Section 12 of the Income Tax Act

The decision most relied on for Section 12 is Ashok Pai v. CIT (292 ITR 11), cited in 812 of the 2,391 judgments on BharatTax that turn on this section.

Leading authorities on Section 12

Ashok Pai v. CIT
292 ITR 11 · 2007 · Supreme Court
812
citing judgments

“Concealment of particulars of income” and “furnishing inaccurate particulars of income” are two distinct offences under Section 271(1)(c) of the Income Tax Act. A penalty cannot be levied under one limb if the show cause notice or basis for penalty specifies the other, as this constitutes a complete variance in the reasons for assuming jurisdiction.

CIT v. Institute of Banking Personnel Selection
264 ITR 110 · 2003 · High Court
398
citing judgments

Depreciation is allowable on assets for which the cost has been fully allowed as an application of income under Section 11 in previous years, when computing the income of a charitable trust. Charitable trusts are also entitled to carry forward their deficit.

ACIT v. Ahmedabad Urban Development Authority
143 Taxmann.com 278 · 2022 · Supreme Court
390
citing judgments

If activities for the advancement of general public utility are carried on as a business, income from such activities is not exempt under Section 11, even if the profits are utilized for the main charitable object. The argument that profits from general public utility activities can be ploughed back to charity to maintain exemption is not a good law.

Addl. CIT v. Surat Art Silk Cloth Manufacturers Association
121 ITR 1 · 1980 · Supreme Court
328
citing judgments

A charitable institution, whose predominant object is general public utility, can engage in non-charitable activities yielding incidental profits, provided these profits are deployed to achieve the dominant charitable object. A subsidiary object, if ancillary to the primary charitable purpose, does not negate the institution's charitable character.

Sole Trustee, Loka Shikshana Trust v. CIT
101 ITR 234 · 1975 · Supreme Court
323
citing judgments

This case defines 'education' under Section 2(15) of the Income Tax Act as systematic instruction, schooling, or training given to the young for preparation for the work of life. It clarifies that 'education' in this context has a narrow meaning, not extending to every acquisition of further knowledge.

(i) Formula One World Championship Ltd. v. CIT
394 ITR 80 · 2017 · Supreme Court
200
citing judgments

This case provides foundational principles that illuminate the contours of the concept of 'Permanent Establishment' (PE) under tax treaties, especially regarding a 'fixed place' PE.

CIT v. Gujarat Oil & Allied Industries
201 ITR 325 · 1993 · High Court
195
citing judgments

The requirement to file an audit report along with the income tax return, as specified in provisions like Section 80J(6A) or 80-IA(7), is directory and not mandatory. Substantial compliance is achieved if the audit report is submitted at any time before the assessment is framed or completed, and benefits should not be denied merely due to a delay in furnishing it.

Income Tax v. Institute of Banking Personnel Selection (IBPS)
131 Taxmann 386 · 2003 · High Court
188
citing judgments

The Income Tax Act, 1961, does not permit the carry forward of excess expenditure of a charitable trust to be set off against future surpluses, as such trusts are governed by a self-contained code under Sections 11 to 13, not the head 'Profits and Gains of Business'. However, depreciation on fixed assets is allowable to a charitable institution registered under section 12A.

CIT v. Andhra Chamber of Commerce
55 ITR 722 · 1965 · Supreme Court
167
citing judgments

An organization qualifies as having a charitable purpose if its primary object is the advancement of general public utility, even if its members receive incidental benefits. The existence of incidental non-charitable objects does not negate its charitable status.

Asea Brown Boveri Limited v. Industrial Finance Corporation of India Ltd.
154 Taxmann 512 · 2006 · Supreme Court
157
citing judgments

