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October 2025

Charitable institution — Exemption u/s. 11 — Charitable purpose — Applicability of proviso to s. 2(15) — Donations received from donors after deducting an amount shown as deduction of tax at source u/s. 194C and 194J — AO treating receipts as consultancy fees and contractual income based on deduction of tax at source rejected exemption u/s. 11 — Assessee’s revision petition u/s. 264 was rejected — Held, proviso to s. 2(15) cannot be invoked alleging that services rendered in relation to trade, commerce or business — Provison under which donor deducted tax alone could not determine nature of receipt — No element of trade, commerce or business activity established — Assessee is entitled to exemption — Assessment order and order rejecting revision petition set aside.

By Keshav Bhujle | Ritu Punjabi, Advocates
Reading Time 4 mins

37. (2025) 476 ITR 489 (Delhi)

Aroh Foundation vs. CIT

A. Y. 2017-18 Date of order 05/02/2024

Ss. 2(15) proviso, 11, 12, 13(8), 194C, 194J and 264 of ITA 1961

Charitable institution — Exemption u/s. 11 — Charitable purpose — Applicability of proviso to s. 2(15) — Donations received from donors after deducting an amount shown as deduction of tax at source u/s. 194C and 194J — AO treating receipts as consultancy fees and contractual income based on deduction of tax at source rejected exemption u/s. 11 — Assessee’s revision petition u/s. 264 was rejected — Held, proviso to s. 2(15) cannot be invoked alleging that services rendered in relation to trade, commerce or business — Provison under which donor deducted tax alone could not determine nature of receipt — No element of trade, commerce or business activity established — Assessee is entitled to exemption — Assessment order and order rejecting revision petition set aside.

The assessee is a non-Governmental organisation registered as a charitable institution u/s. 12A, 12AA and 80G of the Income-tax Act, 1961. The assessee claims to have been working for the upliftment of the poor, underprivileged children and

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