2025 (3) TMI 154 - SCH - Income Tax

Petition with 306-Day Delay Raises Tax Implications and Legal Issue under Section 13(1)(b) of Income Tax Act

SC addressed a petition with a 306-day delay, highlighting a substantial tax implication of approximately Rs.7.5 crore and a critical legal issue ... Benefit of exemption u/s 11 & 12 - Section 13(1)(b) applicability - delay of 306 days in preferring this petition before SC - HELD THAT:- The High Court seems to have taken the view that the assessee is a religious society working for the benefit of a particular community and therefore is entitled to the benefit of exemption under Sections 11 & 12 of the Act, 1961 respectively. However, prima facie it appears that the High Court overlooked the fact that the society has been registered under Section 12A of the Act, 1961 as a charitable institution/organisation. Issue notice on the application for delay as well as on the main matter. The Supreme Court considered a petition with a 306-day delay but noted the significant tax effect of nearly Rs.7.5 crore and an important legal question regarding Section 13(1)(b) of the Income Tax Act, 1961. The Court observed that the High Court may have erred in granting exemption under Sections 11 & 12 of the Act to a religious society instead of recognizing its registration under Section 12A as a charitable institution. Notice was issued on both the delay application and the main matter.