COMMISSIONER OF INCOME TAX (EXEMPTIONS), KOLKATA Vs. VIDYA BHARATI SOCIETY FOR EDUCATIONAL & SCIENTIFIC ADVANCEMENT

JUDGEMENT

(1.) This appeal of the revenue filed under Sec. 260A of the Income Tax Act (the 'Act' in brevity) is directed against the composite order dtd. 6/9/2017 passed by the Income Tax Appellate Tribunal, B-Bench, Kolkata (the 'Tribunal') in ITA No.1456/Kol/2016.

(2.) The revenue has raised the following substantial questions of law for consideration:

(3.) The short question which falls for consideration is whether the Commissioner of Income Tax (Exemption) [CIT(E)] was justified in cancelling the registration granted to the assessee trust under Sec. 12A of the Act dtd. 6/9/2017 by its order dtd. 6/5/2016. The CIT(E) concluded that that the activities of the trust are not genuine and they are not being carried out in accordance with the declared objects as contained in the deed of trust. The assessee trust is running three schools and the first of such schools was established in the year 1965 and the three schools are stated to have on their roll more than 3,400 students and the schools are recognised by the West Bengal Higher Secondary Board of Education, Government of West Bengal. The allegation based on which the proceedings were initiated for cancellation was that the name of the assessee trust appeared in the list of bogus donor as culled out from the statement recorded from one Sri Rabindranath Lahiri, managing trustee of Batanagar Education and Research Trust. Based on such allegation, show cause notice dtd. 3/12/2015 was issued to the assessee proposing cancellation of registration by invoking the provisions under Sec. 12AA(3) of the Act. The CIT(E) placed heavy reliance on the statement recorded by Sri Rabindranath Lahiri on 5/1/2016 and that despite opportunity being granted to the assessee trust to cross-examine the said Mr. Lahiri, such opportunity was not availed by the assessee and, therefore, drew adverse inference and cancelled the registration. The assessee preferred appeal before the Tribunal contending that the order of cancellation of registration granted under Sec. 12A was in gross violation of the principles of natural justice without disclosing the materials relied upon and without affording reasonable/adequate opportunity to controvert or deal with the same including by way of cross-examination. It was further contended that the cancellation of registration with retrospective effect from 1/4/2011 was bad in law.