Section 12AA of the Income Tax Act

The decision most relied on for Section 12AA is ACIT v. Ahmedabad Urban Development Authority (143 Taxmann.com 278), cited in 390 of the 4,243 judgments on BharatTax that turn on this section.

Leading authorities on Section 12AA

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.

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.

Queen’s Educational Society v. CIT
372 ITR 699 · 2015 · Supreme Court
152
citing judgments

An educational institution that generates a surplus does not automatically lose its charitable status or cease to exist solely for educational purposes. This is true if the surplus is reinvested for its educational objectives, and the predominant object test determines if the institution's primary aim is education or profit.

Union of India v. Exide Industries
425 ITR 1 · 2020 · Supreme Court
146
citing judgments

The provision for leave encashment is allowable as a deduction only on an actual payment basis under Section 43B(f) of the Income Tax Act, 1961. The Supreme Court upheld the constitutional validity of Section 43B(f).

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.

R.B. Jodha Mal Kuthiala v. CIT
82 ITR 570 · 1971 · Supreme Court
131
citing judgments

Tax laws must be interpreted reasonably and in consonance with justice, even though equitable considerations are generally irrelevant in their interpretation.

Sarvodaya Charitable Trust v. ITO (Exemption)
125 Taxmann.com 75 · 2021 · High Court
129
citing judgments

The filing of Form 10B for claiming exemption under sections 11 and 12 is directory, not mandatory. A delay in filing Form 10B can be condoned, and exemption cannot be denied solely on this ground if the assessee satisfies other conditions and shows sufficient cause.

ACIT v. Surat City Gymkhana
300 ITR 214 · 2008 · Supreme Court
125
citing judgments

Once an institution receives registration under Section 12AA, the Assessing Officer must compute its income as per Section 11, focusing only on the application of income and not re-examining the charitable nature of its activities. The Supreme Court also clarified the meaning and scope of 'general public utility' under Section 2(15).

Judgments on Section 12AA

Shree Kamdhenu Gau Vikas Trust, Bhavnagar vs. Commissioner of Income Tax (Exemption), Ahmedabad

In the result, the appeal of the assessee is dismissed in limine

ITA 2218/AHD/2017[N.A]Status: DisposedITAT Ahmedabad15 Oct 2019

Bench: Shri Rajpal Yadav & Shri Amarjit Singhआयकर अपील सं./ Ita No. 2218/Ahd/2017 "नधा"रण वष"/Assessment Year: Na Shree Kamdhenu Gau Vs. Commissioner Of Vikas Trust, Income-Tax (Exemption), At & Post : Sarvedi, Ahmedabad Tal : Sihar, Dist : Bhavnagar Pan : Aarts 6952 L अपीलाथ"/ (Appellant) "" यथ"/ (Respondent) Assessee By : None Revenue By : Shri Mudit Nagpal, Sr Dr सुनवाई क" तार"ख/Date Of Hearing : 23/08/2019 घोषणा क" तार"ख /Date Of Pronouncement: 15/10/2019 आदेश/O R D E R Per Rajpal Yadav: This Appeal By The Assessee Is Directed Against The Order Of The Learned Commissioner Of Income-Tax (Exemptions), Ahmedabad Dated 27.07.2017 Rejecting The Application Filed By The Assessee For Registration Of The Trust U/S 12Aa Of The Income-Tax Act, 1961. 2. None Appeared On Behalf Of The Appellant-Assessee When The Case Was Called Out For Hearing & No Adjournment Application Was Filed. Notice Of Hearing Was Sent Through The Departmental Representative Fixing The Date Of Hearing On 23.08.2019. The Departmental Representative Has Filed A Letter From The Income Tax Officer (Exemptions), Bhavnagar Dated 04.07.2019 Stating That The Said Notice Was Served Upon The Assessee On 04.07.2019. This Shows That The Assessee Is Not Interested In Pursuing With Its Appeal. Therefore, In View Of The Decision Of Hon'Ble Madhya Pradesh Shree Kamdhenu Gau Vikas Trust Vs. Cit (Exemption) For Ay: Na 2

For Appellant: NoneFor Respondent: Shri Mudit Nagpal, Sr DR
Section 12A