Income Tax Act, 1961: s.12AA – Cancellation of registration of respondent Trust under s.12AA – Statement of the Managing Trust of Trust showed that donations were received by way of cheques out of which substantial money was ploughed back or returned to the donors in cash – The facts thus clearly show that those were bogus donations and that the registration conferred upon it under ss.12AA and 80G of the Act was completely being misused by the Trust – An entity which is misusing the status conferred upon it by s.12AA of the Act is not entitled to retain and enjoy said status – The authorities were therefore, right and justified in cancelling the registration under ss.12AA and 80G of the Act.
Allowing the appeal, the Court
HELD: The answers given to the questionnaire by the Managing Trustee of the Trust show the extent of misuse of the status enjoyed by the Trust by virtue of registration under Section 12AA of the Act. These answers also show that donations were received by way of cheques out of which substantial money was ploughed back or returned to the donors in cash. The facts thus clearly show that those were bogus donations and that the registration conferred upon it under Sections 12AA and 80G of the Act was completely being misused by the Trust. An entity which is misusing the status conferred upon it by Section 12AA of the Act is not entitled to retain and enjoy said status. [Para 11][38-D-F]
As published in the Supreme Court Reports, Supreme Court of India. Text from the Indian Supreme Court Judgments open data set (Dattam Labs), CC BY 4.0.
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