“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

Hanumant Construction Pvt. Ltd., Raipur vs. ACIT, Central Circle-1, Raipur

In the result, all the appeals filed by the assessee are allowed for statistical purposes

ITA 545/RPR/2025[2013-14]Status: DisposedITAT Raipur06 Feb 2026AY 2013-14

Bench: Shri Partha Sarathi Chaudhury & Shri Avdhesh Kumar Mishraआयकर अपील सं. / Ita Nos.545, 546, 547, 548, 549 & 550/Rpr/2025 "नधा"रण वष" / Assessment Years : 2013-14 To 2018-19 Hanumant Construction Pvt. Ltd. Ground Floor, Parwani Complex, Civil Lines, Raipur (C.G.) Pan: Aabch7062D

For Appellant: Shri B. Subramanyam, CAFor Respondent: Shri Yogesh Kumar Sharma, CIT-DR

Raipur ITA Nos. 545 to 550/RPR/2025 when the assessee is bankrupt and there is no income, then there is no question of application of income tax, more so, regarding the application of law of limitation. In such scenario, demanding the assessee to comply with time fame would be something even

Global Council of Zoroastrians Trust, Mumbai vs. CIT (Exemptions), Mumbai

ITA 4930/MUM/2025[N.A.]Status: DisposedITAT Mumbai06 Feb 2026

Bench: Shri Saktijit Dey & Shri Jagadish

Section 11Section 12ASection 12A(1)(ac)Section 13(1)(b)Section 80GSection 80G(5)

examination of the objects of the trust and the genuineness of activities, and not to embark upon an enquiry regarding possible future application of income or apprehended violations. 6. It was further submitted that the mere fact that the trust’s objects refer to a particular community does not automatically ... material for achieving its objects. The scope of enquiry at this stage is therefore limited and does not extend to examination of actual application of income in a particular manner or to hypothetical future conduct of the trust. 9. The Hon’ble Supreme Court in Dawoodi Bohara Jamat

Global Council of Zoroastrians Trust, Mumbai vs. CIT (Exemptions), Mumbai

ITA 4928/MUM/2025[N.A.]Status: DisposedITAT Mumbai06 Feb 2026

Bench: Shri Saktijit Dey & Shri Jagadish

Section 11Section 12ASection 12A(1)(ac)Section 13(1)(b)Section 80GSection 80G(5)

Rao Khem Chand Vidya Vihar Shiksha Samiti, Rewari vs. ITO-TDS, Rohtak

In the result, the appeal of the Assessee in ITA No

ITA 3856/DEL/2024[2016-17]Status: DisposedITAT Delhi06 Feb 2026AY 2016-17

Bench: Ms. Madhumita Roy & Shri Naveen Chandra

For Appellant: Shri M.R. Sahu, CAFor Respondent: Ms. Harpreet Kaur Hansra, Sr. DR

Section 12ASection 191Section 200(3)Section 200A(1)Section 201Section 234ESection 40a

12AA of the Income-tax Act, 1961 [the Act, for short] and claiming relief u/s 11 of the Act relating to its application of income. The Assessing Officer, made an assessment u/s 143(3) dated 15.11.2018, disallowed a sum of Rs.8,31,572/- due to non-deduction

M/S.Agastya Gurukulam Public Charitable Trust, Chennai vs. CIT, Exemptions, Chennai

ITA 377/CHNY/2025[-]Status: DisposedITAT Chennai05 Feb 2026

For Appellant: Shri. R. Viswanathan, C.AFor Respondent: Ms. E. Pavuna Sundari, C.I.T

Section 12ASection 2(15)Section 80G(5)

that the curriculum and examinations conducted by the NIOS is recognised is on par with the CBSE conducted courses. On the issue of application of income and scholarships, the Id.AR for assessee submitted that in the earlier years the income was applied to charitable activities and that scholarships were given

M/. Agastya Gurukulam Public Charitable Trust, Chennai vs. CIT, Exemptions, Chennai

The appeals of the assessee are allowed

ITA 376/CHNY/2025[-]Status: DisposedITAT Chennai05 Feb 2026

Bench: Shri Manu Kumar Giri & Shri S. R. Raghunatha

For Appellant: Shri. R. Viswanathan, C.AFor Respondent: Ms. E. Pavuna Sundari, C.I.T

