“application of income”

Judicial DoctrinesDiversion vs ApplicationDiversion vs Application1,603 judgments

The decision most relied on for application of income is Maxopp Investment Ltd. v. CIT (402 ITR 640), cited in 1,596 judgments on BharatTax.

Leading authorities on application of income

Maxopp Investment Ltd. v. CIT

402 ITR 640 · 2018 · Supreme Court

1,596

citing judgments

Disallowance under Section 14A is not automatic and requires the Assessing Officer to record satisfaction before applying Rule 8D. Only investments yielding exempt income are considered for disallowance, irrespective of their strategic nature.

Godrej & Boyce Mfg. Co. Ltd. v. DCIT

328 ITR 81 · 2010 · High Court

1,183

citing judgments

Rule 8D, for computing disallowance under Section 14A for expenses related to exempt income, applies from Assessment Year 2008-09 onwards; for prior years, a reasonable disallowance must be made. The disallowance under Section 14A cannot exceed the actual exempt income earned.

CIT v. Max India Ltd.

295 ITR 282 · 2007 · Supreme Court

1,162

citing judgments

Under Section 263, an assessment order is not erroneous and prejudicial to the interest of the revenue merely because the Principal Commissioner disagrees with the Assessing Officer's (AO) view, particularly if the AO has adopted one of two permissible views in law, unless that view is completely unsustainable. If due inquiries were made, the AO's order does not become erroneous solely because the fact of inquiries was not recorded.

Godrej & Boyce Manufacturing Company Ltd. v. DCIT

394 ITR 449 · 2017 · Supreme Court

683

citing judgments

Expenditure can only be disallowed under Section 14A if the income is exempt and not part of the total income. The Assessing Officer must first record dissatisfaction with the assessee's accounts or computation before proceeding to make a disallowance under Section 14A or applying Rule 8D.

Commissioner of Income Tax v. Nova Promoters and Finlease (P) Ltd.

342 ITR 169 · 2012 · High Court

658

citing judgments

To make an addition under Section 68 for unexplained cash credits, the Assessing Officer must conduct proper inquiry into the identity, genuineness, and creditworthiness of the creditor, especially concerning share application money. The assessee's initial discharge of burden by providing necessary details shifts the onus back to the AO for further investigation, including the source of source.

Olari Little Flower Kuries (P.) Ltd. v. UOI

440 ITR 26 · 2022 · High Court

614

citing judgments

The fee under Section 234E of the Income-tax Act cannot be levied for defaults in filing TDS statements committed prior to June 1, 2015, as the provision for its levy became effective only from that date.

Dilip N. Shroff v. JCIT

291 ITR 519 · 2007 · Supreme Court

565

citing judgments

A penalty notice issued under Section 271(1)(c) is invalid if the Assessing Officer fails to strike out the inapplicable limb (concealment or furnishing inaccurate particulars) from the standard proforma, indicating non-application of mind. The initial burden of proving concealment or inaccurate particulars rests on the Revenue.

CIT v. Kaushalya

216 ITR 660 · 1995 · High Court

511

citing judgments

A penalty levied under Section 271(1)(c) for concealment or furnishing inaccurate particulars of income is not invalidated by the Assessing Officer's failure to strike off irrelevant portions in the show cause notice, provided the assessee understood the exact charge and suffered no prejudice, indicating an application of mind by the AO.

