Mere Deduction Of TDS By Donor Would Not Disentitle NGO From I-T exemption

The court observed that the benefits for the relevant AY in question have been denied merely on the ground that the donor has deducted tax at source under Sections 1940 and 1947 of the Act while allocating the requisite grants to the assessee. The assessee submitted before the court that neither in the assessment order nor in the revisional order, by which the revision has been dismissed, was any reason assigned to lawfully deny benefits under Section 11 and Section 12 of the Act.

- 

The Delhi High Court in the case Aroh Foundation Versus Commissioner Of Income Tax Exemptionand Anr. observed and has held that a mere deduction of TDS by a donor on grants would not disentitle the assessee-NGO from exemption under Section 11 of the Income Tax Act. the bench comprising of Justice Yashwant Varma and Justice Purushaindra Kumar Kaurav in the case observed and as set aside the assessment order. Thus, the court allowed the petition.

The bench in the case held that the receipt for an amount of Rs. 5.90 crore shall not be treated as income and allowed the claim of the assessee under Section 11 and Section 12 of the Income Tax Act. The petitioner or assessee is a non-governmental organization and registered as a charitable institution under Section 12A, Section 12AA, and Section 80G. thus, the assessee claims to have been working for the upliftment of the poor, underprivileged children and women, health, preservation of the environment, and other social causes.