K. Varma Charitable Trust v. DIT(E) (2022) 287 Taxman 665/ 218 DTR 200 / 329 CTR 269 113 CCH 165 (SC). Editorial : K. Varma Charitable Trust v. DIT(E) (2022) 139 taxmann.com 17 (SC)

S. 12A : Registration-Trust or institution-Bogus earthquake relief donations-Cancellation of registration was up held-Review Petition filed against Supreme Court order dismissing SLP which was dismissed [S. 260A, Art. 136].

Assessee was a Public Charitable Trust engaged in field of education, relief to poor and other general public charitable objects.  On scrutiny, Director of Income-tax (DIT) observed that assessee trust, in collusion with its sister concerns, had hatched a web of bank transactions in order to defraud revenue and to enrich its sister concerns by giving them receipts for receipt of bogus earthquake relief donations which had entitled them to claim exemption from their taxable income.  DIT withdrew registration granted to assessee under section 12A. Tribunal did not confirm order of DIT but observed that such order was passed solely on basis of activities carried on by assessee during previous year and suggested that DIT ought to have looked into affairs of Trust for subsequent year also and without doing so, could not have withdrawn registration. High Court  held that there was no relevance of events which might have taken place in later year and accordingly restored order of DIT holding that registration granted to assessee trust had rightly been cancelled as assessee trust was not carrying on any charitable activity and was involved in misutilisation of bank account Special Leave Petition filed against said impugned order was dismissed.  On review petition the Court held that  there being no error apparent on face of record, review petition was to be dismissed.