“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

Swamiji Sri Brahmatantra Swatantra Parakala Swamy, Mysore vs. Deputy Commissioner of Income Tax, Exemptions, Circle-1, Bangalore

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

ITA 1628/BANG/2025[2018-19]Status: DisposedITAT Bangalore16 Feb 2026AY 2018-19

Bench: Shri Prashant Maharishi, Vice – & Shri Soundararajan K.Assessment Year : 2018-19

For Appellant: Shri Vinaysimha, CAFor Respondent: Shri Subramanian .S, JCIT-DR

Section 11Section 12ASection 142(1)Section 270A

assessee is a registered trust u/s. 12A of the Act and filed their return of income and claimed the receipts as deduction towards application of income u/s. 11 of the Act. The AO issued notice u/s. 142(1) on three occasions and sought for the details about the deduction claimed ... towards the application of income. The AO also sought for the reason for the accumulation of more income by the trust. Page 2 of 5 The assessee submitted their reply along with the details and form 10 and 10B for the accumulation of income. The AO had not accepted

Din Dayal Jalan Textiles Pvt Ltd, Mumbai vs. Asst. CIT 4(1)(1), Mumbai

In the result, the appeal of the assessee is allowed

ITA 7678/MUM/2025[2022-23]Status: DisposedITAT Mumbai16 Feb 2026AY 2022-23

Bench: Shri Saktijit Dey & Shri Makarand Vasant Mahadeokardin Dayal Jalan Textile Acit-4(1)(1), Pvt. Ltd. Room No. 642, 6Th 904-5, Royal Square, 9Th Vs. Floor, Aayakr Floor, 173, Dr. Vigas Bhavan, Queen Street, Mumbai-400 002 Road, Mumbai – 400 001 Pan/Gir No. Aabcd2310E (Applicant) (Respondent) Assessee By Shri D. C. Jain, Ld. Ar Revenue By Shri Annavaram Kosuri, Ld. Dr Date Of Hearing 09.02.2026 Date Of Pronouncement 16.02.2026

Section 132Section 143(3)Section 144BSection 2Section 69A

selected for scrutiny under CASS on the reasons recorded as “Large squared up loans during the year, Reduction in profit because of application of Income Computation and Disclosure Standards and Information in verification cases uploaded through CRIU.” 3. During the course of assessment proceedings, the Assessing Officer received information that

Narrotam Morarjee Institute of Shipping, Mumbai vs. ITO (Exemption)Ward 2(1), Mumbai

In the result, appeal of the assessee is allowed

ITA 5559/MUM/2025[2018-19]Status: DisposedITAT Mumbai16 Feb 2026AY 2018-19

Bench: Shri Amit Shukla & Shri Girish Agrawalassessment Year: 2018-19 Narrotam Morarjee Institute Of National Faceless Shipping, Mumbai Assessment Appeal Centre 76 – Jolly Maker, Chambers – 2, (Nfac) Office Of The Vs. Vivek Shah, Mumbai, Nariman Commissioner Of Income Point S.O.-400021 Tax, Appeal, Addl/Jcit(A) Delhi (Pan : Aaatn0042R) (Appellant) (Respondent) Present For: Assessee : Shri Nishit Gandhi, Advocate Revenue : Shri Leyaqat Ali Afaqui, Sr. Dr Date Of Hearing : 18.11.2025 Date Of Pronouncement : 16.02.2026 O R D E R Per Girish Agrawal: This Appeal Filed By The Assessee Is Against The Order Of Commissioner Of Income Tax (Appeal), National Faceless Appeal Centre (Nfac), Delhi Vide Order No. Itba/Nfac/S/250/2025- 26/1078465227(1) Dated 14.07.2025 Passed Against The Penalty Order U/S. 270A Of The Income-Tax Act, 1961 (Hereinafter Referred To As The “Act”), For Ay 2018-19. 2. Grounds Taken By The Assessee Are Reproduced As Under: 1. In The Facts & Circumstances Of The Case & In Law, The Learned Commissioner Of Income Tax (Appeals), National Faceless Appeals Centre, Delhi ["The Cit (A)") U/S 250 Of The Income Tax Act, 1961 ["The Act For Short Erred In Confirming The Penalty U/S 270A Of The Act Passed

For Appellant: Shri Nishit Gandhi, AdvocateFor Respondent: Shri Leyaqat Ali Afaqui, Sr. DR

Section 11Section 11(1)(a)Section 11(2)Section 12ASection 250Section 270A

penalty order, there is no discussion in respect of disallowance made by ld. AO towards depreciation nor in respect of application of income towards capital expenditure though in the assessment order ld. AO had mentioned about initiation of penalty proceedings u/s 270A while making disallowance for depreciation, holding

Triveni Turbine Ltd, Noida vs. ACIT, Circle 5(3)(1), Noida

In the result, the appeal of the assessee is dismissed

ITA 1061/DEL/2023[2018-19]Status: DisposedITAT Delhi16 Feb 2026AY 2018-19

Bench: Shri Anubhav Sharma & Shri Krinwant Sahay[Assessment Year: 2018-19]