Judgments citing application of income

St. Francis Xavier Church, Panvel vs. Income Tax Officer (Exemption), Thane

In the result, appeal of the assessee is allowed for statistical purposes

ITA 5883/MUM/2025[2024-25]Status: DisposedITAT Mumbai25 Nov 2025AY 2024-25

Bench: Justice (Retd.) Shri C.V. Bhadang & Shri Vikram Singh Yadavassessment Year : 2024-25 St. Francis Xavier Church Trust, Income Tax Officer, Plot 379/B, Behind Orion Mall Exemption Ward, Thane & S.T. Depot, Vs. Quershi Mansion, Panvel-410206. Gokhale Road, Pan : Aaets4913N Naupada, Thane-400602. (Appellant) (Respondent) For Assessee : None For Revenue : Smt. B. Brahma Vidya Date Of Hearing : 25-11-2025 Date Of Pronouncement : 25-11-2025 O R D E R Per Vikram Singh Yadav, A.M : This Is An Appeal Filed By The Assessee Against The Order Of The Learned Addl/Jcit(A)-Agra, Dated 29-07-2025, Pertaining To Assessment Year (Ay) 2024-25, Wherein The Assessee Has Taken The Following Grounds Of Appeal: “1.1. On The Facts & In Circumstances Of The Case & In Law The Learned Commissioner Of Income-Tax (Appeals) [Cit(A)] Erred In Confirming The Denial Of Exemption/Deductions Under Section 11 Of The Act Resorted To By The Centralized Processing Centre [Cpc), Income Tax Department, Bengaluru (The Learned Assessing Officer) While Processing The Return Of Income Under Section 143(1) Of The Act On The Grounds That The Audit Report In Form 10-Bb Was Filed Belatedly, Though With The Return Of Income Which Was Filed Within The Extended Time Limit Under Section 139(1) Of The Act.

For Appellant: NONEFor Respondent: Smt. B. Brahma Vidya

Section 11Section 11(1)(a)Section 11(2)Section 11(6)Section 12ASection 139(1)Section 143(1)Section 143(1)(a)

under section 11 read with Section 11(6) of the Act being the amount of capital expenditure incurred to be allowed as application of income. It is submitted that the disallowances referred to above are unjustified and bad in law as the denial of exemption under Section

Nyati Builders Private Limited, Pune vs. Assisstant Commissioner of Income Tax, Pune

In the result, the appeal of the assessee is allowed

ITA 1246/PUN/2025[2018-19]Status: DisposedITAT Pune24 Nov 2025AY 2018-19

For Appellant: Department byFor Respondent: Date of hearing

Section 115JSection 135Section 139Section 143(2)Section 143(3)Section 37Section 80G

Explanation -2 to section 37 was introduced with the purpose and intention to stop claim of deduction for CSR spends, which is an application of income. However, the Appellant has changed stance and has used a method to claim deduction under a different provision of section 80G. Doctrine of colourable ... activities. This proves that there is no case for relief in case of non-eligible CSR spends. (v) CSR outlay is Application of Income: Further, disallowance of CSR spends are not a case of double disallowance. It is an outlay from capital base of the assessee. It is an "application

Muktisar Welfare Club, Muktsar, Punjab vs. ITO Ward 2(2), Muktsar

In the result, both the appeals of the assessee are allowed for statistical purposes

ITA 235/ASR/2025[2024-2025]Status: DisposedITAT Amritsar21 Nov 2025AY 2024-2025

Bench: Sh. Manoj Kumar Aggarwal & Sh. Udayan Das Gupta(Hybrid Hearing) I.T.A. No. 182 & 235/Asr/2025 Assessment Year.: 2024-25 Muktisar Welfare Club, Near Vs. Ito, Ward-2(2), Manga Petrol Pump Ajit Muktsar. Cinema Road, C/O Rinku Pharma Muktsar, Muktsar, Punjab. [Pan: Aadam2794B] (Respondent) (Appellant)

Section 12ASection 12A(1)Section 12A(1)(ac)

this rejection order is passed solely on this procedural defect without pointing out any other deficiency regarding the genuineness of the activities or application of income for other than chartable I.T.A. No. 182 & 235/Asr/2025 Assessment Year.: 2024-25 5 purpose or for violation of any other object clause

Muktisar Welfare Club, Muktsar vs. ITO Ward 2(2), Muktsar/, Punjab

In the result, both the appeals of the assessee are allowed for statistical purposes

ITA 182/ASR/2025[2024-25]Status: DisposedITAT Amritsar21 Nov 2025AY 2024-25

Section 12ASection 12A(1)Section 12A(1)(ac)

Star Paper Mills Limited, Kolkata vs. PCIT - 2, Kolkata

In the result, the appeal of the assessee is allowed

ITA 641/KOL/2025[2018-19]Status: DisposedITAT Kolkata20 Nov 2025AY 2018-19

Bench: SHRI RAJESH KUMAR, ACCOUNTANT MEMBER SHRI PRADIP KUMAR CHOUBEY (Judicial Member)

