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“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

Makson Pharma Ceuticals (India) Private Limited, Surendranagar vs. Pr. CIT, Ahmedabad-3, Ahmedabad

In the result, the appeal of the assessee is allowed

ITA 1232/AHD/2025[2020-21]Status: DisposedITAT Ahmedabad12 Dec 2025AY 2020-21

Bench: Dr. Brr Kumar & Ms. Suchitra Kambleassessment Year 2020-21

For Appellant: Shri Mehul Ranpura, A.RFor Respondent: Shri Alpesh Parmar, CIT-D.R
Section 143(3)Section 14ASection 263Section 37(1)Section 80G

claimed as deduction u/s. 80G of the Act. CSR is mandated to be income by company and is an application of income and cannot be allowed as business I.T.A No. 1232/Ahd/2025 Makson Pharma Ceuticals (India) Pvt. Ltd., A.Y. 2020-21 expenditure. At the same time, this amount cannot be used

ITO (International Taxation)-1, Hyderabad vs. Kesava Kumar Kunapureddy, Hyderabad

In the result, the appeal of the Revenue is dismissed

ITA 937/HYD/2025[2018-19]Status: DisposedITAT Hyderabad12 Dec 2025AY 2018-19

Bench: SHRI VIJAY PAL RAO, HON’BLE (Vice President), SHRI MANJUNATHA G, HON’BLE (Accountant Member)

Section 139(1)Section 54ESection 54F

being the amount of TDS deducted on sale consideration for purchase of the property as application of income or amount spent for construction/purchase of house property on or before the due date for filing of return of income under Section 139(1) of the Act, because, the said amount

The Bombay St. Xaviers, Mumbai vs. Income Tax Officer Exemption Ward 2(4), Mumbai

ITA 3643/MUM/2025[2023-24]Status: DisposedITAT Mumbai12 Dec 2025AY 2023-24

Bench: SHRI OM PRAKASH KANT, ACCOUNTANT MEMBER SHRI RAHUL CHAUDHARY (Judicial Member)

For Appellant: Ms. Vasanti B. PatelFor Respondent: Shri Leyaqat Ali Aafaqui
Section 11Section 11(1)Section 119(2)(b)Section 12ASection 12A(1)(b)Section 143(1)

claiming the exemption. GROUNDS OF APPEAL The Appellant prays that the learned Assessing Officer (CPC) be directed to grant the deduction for application of income under section 11 of the Act for the sum of Rs. 7,49,97,625/- and reduce the total income of the Appellant accordingly

The Bombay St. Xaviers Society, Mumbai vs. Income Tax Officer Exemption Ward 2(4), Mumbai

ITA 1266/MUM/2025[2022-23]Status: DisposedITAT Mumbai12 Dec 2025AY 2022-23

Bench: SHRI OM PRAKASH KANT, ACCOUNTANT MEMBER SHRI RAHUL CHAUDHARY (Judicial Member)

For Appellant: Ms. Vasanti B. PatelFor Respondent: Shri Leyaqat Ali Aafaqui
Section 11Section 11(1)Section 119(2)(b)Section 12ASection 12A(1)(b)Section 143(1)

claiming the exemption. GROUNDS OF APPEAL The Appellant prays that the learned Assessing Officer (CPC) be directed to grant the deduction for application of income under section 11 of the Act for the sum of Rs. 7,49,97,625/- and reduce the total income of the Appellant accordingly

Salwan Education Trust, New Delhi vs. DCIT, Exmp 2(1), Delhi

In the result, the appeal of the assessee is allowed as above

ITA 5275/DEL/2024[2018-19]Status: DisposedITAT Delhi12 Dec 2025AY 2018-19

Bench: Shri Challa Nagendra Prasad & Shri Brajesh Kumar Singh[Assessment Year: 2018-19] Salwan Education Trust, Dcit, Salwan Schools Campus, Pt Exemption 2(1), Girdhari Lal Salwan Marg, Vs Delhi, Rajinder Nagar, 24Th Floor, Civic Centre, New Delhi-110060, New Delhi-110002. Pan- Aacts9741A Assessee Revenue

Section 11(1)Section 11(2)Section 12ASection 143(2)Section 143(3)

case, the CIT (Appeals) NFAC has erred in sustaining the addition of Rs.2,63,76,431-on the ground that the application of income was not intimated to the Assessing authority and ignored the fact that the sum of Rs. 3,94,60,633 being the total amount of accumulation ... which is the sole and object of the appellant trust which was running several schools. 6. Applying the doctrine of legislative intent, the application of income towards objects of the trust was fully eligible to cover the unspent amount of Rs.3,94,60,633/- 7. In this context reliance

