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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Since the primary object was the advancement of an object of general public utility without a profit motive, the activities did not constitute trade, commerce, or business. Therefore, the restrictions in the proviso to Section 2(15) were not applicable and assessee was held entitled to the exemption under Section 11.
ITAT held that CPC cannot deny charitable exemption under section 11 through section 143(1) adjustment without issuing prior intimation. The matter was restored to the AO for fresh examination after due opportunity.
ITAT Bangalore held that once the genuineness of the building construction expenditure is proved, the consequential claim of depreciation on such genuine assets cannot be denied to trust since depreciation was claimed only on actual assets used for charitable purpose.
The dispute concerned whether courts could revisit the validity of an arbitration clause after appointing an arbitrator. The Supreme Court held that once the Section 11 order became final under the pre-2015 regime, the issue could not be reopened.
The case examined whether delayed filing of Form 10AB could be condoned after statutory amendments. The Tribunal held that post-October 2024 law empowers authorities to condone delay on reasonable cause and remanded the matter for fresh consideration.
The Tribunal ruled that interest earned on Government grants parked under official directions cannot be divorced from the original grant. Denial of exemption was found to defeat the purpose of section 10(23C)(iiiab), leading to relief for the assessee.
The tribunal held that indexed cost of acquisition must be allowed while computing LTCG of a charitable trust. Indexation under Section 48 applies even when gains are treated as application of income under Section 11(1A).
The Revenue challenged the appellate authoritys decision to remand an ex-parte order. The Tribunal ruled that the remand was lawful and well within statutory appellate powers.
The ruling clarifies that denial of charitable exemption for delayed Form 10B goes beyond Section 143(1). If verification is needed, it cannot be resolved through mechanical processing adjustments.
Income earned from sanitation, gardening, and waste management contracts was treated as charitable. The tribunal held such receipts furthered environmental objects under Section 2(15).
