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)

Mallarpur Naisuva, Birbhum vs. CIT(E), Kolkata.

The appeal of the assessee is allowed accordingly and the ld

ITA 165/KOL/2024[N/A]Status: DisposedITAT Kolkata23 Apr 2024

Bench: Shri Sanjay Garg & Dr. Manish Boradi.T.A. Nos.164&165/Kol/2024 Mallarpur Naisuva……………..…….…................…...……………....Appellant Mallarpur, Birbhum, W.B-731216. [Pan: Aabtm6211E] Vs. Cit(Exemptions), Kolkata.....…..........................................…..…..... Respondent Appearances By: Shri P. K. Ray, Ar & Daud Ahmed Buksh, Appeared On Behalf Of The Appellant. Shri Abhijit Kundu, Cit-Sr. Dr, Appeared On Behalf Of The Respondent. Date Of Concluding The Hearing : April 09, 2024 Date Of Pronouncing The Order : April 23, 2024 आदेश / Order संजय गग", "या"यक सद"य "वारा / Per Sanjay Garg: The Captioned Appeals Have Been Preferred By The Assessee Against The Separate Orders Both Dated 09.01.2024 Of The Commissioner Of Income Tax (Exemption), Kolkata [Hereinafter Referred To As ‘Cit(Exemption)’]. Ita No.164/Kol/2024 Is Against The Rejection Of Application For Registration U/S 12Aa(1)(Ac)(Iii) Of The Income Tax Act (Hereinafter Referred To As The ‘Act’) & Ita No.165/Kol/2024 Is Against The Rejection Of The Application Of The Assessee For Final Approval As Per The Provisions Of Section 80G(5)(Iii) Of The Act. 2. Ita No.164/Kol/2024 - The Ld. Cit(Exemptions) Has Rejected The Application Holding The Same To Be Prima Facie Not Maintainable Being Premature. The Ld. Cit(Exemptions) Observed That The Assessee Earlier

Section 11Section 12Section 12ASection 12A(1)(ac)Section 80GSection 80G(5)Section 80G(5)(iii)

Hijaldiha Vivekananda Seva Samity, Bankura vs. CIT(Exemption), Kolkata

In the result, both the appeals of the assessee are treated as allowed for statistical purposes

ITA 280/KOL/2024[00]Status: DisposedITAT Kolkata29 Feb 2024

Bench: Shri Sanjay Garg & Dr. Manish Boradi.T.A. No.279&280/Kol/2024 Hijaldiha Vivekananda Seva Samity…................…...……………....Appellant At & Post Hijaldiha, Bankura-722138, W.B [Pan: Aaaah1978F] Vs. Cit(Exemptions), Kolkata…...…..........................................…..…..... Respondent Appearances By: Shri P. K. Roy, Ar, Appeared On Behalf Of The Appellant. Shri S. Datta, Cit-Dr, Appeared On Behalf Of The Respondent. Date Of Concluding The Hearing : February 27, 2024 Date Of Pronouncing The Order : February 29, 2024 आदेश / Order संजय गग", "या"यक सद"य "वारा / Per Sanjay Garg: The Present Appeals Have Been Preferred By The Assessee-Trust Against The Separate Orders Both Dated 23.11.2023 Of The Commissioner Of Income Tax (Exemptions) [Hereinafter Referred To As ‘Cit(E)’]. 2. The Assessee In Ita No.279/Kol/2024 Is Aggrieved By The Action Of The Cit(E) For Rejection Of The Assessee’S Application For Grant Of Provisional Registration U/S 12A(1)(Ac)(Iii) Of The Income Tax Act (Hereinafter Referred To As The ‘Act’), Whereas, In Ita 280/Kol/2024, The Assessee Has Assailed The Order Of The Cit(E) For Rejection Of The Application Of The Assessee For Grant Of Provisional Approval Under Clause (Iii) Of 1St Proviso To Section 80G(5) Of The Act. 3. At The Outset, The Ld. Counsel For The Assessee Has Brought Our Attention To The Impugned Orders Of The Cit(E) To Submit That The Same

Section 12A(1)(ac)Section 80G(5)

Hijaldiha Vivekananda Seva Samity, Bankura vs. CIT(Exemptions), Kolkata

In the result, both the appeals of the assessee are treated as allowed for statistical purposes

ITA 279/KOL/2024[00]Status: DisposedITAT Kolkata29 Feb 2024

Bench: Shri Sanjay Garg & Dr. Manish Boradi.T.A. No.279&280/Kol/2024 Hijaldiha Vivekananda Seva Samity…................…...……………....Appellant At & Post Hijaldiha, Bankura-722138, W.B [Pan: Aaaah1978F] Vs. Cit(Exemptions), Kolkata…...…..........................................…..…..... Respondent Appearances By: Shri P. K. Roy, Ar, Appeared On Behalf Of The Appellant. Shri S. Datta, Cit-Dr, Appeared On Behalf Of The Respondent. Date Of Concluding The Hearing : February 27, 2024 Date Of Pronouncing The Order : February 29, 2024 आदेश / Order संजय गग", "या"यक सद"य "वारा / Per Sanjay Garg: The Present Appeals Have Been Preferred By The Assessee-Trust Against The Separate Orders Both Dated 23.11.2023 Of The Commissioner Of Income Tax (Exemptions) [Hereinafter Referred To As ‘Cit(E)’]. 2. The Assessee In Ita No.279/Kol/2024 Is Aggrieved By The Action Of The Cit(E) For Rejection Of The Assessee’S Application For Grant Of Provisional Registration U/S 12A(1)(Ac)(Iii) Of The Income Tax Act (Hereinafter Referred To As The ‘Act’), Whereas, In Ita 280/Kol/2024, The Assessee Has Assailed The Order Of The Cit(E) For Rejection Of The Application Of The Assessee For Grant Of Provisional Approval Under Clause (Iii) Of 1St Proviso To Section 80G(5) Of The Act. 3. At The Outset, The Ld. Counsel For The Assessee Has Brought Our Attention To The Impugned Orders Of The Cit(E) To Submit That The Same

Section 12A(1)(ac)Section 80G(5)