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

Body & Organ Donation Society of India (Bodi), Cuttack vs. CIT (Exemption), Hyderabad

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

ITA 100/CTK/2023[2022-23]Status: DisposedITAT Cuttack26 Jun 2023AY 2022-23

Bench: Shri George Mathan & Shri Rajesh Kumarआयकर अऩीऱ सं/Ita No.100/Ctk/2023 (ननधाारण वषा / Assessment Year : 2022-2023) Body & Organ Donation Society Of Vs Cit (Exemption), Hyderabad India (Bodi) Bishnu Vihar, Rajnagarpatna, Gopalpur, Cuttack-753003 Pan No. :Aagab 5267 K (अऩीऱाथी /Appellant) .. (प्रत्यथी / Respondent) ननधााररती की ओर से /Assessee By : Shri S.K.Sarangi, Ca राजस्व की ओर से /Revenue By : Shri M.K.Gautam, Pr.Cit(Osd) सुनवाई की तारीख / Date Of Hearing : 26/06/2023 घोषणा की तारीख/Date Of Pronouncement : 26/06/2023 आदेश / O R D E R Per Bench : This Is An Appeal Filed By The Assessee Against The Order Of The Ld. Cit(E), Hyderabad, Dated 11/03/2023, Passed In Din & Oder No.Itba/Exm/F/Exm45/2022-23/1050630810(1), For The Assessment Year 2022-2023. 3. It Was Submitted By Ld Ar That The Ld Cit(E) Was Not Justified To Reject The Application For Registration U/S.12Aa Of The Act On The Ground Of Non-Submission Of “Form-10Ac & Urn” Issued By The Cpc, Particularly When “Form-10Ac & Urn” Has Not Been Issued & Served On The Assessee. It Was Also The Submission That Proper Opportunity Of Hearing Was Not Granted To The Assessee. It Was The Submission That If One More Opportunity Is Allowed, The Assessee Would Furnish All The Evidences For Disposal Of The Appeal. 4. In Reply, Ld Sr Dr Submitted That Proper Opportunities Were Allowed As Is Evident From The Impugned Order. It Was Submitted That The Order Passed By The Cit(E) Deserves To Be Upheld.

For Appellant: Shri S.K.Sarangi, CAFor Respondent: Shri M.K.Gautam, Pr.CIT(OSD)
Section 12A

DCIT(E), Circle-1(1), New Delhi vs. Delhi & District Circket Association, New Delhi

In the result, the appeal of the revenue is dismissed

ITA 3058/DEL/2019[2015-16]Status: DisposedITAT Delhi09 Jun 2023AY 2015-16

Bench: Shri Chandra Mohan Garg & Shri M. Balaganeshassessment Year: 2015-16 The Dcit 1(1), Exemption, New Delhi M/S. Delhi & District Cricket Association 110002 Ferozshah Kotla Ground, Bahadur Shah Vs. Zafar Marg, New Delhi 110002 Pan Aaatd 0828 P (Appellant) (Respondent) For Revenue : Ms. Maimun Alam, Sr. Dr For Assessee : Shri Ved Jain, Adv. Shri Aman Garg, Ca Date Of Hearing : 25.04.2023 Date Of Pronouncement : 09.06.2023 Order Per Chandra Mohan Garg, J.M. This Appeal Has Been Filed Against The Order Of Cit(A)-40, New Delhi Dated 15.01.2019 For Ay 2015-16. 2. The Grounds Raised By The Revenue Are As Follows:- (I) On The Facts & In The Circumstances Of The Case & In Law, Ld Cit (A) Has Erred In Directing The Ao To Allow Exemption Us. 11 Of The Act Particularly When The Assessee Has Shown Receipts From Sponsorship Income, Sale Of Liquor, Income From Corporate Boxes & Sale Of Tickets Which Are Purely Commercial In Nature. (Ii) On The Facts & In Circumstances Of The Case & In Law, Id Cit (A) Has Erred In Treating Prior Period Expenses, Provisions For Gratuity & Leave Encashment As Consequential To Allowing Exemption To The Assessee Ignoring The Fact That Such Expenses Are Not Incurred During The Year & Cannot Be Treated As Application Of Income. (Iii) On The Facts & In Circumstances Of The Case & In Law, Ld Cit(A) Has Erred In Deleting The Addition Made U/S 40(A) (3) Of The Income Tax Act, Such Addition Being Consequential In Nature To Disallowance Of Benefit Of Exemption To The Assessee.

For Appellant: Shri Ved Jain, AdvFor Respondent: Ms. Maimun Alam, Sr. DR
Section 11Section 12ASection 40