Section 143(2)Section 143(3)Section 263Section 36(1)(vii)

selected for scrutiny by issue of notice u/s 143(2) of the Act dated 22.09.2019 wherein one of the CASS reasons was regarding application of Income Computation & Disclosure Standards. The Ld. AR pointed out that, the NFAC had raised specific queries in relation to applicability of ICDS standards

Harmony Foundation, Mumbai vs. ITO Exem Ward 1(3), Mumbai

ITA 5725/MUM/2025[2016-17]Status: DisposedITAT Mumbai20 Nov 2025AY 2016-17

Bench: Shri Narender Kumar Choudhry

For Appellant: Shri Haridas Bhat, Ld. A.RFor Respondent: Shri A.M.K. Mahadevan, Ld. Sr

Section 11Section 11(2)Section 12ASection 142(1)Section 143(2)Section 250Section 80G

IN THE INCOME TAX APPELLATE TRIBUNAL, MUMBAI BENCH “SMC”, MUMBAI BEFORE SHRI NARENDER KUMAR CHOUDHRY, JUDICIAL MEMBER ITA No.5725/M/2025 Assessment

Kranthi Educational Society, Bhadrachallam vs. DCIT., Exemption Circle-1(1), Hyderabad

In the result, the appeal filed by the assessee is allowed for statistical purposes in terms of our observations given hereinabove

ITA 820/HYD/2025[2022-2023]Status: DisposedITAT Hyderabad19 Nov 2025AY 2022-2023

Bench: the Ld. CIT(A).

Section 11Section 11oSection 12ASection 12A(1)(b)Section 139Section 143(1)Section 143(1)(a)

further contended that, the audit had 3 Kranthi Educational Society been completed on time and that the financial statements clearly demonstrated excess application of income amounting to Rs.5,57,229/-, thereby satisfying the conditions prescribed under Sections 11 and 12 of the Act. The assessee also argued that, the belated ... submitted that, the assessee had applied more than 85% of its income for charitable purposes and the financial statements showed excess application of income, which satisfies the primary requirement of the Act. He submitted that the filing of Form No.10B is directory in nature and not mandatory, and such report

Bharat Serums and Vaccines Limited, Mumbai vs. Deputy Commissioner of Income Tax - Circle 15(1)(2), Mumbai

In the result, grounds of appeal raised by the assessee are allowed

ITA 2780/MUM/2025[2020-2021]Status: DisposedITAT Mumbai18 Nov 2025AY 2020-2021

Bench: Shri Narender Kumar Choudhry & Shri Prabhash Shankarbharat Serums & V/S. Deputy Commissioner Of Vaccines Limited बनाम Income Tax, Circle – 15(1)(2), 3Rd Floor, Liberty Tower, Aayakar Bhavan, Mumbai – Airoli, Navi Mumbai – 400 020, Maharashtra 400708, Maharashtra स्थायी लेखा सं./जीआइआर सं./Pan/Gir No: Aaacb2431M Appellant/अपीलार्थी .. Respondent/प्रतिवादी

For Appellant: Shri Manoj Mundra,ARFor Respondent: Shri Leyaqat Ali Aafaqui (Sr.DR)

Section 142(1)Section 143(3)Section 263Section 37(1)Section 80GSection 80G(5)

aforesaid provision is given in the Explanatory Memorandum to the Finance (No.2) Bill, 2014 and is reproduced as under; "CSR expenditure, being an application of income, is not incurred wholly and exclusively for the purposes of carrying on business. As the application of income is not allowed as deduction ... legislative intent and the rationale of disallowance of CSR expenditure referred to in section 135 of the Companies Act, that such expenditure is application of income and not incurred for the purposes of business. We are of considered view that this in itself justifies the grant of deduction

Shri Bhavnagar Dashashrimali Kanthibandh (Vaishnav) Vanik Gnati, Bhavnagar vs. The CIT(Exemption), Ahmedabad

In the result, the appeal in ITA No

ITA 135/AHD/2025[NA]Status: DisposedITAT Ahmedabad17 Nov 2025

Bench: Ms. Suchitra R. Kamble & Shri Makarand V.Mahadeokar

For Appellant: Shri Mohit Balani, AR

Section 12ASection 14Section 253(5)

section 12AB(4). If, in future, any “specified violation” as defined in the Explanation to that section is detected, such as the application of income for the benefit of a particular community, the registration can be cancelled after due process. 4.12 Accordingly, while distinguishing the decision in Gohilwad Vankar Samaj

