ITAT Disallows Tax Exemption for Trust’s Commercial Activities

Sri Palaniappa Charitable Vs ITO (ITAT Chennai) In the case of Palaniappa Charitable Vs ITO, the Income Tax Appellate Tribunal (ITAT) Chennai recently upheld that income from commercial activities, such as providing uniforms, books, and transport services to students, is not exempted under Section 11 of the Income Tax Act. The Tribunal deemed these activities as not the main objects of the trust but commercial in nature, and hence, income generated from these activities cannot claim tax exemption. The assessee, a charitable trust, was registered under Section 12AA of the Act and was primarily ...