“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

M/S. M.P. Board of Secondary Education, Bhopal vs. The DCIT Excemption, Bhopal

Appeal is allowed

ITA 164/IND/2018[14-15]Status: DisposedITAT Indore03 Dec 2025

Bench: Shri B.M. Biyani

Section 11Section 11(1)(a)Section 143(2)Section 143(3)Section 234A

Ultimately, the AO assessed total income at Rs. 6,68,03,650/- after making a disallowance of 2,16,50,650/- out of “application of income” claimed by assessee u/s 11(1)(a). Aggrieved, the assessee carried matter in first-appeal before CIT(A) but did not get any success ... decisions referred to above, whether the expenditure incurred by the, trust for the payment of income-tax can be said to be actual application of income for the charitable purposes of the trust in India.” (b) Hon’ble Delhi High Court in Director of Income-tax (Exemption) Vs. National Association

Nehru Smaraka Vidya Kendra Trust, Bangalore vs. Commissioner of Income Tax, Exemptions, Bangalore

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

ITA 715/BANG/2025[2025-26]Status: DisposedITAT Bangalore03 Dec 2025AY 2025-26

Bench: Shri Waseem Ahmed & Shri Soundararajan K.Assessment Year : 2025-26

For Appellant: Dr. Sheetal Borkar, AdvocateFor Respondent: Shri Muthu Shankar, CIT-DR

Section 11(1)Section 11(1)(a)Section 12ASection 2(15)Section 80GSection 80G(5)(iii)

Income Tax (Exemptions) while arriving at the excess of income over expenditure has grossly ignored the capital expenditure applied during the year as application of income under section 11(1) of the Income tax Act, 1961. 8. The learned Commissioner of Income Tax (Exemptions) erred in law in not allowing ... accumulation under section 11(1)(a) of the Income tax Act, 1961, being 15% of the gross receipts, as application of income. 9. The learned Commissioner of Income Tax (Exemptions) has failed to understand the method of computation of total income ie., application income in Trust cases. Page

St. Thomas Church, Mumbai vs. Income Tax Officer (Exemption) Ward 2(3), Mumbai

ITA 4187/MUM/2025[2023-24]Status: DisposedITAT Mumbai03 Dec 2025AY 2023-24

Bench: Smt. Beena Pillai (Jm) & Shri Omkareshwar Chidara (Am) St. Thomas Church Ito(E), Ward 2(3) 1, Church Road, Goregaon-E 6Th Floor, Mtnl Mumbai-400 063. Vs. Bldg, Peddar Road Mumbai-400 026. Pan : Aaatt4878R Appellant Respondent

For Appellant: Ms. Vasanti Patel & ShriFor Respondent: Shri Hemanshu Joshi

Section 11Section 11(3)Section 143(1)

denial of benefits under section 11 of the Act resulted in the disallowance of accumulation benefit of 15% of income, surplus claimed as “Application of Income” and capital expenditure claimed as “Application of Income”. Apart from the above disallowances, an addition of Rs. 10,58,000/- was also made

ACIT, Exemptions, Circle-1, Ahmedabad vs. Vyakti Vikas Kendra India, Ahmedabad

In the result, the appeal of the Revenue is dismissed

ITA 1656/AHD/2025[2016-17]Status: DisposedITAT Ahmedabad02 Dec 2025AY 2016-17

Bench: Ms. Suchitra Kamble & Shri Narendra Prasad Sinhaassessment Year: 2016-17

Section 10(23)(iiiad)Section 11Section 11(1)(a)Section 11(1)(d)Section 11(2)Section 143(3)Section 2(15)

previous year and not out of the accumulation under section 11(2) then the same be eligible to be considered as application of income as long as the recipients are charitable organizations. Having regard this particular aspect of the matter the AO has been further directed by the Learned CITA ... whether they are charitable organisation. Subject to such verification of the objects of the recipients the Ld AO was directed to treat the application of income of the assessee, which in our considered view is just and proper and without any ambiguity so as to warrant interference. The order passed

Mumbai Cricket Association, Mumbai vs. Commissioner of Income Tax (Exemptions), Mumbai

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

ITA 1257/MUM/2025[2024-2025]Status: DisposedITAT Mumbai02 Dec 2025AY 2024-2025

Bench: Shri Sandeep Gosain& Shri Prabhash Shankar

Section 11(1)(c)Section 12ASection 12A(1)(ac)Section 2(15)

that provisions of section 11(1)(c) of the Act are violated without appreciating that 'arranging tours outside India' does not amount to application of income for purposes outside India. 4. The learned Commissioner of Income Tax (Exemptions) erred in facts and in law in holding that the return

