#Exemption

ITAT Delhi clarifies that scholarships disbursed in India for overseas education do not violate Section 11(1)(c) of the Income Tax Act, preserving tax exemption for charitable trusts. The ruling underscores that the 'application of income' test is met where funds are released domestically, even if utilized abroad, offering critical relief for educational trusts.

ITAT Pune rules that substantial payment and possession transfer under an agreement to sell qualifies for Section 54F exemption, even if the sale deed is registered years later. This clarifies that formal registration delay does not invalidate the exemption claim, offering relief to taxpayers in similar transactions.

ITAT Mumbai ruled that the absence of a CBDT notification under Section 10(46) of the Income Tax Act does not preclude a de novo assessment of exemption claims. The Tribunal set aside the denial of exemption and directed fresh adjudication, keeping all grounds open, including the assessee's claim of being a 'State' instrumentality under Article 289. This ruling clarifies that procedural pendency cannot defeat substantive rights to exemption.

The ITAT Ahmedabad has ruled that the presence of religious elements like prayer halls and rituals such as Pran Pratistha and Havan does not disqualify a trust from tax exemption under Sections 11 and 12, provided its primary activities remain oriented toward public welfare in education, medical relief, and financial aid. This clarifies that charitable intent, not religious form, determines eligibility - a critical precedent for trusts blending spiritual and social service.

CESTAT Hyderabad rules that repair and maintenance services for Indian Navy ships and dockyards are exempt from service tax because they serve sovereign, non-commercial governmental functions, not commercial activities. This clarifies the scope of exemption for defence-related infrastructure contractors and reinforces the principle that state functions, even when outsourced, do not trigger indirect tax liability unless commercial in nature.

CESTAT rules that sub-contractors providing exempted works contract services to government authorities remain eligible for service tax exemption under Notification No. 25/2012, even if payments are routed through a sister concern. The ruling clarifies that the exemption hinges on the nature of the service, not the payment channel, offering relief to sub-contractors in similar arrangements.

The ITAT Delhi has ruled that royalty and sponsorship receipts earned by the Wrestling Federation of India are incidental to its charitable objectives under Section 2(15), and therefore not taxable as business income. This preserves the federation’s exemption under Sections 11 and 12, setting a critical precedent for national sports bodies relying on non-commercial funding to sustain public welfare activities.

Bombay High Court clarifies that the transfer of leasehold rights constitutes a transfer of immovable property, not a supply of services, and is thus exempt from GST. The ruling provides critical relief for businesses and lessors involved in lease assignments, reinforcing the distinction between property transfers and taxable services under GST law.

ITAT Ahmedabad rules that a mere agreement to purchase a residential property does not satisfy Section 54 exemption requirements; a registered conveyance deed is mandatory to claim capital gains tax relief. The ruling clarifies that taxpayers must ensure legal title transfer to avoid disallowance of exemptions, impacting property sellers relying on unregistered agreements.

CESTAT Bangalore holds that services for road maintenance during 2005-2009 are exempt under Section 97 of Finance Act, 2012, and contract labor does not equate to manpower supply.

ITAT Ahmedabad holds that failure to submit documents during assessment does not preclude reconsideration when evidence is produced before CIT(A); penalty cancelled due to set-aside of assessment.

CESTAT Chennai holds that separate billing for food and banquet hall services entitles taxpayers to exemption under Notification 12/2003-ST, invalidating clubbed service tax demands.