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Registration granted under section 12A, on 12th February 1996, and the benefits flowing therefrom, cannot be extended to the amended objects of the society unless the DIT examines the same and comes to a conclusion that the registration under section 12A, can be extended to the revised objects, memorandum and by-laws. It would be illogical to hold that once an institution is registered under section 12A, no matter whatever may be the changes in the objects, rules and regulations, for any number of times, the institution should be given the benefit of section 11 to 13 of the Act, in view of the original registration granted under section 12A.
If in any year, the gross receipts of the Institution exceeds Rs. 10 lakhs or Rs. 25 lakhs, as the case may be, then in that year, the Assessing Officer is empowered to examine the allowability of exemption u/s 11 but the same has no effect on granting the registration u/s 12AA of the Act.
Assessee has filed writ petition against order passed by the Director General of Income Tax (Exemptions), for denying them exemption under Section 10(23C)(vi) of the Income Tax Act, 196, on the ground that the aforesaid institute was not directly imparting education and had not employed teachers who were teaching or giving lectures to the students.
As the income of BCCI was entirely exempt from tax under section 12A of the Income Tax Act 1961, the question of disclosing low earnings to avoid paying taxes did not arise. Gross receipt disclosed by BCCI in its tax returns for the assessment years 2007-08 to 2010-11, are Rs. 651.82 crore, Rs. 1,000.40 crore, Rs.1.387.02 crore and Rs. 1,666.84 crore respectively IPL is a part of BCCI and has no separate legal status.
Dy. DIT, Ernakulam Vs Adi Sankara Trust ( ITAT Cochin)- Income Tax – Sections 11, 12A, 32(1) – When assessee, a charitable body, has already claimed deduction for acquisition of capital assets as application of money, the further claim of depreciation on the same assets would amount to double benefits and can not be allowed.
DDIT(E)-II Vs. M/s. Rock Church Ministries (ITAT Hyderabad ) The purpose of section 13(1)(c) is to deprive a religious or charitable trust from exemption if it is found that its income is used or applied, directly or indirectly, for the benefit of the specified persons. Section 13(1)(c) carves out a general exception wherein the provisions of sections 11 and 12 will not operate on account of user or application of any income of the trust for any direct or indirect benefit of the any specified persons. It is an undisputed fact that the rent paid of Rs. 9,500 is not excessive even as per the old provisions of municipal. The assessee paid the rent as per the old municipal taxes. The present rental value would be much more than the rent paid by the assessee for the property having a building of 4000 sq. Ft. on a land admeasuring 15,000 sq. ft. that too in a prime locality in the city of Hyderabad. The market rent i.e., Rs. 80,000 per month as estimated by the Government Valuer is much more to the rent paid by the assessee. The Assessing Officer could not establish that the rent paid by the assessee is excessive and the rental value estimated by the Government valuer is incorrect. The contention of the Revenue that there is variation in the name in the municipal records and I.T. records is also baseless as the name in the municipal records is in abbreviated form.
The Income Tax department has got the power to cancel any charitable organisation’s registration that accords it the benefit of tax exemption. The department can annul the registration and the exemption emanating from it if the organisation is found to violate the norms for registration, according to Budget 2010-11.
From the above facts, it is clear that Once the society during a period of almost 12 years has not carried out any activity, except purchasing land, to construct school/college building for imparting education, which was the main object of the society the activities of the trust for granting approval under section 80G cannot be called genuine and the CIT was fully justified in refusing to grant approval u/s 80G of the Income-tax Act. Hence, the order of Commissioner of Income-tax is upheld and consequently the remaining grounds of appeal taken by the appellant society stand rejected.
Assessees who fulfill all the conditions are entitled to registration cannot be faulted. The contention of the Revenue that the assessees are not registered as an institution and hence not entitled for registration is also without any merit, because, there is no requirement under the Act that an institution
Certain provisions in the Direct Tax Code applicable to religious and charitable institutions and trusts will pose “serious difficulties” for these organizations, the Catholic Church has said. “The Direct Tax Code as conceived creates serious difficulties for societies, trusts and institutions functioning under Catholic christians community and other religions,” said the Catholic Bishops Conference of India (CBCI) in a memorandum to Finance Minister Pranab Mukherjee.
