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2022 (6) TMI 1416 - AT - Income TaxRevision u/s 263 - anonymous donations receipts - as submitted there was a survey in the premises of the assessee on notice did not contain any query in regard to anonymous donations received by the assessee much less the donation - HELD THAT - CIT (E) in his order u/s.263 of the Act had directed the AO to examine the donors and make proper enquiry and redo the assessment but the AO instead of doing the verification has practically rejected the assessee s contention and has made addition representing 30% of the donations received treating the same as anonymous donations. We are not going into the merits of the consequential order passed u/s.143(3) r.w. 263 r.w.s 144B - However, a perusal of the original assessment order clearly shows that no examination of the issues has been done. This being so, the ld CIT (E) is very much in his powers to direct the AO to examine the same. No error in the order of the ld CIT (E) has been pointed out by assessee. This being so, the order of ld CIT(E) passed u/s.263 stands upheld.
Issues:
1. Validity of the order passed by CIT (E) directing AO to verify anonymous donations received by the assessee. 2. Compliance of the directions given by CIT (E) in the order u/s.263 by the Assessing Officer. Issue 1: Validity of the order passed by CIT (E) directing AO to verify anonymous donations received by the assessee: The appeal was filed by the assessee under section 263 of the Income Tax Act against the order of CIT (E), Hyderabad at Vizag. The assessee contended that the notice during the survey did not inquire about anonymous donations. The CIT (E) directed the Assessing Officer to verify the donations, which were treated as anonymous. The Tribunal observed that the Assessing Officer did not conduct the verification as directed by the CIT (E) but instead made an addition of 30% of the donations as anonymous donations. The Tribunal noted that the original assessment order did not address the issue, and therefore, the CIT (E) was within his powers to direct the examination. The Tribunal upheld the order of CIT (E) under section 263 as no errors were pointed out by the assessee's representative. Issue 2: Compliance of the directions given by CIT (E) in the order u/s.263 by the Assessing Officer: The Tribunal highlighted that the Assessing Officer failed to comply with the directions given by the CIT (E) to examine the donors and conduct a proper enquiry regarding the anonymous donations. The Tribunal emphasized that the original assessment order did not address the issue raised by the CIT (E), indicating a lack of examination by the Assessing Officer. Despite the assessee's submission and the directions of the CIT (E), the Assessing Officer made an addition representing 30% of the donations as anonymous donations without conducting the necessary verification. The Tribunal did not delve into the merits of the subsequent order passed under section 143(3) read with section 263 and section 144B of the Income Tax Act but focused on the failure of the Assessing Officer to follow the directions given by the CIT (E), resulting in the upholding of the CIT (E)'s order under section 263. In conclusion, the Tribunal upheld the order of the CIT (E) directing the Assessing Officer to verify the anonymous donations received by the assessee, emphasizing the importance of compliance with such directions and the need for proper examination of issues raised during assessments to ensure the correctness of tax assessments.
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