AI Drafter 
TaxTMI 
TaxTMI 
2025 (6) TMI 1081
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....on that arises for consideration is whether a charitable institution registered under section 12A of the Income Tax Act, 1961 (for short 'the Act') was required to file a return of income for the purposes of claiming the benefit of exemption under sections 11 and 12 of the Act, prior to 2018. 2. Petitioner is a charitable trust rendering educational services and is an assessee under the Act. According to the petitioner, for the assessment years 2015-16 and 2016-17, its entire receipts were applied for charitable purposes and hence it was not necessary to file a return of income. Since petitioner had not filed the return for the aforementioned assessment years, the Income Tax Officer issued a notice under section 148 of the Act proposing ....
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....e under challenge in this writ petition. Petitioner has also sought for a declaration that, as a charitable institution, it is eligible for exemption under sections 11 and 12 of the Act, notwithstanding the non-filing of returns for the years 2015-16 and 2016-17. 4. A statement has been filed on behalf of the respondents pleading that, the registration under section 12A of the Act by itself, does not confer any right for exemption to the petitioner under sections 11 and 12 of the Act. It is averred that the exemption from taxation will arise only when the assessee complies with the conditions laid down in sections 11, 12, 12A and 13 of the Act, apart from other provisions of the statute. Respondents also pleaded that filing of return of ....
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....esentative assessee and not to the trust as such and hence there is no requirement to file a return, as the entire income is exempt under law. It was further submitted that the term representative assessee in section 139(4A) has to be interpreted in the light of section 160 of the Act and therefore petitioner being a trust, is not obliged to file a return under the said provision. 6. Per contra, Sri. Jose Joseph, the learned Senior Standing Counsel for the Income Tax Department submitted that the contention raised by the petitioner is without any basis and that, in the absence of any return filed by the petitioner, it could not have claimed the benefit of exemption. The Standing Counsel further submitted that since the trust had income b....
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....e prescribed form and in the prescribed manner to the Principal Commissioner or Commissioner before the 1st day of July, 1973, or before the expiry of a period of one year from the date of the creation of the trust or the establishment of the institution, whichever is later and such trust or institution is registered under section 12AA: Provided ..... (omitted as not relevant)- (i) ..... (omitted as not relevant) (ii) ..... (omitted as not relevant) Provided further ..... (omitted as not relevant); (aa) ..... (omitted as not relevant) (ab) ..... (omitted as not relevant) (b) where the total income of the trust or institution as computed under this Act without giving effect to th....
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....nt. 10. When a trust claims that its income is exempt from tax under sections 11 and section 12 of the Act, it was obligatory under section 12A(b) of the Act as it then existed, to file a return since such a return was a condition of eligibility for claiming exemption during the years in question. Moreover, in the absence of a return, the assessee's claim for exemption will not be able to be decided. A decision on the eligibility for exemption can be made only after relevant materials are placed before the department by filing the return. Evaluation is necessary every year and for that purpose, the return is required to be filed by the assessee even if the assessee claims exemption of income tax. Thus, a religious or charitable trust....
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....igh Court held that under section 139(4A), every person in receipt of income derived from property held under trust for charitable or religious purposes, is required to furnish a return of income, if its total income, ignoring exemptions under sections 11 and section 12 of the Act, exceeds the maximum amount not chargeable to income tax. The following observations are relevant" "In other words, section 139(4A) deals with filing of returns by Charitable or Religious Trusts or Institution, whose income was exempt under section 11 and section 12 of the Act exceeds the maximum amount not chargeable to Income Tax................. Section 139(4A) enjoins upon every person who is in receipt of income derived from property held under trust....