Section 12ASection 2(15)Section 80G(5)

that the curriculum and examinations conducted by the NIOS is recognised is on par with the CBSE conducted courses. On the issue of application of income and scholarships, the ld.AR for assessee submitted that in the earlier years the income was applied :-4-: ITA. Nos:376 & 377/Chny/2025 to charitable activities

International Society of Divine Love Jagadguru Dham, Mathura vs. ITO, Ward (Exemption), Agra

In the result, the appeal of the Assessee is allowed

ITA 527/AGR/2025[2018-19]Status: DisposedITAT Agra03 Feb 2026AY 2018-19

Bench: Shri M. Balaganeshinternational Society Of Divine Vs. Ito, Love Jagadguru Dham Raman Ward (Exemption), Reti, Vrindavan, Mathura- Aayankar Bhawan, 281121 Sanjay Place, Agra (Appellant) (Respondent) Pan: Aati2546M Assessee By : None Revenue By: Shri Anil Kumar, Sr. Dr Date Of Hearing 23/01/2026 Date Of Pronouncement 03/02/2026

For Appellant: NoneFor Respondent: Shri Anil Kumar, Sr. DR

Section 12ASection 143(3)Section 2(15)

whether the bhandara expenses incurred by the Assessee could be construed as International Society of Divine Love Jagadguru Dham Raman Reti application of income for charitable purposes in the facts and circumstances of the instant case. 4. I have heard the Learned DR and perused the materials available on record ... funds for objects of the Trust. The learned AO accordingly re-computed the income of the Trust by ignoring these two items as application of income for charitable purposes and completed the assessment under Section 143(3) read with Sections

Income Tax Officer, Cumballa Hill vs. Seth Damji Laxmichand Jain Dharma Sthanak, Chinchpokali

In the result, the appeal is dismissed

ITA 4824/MUM/2025[2012-13]Status: DisposedITAT Mumbai03 Feb 2026AY 2012-13

Bench: Shri Saktijit Dey & Shri Jagadishincome Tax Officer Seth Damji Laxmichand Jain Room No. 617, 6Th Floor, Dharma Sthanak Mtnl Building, Peddar Road, Vs. 64 Dr. Ambedkar Road, Cumballa Hill, Mumbai-400 026 Opp. Kalchowki, Post Office, Chichpokali, Mumbai-400 012 Pan/Gir No. Aacts 2218 L (Appellant) : (Respondent) Appellant By : Shri Hemant Jawahar Lal & Shri Ravi Ganatra Respondent By : Shri Arun Kanti Datta – Cit Dr Date Of Hearing : 14.01.2026 Date Of Pronouncement : 03.02.2026 O R D E R Per Saktijit Dey: The Present Appeal By The Department Arises Out Of Order Dated 26.05.2025, Passed By National Faceless Appeal Centre (‘Nfac’ For Short), Delhi Pertaining To The Assessment Year (A.Y. For Short) 2012-13. 2. The Effective Grounds Raised By The Department Are As Under: 1. "On The Facts & Circumstances In Allowing Of The Case & In Law, The Ld Cit(A) Erred The Benefit Of Indexed Cost Of Acquisition Trust Registered U/S. 48 Of The Act To A U/S. 12A, Disregarding Dated 19.06.1968. The Cbdt Circular No 5-P(Lxx- 2. "On The Facts & Circumstances Allowing Accumulation Of The Case & In Law, The Cit(A) Erred In Same Being Under Section 11(1)(A) On Capital Gains, Despite The Resulting In Already Deemed As Applied Under Section 11(1A), Thereby Double Deduction". 3. "On The Facts & Circumstances To Appreciate Of The Case & In Law, He Ld. Cit(A) Failed J.K. Synthetics The Ratio Of Decision Of Hon'Ble Supreme Court In The Case Of Apex Court Ltd. V. Union Of India (199 Itr 43) (Sc) Wherein The Hon'Ble Has Categorically Held That No Legislation Permit Double Can Be Construed To Specifically Deduction In Respect Of The Same Expenditure Unless Provided.

For Appellant: Shri Hemant Jawahar Lal &For Respondent: Shri Arun Kanti Datta – CIT DR

Section 11Section 11(1)(a)Section 11(2)Section 11ASection 12ASection 48

arising from transfer of a capital asset being property held by the Trust for charitable or religious purpose can be considered as an application of income if such capital gain is utilized for acquiring another capital asset to be held by the Trust. Explanation 2 to section

Global Education Trust, Mumbai vs. Income Tax Officer(Exem), Ward-1(3), Mumbai

In the result, the appeal is allowed

ITA 3463/MUM/2025[2020-21]Status: DisposedITAT Mumbai03 Feb 2026AY 2020-21

Bench: Justice (Retd.) C V Bhadang, Hon’Ble & Shri Prabhash Shankar, Hon’Bleglobal Education Trust, Ito (Exemption) Ward 1(3), 9, 1St Floor, Brijwasi Building Mumbai Vs. Sonawala Road, Goregaon East, Mumbai 400 063. Pan : Aaatg8496J (Appellant) (Respondent)

For Appellant: Shri Prakash JhunjhunwalaFor Respondent: Shri Arun Kanti Datta

Section 10(11)Section 11Section 143(1)Section 249(3)

short). The appellant had declared ‘nil’ income for the relevant year after claiming a sum of Rs.11,46,35,679-/ as application of income. The CPC, Bangalore had refused to grant exemption vide intimation dated 24.12.2021 under section 10(11) inter alia on the ground of the delay in filing

Income Tax Officer, Exemptions, Madurai vs. Dolphin Educational Foundation, Madurai

ITA 2600/CHNY/2025[2020-21]Status: DisposedITAT Chennai02 Feb 2026AY 2020-21

For Appellant: Ms. R. Anitha, Addl. C.I.ΤFor Respondent: None

आयकर अपीलीय अधिकरण, 'सी' न्यायपीठ, चेन्नई IN THE INCOME TAX APPELLATE TRIBUNAL 'C' BENCH, CHENNAI श्री मनु कुमार गिरि, न्यायिक

Team Colours Foundation, Vadlamuru vs. ITO, Exemption Ward, Rajahmundry

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

ITA 730/VIZ/2025[2023-24]Status: DisposedITAT Visakhapatnam30 Jan 2026AY 2023-24

Bench: Ld.CIT(A) and this First Appellate Authority confirmed the addition by stating that the Trust doesn't have Registration u/s 12AB and hence all the donations were taxable as corpus donations. For coming to this conclusion, the Ld.CIT(A) quoted several decisions in his appeal order including a Supreme Court decision of UP Forest Corporation Vs. CIT, 297 ITR 1 (SC). 5. The appellant Trust filed an appeal before ITAT with the grounds of appeal mentioned in para 2 of this order. Apart from argui

Section 11Section 12ASection 80G(5)

registration already granted to the appellant Trust. b) The Ld.CIT(A) has erred in treating the voluntary contributions as corpus and disregarded the application of income presuming that the appellant lacked a valid 12AB registration. 3. From the assessment order, it is observed that the case was selected for cancellation

Shree Tekchandji Maharaj Trust, Ujjain vs. Assessing Officer, Ujjain

ITA 537/IND/2025[2016-17]Status: DisposedITAT Indore30 Jan 2026AY 2016-17

Bench: Shri B.M. Biyani & Shri Paresh M Joshi

Section 133(6)Section 139(1)Section 142(1)Section 144Section 147Section 148Section 148ASection 250Section 253Section 69A

depreciation claimed w.r.t. movable / immovable assets. Also specify whether the capital expenditure on account of acquisition of these assets have been claimed as application of income in the current year/previous years or not. If yes, submit justification for the same. 12) Details of the persons/ institutions to whom donation have

Edgeverve Systems Limited, Bangalore vs. ACIT, Circle-2(2)(1), Bangalore

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

ITA 293/BANG/2025[2020-21]Status: DisposedITAT Bangalore30 Jan 2026AY 2020-21

Bench: Shri Waseem Ahmed & Shri Soundararajan K

For Appellant: Shri Padamchand Kincha, CAFor Respondent: Shri Shivanad Kalakeri, CIT (DR)

Section 250Section 254Section 37Section 90

nature of income tax and are directly linked to the profits earned abroad. Such taxes, according to the learned DR, represent application of income and not an expenditure incurred for the purpose of carrying on business. Therefore, they are not allowable as a deduction under section

Edgeverve Systems Limited, Bangalore vs. ACIT, Circle-2(2)(1), Bangalore

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

ITA 292/BANG/2025[2019-20]Status: DisposedITAT Bangalore30 Jan 2026AY 2019-20

Bench: Shri Waseem Ahmed & Shri Soundararajan K

For Appellant: Shri Padamchand Kincha, CAFor Respondent: Shri Shivanad Kalakeri, CIT (DR)

Section 250Section 254Section 37Section 90

Edgeverve Systems Limited, Bangalore vs. ACIT, Circle-2(2)(1), Bangalore

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

ITA 290/BANG/2025[2017-18]Status: DisposedITAT Bangalore30 Jan 2026AY 2017-18

Bench: Shri Waseem Ahmed & Shri Soundararajan K

For Appellant: Shri Padamchand Kincha, CAFor Respondent: Shri Shivanad Kalakeri, CIT (DR)

Section 250Section 254Section 37Section 90

Here Solutions India Private Limited, Mumbai vs. The Deputy Commissioner of Income Tax (Circle 4(2)(1), Mumbai)

In the result, appeal of the assessee is allowed

ITA 6658/MUM/2025[2022-2023]Status: DisposedITAT Mumbai30 Jan 2026AY 2022-2023

Bench: Smt. Beena Pillai & Shri Girish Agrawalassessment Year: 2022-23

For Appellant: Shri Ketan Ved, CAFor Respondent: Shri Pravin Salunkhe, Sr. DR

Section 144C(5)Section 37Section 37(1)Section 80GSection 80G(1)(i)Section 80G(5)

there is no restriction under section 80G to the effect that the contribution should be voluntary and that the CSR spend is an application of income which is eligible for deduction from the gross total income of the assessee as per the provisions of section 80G.  Now coming

Indian Education Trust, Dhanbad vs. Commissioner Income Tax Appeal, Income Tax Department Delhi

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

ITA 442/RAN/2024[2018-19]Status: DisposedITAT Ranchi29 Jan 2026AY 2018-19

Bench: Shri Sonjoy Sarma & Shri Ratnesh Nandan Sahay(Virtual Hearing) Indian Education Trust, Exemption Ward, Shishu Vihar, Bastacolla, Dhansar, Dhanbad. Vs. Dhanbad, Jharkhand. Pan No. Aaati 4414 L Appellant/ Assessee Respondent/ Revenue

Section 11(1)Section 12ASection 143Section 143(3)Section 144Section 250

Income Tax Act, 1961 (In short, the Act) was passed on 13/04/2021 for the A.Y. 2018-19 on the ground that the application of income amounting to ₹ 3,24,32,966/- claimed by the appellant trust was wrongly shown under Section 11(1) of the Act and failed to substantiate

ACIT(Exemption), Circle-2, Ahmedabad vs. Gujarat Enviormental Service Society, Anand

In the result, the appeal of the Department is dismissed

ITA 1817/AHD/2025[2023-24]Status: DisposedITAT Ahmedabad29 Jan 2026AY 2023-24

Bench: Dr. Brr Kumar & Shri Siddhartha Nautiyal

For Appellant: Shri Sunil Talati, CAFor Respondent: Shri R P Rastogi, CIT-DR

Section 11Section 12ASection 2(15)

appeal, the Ld. CIT(A), after examining the objects of the assessee, the nature of activities carried out and the manner of application of income, ACIT(Exemption) vs. Gujarat Enviormental Service Society Asst.Year –2023-24 - 5– held that the activities of the assessee were purely charitable in nature, falling within

Gujarat Knowledge Society, Gandhinagar vs. The ITO, Ward-1(Exemp), Ahmedabad

In the result, the appeal of the assessee is allowed

ITA 1990/AHD/2024[2017-18]Status: DisposedITAT Ahmedabad29 Jan 2026AY 2017-18

Bench: Dr. Brr Kumar & Shri Siddhartha Nautiyal

For Appellant: Shri S.N. Divatia & Shri Samir Vora AR’sFor Respondent: Shri R P Rastogi, CIT-DR

Section 10Section 250Section 5

assessee was entitled to exemption under section 11 of the Act by virtue of its valid registration under section 12AA, and the application of income in earlier and subsequent years had been consistently accepted by the Department. The assessee also highlighted the principle of consistency, pointing out that in Assessment

Mihijam Educational Trust, Kolkata vs. I.T.O., Ward - 30(1), Kolkata

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

ITA 2074/KOL/2025[2023-2024]Status: DisposedITAT Kolkata29 Jan 2026AY 2023-2024

Bench: Shri George Mathan & Shri Rakesh Mishra

Section 10Section 139(1)Section 143(1)

Appeals) and Ld. A.O. CPC both erred in not allowing entire income of the appellant as exempt U/s 10(23C)(iiiad) and assessing Application of income Rs. 83,12,644/- as total income U/s 143(1) of the Act. 6) For that on the facts and circumstances of the case