Section 135Section 143(3)Section 144BSection 234ASection 35Section 37(1)Section 80GSection 80G(2)(a)

same is incurred wholly and exclusively for the purposes of carrying on business or profession. As the CSR expenditure (being an application of income) is not incurred for the purposes of carrying on business, such expenditures cannot be allowed under the existing provisions of section 37 of the Income

Institute of Actuaries of India, Mumbai vs. DCIT (Exemptions)-1(1), Mumbai

ITA 7028/MUM/2025[2015-16]Status: DisposedITAT Mumbai11 Feb 2026AY 2015-16

Bench: Shri Pawan Singh, Jm & Shri Arun Khodpia, Am

Section 10Section 11Section 119(2)(b)Section 143(1)

income as Nil. The said return was processed on 30.03.2017 by the CPC, Bangalore and while processing the return, the CPC had disallowed application of income and claim of exemption under section 11 of the Act because of non-filing of prerequisite and mandatory Audit Report in Form

Navalmal Firodia Memorial Hospital Trust, Pune vs. Income Tax Officer, Exemption Ward 1(2), Pune

In the result, the appeal filed by the assessee is allowed

ITA 2460/PUN/2025[2023-24]Status: DisposedITAT Pune10 Feb 2026AY 2023-24

Bench: the learned CIT(A), the same has neither been taken note of or distinguished in any manner. Not following the binding Judicial precedent of the Jurisdictional ITAT Pune is gross impropriety in law. Ground No. 2: The Appellant craves leave to add, alter, amend or withdraw all or any of the Grounds of Appeal herein and to submit such statements, documents and papers as may be considered necessary either at or before the appeal hearing.”

For Appellant: Shri Shrenik GandhiFor Respondent: Shri Manish Sinha (Virtual)

Section 11Section 11(2)(a)Section 11(3)Section 11(3)(c)Section 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

Calcutta New School Society, Kolkata vs. ITO, Ward 1(1), Exempt, Kolkata

ITA 1021/KOL/2025[2022-2023]Status: DisposedITAT Kolkata10 Feb 2026AY 2022-2023

Bench: Shri Rajesh Kumar & Shri Pradip Kumar Choubey

Section 154Section 250Section 5Section 80G

discharging its tax liability of Rs.47,757. At the time of filing the return in Form ITR-7, the assessee reported an application of income amounting to Rs. 13,567,642 and an accumulation of Rs.10,41,069, however, the return was not accepted and subsequently processed by CPC thereby

John Dewey Educational Trust, Villupuram vs. DCIT / ACIT, Exemptions, Chennai

In the result, the appeal of the assessee is allowed

ITA 2917/CHNY/2025[2022-23]Status: DisposedITAT Chennai10 Feb 2026AY 2022-23

Bench: Shri Aby T. Varkey & Ms. Padmavathy.Sआयकर अपील सं./Ita No.2917/Chny/2025 िनधा$रण वष$ /Assessment Year: 2022-23

For Appellant: Ms. Nidhi Jain, C.A ()For Respondent: Ms. R. Anitha, Addl. CIT

Section 11Section 143(3)Section 250

expenditure and capital expenditure, respectively from borrowed funds, would not automatically prove that the appellant had not claimed the said amounts as its application of income in any of the preceding year(s) starting from the year in which the said loan / borrowings were taken by it. On the contrary ... Conjoint treading of both the columns of this Schedule would mean that, sum of Rs. 53,24,467/- has not been claimed as application of income u/s 11 of the Act in the said year. From the above it is apparent that in terms of its demonstration that the impugned

DCIT, Central Circle 7(1), Mumbai vs. Dr D Y Patil Educational Academy, Mumbai

In the result, the appeal filed by the revenue stands

ITA 3922/MUM/2025[2015]Status: DisposedITAT Mumbai10 Feb 2026

Bench: Shri Sandeep Gosain, () & Shri Prabhash Shankar, ()

Section 132Section 147Section 153CSection 250Section 68

exemption under section 10(23C) of the Act with respect to donation of Rs. 1 crore and not considering the gratuity provision as application of income for educational purposes. No doubt, on identical facts and circumstances the addition made by the learned Assessing Officer for A.Y. 2011-12 wherein, donation

The Federation of Indian Publishers, Near Jnu vs. Ward Exemp 2(3), Delhi, Civic Centre, New Delhi

Appeal is allowed for statistical purpose

ITA 163/DEL/2026[2024-25]Status: DisposedITAT Delhi10 Feb 2026AY 2024-25

Bench: Sh. Satbeer Singh Godaraita No. 163/Del/2026 : Asstt. Year: 2024-25 The Federation Of Indian Publishers Vs Income Tax Officer, 18/1-C, Institutional Area, Aruna Ward Exemp-2(3), Asaf Ali Marg (Near Jnu), New Delhi-110002 New Delhi-110067 (Appellant) (Respondent) Pan No. Mnrps2732P Assessee By: Sh. R. K. Kapoor, Ca Revenue By : Sh. Manoj Kumar, Sr. Dr Date Of Hearing: 10.02.2026 Date Of Pronouncement: 10.02.2026 Order This Assessee’S Appeal For Assessment Year 2024-25 Arises Against The Addl./Jcit(A), Agra’S Din & Order No. Itba/Apl/S/250/2025-26/1079012042(1) Dated 29.07.2025, In Proceedings U/S 143(1) Of The Income Tax Act, 1961 (In Short “The Act”).