Ct Educational Society, Jalandhar vs. DCIT, Chandigarh

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

ITA 422/CHANDI/2024[2017-18]Status: DisposedITAT Chandigarh10 Dec 2025AY 2017-18

Bench: SHRI. LALIET KUMAR (Judicial Member), SHRI. KRINWANT SAHAY (Accountant Member)

For Appellant: Shri Ashray Sarna, CA(Virtual Mode)For Respondent: Shri Manav Bansal, CIT, DR
Section 11Section 143Section 143(3)Section 144B

r.w.s. 13(3). iii. Disallowance of Loan Repayment: Repayment of loan amounting to Rs. 2,46,02,962/- was denied as an application of income because the assessee could not submit proof that the loan amount was included in its income in the year of its receipt. iv. Additions

Ct Educational Society, Jalandhar vs. DCIT, Chandigarh

In the result, the appeal filed by the Assessee is Partly Allowed for

ITA 396/CHANDI/2024[2016-17]Status: DisposedITAT Chandigarh10 Dec 2025AY 2016-17
For Appellant: Shri Ashray Sarna, CA(Virtual Mode)For Respondent: Shri Manav Bansal, CIT, DR
Section 11Section 12ASection 13(1)(c)Section 13(2)Section 143(2)Section 143(3)Section 2(15)Section 250

which it was held as under: Exemption under s.10(23C)(vi)—Educational institution, university, etc.—Profit motive-Assessee society's application of income is undisputedly more than 100 per cent for the attainment and achievement of its objects in the last three years-Therefore, by no stretch of imagination

Haryana Building and Other Construction Workers Welfare Board, Panchkula vs. DCIT, Exemption, Sector 17

In the result, this appeal of the Assessee stands dismissed

ITA 339/CHANDI/2023[2018-2019]Status: DisposedITAT Chandigarh10 Dec 2025AY 2018-2019
For Appellant: Sh. Nikhil Goyal, AdvocateFor Respondent: Sh. Manav Bansal, CIT DR
Section 263

आयकर अपीलीय अधिकरण, चण्डीगढ़ न्यायपीठ, चण्डीगढ़ IN THE INCOME TAX APPELLATE TRIBUNAL CHANDIGARH BENCH, ‘A’, CHANDIGARH BEFORE SHRI LALIET KUMAR

Haryana Building and Other Construction Workers Welfare Board, Panchkula vs. DCIT, Exemption, Chandigarh

In the result, this appeal of the Assessee stands dismissed

ITA 338/CHANDI/2023[2017-2018]Status: DisposedITAT Chandigarh10 Dec 2025AY 2017-2018

Bench: Shri Laliet Kumar & Shri Krinwant Sahay

For Appellant: Sh. Nikhil Goyal, AdvocateFor Respondent: Sh. Manav Bansal, CIT DR
Section 263

आयकर अपीलीय अधिकरण, चण्डीगढ़ न्यायपीठ, चण्डीगढ़ IN THE INCOME TAX APPELLATE TRIBUNAL CHANDIGARH BENCH, ‘A’, CHANDIGARH BEFORE SHRI LALIET KUMAR

Haryana Building and Other Construction Workers Welfare Board, Panchkula vs. CIT(Exemption), Chandigarh

In the result, this appeal of the Assessee stands dismissed

ITA 63/CHANDI/2021[2015-16]Status: DisposedITAT Chandigarh10 Dec 2025AY 2015-16

Bench: Shri Laliet Kumar & Shri Krinwant Sahay

For Appellant: Sh. Nikhil Goyal, AdvocateFor Respondent: Sh. Manav Bansal, CIT DR
Section 263

आयकर अपीलीय अधिकरण, चण्डीगढ़ न्यायपीठ, चण्डीगढ़ IN THE INCOME TAX APPELLATE TRIBUNAL CHANDIGARH BENCH, ‘A’, CHANDIGARH BEFORE SHRI LALIET KUMAR

Rithwik Foundation for Performing Arts, Mumbai vs. The Commissioner of Income Tax (Exemption), Mumbai

In the result, the appeal of the assessee is allowed

ITA 4527/MUM/2025[N.A ]Status: DisposedITAT Mumbai10 Dec 2025

Bench: Shri Sandeep Gosain & Shri Prabhash Shankar

For Appellant: Mr. Tarang Mehta,ARFor Respondent: Shri Umashankar Prasad,(CIT-DR)
Section 11Section 12ASection 8Section 80GSection 80G(5)

expenses incurred outside India for protecting and furthering the primary charitable purposes in India cannot, in law and in practice, be treated as application of income outside India within the meaning of section 11 of the Act. In this regard, reliance is placed on the decision of the Delhi Bench ... order in the present case, therefore denying registration to the applicant assessee merely for the reason that its objects included application of income outside India, we hold, is not in accordance with law. More particularly when, admittedly, this was not the sole and main object of the applicant assessee