Shri Bhavnagar Dashashrimali Kanthibandh (Vaishnav) Vanik Gnati, Bhavnagar vs. The CIT(Exemption), Ahmedabad

ITA 134/AHD/2025[NA]Status: DisposedITAT Ahmedabad17 Nov 2025

Bench: Ms. Suchitra R. Kamble & Shri Makarand V.Mahadeokar

For Appellant: Shri Mohit Balani, ARFor Respondent: Shri Rignesh Das, CIT-DR

Section 12ASection 14Section 253(5)

आयकर अपीलीय अधिकरण, अहमदाबाद न्यायपीठ 'C' अहमदाबाद। IN THE INCOME TAX APPELLATE TRIBUNAL “C” BENCH, AHMEDABAD BEFORE MS. SUCHITRA R

James Joseph Palackan, Palackal vs. ITO, Ward-2, Kottayam

In the result, the appeal filed by the assessee stands partly allowed for statistical purposes

ITA 625/COCH/2025[2016-17]Status: DisposedITAT Cochin14 Nov 2025AY 2016-17

Bench: Shri Inturi Rama Rao, Am Assessment Years: 2015-16 James Joseph Palackan .......... Appellant Palco Constructions, Palackal, Vaikom Kottayam 686140 [Pan: Aeupp8573P] Vs. The Income Tax Officer, Ward-2, Kottayam .......... Respondent Assessee By: Shri C.J. Romid, Ca Revenue By: Smt. Leena Lal, Sr. D.R. Date Of Hearing: 28.10.2025 Date Of Pronouncement: 14.11.2025 O R D E R This Appeal Filed By The Assessee Is Directed Against The Order Of The National Faceless Appeal Centre, Delhi [Cit(A)] Dated 07.07.2025 For Assessment Year (Ay) 2016-17. 2. Brief Facts Of The Case Are That The Appellant Is An Individual Engaged In The Business Of Executing Civil Contracts. The Return Of Income For Ay 2016-17 Was Filed On 29.06.2016 Declaring Income Of Rs. 2,97,440/- & Also Agricultural Income Of Rs. 30,00,000/-. The Same Was Revised On 24.01.2018 Showing Agricultural Income Of Rs. 1,00,000/- Only. Against The Said Return Of Income, The Assessment Was Completed By The Income Tax Officer, Ward-2, Kottayam (Hereinafter Called "The Ao") Vide Order Dated 31.12.2018

For Appellant: Shri C.J. Romid, CAFor Respondent: Smt. Leena Lal, Sr. D.R

Section 143(3)

return of income. Mere disbelieving agricultural income does not result in taxable income, inasmuch as, the agricultural income was not shown as application of income. The very fact that the appellant had revised the return of income showing agricultural income of only Rs. 1,00,000/- would demonstrate the fact ... that this agricultural income of Rs. 30,00,000/- was not shown as application of income. In any event, the assessing authority ought not have ignored the revised return of income filed by the appellant. Therefore, I am of the considered opinion that the matter requires remand for de novo

Dabur India Ltd., New Delhi vs. PCIT - 1, New Delhi

In the result, appeal filed by the assessee is allowed

ITA 2075/DEL/2024[2018-19]Status: DisposedITAT Delhi14 Nov 2025AY 2018-19

Bench: SHRIS.RIFAUR RAHMAN (Accountant Member), SHRI VIMAL KUMAR (Judicial Member)

For Appellant: Shri M.P. Rastogi, AdvocateFor Respondent: Shri Sanjeev Kaushal, CITDR

Section 143(3)Section 263Section 32Section 35Section 35(1)Section 80GSection 80I

reconciled, necessary additions on this account may be made. 3. AO may examine the issue regarding reduction in profit because of application of income computation & Disclosure standards has not been examined by the AO at all. After obtaining clarifications and details with reference to impact of accounting standards ... assessee. 8. That the Pr. CIT has erred on facts and under the law that without giving any finding about the effect of application of income computation and disclosure standards adopted by the company under the Income-tax Act and accordingly in the absence thereof the order as passed

Kerala Beedi and Cigar Workers Welfare Fund Board, Kannur vs. ITO, Exemption Ward, Kannur

In the result, both the appeal of the assessee bearing ITA No

ITA 668/COCH/2025[2018-19]Status: DisposedITAT Cochin13 Nov 2025AY 2018-19

Bench: BEFORESHRI. INTURI RAMA RAO, ACCOUNTANT MEMBERAND SHRI. ANIKESH BANERJEE (Judicial Member)

For Appellant: Shri V M Veeramani, C.AFor Respondent: Shri Leena Lal, (SR.AR.)

