In Brief
The Supreme Court examined whether a single bogus donation could justify cancelling the registration of Jagannath Gupta Family Trust, a registered charitable organization. A survey revealed a Rs. 37-lakh allegedly fictitious donation used for money laundering. The Commissioner cancelled the registration; the appellate tribunal remanded the matter for procedural fairness (cross-examination opportunity); the High Court quashed the cancellation, holding one bogus donation insufficient. The Supreme Court held the High Court's reasoning erroneous and contrary to Section 12AA(3) of the Income Tax Act. The appeal was allowed and the matter remanded for fresh consideration by the primary authority with proper procedural safeguards, while leaving merits open.
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