Judgments on Section 12

Income Tax Officer, Faridabad vs. Manav Sanskar Shiksha Sanstha, Faridabad

In the result, appeal of the Revenue is partly allowed

ITA 3190/DEL/2025[2020]Status: DisposedITAT Delhi17 Jun 2026

Bench: Shri Yogesh Kumar U.S & Shri Manish Agarwal[Assessment Year : 2020-21] Ito Vs Manav Sanskar Shiksha Aaykar Bhawan, Sanstha, 3 & 4, Ashoka Enclave, Faridabad Part-1, Sector-4, Faridabad, Haryana-121001 Haryana-201004 Pan-Aacam0915H Appellant Respondent Revenue By Shri Om Prakash, Sr. Dr Assessee By Shri Ajay Kumar Agarwal, Ca Date Of Hearing 24.03.2026 Date Of Pronouncement 17.06.2026 Order Per Manish Agarwal, Am : The Present Appeal Is Filed By The Revenue Against The Order Dated 21.03.2025 By Ld. Commissioner Of Income Tax (A), National Faceless Appeal Centre (“Nfac”), Delhi [“Ld. Cit(A)”] In Appeal No. Nfac/2019-20/10434387 Passed U/S 250 Of The Income Tax Act, 1961 [“The Act”] Arising From The Intimation Order Dated 24.12.2021 Passed U/S 143(1) Of The Act Pertaining To Assessment Year 2020-21. 2. Brief Facts Of The Case Are That The Assessee Is A Registered Society, Doing Charitable Activity Of Imparting Education & Registered U/S 12Aa Of The Act In Terms Of Approval Granted By Ld. Cit(A), Faridabad Dt 15.04.2013 & Subsequently, Renewed By Pcit Vide Order Dated 08.07.2024. The Return Of Income For The Year Under Appeal Was Filed In Form Itr 7 On 27.12.2020 Loss Of 13,76,228/- Being Excess Of Expenditure Over Income & Has Not Exemption U/S 12 Of The Act. The Cpc In Terms Of The Order U/S 143(1) Of The Act Denied The Exemption As The Assessee Has Not Filed Form 10B Alongwith The Return Of Income Filed & Create A Demand On Gross Receipts. Thereafter, The Assessee A Rectification Application However, As The Assessee Has Not Filed Form 10B Before The Filing Of Return Of Income & Power Of Condonation Of Delay In From 10B As Per Section 119(2)(B) Of The Act Is With The Concerned Pcit/Cit/Dit Therefore, The Cpc Has Rejected The Application Of The Assessee Filed U/S 154 Of The Act.

Section 11Section 119(2)(b)Section 12Section 12ASection 12A(1)(b)Section 143(1)Section 154Section 250

Orissa Assembly of Small and Medium Enterprises, Cuttack vs. Income Tax Officer, Exemption, Cuttack

In the result, appeal of the assessee is allowed

ITA 448/CTK/2026[2023-2024]Status: DisposedITAT Cuttack05 Jun 2026AY 2023-2024

Bench: S/Shri George Mathan & Rajesh Kumarassessment Year: 2023-24 Orissa Assembly Of Small & Vs. Income Tax Officer (Exemption), Medium Enterprises, Khapuria, Cuttack Cuttack Pan/Gir No. Aaato 1832 A (Appellant) .. ( Respondent) Assessee By : Shri Ambika Prasad Mohanty, Ca Revenue By : Shri Vijaya Singh, Ld Sr. Dr Date Of Hearing : 05/06/2026 Date Of Pronouncement : 05/06/2026 O R D E R Per Bench This Is An Appeal Filed By The Assessee Against The Order Of The Ld Addl/Jcit(A)- 9, Mumbai Dated 18.3.2026 In Appeal No. Addl/Jcit(A)-9, Mumbai/10061/2022-23 For The Assessment Year 2023-24. 2. Shri Ambika Prasad Mohanty, Ld Ar Appeared For The Assessee & Shri Vijaya Singh, Ld Sr Dr Appeared For The Revenue. 3. It Was Submitted By Ld Ar That The Return Filed By The Assessee Came To Be Processed & An Intimation Came To Be Issued U/S.143(1) On 4.12.2024, Wherein, The Assessee Has Been Denied The Benefit Of Registration U/S.12A Of The Act & The Entire Receipts Of The Assessee Has Been Brought To Tax. It Was The Submission That The Assessee Has Filed Rectification Application U/S.154 Of The Act, Which Was Rejected On 2 Assessment Year: 2023-24

For Appellant: Shri Ambika Prasad Mohanty, CAFor Respondent: Shri Vijaya Singh, ld Sr. DR
Section 11Section 12ASection 143(1)Section 154