Adhar Projects Welfare Society Vs ITO Exemption (ITAT Pune)
Summary: The Income Tax Appellate Tribunal (ITAT), Pune, in its decision dated 25th June 2025 in the case of Adhar Projects Welfare Society held that when the assessee was not eligible for exemption under Section 11 of the Income Tax Act, 1961 for AY 2016–17, only net income should be taxed under the status of an Association of Persons (AOP). The Tribunal also opined that technical errors like incorrect ITR filing should not penalize taxpayers unfairly.
1. Facts of the Case:
The assessee is a public charitable trust registered under the Bombay Public Trust Act, 1950. For the Assessment Year (AY) 2016–17, it filed its return in Form ITR-7 on 30.11.2016, claiming exemption under Section 11 of the Income Tax Act, 1961. The trust reported gross receipts of ₹12,52,178 and claimed that ₹ 12,24,343 was applied towards charitable activities, with ₹ 27,835 set aside for future application. However, the registration under Section 12AA of the Act was only granted retrospectively on 20.12.2018. As a result, the Centralized Processing Centre (CPC), Bangalore, while processing the return under Section 143(1), denied the exemption on the basis that the trust was not approved under Section 12AA during the relevant period.
