AO applied the provision of S.40(a)(ia) and disallowed the exemptions. CIT (A) deleted the addition, which is affirmed by the Tribunal. On appeal by the revenue the Court held that, once exemption u/s 11 was denied, assessee is required to deduct TDS. Accordingly the order of the AO disallowances of the expenses is affirmed.
CIT v. Army Wives Welfare Association, Lucknow (2020) 185 DTR 395 / 312 CTR 375/ 271 Taxman 139/ 116 taxmann.com 215 (All.)(HC)
S. 40(a)(ia) : Amounts not deductible-Deduction at source– Interest, commission-When exemption u/s.11 is denied the assessee is liable to deduct tax at source – Addition made by the AO is held to be justified. [S. 10(23AA), 11, 12A, 13]