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

Credit Guarantee Fund Trust for Micro and Small Enterprises, Mumbai vs. Deputy Commissioner of Income Tax Exemption -1(1), Mumbai

In the result, the appeal of the assessee is allowed

ITA 4699/MUM/2025[2018-19]Status: DisposedITAT Mumbai15 Sept 2025AY 2018-19

Bench: Shri Vikram Singh Yadav & Shri Rahul Chaudharyassessment Year : 2018-19 Credit Guarantee Fund Trust Deputy Commissioner Of For Micro & Small Enterprises, Income Tax, Exemption-1(1), 1St Floor, Vs. Mtnl Tel. Exch. Building, Sidbi Swavalamban Bhavan, Cumballa Hills, Pedder Road, Avenue 3, Lane 2, G-Block, Mumbai-400026. Bandra Kurla Complex, Bandra (East), Mumbai-400051. Pan : Aaatc2613D (Appellant) (Respondent) For Assessee : Shri Shailesh Shah & Shri Jay Dharod For Revenue : Shri R.A. Dhyani, Cit-Dr Date Of Hearing : 04-09-2025 Date Of Pronouncement : 15-09-2025 O R D E R Per Vikram Singh Yadav, A.M : This Is An Appeal Filed By The Assessee Against The Order Of The Learned Commissioner Of Income Tax (Appeals)-National Faceless Appeal Centre (Nfac), Delhi [„Ld.Cit(A)‟], Pertaining To Assessment Year (Ay) 2018-19, Wherein The Assessee Has Taken The Following Grounds Of Appeal: “(1) On The Facts & Circumstances Of The Case & In Law, The Learned Commissioner Of Income Tax (Appeals) [Ld. Cit(A)], Nfac Has Erred In Confirming The Order Of Levying Penalty U/S 270A Of The Act Of Rs. 293,63,60,258/- On 2 Disallowances Made In The Assessment Order Passed U/S 143(3) R.W.S 144B Of The Act Without Appreciating The Fact That The Hon'Ble Itat, Mumbai Has Fully Deleted The Said Disallowances & Reasons Assigned By Him For Doing So Are Wrong & Contrary To The Facts & Circumstances Of The Case, Provisions Of The Act & Income Tax Rules, 1962 ("The Rules") Made Thereunder. The Appellant Prays That The Penalty U/S 270A Of The Act Of Rs. 293,63,60,258/- Be Deleted. The Appellant Craves Leave To Add, Amend, Alter, Modify And/Or Delete All Or Any Of The Above Grounds Of Appeal, On Or Before The Date Of Hearing.”

For Appellant: Shri Shailesh Shah &For Respondent: Shri R.A. Dhyani, CIT-DR
Section 11Section 12ASection 143Section 143(3)Section 144Section 2(15)Section 270A

Shri Ekta Education Trust, Keshod vs. The ITO Exemption, Ward (2), Rajkot.

In the result, appeal of the assessee is allowed for statistical purposes

ITA 177/RJT/2025[2022-23]Status: DisposedITAT Rajkot29 Aug 2025AY 2022-23

Bench: Dr. Arjun Lal Saini & Shri Dinesh Mohan Sinhaआयकर अपील सं./Ita No. 177/Rjt/2025 ("नधा"रण वष"/Assessment Year: (2022-23) Shri Ekta Education Trust बनाम Income Tax Officer (Exemption), Professional Academy Primary Ward-2, Rajkot, New Aayakar /Vs. School, Gokuldham Mangrole Road, Bhawan, Race Course Ring Keshod-362 220 Road, Rajkot-360 001 "थायी लेखा सं./जीआइआरसं./Pan/Gir No.: Aafts 1570 G (अपीलाथ"/Appellant) (""यथ"/Respondent) "नधा"रती क" ओर से/Appellant By : Shri D.M.Rindani, A.R. & Ms. Devina Patel, Ar राज"व क" ओर से/Respondent By : Shri Abhimanyu Singh Yadav, Sr. D.R. सुनवाई क" तार"ख/ Date Of Hearing : 13/08/2025 घोषणा क" तार"ख/Date Of Pronouncement : 29/08/2025 आदेश / O R D E R Per, Dr. Arjun Lal Saini: Captioned Appeal Filed By The Assessee, Pertaining To Assessment Year (Ay) 2022-23, Is Directed Against The Order Under Section 250 Of The Income Tax Act, 1961 (Hereinafter Referred To As “The Act”) Passed By The Learned Commissioner Of Income Tax(Appeal)/Addl/Jcit(A)-1, (In Short “Ld.Cit(A)”, Dated 12.02.2025, Which In Turn Arises Out Of An Order Passed By The Centralized Processing Centre/Assessing Officer U/S 143(1) Of The Act. 2. The Grounds Of Appeal Raised By The Assessee Are As Follows: “1. The Learned Addl/Jcit(A)-1, Visakhapatanam, Erred In Confirming The Action Of The Cpc, Bangalore By Failing To Appreciate That The Actin Of Cpc, Bangalore In Making Adjustments To The Returned Income Of The Appellant By Way Of Intimation U/S 143(1) Of The Act & In Denying The Benefit Of Sec.11 Of The Appellant Was Not A Case Of Permissible Prima Facie Adjustment.

For Appellant: Shri D.M.Rindani, A.R. &For Respondent: Shri Abhimanyu Singh Yadav, Sr. D.R
Section 11Section 139(1)Section 143(1)Section 250