Section 12A(1)(ac)(iii) of the Income Tax Act

Income-tax Act, 2025: ss.332–355

Section 12A(1)(ac)(iii) falls under section 12A of the Income-tax Act, 1961, which corresponds to sections 332 to 355 of the Income-tax Act, 2025, the provisions on registered non-profit organisations.

Read the 2025 provisions

Correspondence checked against the ICAI tabular mapping of the two Acts and the BharatTax.co section commentary.

The decision most relied on for Section 12A(1)(ac)(iii) is Sree Meenakshi Mills Ltd. v. Commissioner of Income Tax (31 ITR 28), cited in 137 of the 1,616 judgments on BharatTax that turn on this section.

Leading authorities on Section 12A(1)(ac)(iii)

Sree Meenakshi Mills Ltd. v. Commissioner of Income Tax
31 ITR 28 · 1957 · Supreme Court
137
citing judgments

Expenditure incurred for commercial expediency, even without a direct or immediate benefit but indirectly facilitating business, is deductible as laid out wholly and exclusively for trade. The scope of reference jurisdiction under Section 66 is limited to questions of law, allowing challenges to Tribunal findings of fact only if they are perverse, unreasonable, or lack evidence.

Ananda Social and Educational Trust v. CIT
426 ITR 340 · 2020 · Supreme Court
116
citing judgments

For registration under Section 12AA, the Commissioner (Exemptions) must examine the objects of the trust and the genuineness of its proposed activities, even if the trust has not yet commenced actual charitable activities or incurred expenditure.

CIT v. Dawoodi Bohra Jamat
364 ITR 31 · 2014 · Supreme Court
83
citing judgments

A trust's objects, even if based on religious tenets, can qualify as charitable for tax exemptions if its benefits are not exclusively restricted to a particular religious community or caste.

CIT v. Parma Nand
268 ITR 172 · 2004 · High Court
81
citing judgments

Whether there was sufficient cause for delay in making applications for registration under section 12A and 80G is always a question of fact, and contumacious conduct by the assessee must be established for levying penalty under section 271C for non-deduction of TDS.

Trustees of Shri Kot Hindu Stree Mandal v. CIT
209 ITR 396 · 1994 · High Court
80
citing judgments

Membership fees and subscription amounts received by a trust or society from its members are not considered 'voluntary contributions' under Section 12 of the Income-tax Act, as they are not gratuitous payments or gifts but are made with consideration.

Udhavdas Kewalram v. CIT
66 ITR 462 · 1967 · Supreme Court
59
citing judgments

The Income-tax Appellate Tribunal performs a judicial function under the Indian Income-tax Act, invested with authority to finally determine all questions of fact. When deciding an appeal, the Tribunal must consider all material facts with due care, record findings on all contentions, and maintain a judicial balance between the revenue and taxpayer claims. The power to condone delay by enacting section 5 of the Limitation Act of 1963 enables courts, including the Tribunal, to do substantial justice, with "sufficient cause" being an elastic expression.

CIT v. Dawoodi Bohara Jamat
43 Taxmann.com 243 · 2014 · Supreme Court
57
citing judgments

Section 13(1)(b) of the Income-tax Act applies to composite trusts that engage in both religious and charitable activities, meaning such trusts may be excluded from exemption under Section 11.

Ahmedabad Rana Caste Association v. CIT
82 ITR 704 · 1971 · Supreme Court
51
citing judgments

An intention to benefit a section of the public, as distinguished from a special individual, is sufficient for a trust to be considered for charitable registration and exemptions. This applies even if the beneficiaries belong to a specific caste, community, or professional group, allowing the trust to qualify as serving a general public utility under Section 2(15).

Shree Swaminarayan Gadi Trust v. CIT
162 Taxmann.com 772 · 2024 · Reported
44
citing judgments

Where a trust application has a curable defect, the assessee should be allowed an opportunity to explain and rectify the defect before the CIT (Exemption). The appellate tribunal may allow the appeal and direct the CIT to reconsider the application.

Ram Nath Sahu & Others v. Gobardhan Sao and Others
3 SCC 195 · 2002 · Reported
43
citing judgments

The expression "sufficient cause" for condonation of delay under Section 5 of the Limitation Act or similar provisions must receive a liberal construction to advance substantial justice. Courts should avoid a pedantic or hyper-technical approach, generally accepting explanations unless negligence, inaction, or lack of bona fides is evident.

Judgments on Section 12A(1)(ac)(iii)

Treated Pumping Water Irrigation Farmers Association, Tiruppur vs. CIT Exemptions, Chennai

In the result, the appeal filed by the assessee is allowed for statistical purposes

ITA 978/CHNY/2024[-]Status: DisposedITAT Chennai26 Jun 2024

Bench: Hon’Ble Shri Manu Kumar Giri, Jm & Shri S.R. Raghunathaआयकर अपील सं./Ita No.978/Chny/2024 Treated Pumping Water Irrigation The Commissioner Of Income Tax Farmers Association, Vs. Exemption, 1, Mangammal Kovil Premises, Chennai. Palladam, Siddanaickenpalayam, Tiruppur 641 659. Pan: Aaiat 9132B (अपीलाथ"/Appellant) (""यथ"/Respondent) अपीलाथ" क" ओर से/Appellant By : Shri.N. Arjun Raj, Advocate ""यथ" क" ओर से/Respondent By : Shri. V. Nandakumar, Irs, Cit. सुनवाई क" तारीख/Date Of Hearing : 24.06.2024 घोषणा क" तारीख/Date Of Pronouncement : 26.06.2024 आदेश /O R D E R Per Manu Kumar Giri () This Appeal By The Assessee Is Arising Out Of The Order Of The Commissioner Of Income Tax (Exemption), Chennai In Form 10Ad Of The Income Tax Act, 1961 (Hereinafter The ‘Act’) Vide Application No.Cit(Exemption), Chennai/2023-24/12Aa/11335 Dated 27.06.2023. 2. At The Outset, It Is Noticed That The Appeal Filed By The Assessee Is Barred By Limitation By 58 Days. The Impugned Order Passed By The Cit(Exemption) Dated 14.12.2023 Was Served On The Assessee On 14.12.2023. The Appeal Has To Be Filed On Or Before 12.02.2024 But It Was Actually Filed On 10.04.2024 With A Delay Of 58 Days. The Assessee Has Filed Affidavit Along With Condonation Petition Stating The Reason That Due To The Complexities Surrounding New Regime Of Registration & Delay In The Office Of Chartered Accountant.The Ld.Cit-Dr Did Not Seriously Objected To Condone The Delay. We Find The Cause As Reasonable & Hence, Condone The Delay & Admit The Appeal.

For Appellant: Shri.N. Arjun Raj, AdvocateFor Respondent: Shri. V. Nandakumar, IRS, CIT
Section 12ASection 12A(1)(ac)