Income received from a charitable/religious trust will be tax-exempt under Section 11, provided that the activity being performed is incidental to the attainment of objectives set by the trust/institution, and separate books of account are maintained by the particular trust/institution pertaining to the business. In this article, we look at some of the major exemptions provided under Section 11 of the Income Tax Act.
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The Tribunal condoned a 60-day delay after accepting explanations relating to migration of the ITAT portal and the death of a family member. The registration dispute was thereafter heard on merits.
The Tribunal ruled that corpus donations cannot be taxed merely because Section 12AA registration was granted subsequently. Once registration existed before processing of return, exemption under Section 11 could not be denied.
The Mumbai ITAT held that the appellate authority failed to consider pending writ petitions and interim directions of the Bombay High Court regarding exemption under Section 10(23C)(via). The matter was remanded for reconsideration after final disposal of the writ petitions.
The ITAT Chennai held that exemption under Section 11 cannot be denied merely because Form 10B was not filed along with the return, when it was available before processing under Section 143(1). The Tribunal directed CPC to amend the intimation and consider the audit report.
Bombay High Court held that delay in filing Form No. 10 for claiming accumulation under Section 11(2) should be condoned where genuine hardship exists. The Court adopted a liberal and justice-oriented approach to protect charitable exemption claims.
ITAT Mumbai observed that the charitable trust had filed its original return within the due date prescribed under Section 139(1). The Tribunal directed fresh adjudication of the exemption claim instead of rejecting it on technical grounds.
The Patna ITAT upheld rejection of a trust’s Section 12AB registration after finding that the trust deed permitted application of income for persons residing outside India. The Tribunal held that Section 11 allows exemption only for charitable expenditure incurred in India.
The Mumbai ITAT held that taxability cannot be conclusively decided while an application for exemption under Section 10(46) remains pending before the CBDT. The matter was restored to the AO for fresh adjudication after the CBDT’s final decision.
PCIT had erroneously mixed up the scope of renewal proceedings with cancellation proceedings under Section 12AB(4). Further, Settlement Commission itself had accepted the charitable nature and genuineness of the assessee’s activities and PCIT (Central) was found to lack jurisdiction to adjudicate the issue of renewal/cancellation of registration.
The Tribunal held that rental income earned from immovable property held under trust could not automatically be treated as business income. It ruled that the proviso to Section 2(15) was wrongly invoked where the trust’s dominant object remained charitable.
