The assessee trust was denied exemption u/s 11 as it was found ...

Charitable trust denied tax exemption for excessive commercial exploitation of premises beyond permitted 20% limit.

Case Laws Income Tax

November 27, 2024

The assessee trust was denied exemption u/s 11 as it was found to be systematically exploiting its property commercially by renting out space for exhibitions, corporate meetings, etc., which were not related to the objects of the trust. The Assessing Officer held that these activities were not incidental to attaining the trust's objectives. Additionally, the assessee failed to maintain separate books of accounts for such commercial receipts as required u/s 11(4A). The Tribunal observed that based on the Supreme Court's decision in Ahmedabad Urban Development Authority, an entity can be granted exemption if the profits generated while carrying out general public utility objectives do not exceed 20% of total receipts as per the second proviso to Section 2(15). However, this aspect was not adjudicated upon by the lower authorities. Consequently, the Tribunal set aside the impugned order and restored the matter to the Assessing Officer to decide afresh, considering the ratio of the Ahmedabad Urban Development Authority judgment regarding the 20% limit on commercial receipts. The revenue's appeal was partly allowed for statistical purposes.

View Source

← Previous Next →

The assessee trust was denied exemption u/s 11 as it was found ...

Charitable trust denied tax exemption for excessive commercial exploitation of premises beyond permitted 20% limit.

Case Laws Income Tax

November 27, 2024

You may also like:

The reopening of assessment u/s 147 cannot be sustained as the exemption u/s 11 was wrongly denied. The notice claimed the petitioner engaged in commercial activities,...

The Appellate Tribunal considered whether the assessee, a trust registered u/s 12AA, qualified for exemption u/s 11 as a charitable entity. The AO argued the trust's...

Exemption u/s 11 - Charitable activity u/s 2(15) - Commercial activity - Citing past decisions favorable to the trust under similar assessments, the Tribunal reiterated...

This case deals with the tax liability u/s 115BBC(1) for anonymous donations received in the "Hundi" by a charitable and religious trust. The key points are: The...

The AO denied exemption u/s 11 to the assessee trust based on incriminating evidence of undisclosed income declared under PMGKY, systematic recovery of staff salaries,...

Exemption u/s 11 - registration u/s 12A withdrawn - the donee trust will treat the donation as towards its corpus and can only utilise the accruing income from the...

Charitable Trust - if commercial principles are applied then adjustment of expenses incurred by the trust for charitable religious purpose in the earlier years against...

Exemption u/s 11 - On lifting the veil, it is clear as daylight that the modus operandi adopted by the Assessee Institutions and Trusts are with the twin objectives of...

The appellant Trust's application for registration u/s 12A was rejected by the Commissioner of Income Tax (Exemptions) on the grounds that its activities were not...

Exemption u/s 11 - assessee is a Charitable Trust registered u/s. 12A - The Tribunal found that the trust, despite being primarily focused on its members, was engaged in...

The Income Tax Appellate Tribunal (ITAT) held that the provisions of Section 13(1)(b) of the Income Tax Act can be invoked at the time of assessment, based on the...

Exemption u/s.10(23)(vi) - The assessee-trust does not have profit motive, the small profit generated while carrying out charitable activities, does not mean that...

Exemption u/s 11 - Donation to other trusts - no explanation offered for many donations made by the Trust as to whether they were for activities in conformity with the...

Exemption u/s 11 - Claim of set off of carry forward of losses - if commercial principles are applied then adjustment of expenses incurred by the trust for charitable...

Exemption u/s 11 denied - grant of approval under Section 10 (23C) (vi) denied - Trust Deed seems to indicate that the source of funds of the petitioner’s trust is only...

Quick Updates: