In Brief
A family trust registered as a charitable entity under the Income Tax Act received an alleged bogus donation of Rs. 37 lacs. The tax authority cancelled the trust's charitable registration, claiming the donation was money laundering. The Appellate Tribunal remanded for a fair hearing where the trust could cross-examine the donor. The High Court quashed the cancellation, holding that one bogus donation cannot prove the trust's activities are not genuine. The Supreme Court reversed this, holding that serious allegations of money laundering and ingenuine activities need proper investigation and cannot be dismissed merely because they involve a single transaction. The case was remitted for fresh consideration by the tax authority.
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