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“application of income for charitable purposes”

Charitable TrustsSection 11Section 1197 judgments

The decision most relied on for application of income for charitable purposes is CIT v. Shri Plot Swetamber Murti Pujak Jain Mandal (211 ITR 293), cited in 204 judgments on BharatTax.

Leading authorities on application of income for charitable purposes

CIT v. Shri Plot Swetamber Murti Pujak Jain Mandal
211 ITR 293 · 1995 · High Court
204
citing judgments

A charitable trust can carry forward its excess expenditure from previous years and adjust it against the income of subsequent years, which qualifies as an application of income under Section 11. Additionally, voluntary contributions received for a specific purpose are treated as corpus funds and are not taxable.

CIT v. Rajasthan & Gujarati Charitable Foundation Poona
402 ITR 441 · 2018 · Supreme Court
187
citing judgments

Depreciation is allowable as a deduction even if the expenditure for acquiring the capital asset was treated as application of income for charitable purposes. This does not constitute a double benefit.

Lissie Medical Institutions v. CIT
348 ITR 344 · 2012 · High Court
164
citing judgments

The Kerala High Court held that charitable institutions claiming exemption under Section 11 are not entitled to claim depreciation on assets used for charitable purposes, taking a view contrary to most other High Courts.

CIT v. Maharana of Mewar Charitable Foundation
164 ITR 439 · 1987 · High Court
153
citing judgments

For charitable trusts, the set-off of excess expenditure from prior years against the income of a subsequent year is considered an application of income for charitable purposes. Similarly, the repayment of loans borrowed for legitimate charitable activities is also treated as an application of income.

ACIT v. Surat City Gymkhana
300 ITR 214 · 2008 · Supreme Court
125
citing judgments

Once an institution receives registration under Section 12AA, the Assessing Officer must compute its income as per Section 11, focusing only on the application of income and not re-examining the charitable nature of its activities. The Supreme Court also clarified the meaning and scope of 'general public utility' under Section 2(15).

CIT v. Market Committee, Pipli
330 ITR 16 · 2011 · High Court
113
citing judgments

A charitable trust can claim depreciation on assets when computing the income applied for charitable or religious purposes under Section 11 of the Income Tax Act, for assessment years prior to the introduction of Section 11(6). The restriction on claiming depreciation, as introduced by Section 11(6), is prospective from AY 2015-16.

CIT v. Tiny Tots Education Society
330 ITR 21 · 2011 · High Court
112
citing judgments

Charitable institutions are entitled to claim depreciation on assets even when the cost of acquisition has already been treated as an application of income for exemption purposes, as this does not constitute a double deduction.

CIT v. Andhra Pradesh State Road Transport Corporation
159 ITR 1 · 1986 · Supreme Court
102
citing judgments

An organization qualifies as charitable under Section 2(15) only if its income and property are solely applied for its charitable objects and, upon dissolution, its residual assets are restricted for utilization exclusively for charitable purposes, not for distribution to members or as general state revenue.

Judgments citing application of income for charitable purposes

Maheshwari Pragati Mandal, Mumbai vs. Commissioner of Income Tax (Appeals) Income Tax Department, Mumbai

In the result, appeal filed by the assessee allowed

ITA 3225/MUM/2022[2014-15]Status: DisposedITAT Mumbai02 May 2023AY 2014-15

Bench: Shri Amit Shukla, Hon'Ble & Shri S. Rifaur Rahman, Hon'Blemaheshwari Pragati Mandal V. Commissioner Of Income Tax (Appeals) National Faceless Appeal Centre 2Nd Floor Maheshwari Bhavan Delhi Girgaon Road, Kalbadevi Mumbai-400002 Pan: Aaatm0226G (Appellant) (Respondent)

Section 11Section 12ASection 143(2)

disallowing the depreciation which was claimed under section 32 of the Act was that once the capital expenditure is treated as application of income for charitable purposes, the assessees had virtually enjoyed a 100 per cent. write off of the cost of assets and, therefore, the grant of depreciation would

Rajiv Gandhi Vidhya Pith Shiksha, Jaipur vs. ITO, Exemption W(1), Jaipur

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

ITA 234/JPR/2022[2016-17]Status: DisposedITAT Jaipur18 Apr 2023AY 2016-17

Bench: DR. S. SEETHALAKSHMI (Judicial Member), SHRI RATHOD KAMLESH JAYANTBHAI (Accountant Member)

