In Brief
Delhi's Commissioner of Income Tax appealed a High Court decision upholding exemption of a registered charitable society founded by freedom fighter Lala Lajpat Rai in 1921. The society claimed income tax exemption under Section 11 while running schools, a medical centre, an old-age home, and managing a newspaper with advertisement revenue. The Supreme Court found that while charitable trusts may conduct business activities connected to their charitable objects, receipts must not exceed 20% of total income. Advertisement revenue from newspapers constitutes taxable business income. The Court allowed the appeal in part, remitting the case to the Assessing Officer for fresh examination of whether the society's total receipts comply with statutory limits.
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