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

[Nandan Khambete]

For claiming exemption u/s 11 or 12, Registration u/s 12A is a must

AI Summary

Registration under section 12A required for trust exemption; without it income may be taxed on total receipts. A trust registered under the Societies Registration Act but not under section 12A was assessed on total receipts after its expenditures for trust objects were disallowed; rectification under section 154 did not alter the assessing officer's computation. Registration under section 12A is a prerequisite to claim exemptions for charitable or religious trusts and to secure deduction of object-related expenditures.