Section 11Section 12ASection 142(1)Section 143(3)Section 250Section 270A

form 10B as valid one without considering the revised form 10B. The grievances of the assessee that the Ld. AO wrongly adopted the application of income in impugned assessment year amount to Rs. 1,58,03,104/- instead of Rs.4,61,27,469/-. Aggrieved assessee filed an appeal before ... lakhs instead of Nil under section 11(1)(2) and later filed a revised audit report and claimed repayment of loan as application of income, since assessee’s claim was supported by audited financials, revised audit report, revised computation and bank statements reflecting repayment of loan, Assessing Officer

Kerala Beedi and Cigar Workers Welfare Fund Board, Kannur vs. Assessment Unit, Income Tax Department

In the result, both the appeal of the assessee bearing ITA No

ITA 659/COCH/2025[2018-19]Status: DisposedITAT Cochin13 Nov 2025AY 2018-19

Bench: BEFORESHRI. INTURI RAMA RAO, ACCOUNTANT MEMBERAND SHRI. ANIKESH BANERJEE (Judicial Member)

For Appellant: Shri V M Veeramani, C.AFor Respondent: Shri Leena Lal, (SR.AR.)

Section 11Section 12ASection 142(1)Section 143(3)Section 250Section 270A

Scholars Education Trust of India, Jaipur vs. CIT Exemption, Jaipur

In the result, appeal of the assessee is allowed

ITA 1225/JPR/2025[2013-14]Status: DisposedITAT Jaipur12 Nov 2025AY 2013-14

For Appellant: Shri Mahesh Kumar, C.AFor Respondent: Shri Rajesh Ojha, CIT

Section 10Section 10(23)(vi)Section 11(5)Section 13(1)Section 13(3)Section 153(5)Section 2(41)

contentions: 37. Investments are made in pursuance to the charitable objects of the Assessee-trust. The said investments are done as valid application of income within the frame work of Section 11(1) of the Act towards the objects of the Assessee-trust. Furthermore, no doubt is raised ... submits that above said investments in real estate transactions were made by the assessee as part and parcel of its valid application of income within Section 11(1) of the Act, towards its charitable and educational purposes and hence cannot be doubted to be as a valid mode of investment

Peoples Mobile Hospital, Mumbai vs. Income Tax Officer Exemption Ward 2(2), Mumbai

In the result, the appeal of the assessee is dismissed

ITA 4116/MUM/2025[2022-23]Status: DisposedITAT Mumbai12 Nov 2025AY 2022-23

Bench: Shri Pawan Singh & Smt. Renu Jauhri

For Appellant: Respondent byFor Respondent: Ms. Vasanti Patel

Section 11Section 11(1)(a)Section 11(2)Section 11(5)Section 12ASection 139(4)Section 143(1)Section 250

Rs.2,88,03,168/- under section 11 of the act being the amount of revenue expenditure incurred to be allowed as application of income Page 3 ITA NO. 4116/mum/2025. 2.1.2 A sum of Rs.56,53,521/- under section 11(1)(a) of the Act being amount accumulated or set apart ... Rs.25,000/- under section 11 of the Act being the amount of capital expenditure incurred to be allowed as application of income. It is submitted that the disallowances referred to above are unjustified and bad in law as the denial of exemption under Section 11 of the Act itself

Foundation for Universal Responsibility of His Holiness the Dalai Lama, Delhi vs. ITO, Exemp. Ward-1(1), Delhi

