OM KOTHARI FOUNDATION,JAIPUR RAJASTHAN vs. ACIT CENTRAL CIRCLE-1, JAIPUR, JAIPUR RAJASTHAN

An application for adjournment has been moved on behalf of the assessee; however, I find no sufficient ground for adjournment of the appeal. Therefore, the application of the assessee for adjournment is hereby dismissed. I proceed to decide the appeal of the assessee on merits after going through the record and hearing the Ld. DR.

A perusal of the above grounds of appeal would reveal that assessee has taken two effective grounds; firstly, disallowance of income tax expenses of Rs.16,53,830/- and secondly, addition of income of Rs.1,63,920/- on account of suppressed interest income. 5. So far as the issue of addition on account of income tax expenses of Rs. 16,53,830/- is concerned, the assessee submitted before the lower authorities that the assessee is a charitable organization and that as per the various decisions of the Higher Courts, payment of taxes should be treated as application of income towards charitable objects of the

The ld. CIT(A), however, observed that the assessee has claimed the tax deducted at source (TDS) as its expenditure and that such TDS deducted at source was subject to refund on filing of the return. He, therefore, disallowed the said expenditure claimed on account of TDS deducted.

I have gone through the record and heard the Ld. DR. No doubt, the TDS deducted can be claimed at the time of filing the return. The assessee trust is a charitable organization and its income is exempt u/s 11 of the Act and, under these circumstances, there is no question of payment of any tax so far as the income of the assessee as a charitable organization is concerned. The TDS, if any, deducted by any party is subjected to refund. It can not be said to be application of income. Under such circumstances, the deduction of TDS cannot be claimed as an expense/application of income. I do not find any infirmity in the order of the Ld. CIT(A) in this respect.

However, the Ld. CIT(A) has noted that the bank has duly deducted the TDS on such amount. The action of the lower authorities is upheld in taking the interest income of Rs.33,56,744/- as against the interest income shown by the assessee of Rs.31,92,824/-. However, the said difference of the interest received is subject to the claim of deduction u/s 11 of the Act. If the assessee demonstrates to the AO that the difference of the income is also covered under the relevant provisions of Section 11 of the Act regarding application of income/accumulation etc., then no addition will be warranted.

With the above observation, the appeal of the assessee is treated as allowed for statistical purposes. Order is pronounced under provision of Rule 34 of ITAT Rules, 1963 on 21.04.2026.