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

Ace Derivatives & Commodity Exchange Investor (Client) Prtaection Fund Trust, Mumbai vs. DIT (E), Mumbai

In the result, the appeal filed by the assessee is hereby ordered to be allowed

ITA 6580/MUM/2014[]Status: DisposedITAT Mumbai28 Mar 2018

Bench: Shri G.S. Pannu, Am & Shri Amarjit Singh, Jm आयकर अपील सं/ I.T.A. No.6580/Mum/2014 (निर्धारण वर्ा / Assessment Year: 20014-15) Ace Derivatives & बिधम/ Director Of Income Tax Commodity Exchange (Exemption), Vs. 6Th Floor, Piramal Chambers Investor (Client) Protection Fund Trust Parel Mumbai. 400012 401B, Infinity It Park, Gen. Ak Vaidya Marg, Dindoshi Malad (E), Mumbai 400097 स्थायी लेखा सं./जीआइआर सं./Pan/Gir No. : Aadta9506A (अपीलाथी /Appellant) .. (प्रत्यथी / Respondent) Revenue By: Shri R. P. Meena (Cit Dr) Assessee By: Shri Chetan Kakka (Ar) सुनवाई की तारीख / Date Of Hearing: 23.03.2018 घोषणा की तारीख /Date Of Pronouncement: 28.03.2018 आदेश / O R D E R Per Amarjit Singh, Jm: The Assessee Has Filed The Present Appeal Against The Order Dated 30.09.2014, Passed By The Director Of Income- Tax (Exemption), 6Th Floor, Piramal Chambers, Parel, Mumbai- 400012 In Which The Application Moved By The Appellant U/S 12A Of The Act Has Been Ordered To Be Rejected. 2. The Appellant Has Raised The Following Grounds:- “1. Director Of Income Tax(Exemption) Hereinafter Referred As ‘Dit(E)’ Erred In Rejecting The Application For Registration U/S 12Aa Of The Income Tax Act, 1961 Ignoring All Merits Of The Case.

For Appellant: Shri Chetan Kakka (AR)For Respondent: Shri R. P. Meena (CIT DR)
Section 12ASection 13(3)Section 2(15)