INCOME TAX ACT, 1961

Section 11

Charitable trusts - Exemption under section 11 - Revenue alleged that property could not be construed as held by trust when it was not owner of property -

Revenue was aggrieved by order of Tribunal directing CIT(A) to grant registration and holding income derived from the property held by assessee-trust for charitable and religious purposes. Revenue contended that assessee did not produce evidence that Government had bestowed rights for use of land and complex upon the assessee society, that had claimed carrying out development and maintenance for public at large. It was further contended that when property (land and buildings) was not owned by the trust, same could not be construed as property held by trust. Held: Section 12A lays down the conditions of applicability of sections 11 and 12. Subject to provisions of sections 60 to 63, income mentioned in it shall not be included in total income of previous year. Section 12A nowhere provides that property should be owned by trust. The requirement is “held for charitable purpose”. In instant case, land though belonged to government but construction made on it was held under trust and it was for income from such property that application for registration under section 12AA of the Act was moved. Section 12 gives a deeming fiction that voluntary contribution received by trust created for charitable or religious purposes shall be deemed for the purpose of Section 11 to be income derived from the property held by trust for charitable and religious purposes. Thus, objection that property was not owned by assessee- society could not be sustained.

REFERRED : CIT v. A.R. Trust, Meerut [Appeal No. 112 of 2013] : 2017 TaxPub(DT) 4287 (All-HC) Mandir Shree Mahakali Sabha v. CIT (Exemptions) [ITA No. 821/Chd/2016, dt. 11-10-207]

FAVOUR : In assessee's favour

A.Y. :

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