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2022 (4) TMI 289 - ITAT MUMBAIRevision u/s 263 - allowing the donation of given by the assessee to another charitable trust after denying the exemption under section 11 of the Income-tax Act and held that the order passed by the AO is erroneous insofar as prejudicial to the interest of the Revenue - HELD THAT:- It is clear from the finding of the AO that he held the assessee trust is not eligible for any exemption under section 11 and consequently taxed the entire income of the assessee trust by denying the benefit of exemption under section 11 in totality. AO added the entire surplus to the income of the assessee. Therefore, the issue of claim of donation is directly consequential to the decision taken by the Assessing Officer on the eligibility of exemption under section 11 of the Act. Thus, the claim of donation allowed by the AO while passing the assessment order is contradictory to the decision taken by the Assessing Officer. To that extent we do not find any error or illegality in the impugned order of the Commissioner of Income-tax (Exemption) as well as invoking the provisions of section 263 - allowability of the claim on account of donation to another charitable trust is also subjected to the outcome of issue of denial of the exemption under section 11 in totality which is pending before the CIT(A). Therefore, even if the Assessing officer has to consider this issue of allowability of the claim of donation given to another trust, the same has to be finally decided as per the outcome of the appeal filed by the assessee. Sofar as objection raised by the assessee that the Commissioner of Income-tax (Exemption) cannot invoke the provisions of section 263 when the issue is pending before the CIT(A), we find that when the Assessing Officer has allowed the claim of donation without even without even examining such claim despite denial of benefit of exemption under section 11 in totality then the said issue cannot be said to have been pending in the appeal before the CIT(A). Even otherwise, as per clause (c) of Explanation 1 of section 263(1), the Commissioner has the power to such matter which has not been considered and decided in the appeal. Accordingly, we do not find any merit or substance in this contention and the issue raised by the assessee. We modify the impugned order of the Commissioner of Income-tax (Exemption) to the extent of para 4 and remit the issue of allowability of the claim of donation to the Assessing Officer instead of doing the assessment de novo. Appeal of assessee partly allowed.
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