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

Ai-Jadeed Social Welfare Association, Osmanabad vs. Income Tax Officer, Ward-Exemption, Pune

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

ITA 111/PUN/2024[2018-19]Status: DisposedITAT Pune19 Mar 2024AY 2018-19

Bench: Shri Partha Sarathi Chaudhury & Dr. Dipak P. Ripoteal-Jadeed Social Welfare Vs Ito, Ward-Exemption, Association, At Post Pune. Hangarga, Nal, Tal. Tuljapur, Dist. Osmanabad-413602 Pan: Aabta 3186 G Appellant Respondent Assessee By : Shri Nitin Rander, Ca Revenue By : Shri Umesh Phade, Dr Date Of Hearing : 19/03/2024 Date Of Pronouncement : 19/03/2024 Order Per Partha Sarathi Chaudhury, Jm: This Appeal Preferred By The Assessee Emanates From The Order Of National Faceless Appeal Centre [Nfac], Delhi, Dated 28.11.2023 For A.Y.2018-19 As Per The Following Grounds Of Appeal:- “1. On The Facts & In The Circumstances Of The Case & In Law, The Ld. Cit(A) Erred In Holding That The Delay In Filing The Appeal Cannot Be Condoned. The Appellant Prays That The Delay Be Condoned & Appeal Be Taken Up For Hearing. 2. On The Facts & In The Circumstances Of The Case & In Law, The Ld. Ao & Ld. Cit(A) Ought To Have Held That The Assessee Is A Charitable Trust Registered U/Sec. 12A & U/Sec. 80G Of The Income Tax Act, 1961 (Act) & Accordingly, Eligible For Claim Of Exemption U/Sec. 11 Of The Act. 3. On The Facts & In The Circumstances Of The Case & In Law, The Ld. Ao Erred In Disallowing The Claim Of Rs. 86,18,109/- Towards Application Of Income U/Sec. 11 Of The Act. 4. On The Facts & In The Circumstances Of The Case & In Law, The Ld. Cit(A) Erred In Not Deciding The Issue On Merits & Not Allowing The Application Of Income On Objects Of The Trust U/Sec. 11 Of Rs. 86,18,109/- & Thereby Treating The Same As Income Of The Appellant. Al-Jadeed Social Welfare Association 5. Without Prejudice To Above Grounds Of Appeal, The Ld. Authorities Erred In Not Allowing The Income Of The Assessee, Being An Educational Institution Substantially Financed By State Government, Is Eligible For Exemption U/Sec. 10(23C)(Iiiab) Of The Act.”

For Appellant: Shri Nitin Rander, CAFor Respondent: Shri Umesh Phade, DR
Section 10Section 11Section 12ASection 80G

Shree Ram Chandra Saraf Seva Nidhi, Kolkata vs. CIT(Exemption), Kolkata

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

ITA 50/KOL/2024[00]Status: HeardITAT Kolkata14 Mar 2024

Bench: Shri Sanjay Garg & Shri Girish Agrawali.T.A. Nos.49&50/Kol/2024 Shree Ram Chandra Saraf Seva Nidhi……............…...……………....Appellant 1/A, Vansittart Row, Dalhousie, Kolkata-1. [Pan: Aabts5506N] Vs. Cit(Exemption), Kolkata……...............................................…..…..... Respondent Appearances By: Shri Abhishek Bansal, Ar, Appeared On Behalf Of The Appellant. Shri Rakesh Kr. Das, Cit-Dr, Appeared On Behalf Of The Respondent. Date Of Concluding The Hearing : March 14, 2024 Date Of Pronouncing The Order : March 14, 2024 आदेश / Order Per Bench: The Present Appeals Have Been Preferred By The Assessee Against The Separate Orders Both Dated 19.12.2023 Of The Commissioner Of Income Tax (Exemption), Kolkata [Hereinafter Referred To As ‘Cit(E)’], Whereby, The Applications Of The Assessee Have Been Rejected For Provisional Registration As A Charitable Institution U/S 12A Of The Income Tax Act (Hereinafter Referred To As The ‘Act’) & U/S 80G Of The Act. 2. The Ld. Counsel For The Assessee Has Submitted That The Assessee Was Earlier Registered As A Charitable Institution U/S 12A Of The Act W.E.F. 1991 & Had Also Been Registered U/S 80G Of The Act. Subsequent To The Amendment Brought Into The Relevant Provisions Of Section 12A & Section 80G Of The Act Vide Taxation & Other Laws (Relaxation & Amendment Of Certain Provisions) Act, 2020

Section 12ASection 80GSection 80G(5)

Shree Ram Chandra Saraf Saraf Seva Nidhi, Kolkata vs. CIT(Exemption), Kolkata

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

ITA 49/KOL/2024[00]Status: HeardITAT Kolkata14 Mar 2024

Bench: Shri Sanjay Garg & Shri Girish Agrawali.T.A. Nos.49&50/Kol/2024 Shree Ram Chandra Saraf Seva Nidhi……............…...……………....Appellant 1/A, Vansittart Row, Dalhousie, Kolkata-1. [Pan: Aabts5506N] Vs. Cit(Exemption), Kolkata……...............................................…..…..... Respondent Appearances By: Shri Abhishek Bansal, Ar, Appeared On Behalf Of The Appellant. Shri Rakesh Kr. Das, Cit-Dr, Appeared On Behalf Of The Respondent. Date Of Concluding The Hearing : March 14, 2024 Date Of Pronouncing The Order : March 14, 2024 आदेश / Order Per Bench: The Present Appeals Have Been Preferred By The Assessee Against The Separate Orders Both Dated 19.12.2023 Of The Commissioner Of Income Tax (Exemption), Kolkata [Hereinafter Referred To As ‘Cit(E)’], Whereby, The Applications Of The Assessee Have Been Rejected For Provisional Registration As A Charitable Institution U/S 12A Of The Income Tax Act (Hereinafter Referred To As The ‘Act’) & U/S 80G Of The Act. 2. The Ld. Counsel For The Assessee Has Submitted That The Assessee Was Earlier Registered As A Charitable Institution U/S 12A Of The Act W.E.F. 1991 & Had Also Been Registered U/S 80G Of The Act. Subsequent To The Amendment Brought Into The Relevant Provisions Of Section 12A & Section 80G Of The Act Vide Taxation & Other Laws (Relaxation & Amendment Of Certain Provisions) Act, 2020

Section 12ASection 80GSection 80G(5)