25 June 2013
WHETHER TRUST,, REG. UNDER 12AA, BUT NOT CLAIMING EXEMPTION UNDER 11 TO 13 OF THE INCOME TAX ACT CAN GO FOR ADDITIONAL GROUNDS UNDER APPEAL TO CIT? IS THERE ANY CASE LIKE THIS WHERE THE ADDITIONAL GROUND WAS ACCEPTED BY THE CIT? AS ROI OF TRUST DOES NOT CLAIM EXEMPTION OF SEC. 11 TO 13 OF THE IT ACT.
* If a **trust registered under section 12AA** (meaning it’s registered with the Income Tax department as a charitable trust) * But **not claiming exemption under sections 11 to 13** of the Income Tax Act (i.e., not claiming exemption on income) * Can it **raise additional grounds of appeal before the CIT** (Commissioner of Income Tax) during an appeal? * And whether there are any cases where CIT accepted such additional grounds?
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### Explanation:
1. **Registration under Section 12AA** means the trust is recognized as a charitable entity, but it does **not automatically mean exemption from tax**. The trust must **claim exemption under Sections 11 to 13** to get tax benefits.
2. If the trust is **not claiming exemption**, it will be assessed as a normal taxable entity.
3. Regarding **additional grounds in appeal**:
* Generally, a taxpayer can raise additional grounds before the CIT, provided these are not barred by principles of natural justice or procedural rules. * However, the acceptance of additional grounds depends on the facts of the case and discretion of the CIT.
4. Regarding **case law**, there are some cases where Courts/Tribunals have allowed additional grounds of appeal to be raised at the CIT level, especially if it relates to substantive matters and not mere technicalities. However, specific case citations for trusts not claiming exemption but raising additional grounds may be limited.
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### Practical Suggestion:
* If the trust wants to raise **additional grounds in the appeal** (even without claiming exemption), it should ensure that such grounds are clearly explained and justified as relevant to the assessment.
* Ideally, additional grounds should be raised **at the earliest stage** (i.e., at the time of filing the appeal) to avoid rejection on technical grounds.
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### Summary:
| Situation | Position | | ------------------------------------------------------ | ------------------------------------------------ | | Trust registered under 12AA but not claiming exemption | Assessed normally; no automatic tax exemption | | Additional grounds can be raised in appeal | Allowed if not barred, subject to CIT discretion | | Case law on additional grounds for such trusts | Limited, but some precedents allow it |
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If you want, I can help draft or review grounds of appeal or find relevant case references on this matter. Would you like that?
CAclubindia