Utkarsh, New Delhi vs. Income Tax Officer, Ward Exemp-2(3), Delhi

In the result, the appeal of the assessee is allowed

ITA 6835/DEL/2025[2018-19]Status: DisposedITAT Delhi02 Dec 2025AY 2018-19

Bench: Shri Pawan Singh(Through Hybrid Mode) Utkarsh, Income Tax Officer, Ward-Exemp- 2(3), Room No.427, 24Th Floor, Unit-303, D-246, Gali No.10, Vs Laxmi Nagar, New Delhi-110092 Civic Centre, Minto Road, Pan: Aaaau4839Q New Delhi-110002 Appellant / Assessee Respondent / Revenue

Section 11Section 11(3)Section 143(1)Section 154Section 254(1)

However, Form 10B was also uploaded on ITBA portal on 31.07.2018. The. The CPC Bangalore while processing return of income not allowed application of income under section 11 of the Act on the ground that Form 10B was uploaded after filing return of income. The assessee filed application under section

ACIT, Chennai vs. Rajagopalan, Chennai

In the result, the appeal of the revenue is dismissed

ITA 1443/CHNY/2025[2017-18]Status: DisposedITAT Chennai01 Dec 2025AY 2017-18

Bench: Shri Aby T Varkey & Shri S. R. Raghunatha

For Appellant: Shri. Y. Sridhar, F.C.AFor Respondent: Ms. E. Pavuna Sundari, CIT

Section 132Section 132(4)Section 143(3)Section 245D(4)Section 250Section 69

income filed u/s 153A and also settlement application filed after the date of search without any incriminating material and not claimed any application of income other than the cash deposited in his bank accounts for AY 2017-18. Hence, the addition

Toufeeq Charitable Trust, Malappuram vs. ITO, Exemption, Thrissur

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

ITA 818/COCH/2025[2015-16]Status: DisposedITAT Cochin28 Nov 2025AY 2015-16

Bench: Shri Inturi Rama Rao, Am Assessment Year: 2015-16 Toufeeq Charitable Trust .......... Appellant C-14,139, Thaqua, Andathode, Malappuram [Pan: Aaatt6160E] Vs. The Income Tax Officer (Exemption), Thrissur .......... Respondent Assessee By: ------- None ------- Revenue By: Ms. Neethu S. Sr. Dr Date Of Hearing: 27.11.2025 Date Of Pronouncement: 28.11.2025 O R D E R This Appeal Filed By The Assessee Is Directed Against The Order Of The Commissioner Of Income Tax (Appeals), Agra [Cit(A)] Dated 14.08.2025 For Assessment Year (Ay) 2015-16. 2. Brief Facts Of The Case Are That The Appellant Is A Trust Duly Registered U/S. 12A Of The Income Tax Act, 1961 (The Act). It Is Founded With The Object Of Running Educational Institution For Charity. The Return Of Income For Ay 2015-16 Was Filed On 14.06.2016 Disclosing Nil Income After Claiming Exemption U/S. 11 Of The Act. The Against The Said Return Of Income, The Assessment Was Completed By The Income Tax Officer (Exemption), Thrissur

For Appellant: ------- None -------For Respondent: Ms. Neethu S. Sr. DR

Section 11Section 12ASection 143(3)

total income of Rs. 6,42,219/-. While doing so, the AO had not allowed the capital expenditure as application of income on the ground that no claim was made in the return of income. Similarly, the AO had not allowed the following items as application of income: - i) Revenue

Uttar Pradesh Water Supply and Sanitation Mission, Lucknow vs. ACIT(Exemption) Circle, Lucknow

In the result, both appeals are partly allowed

ITA 360/LKW/2024[2017-18]Status: DisposedITAT Lucknow28 Nov 2025AY 2017-18

Bench: Shri Kul Bharat & Shri Anadee Nath Misshra

Section 11(1)(a)Section 124(3)Section 143Section 143(2)

account of unutilised grant under the Support Fund) on the ground that the assessee had claimed the said amount as application of income although the said amounts remained un-utilised at the end of the implementing agencies. 3. 2. BECAUSE in the application of income, the assessee had claimed ... amount actually utilized by it /by the implementing agencies out of project fund and support fund and the assessee did not claim as application of income any amount which remained un-utilized either at its end or at the end of the implementing agencies, and consequently, the finding

