During survey conducted upon an organisation its director recorded a statement that said organisation was engaged in money laundering and providing accommodation entries to different individuals and organizations by way of accepting donations and returning same to donors through web of financial transactions after retaining commission. Based on the statement Commissioner (E) held that donation received by assessee from said organisation was bogus, thus, trust was indulged in money laundering accordingly, he cancelled registration granted to assessee under section 12AA(3) of the Act. On appeal the Tribunal held that the donation was received by cheque and duly accounted for in profit and loss account as corpus donation which was applied for objects of trust. Commissioner (E) had not brought on record anything to show that activities of assessee were not genuine or activities were not being carried out in accordance with objects of society, further, there was not an iota of evidence brought on record by Commissioner (E) to connect assessee with money laundering activities of said organisation, further, director on whose statement Commissioner (E) relied was not presented for cross-examination. Accordingly the Tribunal held that cancellation of Registration is bad in law. On appeal by Revenue the Court held that   cancellation of registration by Commissioner (E) solely for reason that it received donation from an organisation which was engaged in money laundering activity was unjustified. (AY.  2011-12)