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

Shree Shree Mohanananda Samaj Seva Samity, Kolkata vs. ITO(E) WD-1(3), Kolkata

In the result, the appeal of the assessee is allowed

ITA 2650/KOL/2019[2010-11]Status: DisposedITAT Kolkata05 Jun 2020AY 2010-11

Bench: Shri P.M. Jagtap(Kz)] I.T.A. No. 2650/Kol/2019 Assessment Year: 2010-11 Shree Shree Mohanananda Samaj Seva Samity.......................................………........Appellant Ae-467, Salt Lake City, Kolkata – 700 064. [Pan: Aadts 7675 N] Vs Ito, (Exemption)Ward 1(3) Kolkata...................……………………………………….....Respondent 10B, Middleton Row, Kolkata – 700 071. Appearances By: Shri V.N. Datta, Advocate Appearing On Behalf Of The Assessee. Smt. Ranu Biswas, Addl. Cit, Sr. Dr Appearing On Behalf Of The Revenue. Date Of Concluding The Hearing : March 12, 2020 Date Of Pronouncing The Order : June 05, 2020 Order This Appeal Filed By The Assessee Is Directed Against The Order Of Ld. Cit(A) – 25, Kolkata Dated 18.10.2019 & The Issue Involved Therein Relates To The Disallowance Of Assessee’S Claim For Exemption Of Rs. 13,48,365/- U/S 11(2) Of The Income Tax Act, 1961. 2. The Assessee In The Present Case Is A Trust Which Is Registered U/S 12A Of The Income Tax Act, 1961. The Return Of Income For The Year Under Consideration Was Filed By The Assessee On 08.11.2010 Declaring Its Total Income At Nil. Although The Said Return Was Initially Processed By The Ao U/S 143(1) Of The Act, The Assessment Was Subsequently Reopened By Him & A Notice U/S 148 Was Issued By Him To The Assessee On 26.03.2015. In Reply, A Letter Was Filed By The Assessee Requesting That The Return Filed Originally On 08.11.2010 Be Treated As The Return Filed In Response To Notice U/S 148. As Noticed By The Ao, The Assessee Had Set Apart A Fund Of Rs. 13,48,365/- During The Year Under Consideration By Virtue Of Section 11(2) Of The Act. In 2 I.T.A. No. 2650/Kol/2019 Assessment Year: 2010-11 Shree Shree Mohanananda Samaj Seva Samity

Section 11(2)Section 12ASection 143(1)Section 143(3)Section 144Section 148

M/S Multi Commodity Exchange Investor Protection Fund, Mumbai vs. ITO(E)-2(1), Mumbai

In the result, the appeal of the assessee is hereby ordered to be allowed for statistical purposes

ITA 861/MUM/2020[2014-15]Status: DisposedITAT Mumbai19 Mar 2020AY 2014-15

Bench: Shri Amarjit Singh, Jm & Shri Manoj Kumar Aggarwal, Am आयकर अपील सं/ I.T.A. No.861/Mum/2020 (ननधधारण वर्ा / Assessment Years: 2014-15) बनधम/ M/S. Multi Commodity Ito (E)-2(1) 5Th Floor, Piramal Exchange Investor Vs. Protection Fund Chambers Lalbaug Parel, Exchange Square, Cts Mumbai-400012. No.225 Suren Road Chakala Andheri (E), Mukhed-400093. स्थधयी लेखध सं./जीआइआर सं./Pan/Gir No. : Aadtm1169M (प्रत्यथी / Respondent) (अपीलाथी /Appellant) .. Assessee By: Shri Girish Dave/Tanzil R. Padvekar Revenue By: Ms. Jotilakshmi Nayak (Dr) सुनवाई की तारीख / Date Of Hearing: 12/02/2020 घोषणा की तारीख /Date Of Pronouncement: 19/03/2020 आदेश / O R D E R Per Amarjit Singh, Jm: The Assessee Has Filed The Present Appeal Against The Order Dated 04.11.2019 Passed By The Commissioner Of Income Tax (Appeals)-6, Mumbai [Hereinafter Referred To As The “Cit(A)”] Relevant To The A.Y.2014- 15. 2. The Assessee Has Raised The Following Grounds Of Appeal: - “1) The Learned Commissioner Of Income Tax (Appeals) ("Ld. Cit(A)") Erred In Passing The Order U/S. 250 Of The Income Tax Act, 1961 Without Giving An Opportunity Of Being Heard To Your Appellant Thereby Violating The Principles Of Natural Justice. Looking To The Facts & Circumstances Of Appellant'S Case & In Law, It Is Submitted That Vide Letter Dated 09/10/2019 Your Appellant Had Requested The Ld. Cit(A) For A Short Adjournment As The Concerned Authorized Person Was Out Of India. Without Prejudice To The Above:

For Appellant: Shri Girish Dave/Tanzil RFor Respondent: Ms. Jotilakshmi Nayak (DR)
Section 11Section 12ASection 13(3)Section 2(15)Section 250