Section 139(4A) of the Income Tax Act
The decision most relied on for Section 139(4A) is CIT v. Kasturi & Sons Ltd. (3 SCC 346), cited in 153 of the 94 judgments on BharatTax that turn on this section.
Leading authorities on Section 139(4A)
Fiscal statutes must be construed strictly and literally. When the language is plain and unambiguous, courts must give effect to it without considering legislative intent or equitable considerations.
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.
A charitable educational institution or trust does not lose its charitable character merely because it generates a surplus, provided its primary object remains charitable and it does not operate for profit. The assessment of charitable nature should focus on the institution's objects rather than the quantum of surplus generated.
A charitable trust registered under section 12AA can be denied exemption under section 11 for failure to furnish the audit report in Form 10B along with the return of income, but this failure may be considered a procedural lapse.
Judgments on Section 139(4A)
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