DCIT, Mumbai vs. Hubtown Limited, Mumbai

In the result, the appeal of the assessee is allowed and the appeal of the revenue is dismissed

ITA 3038/MUM/2025[2018 19]Status: DisposedITAT Mumbai10 Dec 2025

Bench: Shri Anikesh Banerjee & Shri Prabhash Shankar

For Appellant: Shri Madhur Agarwal a/w Shri FenilFor Respondent: Shri Ritesh Misra, CIT DR
Section 132Section 132(4)Section 135Section 14ASection 153ASection 250Section 37(1)Section 69ASection 80G

same is incurred wholly and exclusively for the purposes of carrying on business or profession. 6.4.2 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

Hubtown Limited, Mumbai vs. Assistant Commissioner of Income Tax, Central Circle 2(4), Mumbai

In the result, the appeal of the assessee is allowed and the appeal of the revenue is dismissed

ITA 1601/MUM/2025[2018-19]Status: DisposedITAT Mumbai10 Dec 2025AY 2018-19

Bench: Shri Anikesh Banerjee & Shri Prabhash Shankar

For Appellant: Shri Madhur Agarwal a/w Shri FenilFor Respondent: Shri Ritesh Misra, CIT DR
Section 132Section 132(4)Section 135Section 14ASection 153ASection 250Section 37(1)Section 69ASection 80G

same is incurred wholly and exclusively for the purposes of carrying on business or profession. 6.4.2 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

Satvara Gnati Samaj Seva Mandal, Morbi vs. Commissioner of Income-Tax (Appeals), Rajkot

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

ITA 436/RJT/2025[2022-23]Status: DisposedITAT Rajkot09 Dec 2025AY 2022-23

Bench: Dr. Arjun Lal Saini & Shri Dinesh Mohan Sinha

For Appellant: Shri Darshak Thakkar, Ld. ARFor Respondent: Shri Abhimanyu Singh Yadav, Ld. Sr. DR
Section 11(1)Section 12ASection 139(1)Section 142(1)Section 143(1)Section 143(1)(a)Section 143(2)Section 143(3)Section 250Section 270A

That the learned Assessing Officer has erred in disallowing of 4 Rs. 247127/- boing claim of option allowed u/s 11(1) as deemed application of income. 5. That the learned Assessing Officer has erred in initiating penalty proceedings u/s 270A. 6.That the appellant craves leave to add, amend, alter, DLEETE

Shri Multanchand Bora Trust, Pune vs. ACIT, Exemption, Circle- Aurangabad, Aurangabad

In the result, the Appeal of the assessee is partly allowed

ITA 1312/PUN/2025[2020-21]Status: DisposedITAT Pune09 Dec 2025AY 2020-21

Bench: Dr.Dipak P. Ripote & Shri Vinay Bhamoreआयकर अपऩल सं. / Ita No.1312/Pun/2025 निर्धारण वषा / Assessment Year: 2020-21 Shri Multanchand Bora Trust, V The Assistant/Deputy 132B/2A, Ganeshkhind Road, S. Commissioner Of Income Pune – 411007. Tax, Exemption Circle, Aurangabad. Pan: Aafts3329F Appellant/ Assessee Respondent / Revenue Assessee By Shri Shrenik Gandhi Revenue By Shri Amit Bobde –Cit(Dr) Date Of Hearing 11/09/2025 Date Of Pronouncement 09/12/2025 आदेश/ Order Per Dr. Dipak P. Ripote, Am: This Appeal Is Filed By The Assessee Against The Order Of Ld.Commissioner Of Income Tax(Exemption), Pune At Nashik Passed Under Section 263 Of The Income Tax Act, 1961 For A.Y.2020-21, Dated 30.03.2025 Emanating From Assessment Order U/S.143(3) Of The I.T.Act, Dated 20.09.2022. The Assessee Has Raised Following Grounds Of Appeal : “1. Ground No. 1: The Learned Cit (Exemption) Seriously Erred On The Facts & Law, In Exercising The Revisionary Powers Under Section

Section 143(3)Section 263Section 80G

Supreme Court(supra) the 12 ITA No.1312/PUN/2025 [A] order u/s.263 is upheld qua the issue of Donations given by assessee and claimed as application of Income u/s.11of the Act. Discussion on the case law filed by the ld.AR : 13. The case laws relied by the Ld.AR are distinguishable on facts