For Appellant: Sh. Mahendra Gargieya (Adv.) &For Respondent: Smt Monisha Choudhary (Addl. CIT) a
Section 12ASection 142(1)Section 143(2)Section 143(3)Section 234B

respond. During the appellant proceedings, the appellant claimed that the appellant has never treated expenditure incurred on acquisition of capital assets as application of income for charitable purposes u/s.11(1)(a) of the I.T.Act in the previous year and in all preceding previous years. The appellant merely submitted alternative proposition ... entire expenditure amounting to Rs.1,33,01,255.80/- incurred for acquisition of capital assets during the year under consideration may be treated application of income for charitable purposes u/s 11(1)(a) of the Income Tax Act, 1961 and relief may be granted. In view of above, the disallowance made

DCIT (E) Circle-1(1), New Delhi vs. Guru Gobind Singh Indraprastha University, New Delhi

In the result, the appeal of the Revenue is dismissed

ITA 626/DEL/2020[2016-17]Status: DisposedITAT Delhi11 Apr 2023AY 2016-17

Bench: Smt. Diva Singhdr. B. R. R. Kumar

For Appellant: Sh. Deepak Suneja, CAFor Respondent: Sh. Ram Krishan Meena, Sr. DR
Section 11(1)(a)

held that expenditure on salaries and miscellaneous expenses for purpose of carrying out the purpose of the trust can be considered as application of income for charitable purposes. The Courts have held that a liability on the assessee having been imported, the liability would be an accrued liability and would ... held that expenditure on salaries and miscellaneous expenses for purpose of carrying out the purpose of the trust can be considered as application of income for charitable purposes. Further, the income of charitable organizations has to be computed on commercial principles. Accounting standards mandate that provision be made for retirement

DCIT (E), New Delhi vs. M/S Spiritual Regeneration Movement Foundation of India, New Delhi

ITA 5737/DEL/2016[2011-12]Status: DisposedITAT Delhi02 Jan 2023AY 2011-12

Bench: Sh. N. K. Billaiya & Sh. Kul Bharatassessment Year: 2011-12

Section 11Section 12Section 12ASection 50C

purposes of the trust? and (ii) Whether loans advanced by an education trust to students for higher studies would be treated as application of income for charitable purposes? 'Justification of application of income by way of donation and by way of refund of loan Board has decided that repayment ... activities carried on for the fulfillment of the objectives of the trust, granting of loans, even interest-bearing, will amount to the application of income for charitable purposes. As and when the loan is returned to the trust if will be treated as income of that year. ’ The above position

DCIT (E) -1(1), Mumbai vs. M/S. Gharda Foundations, Mumbai

Appeal is dismissed

ITA 2178/MUM/2021[2017-18]Status: DisposedITAT Mumbai29 Jul 2022AY 2017-18
For Appellant: Shri Deepak ShahFor Respondent: Shri Avinash Tiwari
Section 11Section 11(1)(a)Section 12ASection 143(3)Section 250

aforesaid amount to the succeeding assessment years for setting off against the receipt/income of the succeeding years and thereby, claiming application of income for charitable purposes to the extent of such set off. The Assessing Officer denied the aforesaid claim of the Assessee and passed order under Section

M/S Gokula Education Foundation Medical, Bangalore vs. Additional Director of Income Tax Range-17, Bangalore

In the result, appeal of the assessee is partly allowed

ITA 946/BANG/2017[2011-12]Status: DisposedITAT Bangalore25 Jul 2022AY 2011-12

Bench: Shri N.V. Vasudevan, Vice Preseident & Shri Padmavathy Sassessment Year : 2011-12

For Appellant: Shri Narendra Sharma, AdvocateFor Respondent: Shri T. Roumuan Paite, CIT(DR)(ITAT), Bengaluru
Section 11Section 11(1)(a)Section 11(2)Section 12ASection 139(1)Section 143(2)Section 143(3)

reasons given for disallowing expenses incurred in foreign country, the AO disallowed the aforesaid sum also as application of income for charitable purposes. 40. The action of the AO was confirmed by the CIT(A) and hence grounds 8 and 9 by the assessee before the Tribunal. Page

DCIT, Exemption Circle, Ghaziabad vs. Bhagwati Educational Society, Ghaziabad

In the result, the appeal of the Revenue is dismissed

ITA 4258/DEL/2017[2010-11]Status: DisposedITAT Delhi14 Oct 2021AY 2010-11

Bench: Shri Kul Bharat & Shri O.P. Kant[Through Video Conferencing] Assessment Year: 2010-11