In the result, appeal of the Assessee is allowed

ITA 1798/DEL/2025[2023-24]Status: DisposedITAT Delhi12 Nov 2025AY 2023-24

Bench: Shri Challa Nagendra Prasad & Shri M Balaganeshआ.अ.सं/.I.T.A No.1798/Del/2025 िनधा"रणवष"/Assessment Year:2023-24 बनाम Foundation For Universal Income Tax Officer Responsibility Of His Holiness The Vs. (Exemption), Dalai Lama, Ward 1(1), Core-4A, Ugf, India, New Delhi. Habitat Centre, Upper Ground Floor, Lodhi Road, New Delhi. Pan No.Aaatf0174E अपीलाथ" Appellant ""यथ"/Respondent

Section 11(2)Section 11(3)(c)Section 115BSection 12ASection 143(1)

clause (v) or sub-clause (vi) or sub-clause (via) of clause (23C) of section 10, shall not be treated as application of income for charitable or religious purposes, either during the period of accumulation or thereafter. (3) Any income referred to in sub-section (2) which— (a) is applied ... drew our attention to the fact that the assessee had spent a sum of Rs.1,67,47,400/- and to this extent, the application of income for charitable purposes has been accepted by the AO in AY 2014-15 in the order of assessment dated 26.12.2016 passed

Thiruvarur Lions Eye Hospital Trust, Thiruvarur vs. Income Tax Officer, Thiruvarur

In the result, both the appeals filed by the assessee are allowed

ITA 2535/CHNY/2025[2018-19]Status: DisposedITAT Chennai11 Nov 2025AY 2018-19

Bench: Shri George George K & Shri Jagadishआयकर अपील सं./Ita Nos.: 2531 & 2535/Chny/2025 िनधा"रण वष"/Assessment Years: 2016-17 & 2018-19 M/S. Thiruvarur Lions Eye The Income Tax Officer, Hospital Trust, Vs. Thiruvarur 157, Vandampalai, Kangalanchery Post, Thiruvarur – 610 101. Pan: Aaatt 0632P (अपीलाथ"/Appellant) (""यथ"/Respondent) अपीलाथ" क" ओर से/Appellant By : Shri D. Ambarish, Advocate ""यथ" क" ओर से/Respondent By : Ms. Gouthami Manivasagam, Jcit सुनवाई क" तारीख/Date Of Hearing : 11.11.2025 घोषणा क" तारीख/Date Of Pronouncement : 11.11.2025

For Appellant: Shri D. Ambarish, AdvocateFor Respondent: Ms. Gouthami Manivasagam, JCIT

Section 10Section 139Section 143(3)Section 147Section 148Section 250Section 272A(2)(e)

means net income i.e., income after depreciation. The contention of the Ld.AR is not legally tenable. The depreciation is application of income subsequent to the determination of the total income for a trust / institution claiming the benefit of section 11 / 10(23C) of the Act. Depreciation is not an automatic ... deduction but application of income. This is also clear from the dictum laid down by the judicial pronouncement relied on by the Ld.DR. Therefore, this contention of the Ld.AR is rejected. 16. Further, we have to examine whether there is reasonable cause as mandated u/s.273B of the Act for deletion

Thiruvarur Lions Eye Hospital Trust, Thiruvarur vs. Income Tax Officer, Thiruvarur

In the result, both the appeals filed by the assessee are allowed

ITA 2531/CHNY/2025[2016-17]Status: DisposedITAT Chennai11 Nov 2025AY 2016-17

For Appellant: Shri D. Ambarish, AdvocateFor Respondent: Ms. Gouthami Manivasagam, JCIT

Section 10Section 139Section 143(3)Section 147Section 148Section 250Section 272A(2)(e)

All India Fine Art and Crafts Society, New Delhi vs. ITO, Ward Expempt 1(1), Delhi, New Delhi

In the result, appeal of assessee in ITA No

ITA 3730/DEL/2024[2017-18]Status: DisposedITAT Delhi10 Nov 2025AY 2017-18

Bench: Shri Satbeer Singh Godara & Shri Naveen Chandra

For Appellant: Shri Salil Kapoor, AdvFor Respondent: Shri Rajesh Mahajan, Sr. DR

Section 11Section 11(3)Section 143(3)Section 250Section 270A

erred in upholding the view taken by the AO by not treating the amount of Rs. 1,33,82,049/- as the application of income and denying the benefit available under Section 11 of the Act on the said amount. 5. That in view of the facts and circumstances