Section 12A of the Income Tax Act

Income-tax Act, 2025: ss.332–355

Section 12A of the Income-tax Act, 1961 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 is CIT v. Institute of Banking Personnel Selection (264 ITR 110), cited in 398 of the 6,064 judgments on BharatTax that turn on this section.

Leading authorities on Section 12A

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.

Exide Industries Ltd. v. Union of India
292 ITR 470 · 2007 · High Court
320
citing judgments

The Calcutta High Court held that restricting deduction for leave encashment via Section 43B(f) was arbitrary and contrary to Supreme Court decisions. However, this judgment was later stayed by the Supreme Court.

Escorts Ltd. v. UOI
199 ITR 43 · 1993 · Supreme Court
267
citing judgments

A statute should not be construed to permit double deduction for the same expenditure unless specifically provided by law.

1. AIR 1951 SC 467: HARLA v. THE STATE OF RAJASTHAN. 2
2 SCC 453 · 1997 · Reported
222
citing judgments

When an appeal or revision is filed against an order passed by a subordinate forum, and a superior forum modifies, reverses, or affirms that decision, the order of the subordinate forum merges into the superior forum's decision, which then becomes the sole operative and enforceable order.

CIT v. Shri Plot Swetamber Murti Pujak Jain Mandal
211 ITR 293 · 1995 · High Court
204
citing judgments

A charitable trust can carry forward its excess expenditure from previous years and adjust it against the income of subsequent years, which qualifies as an application of income under Section 11. Additionally, voluntary contributions received for a specific purpose are treated as corpus funds and are not taxable.

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.

CIT v. Society of the Sisters of St. Anne
146 ITR 28 · 1984 · High Court
195
citing judgments

Depreciation claimed by a charitable trust on its assets is an allowable application of income for computing exemption under Section 11, and this does not constitute a double deduction.

Judgments on Section 12A

Sri Poddar Madal Bhavani Samity, Kolkata vs. ITO, Ward 1(3), Exemption, Kolkata

The appeal of the assessee is dismissed

ITA 325/KOL/2025[2020-21]Status: DisposedITAT Kolkata14 May 2025AY 2020-21

Bench: Shri Sonjoy Sarma & Shri Rakesh Mishrai.T.A. No.325/Kol/2025 Assessment Year: 2020-21 Sri Poddar Madal Bhavani Samity……………………………..….……….Appellant Ground Floor, Mission Court, 25, R. N. Mukherjee Street, Kol-1. [Pan: Aabts8573R] Vs. Ito, Ward-1(3), Exemption, Kolkata.....................……........……...…..…..Respondent Appearances By: Shri A. K. Tibrewal, Ar, Appeared On Behalf Of The Assessee. Shri Kallol Mistry, Jcit, Sr. Dr, Appeared On Behalf Of The Revenue. Date Of Concluding The Hearing : May 13, 2025 Date Of Pronouncing The Order : May 14, 2025 Order Per Sonjoy Sarma: The Present Appeal Has Been Preferred By The Assessee Against An Order Dated 19.12.2024 Of The Commissioner Of Income Tax, Appeal Addl/Jcit(A)-2 Guwahati [Hereinafter Referred To As ‘Cit(A)’] Passed U/S 250 Of The Income Tax Act (Hereinafter Referred To As The ‘Act’). 2. Brief Facts Of The Case Are That The Assessee Is A Public Charitable Trust Registered U/S 12A Of The Act. The Assessee Filed Its Return Of Income On 31.05.2021 By Declaring Nil Taxable Income After Claiming Application Of Income For Charitable Purposes & Accumulation U/S 11(2) Of The Act. The Cpc, Bengaluru Issued An Intimation U/S 143(1) Of The Act Dated 30.11.2021 By Disallowing The Assessee’S Claim Of Application Of Income Of Rs.13,10,039/- & Accumulation U/S 11 Of The Act At Rs.1,54,072/-. Consequently, The Entire Amount Was Treated As

Section 11Section 11(2)Section 12ASection 143(1)Section 154Section 250Section 44A

National Solar Energy Federation of India, New Delhi vs. CIT (Exemption), New Delhi

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

ITA 141/DEL/2025[AY 2023-24]Status: DisposedITAT Delhi13 May 2025

Bench: Shri Satbeer Singh Godara & Shri S. Rifaur Rahmannational Solar Energy Federation Of India, Vs. Cit (Exemption), 135 – 137, Rectangle 1, D 4, New Delhi. Saket, New Delhi – 110 017. (Pan : Aabtn8293P) (Appellant) (Respondent) Assessee By : Shri Manoj Pahwa, Ca Revenue By : Shri Rajesh Kumar, Cit Dr Date Of Hearing : 13.05.2025 Date Of Order : 13.05.2025 O R D E R Per S.Rifaur Rahman: 1. This Appeal Is Filed By The Assessee Against The Order Of Ld. Commissioner Of Income-Tax (Exemption), Delhi [Hereinafter Referred To As ‘Ld. Cit (E)] Dated 18.12.2024 For Assessment Year 2023-24 Raising Following Grounds Of Appeal :- “1. The Rejection Order Dated 12.12.2024 Was Passed Without Providing Adequate Time For Compliance With The Notice Dated 06.12,2024. The Appellant Acted Promptly Upon Becoming Aware Of The Notice & Filed A Request For An Extension On The Very Same Day 12.12.2024. The Rejection Order Passed Thereafter Disregarded The Appellant'S Timely Request. This Action Is Arbitrary & Violates The Principles Of Natural Justice. The Appellant Had Duly Responded To Previous Notices Dated 04.07.2024, 13.09.2024 & 18.11.2024, Furnishing The Required

For Appellant: Shri Manoj Pahwa, CAFor Respondent: Shri Rajesh Kumar, CIT DR
Section 12ASection 80GSection 80G(5)Section 80G(5)(iii)Section 80G(5)(iv)