“Section 12(1)(a)(ii)”
The decision most relied on for Section 12(1)(a)(ii) is Income Tax-III, Pune v. Rajasthan & Gujarati Charitable Foundation Poona (89 Taxmann.com 127), cited in 130 judgments on BharatTax.
Leading authorities on Section 12(1)(a)(ii)
The claim of depreciation under Section 32 of the Income Tax Act for assets used by charitable trusts is permissible, affirming the Bombay High Court's view that such a claim does not amount to a 'double benefit'.
The burden of proof lies on the Assessing Officer (AO) to establish that a trust or charitable institution is hit by the provisions of Section 13. General allegations or mere transactions with interested persons are insufficient unless concrete benefit is proven.
An order passed by the CIT under Section 12A of the Income Tax Act is quasi-judicial. Until October 1, 2004, there was no express provision in the Act for the CIT to cancel a registration certificate once granted.
The Commissioner of Income Tax (Appeals) can make enhancements to an assessment during appellate proceedings, provided such enhancements do not amount to introducing an entirely new head of income.
Depreciation is allowable on capital assets for charitable trusts even if expenditure was allowed as deduction, as long as it doesn't amount to double deduction. The principles of commercial accountancy apply when computing business income.
Exemption under Section 11 of the Income Tax Act is not denied to a trust where rent paid to a trustee for property is not excessive, even if the trustee is related to the settlors.
