COMMISSIONER OF INCOME TAX vs. SHRI BABA MOHAN RAM KALI KHOLI WALE

[2026:RJ-JP:13090-DB] HIGH COURT OF JUDICATURE FOR RAJASTHAN BENCH AT JAIPUR D.B. Income Tax Appeal No. 13/2025 Commissioner Of Income Tax, (TDS) Jaipur ----Appellant Versus Shri Baba Mohan Ram Kali Kholi Wale, Milakapur Gurjar Tapukara Tijara, Alwar (PAN No. AAJTS1719H). ----Respondent For Appellant(s) : Mr. Shantanu Sharma For Respondent(s) : HON'BLE THE ACTING CHIEF JUSTICE MR. SANJEEV PRAKASH SHARMA HON'BLE MRS. JUSTICE SHUBHA MEHTA Order 28/03/2026 1. The challenge is to the order passed by the Income Tax Appellate Tribunal, Jaipur Bench (hereinafter referred to as “ITAT”) dated 28.06.2024, whereby the order passed by the learned Commissioner Income Tax (TDS) (hereinafter referred to as “CIT TDS”) under Section 263 of the Income Tax Act, 1961 (hereinafter referred to as the “Act of 1961”) dated 22.03.2024, was set aside in the appeal preferred by the assessee. 2. Learned counsel for the Revenue submits that the order passed by the CIT (TDS) under Section 263 of the Act of 1961 ought not to have been interfered with, more so as there was no actual inquiry conducted by the Assessing Officer and this order was erroneous and prejudicial to the interest of the Revenue. Learned counsel submits that the respondent-assessee was not registered under Section 12A of the Act of 1961, although it was a public trust registered under the Rajasthan Public Trust Act, 1959 and therefore could not claim any exemption from the deduction

[2026:RJ-JP:13090-DB] (2 of 3) [ITA-13/2025] of TDS under the provisions of the Act which allow certain exemptions to charitable trusts under Section 12A. The CIT (TDS), by order dated 22.03.2024, reached to the conclusion that the AO had not properly conducted the inquiry and remanded the matter to the AO for conducting proper inquiry into all the aspects, which could not have been halted by the ITAT. 3. We have carefully considered the submissions advanced at bar and perused the orders passed. It is a case relating to AY 2015-16. The AO had passed an order wherein he found defects in the Return and directed and explained that the assesee was in default for non-deduction of TDS/TCS and interest with regard to following payments:- Name of expenses Amount paid TDS TDS deducted Non deduction Mela mandir Security Expenses (u/s194C) (Apka

Electric

& Decoration centre TSS security expenses 46,000/- 8,28,771/- 460/- 8287/- Nil 8,747/- Mela Tent Decoration expenses (194C) (Apka

Electric

& Decoration centre) 4,17,885/- 4178/- Nil 4,178/- Mela

Mandir

Roshni expenses (194C) Apka

Electric

& Decoration centre) 4,92,940/- 4,929/- Nil 4,929/- Mela Expenses (Apka

Electric

& Decoration centre) 25,000/- 250/- Nil 250/- Mela Bhandara Expenses (194C) Dharamveer S/o Hukum Singh Babita & Manoj Swami 1,32,000/- 62,300/- 1320 623/- Nil 1,943/- 4. For the purpose of verification, the assessee was directed to provide details of payments made to the trusts. The assessee thereafter filed a paragraph-wise reply to the notice, after which the AO passed an order holding that the assessee was in default and raised a demand of only Rs.5,560/- i.e. Rs. 2809/-, under

[2026:RJ-JP:13090-DB] (3 of 3) [ITA-13/2025] Section 201(1) and under Section 201(1A) of Rs.2,753/- towards interest. 5. Learned CIT (TDS) also ultimately held that there were specific defects. However, the ITAT found that merely because of a change of opinion, the order passed by the AO cannot be disturbed under Section 263 of the Act of 1961. It is only when the assessment order has been passed without making inquiry and verification from reasonable and prudent officer that the order can be set aside under Section 263 of the Act of 1961, the scope under Section 263 of the Act of 1961 itself is totally limited. 6. We find that there is a categorical finding of the ITAT that the AO had conducted a detailed inquiry and reached to a certain conclusion passed. On perusal of the reply, it cannot be said that there have been no application filed and that the order passed by the AO was prejudical to the interest of Revenue in terms of provisions of Section 263 Explanation Clause 2(a) of the Act of 1961. In CIT v. Ralsons Industries Ltd. 288 ITR 322 (SC), Hon’ble Apex Court in Para 8 has held as under…. “The power of revision under Section 263 is exercised by the higher authority. It is a special provision. The revisional jurisdiction is vested in the Commissioner. An order there under can be passed if it is found that the order of assessment is prejudicial to the Revenue. In such a proceeding, he may not only pass an appropriate order in exercise of the said jurisdiction but in order to enable him to do it. He may make such inquiry as he deems necessary in this behalf.” 7. We do not find any reason to allow this appeal. 8. Accordingly, this appeal stands dismissed. 9. Pending application, if any, also stands dismissed. (SHUBHA MEHTA),J (SANJEEV PRAKASH SHARMA),ACTING CJ LAKSHYA SHARMA /14