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

Shree Kalka Matajina Vahivat Badal Sarvjanik Trust, Mehsana vs. The CIT(Exemption), Ahmedabad

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

ITA 2213/AHD/2024[NA]Status: DisposedITAT Ahmedabad27 Mar 2025

Bench: Ms. Suchitra Kamble & Shri Makarand V. Mahadeokarआयकर अपील सं /Ita No.2213/Ahd/2024 िनधा"रण वष" /Assessment Year : Na Shree Kalka Matajina Vahivat The Cit(Exemption) बनाम/ Badal Sarvjanik Trust Ahmedabad – 380 015 V/S. Maherwada Unjha Kahoda So, Maherwada, Mehsana – 384 130 (Gujarat) "थायी लेखा सं./Pan: Abits 2047 N अपीलाथ%/ (Appellant) &' यथ%/ (Respondent) Assessee By : Shri Prakash Patel, Ar Revenue By : Shri A.P. Singh, Cit-Dr सुनवाई की तारीख/Date Of Hearing : 26 /03/2025 घोषणा की तारीख /Date Of Pronouncement: 27 /03/2025 आदेश/O R D E R Per Makarand V. Mahadeokar, Am: This Appeal By The Assessee Is Directed Against The Order Passed By The Ld. Commissioner Of Income Tax (Exemption), Ahmedabad [Hereinafter Referred To As “Cit(E)”], Dated 23.10.2024, Rejecting The Application For Registration Under Section 12Ab Of The Income Tax Act, 1961. Facts Of The Case: 2. The Assessee Trust Filed An Application In Form No. 10Ab On 01.05.2024 Seeking Registration Under Section 12Ab Of The Income Tax Act, 1961. The Shree Kalka Matajina Vahivat Badal Sarvjanik Trust Vs. Cit(E) 2 Application Was Filed Under Section 12A(1)(Ac)(Vi) – Item (B), Which Is Applicable In Cases Where The Activities Of The Trust Or Institution Have Not Commenced As On The Date Of The Application.

For Appellant: Shri Prakash Patel, ARFor Respondent: Shri A.P. Singh, CIT-DR
Section 10Section 11Section 12ASection 12A(1)(ac)