Expenses incurred for object disallowed

[GOPAL HARLALKA]

Assessee is a trust registered under soceities Registeration Act. However it is not registered u/s 12A of the Income Tax Act.

Total receipt during the year is. ₹ 31,39,726.

Expenditure incurred for the

object of the trust ₹ 26,51,438/-

Surplus of income over expenditure is ₹ 4,88,288 Tax has been paid on ₹ 4,.88,288/-

Return has been filed in form No.7

CPS has has disallowed expenses for ₹ 26,51,438.- and computed tax on entire receipt

of Rs, 31,31,726/- Rectification u/s 154 was filed but again tax been computed on entire receipt.

Please suggest the action to be taken for determination of correct income

In subsequent and earlier year return has been filed in form no. 5 and income has been

computed correctly

AI Summary

Trust Denied Expense Deductions, Tax Calculated on Total Receipts; Section 154 Rectification Request Unsuccessful. Registration Under 12A Required for Exemption. A trust registered under the Societies Registration Act but not under Section 12A of the Income Tax Act reported a total receipt of 31,39,726, with expenses of 26,51,438 for its objectives, resulting in a surplus of 4,88,288, on which tax was paid. However, the tax authorities disallowed the expenses and computed tax on the entire receipt. A rectification request under Section 154 was filed but was unsuccessful. The trust seeks advice on determining the correct income. It is noted that for exemption under Sections 11 or 12, registration under Section 12A is necessary.