Elysium Smiles Foundation, Mumbai vs. Commissioner of Income Tax (Exemptions), Mumbai

ITA 5006/MUM/2025[2026-27]Status: DisposedITAT Mumbai09 Dec 2025AY 2026-27

Bench: Shri Saktijit Dey, Vp & Ms Padmavathy S, Am

For Appellant: Shri Dharan Gandhi, ARFor Respondent: Shri Himanshu Joshi, Sr.-DR
Section 11Section 12Section 12ASection 12A(1)Section 12A(1)(ac)

bench in the case of Dedhia Music Foundation vs CIT(E) [2025] 173 taxmann.com 394 (Mumbai - Trib.) where it has been held that application of income of a charitable trust or institution outside India for carrying out its objects would not fall under any categories of 'specified violation' as mentioned

Elysium Smiles Foundation, Mumbai vs. Commissioner of Income Tax (Exemptions), Mumbai

ITA 5005/MUM/2025[2026-27]Status: DisposedITAT Mumbai09 Dec 2025AY 2026-27

Bench: Shri Saktijit Dey, Vp & Ms Padmavathy S, Am

For Appellant: Shri Dharan Gandhi, ARFor Respondent: Shri Himanshu Joshi, Sr.-DR
Section 11Section 12Section 12ASection 12A(1)Section 12A(1)(ac)

bench in the case of Dedhia Music Foundation vs CIT(E) [2025] 173 taxmann.com 394 (Mumbai - Trib.) where it has been held that application of income of a charitable trust or institution outside India for carrying out its objects would not fall under any categories of 'specified violation' as mentioned

Podar Literacy and Education Trust, Bangalore vs. DCIT Central Circle - 1(4), Mumbai

In the result, the appeal of the assessee is allowed

ITA 4762/MUM/2025[2017-18]Status: DisposedITAT Mumbai09 Dec 2025AY 2017-18
Section 10Section 11Section 11(6)Section 12ASection 132Section 133ASection 143(3)Section 153ASection 270ASection 270A(2)(a)

claimed by the assessee. The basis for such disallowance was that the assessee had treated the acquisition cost of the relevant assets as application of income in earlier years and, in view of the provisions of section 11(6) of the Act, depreciation on such assets could not again ... According to the learned CIT(A), the claim of depreciation on assets whose acquisition cost had already been treated as application of income amounted to an impermissible deduction, leading to overstatement of application of income and, consequently, under-reporting of income. On this reasoning, the learned CIT(A) concluded that

Vinayaka Education Trust, Nadiad vs. The DDIT, CPC, Bengaluru Juris. AO- the ITO, Exemption Ward, Vadodara

In the result, the appeal of the assessee stands allowed

ITA 1402/AHD/2025[2021-22]Status: DisposedITAT Ahmedabad05 Dec 2025AY 2021-22

Bench: Shri Sanjay Garg & Makarand V. Mahadeokar

For Appellant: Shri Chetan Shah, ARFor Respondent: Shri R.P. Rastogi, CIT-DR
Section 10Section 11Section 11(1)Section 11(1)(a)Section 12ASection 143(1)Section 154Section 250

MAHADEOKAR, ACCOUNTANT MEMBER ITA No.1402/Ahd/2025 Asstt. Year: 2021-22 Vinayaka Education Trust Near Panchayat Office, Dakor Road, Alindra - 387115 PAN: AABTV 1870 A (Applicant) Vs. Income Tax Officer Ward, Exemption Vadodara - 390007 (Responent) Assessee by : Shri Chetan Shah, AR Revenue by : Shri R.P. Rastogi, CIT-DR सुनवाई की तारीख/Date ... computed the total income of the assessee at Rs.3,99,83,342/- by treating the entire receipts as taxable income and disallowed the application of income of Rs.3,67,53,006/- and the accumulation of Rs.59,97,501/-. Interest under sections 234A, 234B, 234C and 234F was also charged

Royal Chains Private Limited, Mumbai vs. Deputy Commissioner of Income Tax Central Circle 3(3), Mumbai

In the result, appeal filed by the assessee stands partly allowed

ITA 4260/MUM/2025[2019-20]Status: DisposedITAT Mumbai05 Dec 2025AY 2019-20

Bench: Smt. Beena Pillai () & Smt. Renu Jauhri ()

Section 142(1)Section 143(2)Section 69ASection 80

introduction of this Explanation is elaborated in the Explanatory Notes to the Finance Bill 2014which is reproduced below: "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 deduction for the purposes ... 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 expenditure cannot be allowed under the existing provisions of section 37 of the Income