Section 10(23C) does not prescribe any stipulation which makes registration u/s 12AA a mandatory condition. The provisions of section 11 and 10(23C) are two parallel regimes and operate independently in their respective realms.
Exemption u/s 11 is available to a Charitable trust or endowments or settlements, but also to a Company incorporated under section 8 of the Companies Act, 2013 (corresponding to S. 25 of the Companies Act, 1956) and to a Society formed under the Societies Registration Act, provided the object of these entities are charitable in nature.
What is charitable purpose is defined u/s 2(15) of the Income tax Act, as including relief of the poor, education, “yoga”, medical relief, preservation of environment (including water sheds, forests and wildlife and preservation of monuments or places or objects of artistic or historic interest and the advancement of any other object of general public utility. The advancement of any other object of general public utility has qualifications which have been incorporated under the proviso which has been amended by Finance Act, 2015 w.e.f. 1.4.2016.
In order to avail exemption u/s 11, 12 and 13, the entity should be registered u/s 12AA.
The other essential requirements are (a)The property should be held under a trust or legal obligation;(b) The property should be so held for charitable or religious purposes which, ensure for the benefit of the public. No part of the income or property of the trust should be used or applied directly or indirectly for the benefit of the settlor or other specified persons;(c) The trust should not be created for the benefit of any particular religious community or caste; (d) The exemption is restricted to such portion of the income as is applied or accumulated for application to charitable purpose in India;(e) The accounts of the trust should be audited in certain cases as provided in Sec. 12A(b); (f) The funds of the trust should be invested or deposited in the permissible forms and modes only.
For claiming exemption under section 11, it is not necessary that the conditions u/s 10(23)(vi) must be fulfilled.
In Commissioner Of Income tax Vs. Mahasabha Gurukul Vidyapeeth Haryana (2010)326 ITR 25 (Pun), it was held that Exemption under s. 11 was allowable to the assessee society running an educational institution which was registered under s. 12A, once it is held that all requisite conditions for exemption under s. 11 have been met, even if conditions under s. 10(23C)(vi) have not been complied with, there will be no bar to seek exemption under s. 11.
Conversely, while claiming the exemption u/s 10(23)(vi), it is not required to fulfil the conditions mentioned u/s 11 as also exemption u/s 10(23)(vi). Exemption u/s 10(23)(vi) can be claimed by the assessee without applying for registration us 12A. See Commissioner Of Income tax and Another Vs. Society Of Advanced Management Studies (2013) 352 ITR 269 (All) wherein it has been held that Exemption u/s 10(23C)(vi) of the Act can be claimed by an assessee without applying for registration u/s 12A of the Act as it is not required to fulfil the conditions mentioned u/s 11 of the Act while claiming exemption u/s 10(23C) (vi) of the Act.
In the case of Commissioner Of Income tax Vs. Jeevan Deep Charitable Trust (2014) 361 ITR 0143 (All) the assessee was registered u/s. 12A as being a charitable institution. However, its claim for exemption u/s. 10(23C)(vi) was rejected on the ground that the institution was solely not established for the educational purposes. Relying on the same, assessee’s registration u/s. 12A was cancelled by CIT. The High Court held that exemption u/s. 10(23C)(vi) can be claimed by an assessee without applying for registration u/s. 12A as it is not required to fulfil the conditions mentioned u/s. 11 and hence the registration u/s 12A was restored