Sr. Private Secretary
True copy