One of our client had made donation to charitable institute wherein donation was exempted u/s. 35(1)(ii). During the course of hearing all the explanation was given with necessary evidence and income tax officer has accepted and passed speaking order u/s. 143(3). This case was selected by cast. Later on investigation wing had found that this charitable institution is bogus and run on commission and also cbdt has withdrawn exemption certification of that institution after assessment but retrospective effect. On these basis commissioner of income tax has issued notice u/s. 263. My query is:- is there any remedy or guidelines or judgement for the above case? If yes please i humbly request you to send the details as soon as possible.

ONE OF OUR CLIENT HAD MADE DONATION TO CHARITABLE INSTITUTE WHEREIN DONATION WAS EXEMPTED U/S. 35(1)(ii). DURING THE COURSE OF HEARING ALL THE EXPLANATION WAS GIVEN WITH NECESSARY EVIDENCE AND INCOME TAX OFFICER HAS ACCEPTED AND PASSED SPEAKING ORDER U/S. 143(3). THIS CASE WAS SELECTED BY CAST.

LATER ON INVESTIGATION WING HAD FOUND THAT THIS CHARITABLE INSTITUTION IS BOGUS AND RUN ON COMMISSION AND ALSO CBDT HAS WITHDRAWN EXEMPTION CERTIFICATION OF THAT INSTITUTION AFTER ASSESSMENT BUT RETROSPECTIVE EFFECT. ON THESE BASIS COMMISSIONER OF INCOME TAX HAS ISSUED NOTICE U/S. 263.

MY QUERY IS:-

IS THERE ANY REMEDY OR GUIDELINES OR JUDGEMENT FOR THE ABOVE CASE? IF YES PLEASE I HUMBLY REQUEST YOU TO SEND THE DETAILS AS SOON AS POSSIBLE.

Reply

Section 263 of the Income-tax Act, 1961 (the “Act”) confers the power upon the Commissioner to call for and examine the records of a proceeding under the Act and revise any order if he considers the same to be erroneous and prejudicial to the interests of the revenue, after giving opportunity of being heard to the assessee. If the commissioner passed an order under section 263 of the act without giving an opportunity to being heard, the order will be invalid.

In your client’s case order has been passed because of withdrawn of exemption certification of that charitable institution through retrospective effect.

Your client can claim that the donation was given in bonafide manner to the institution (the assessee was not aware of the fact that the institution is not valid to avail such exemption) via filing appeal to ITAT against order passed by Commissioner.

One of our client had made donation to charitable institute wherein donation was exempted u/s. 35(1)(ii). During the course of hearing all the explanation was given with necessary evidence and income tax officer has accepted and passed speaking order u/s. 143(3). This case was selected by cast. Later on investigation wing had found that this charitable institution is bogus and run on commission and also cbdt has withdrawn exemption certification of that institution after assessment but retrospective effect. On these basis commissioner of income tax has issued notice u/s. 263. My query is:- is there any remedy or guidelines or judgement for the above case? If yes please i humbly request you to send the details as soon as possible.

MY QUERY IS:-

IS THERE ANY REMEDY OR GUIDELINES OR JUDGEMENT FOR THE ABOVE CASE? IF YES PLEASE I HUMBLY REQUEST YOU TO SEND THE DETAILS AS SOON AS POSSIBLE.

Reply

In your client’s case order has been passed because of withdrawn of exemption certification of that charitable institution through retrospective effect.