For Appellant: Sh. R. K. Kapoor, CAFor Respondent: Sh. Manoj Kumar, Sr. DR

Section 11Section 143(1)Section 2

Faced with this situation and in the larger interest of justice, I hereby direct the learned assessing authority to verify the assessee’s application of income as to whether the same is covered under the foregoing rule, within three effective opportunities subject to a rider that the appellant shall plead

Switchtech Incubator Foundation, Khorda vs. Deputy Commissioner of Income Tax, Bhubaneswar

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

ITA 676/CTK/2025[2026-27]Status: DisposedITAT Cuttack09 Feb 2026AY 2026-27

Bench: ITAT. The Ld. counsel submitted that merely for non-submission of financial statement should not be taken base for rejecting of the Form 10AB filed by the assessee for registration of the trust u/s 12AB. He requested and undertook that if one more chance be given to the assessee to produce documents as desired by the Ld. CIT(E). the assessee will comply for the documents.4. On the other hand, the Ld. DR relied on the order of lower authorities.5. Considering the rival submissions and perusi

For Respondent: Sh. Ashim Kumar Chakraborty

Section 10BSection 12ASection 12A(1)(ac)Section 250

assessee vide SCN dated 11.11.2025. However, the assessee did not file desired financial statements/documents, therefore, the genuineness of the activities and application of income of the trust could not be verified. Accordingly, he rejected the application filed by the assessee. 3. Aggrieved from the above order, the assessee filed appeal ... been rejected by the Ld. CIT(E) only for not furnishing the financial statements/documents for the period ending 31.03.2025 and not proving the application of income towards the object of the assessee. However, during the course of hearing before us, the Ld. Counsel 3 Switchtech Incubator Foundation undertook that

Sant Shri Ashramji Mahila Utthan Ashram, Ahmedabad vs. ITO(Exemption), Ward-2, Ahmedanad

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

ITA 1239/AHD/2018[2011-12]Status: DisposedITAT Ahmedabad09 Feb 2026AY 2011-12

Bench: Shri Tr Senthil Kumar & Shri Narendra Prasad Sinha

Section 11Section 12ASection 144Section 271(1)(c)Section 35(1)(i)Section 80G

finding of the Ld. CIT(A) that due to non-compliance of the assessee, the AO couldn’t verify whether the application of income was as per the objects of the trust or not, the Ld. Sr. Counsel submitted that the matter may be set aside to the file ... entitled to claim of exemption u/s. 11 of the Act. The Ld. CIT(A) had, however, given a finding that whether the application of income as claimed by the assessee was as per the objects of the trust or not, was not examined by the AO in the absence

Sant Shree Asharamji Mahila Utthan Ashram, Ahmedabad vs. The Dy.DIT- (Exemption), Ahmedabad

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

ITA 1154/AHD/2015[2011-12]Status: DisposedITAT Ahmedabad09 Feb 2026AY 2011-12

Bench: Shri Tr Senthil Kumar & Shri Narendra Prasad Sinha

Section 11Section 12ASection 144Section 271(1)(c)Section 35(1)(i)Section 80G

Vishnu Janardhan Shirolkar Mahajan Wady Trust, Mumbai vs. ITO (Exemption)-2(4), Mumbai

In the result, the grounds of

ITA 6603/MUM/2025[2015-16]Status: DisposedITAT Mumbai09 Feb 2026AY 2015-16

Section 11Section 12ASection 250Section 254(1)

dismissed as unadmitted. In both the years, Central Processing Centre (CPC) processed the return of income and has the assessee was not allowed application of income under section 11/12 of the Act, on the ground that Form-10-B was filed after filing return of income ... after filing return of income, though it was filed within due date, such fact is otherwise not in dispute. The CPC not allowed application of income under section 11/12 of the Act, on the ground that Form-10-B was filed after filing return of income. Such report was available

Vishnu Janardhan Shirolkar Mahajan Wady Trust, Mumbai vs. ITO (Exemption)-2(4), Mumbai

In the result, the grounds of

ITA 6602/MUM/2025[2021-22]Status: DisposedITAT Mumbai09 Feb 2026AY 2021-22

Bench: SHRI PAWAN SINGH (Judicial Member)

Section 11Section 12ASection 250Section 254(1)