In Brief
A charitable trust registered under the Income Tax Act for providing medical relief and education received donations as cheques and returned much of the money in cash to donors through intermediaries, which the Trust's Managing Trustee admitted were 'bogus' accommodation entries. The Tax Commissioner cancelled the Trust's registration under Section 12AA(3) for misusing its charitable status. The High Court set aside this cancellation, but the Supreme Court reversed the High Court's judgment, holding that the Trust's admission of returning donations in cash demonstrated clear misuse of the registration, and the authorities were justified in cancelling it. The Court held the High Court erred in not addressing the evidence of bogus donations.
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