Section 11Section 12ASection 143(3)Section 68

facts in deleting the disallowance of account of depreciation of Rs.76,96,372/- ignoring the facts that depreciation on account of application of income for charitable purposes is not allowable as the capital expenditure on acquiring fixed assets has already been allowed in respective years. 2 ITA No.4258/Del./2017 ... order dated 13.12.2017) has held that ‘even if the entire expenditure incurred for acquisition of a capital asset is treated as application of income for charitable purposes u/s 11(1)(a) of the Act, the 6 ITA No.4258/Del./2017 assessee is also entitled to depreciation u/s 32. The argument that

ACIT, New Delhi vs. M/S. Maharaji Education Trust, Ghaziabad

The appeal are dismissed

ITA 5138/DEL/2016[2007-08]Status: DisposedITAT Delhi13 Oct 2021AY 2007-08

Bench: Shri Kuldip Singh & Shri Prashant Maharishi(Through Video Conferencing)

For Appellant: Shri Suresh Gupta, C. AFor Respondent: Ms. Paramita M. Biswas[CIT]–
Section 11Section 12ASection 132Section 133ASection 143(1)Section 143(2)Section 143(3)Section 68Section 69Section 69C

internal page 21) and finding in para 27 at page 27 therein determined the expenditure to the extent of 78% as application of income for charitable purposes and the balance amount of 22% in each year is held to be spent for purposes other than charitable purposes. The above balance

Vocational Education Foundation, New Delhi vs. ACIT, Exemptions, Ghaziabad

In the result, all the four appeals filed by the assessee for assessment year

ITA 168/DEL/2018[2012-13]Status: DisposedITAT Delhi06 Oct 2021AY 2012-13

Bench: Shri Kul Bharat & Shri Prashant Maharishi(Through Video Conferencing)

For Appellant: Shri Ved Jain, C. A.;&For Respondent: Shri Govind Singhal, Sr. D.R
Section 10Section 11Section 2(15)Section 251Section 251(1)Section 251(2)

concerned and in which year the depreciation was claimed, the entire expenditure incurred for acquisition of capital assets was treated as application of income for charitable purposes under Section 11(1)(a) of the Act. The view taken by the Assessing Officer in disallowing the depreciation which was claimed under ... Section 32 of the Act was that once the capital expenditure is treated as application of income for charitable purposes, the assessees had virtually enjoyed a 100 per cent write off of the cost of assets and, therefore, the grant of depreciation would amount to giving double benefit

Vocational Education Foundation, New Delhi vs. ACIT, Exemptions, Ghaziabad

In the result, all the four appeals filed by the assessee for assessment year

ITA 167/DEL/2018[2011-12]Status: DisposedITAT Delhi06 Oct 2021AY 2011-12

Bench: Shri Kul Bharat & Shri Prashant Maharishi(Through Video Conferencing)

For Appellant: Shri Ved Jain, C. A.;&For Respondent: Shri Govind Singhal, Sr. D.R
Section 10Section 11Section 2(15)Section 251Section 251(1)Section 251(2)

concerned and in which year the depreciation was claimed, the entire expenditure incurred for acquisition of capital assets was treated as application of income for charitable purposes under Section 11(1)(a) of the Act. The view taken by the Assessing Officer in disallowing the depreciation which was claimed under ... Section 32 of the Act was that once the capital expenditure is treated as application of income for charitable purposes, the assessees had virtually enjoyed a 100 per cent write off of the cost of assets and, therefore, the grant of depreciation would amount to giving double benefit

Vocational Education Foundation, New Delhi vs. ACIT, Exemptions, Ghaziabad

In the result, all the four appeals filed by the assessee for assessment year

ITA 166/DEL/2018[2009-10]Status: DisposedITAT Delhi06 Oct 2021AY 2009-10

Bench: Shri Kul Bharat & Shri Prashant Maharishi(Through Video Conferencing)

For Appellant: Shri Ved Jain, C. A.;&For Respondent: Shri Govind Singhal, Sr. D.R
Section 10Section 11Section 2(15)Section 251Section 251(1)Section 251(2)

concerned and in which year the depreciation was claimed, the entire expenditure incurred for acquisition of capital assets was treated as application of income for charitable purposes under Section 11(1)(a) of the Act. The view taken by the Assessing Officer in disallowing the depreciation which was claimed under ... Section 32 of the Act was that once the capital expenditure is treated as application of income for charitable purposes, the assessees had virtually enjoyed a 100 per cent write off of the cost of assets and, therefore, the grant of depreciation would amount to giving double benefit