Deputy Commissioner of Income Tax (Exemptions) Lucknow, Lucknow vs. Uttar Pradesh Water Supply and Sanitation Mission, Lucknow

In the result, both appeals are partly allowed

ITA 288/LKW/2024[2017]Status: DisposedITAT Lucknow28 Nov 2025

Bench: Shri Kul Bharat & Shri Anadee Nath Misshra

Section 11(1)(a)Section 124(3)Section 143Section 143(2)

Rose Bud Muslim Educational Society, Patna vs. ITO, Exemption, Ward-1, Patna

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

ITA 40/PAT/2025[2016-17]Status: DisposedITAT Patna27 Nov 2025AY 2016-17

Bench: Shri Sonjoy Sarma & Shri Rakesh Mishra

Section 12Section 12ASection 142(1)Section 144Section 250

whatsoever has been allowed. It was requested that another opportunity may be provided as the society has sufficient documents in support of the application of income and the AO has not allowed any expenditure or even computed the income ITA No.: 40/PAT/2025 Assessment Year: 2016-17 Rose Bud Muslim Educational ... that the matter may be remanded to the Ld. AO so that the assessee could produce the required evidence in support of the application of income. The Ld. DR relied upon the order of the appellate authority and requested that the same may be confirmed. 6. We have considered

Saint Marks School Siksha Samiti, Agra vs. Jao (Exemptions), Agra

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

ITA 399/AGR/2025[2023-24]Status: DisposedITAT Agra26 Nov 2025AY 2023-24

Bench: Shri M. Balaganesh(Through Virtual Hearing) Saint Marks School Siksha Samiti, Vs. Jurisdictional Assessing 41, Saint Peters Colony, Ghatia, Officer-Exemption Hariparvat, Agra Ward, Agra (Appellant) (Respondent) Pan: Aaeas7764A

For Appellant: Shri Mahesh Agarwal, CAFor Respondent: Shri Anil Kumar, Sr. DR

Section 11Section 11(2)Section 12ASection 143(1)Section 154

During the year under consideration, the assessee had gross receipts of Rs 2,46,35,564/- against which the application of income for charitable purposes was Rs. 2,27,32,532 ( Rs. 2,08,81,587/- towards running expenses and Rs. 18,50,945/- as addition to fixed assets). Thus

Shree Dandeshwar Shankar Mandir Trust, Mumbai vs. ITO (Exem)-1, Mumbai

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

ITA 6321/MUM/2025[2017-18]Status: DisposedITAT Mumbai26 Nov 2025AY 2017-18

Bench: Shri Vikram Singh Yadavshri Sandeep Singh Karhailshree Dandeshwar Shankar Mandir Trust, 72, Khar Danda Koliwada, Khar West, Mumbai – 400052 ............... Appellant Pan: Aajts6534L V/S Central Processing Centre, Income Tax Department, ……………… Respondent Bangalore.

For Appellant: Ms. Neelam JadhavFor Respondent: Ms. Neena Jeph, CIT-DR

Section 11Section 11(1)(a)Section 12ASection 139(1)Section 143(1)Section 154Section 250

filed its return of income under section 139(1) of the Act on 28.08.2017, declaring gross receipts of Rs.31,79,940/- and claiming application of income towards objects of the trust of Rs.15,45,540/- and accumulation not exceeding 15% of gross receipts amounting to Rs.2,42,865/-. The return ... also evident from the record that in its return of income, the assessee declared gross receipts of Rs.31,79,940/- and claimed application of income towards the object of the trust of Rs.15,45,540/-. Further, the assessee also claimed an accumulation not exceeding 15% of gross receipts of Rs.2

Lic Housing Finance Limited, Mumbai vs. ACIT 2(2)(1), Mumbai, Aaykar Bhavan

In the result, the appeal of the assessee is allowed

ITA 5037/MUM/2025[2017-18]Status: DisposedITAT Mumbai26 Nov 2025AY 2017-18

Bench: Shri Om Prakash Kant () & Shri Raj Kumar Chauhan () Assessment Year: 2017-18

For Respondent: Mr. Sunil Bhandari &

Section 143(3)Section 147Section 148Section 148ASection 151ASection 80G

that Corporate Social Responsibility contribution is The CBDT stated that Corporate Social Responsibility contribution is in the nature o in the nature of application of income and hence cannot be allowed f application of income and hence cannot be allowed as expenditure. A specific amendment to this effect was brought