Vocational Education Foundation, New Delhi vs. ACIT, Exemptions, Ghaziabad

In the result, all the four appeals filed by the assessee for assessment year

ITA 165/DEL/2018[2007-08]Status: DisposedITAT Delhi06 Oct 2021AY 2007-08

Bench: Shri Kul Bharat & Shri Prashant Maharishi(Through Video Conferencing)

For Appellant: Shri Ved Jain, C. A.;&For Respondent: Shri Govind Singhal, Sr. D.R
Section 10Section 11Section 2(15)Section 251Section 251(1)Section 251(2)

concerned and in which year the depreciation was claimed, the entire expenditure incurred for acquisition of capital assets was treated as application of income for charitable purposes under Section 11(1)(a) of the Act. The view taken by the Assessing Officer in disallowing the depreciation which was claimed under ... Section 32 of the Act was that once the capital expenditure is treated as application of income for charitable purposes, the assessees had virtually enjoyed a 100 per cent write off of the cost of assets and, therefore, the grant of depreciation would amount to giving double benefit

Vocational Education Foundation, New Delhi vs. JCIT, Exemption Range, Ghaziabad

In the result, all the four appeals filed by the assessee for assessment year

ITA 6051/DEL/2017[2013-14]Status: DisposedITAT Delhi06 Oct 2021AY 2013-14

Bench: Shri Kul Bharat & Shri Prashant Maharishi(Through Video Conferencing)

For Appellant: Shri Ved Jain, C. A.;&For Respondent: Shri Govind Singhal, Sr. D.R
Section 10Section 11Section 2(15)Section 251Section 251(1)Section 251(2)

concerned and in which year the depreciation was claimed, the entire expenditure incurred for acquisition of capital assets was treated as application of income for charitable purposes under Section 11(1)(a) of the Act. The view taken by the Assessing Officer in disallowing the depreciation which was claimed under ... Section 32 of the Act was that once the capital expenditure is treated as application of income for charitable purposes, the assessees had virtually enjoyed a 100 per cent write off of the cost of assets and, therefore, the grant of depreciation would amount to giving double benefit

DCIT (Exemption), New Delhi vs. M/S. Nav Nirman Sewa Samiti, Delhi

In the result, the appeal filed by the Revenue is dismissed

ITA 645/DEL/2017[2012-13]Status: DisposedITAT Delhi11 May 2021AY 2012-13

Bench: Shri O.P. Kant & Shri Kuldip Singh[Through Video Conferencing]

Section 11Section 12ASection 143(3)Section 70

rationalized to ensure that double benefit is not claimed and such notional amount does not get excluded from the condition of application of income for charitable purpose." 4.1.5 There are many conflicting judgments of various Hon'ble High Courts, including of the jurisdictional High Court, both in favour and against ... disallowing the depreciation which was claimed under Section 32 of the Act was that once the capital expenditure is treated as application of income for charitable purposes, the assessees had virtually enjoyed a 100 per cent write off of the cost of assets and, therefore, the grant of depreciation would

ITO (Exemptions), Ward-1(2), New Delhi vs. Indian Olympic Association, New Delhi

ITA 1651/DEL/2018[2013-14]Status: DisposedITAT Delhi23 Mar 2021AY 2013-14
Section 11Section 2(15)

wherein the Hon'ble Supreme Court has held that even though the expenditure incurred for acquisition of capital assets was treated as application of income for charitable purposes u/s 11A(1) of the Act, yet depreciation would be allowed on assets so purchased. Ground No. 2 is, accordingly, dismissed

DCIT (Exemption), New Delhi vs. The Delhi Public School Society, New Delhi

In the result, this appeal is dismissed

ITA 6084/DEL/2016[2011-12]Status: DisposedITAT Delhi28 Jan 2021AY 2011-12

Bench: Shri Sudhanshu Srivastava & Shri Anadee Nath Misshrady. Cit (Exemptions) The Delhi Public School Circle-2(1), Society, New Delhi. F-Block, East Of Kailash, Vs. New Delhi-110065. Pan –Aaatt 0740J (Appellant) (Respondent)

Section 11Section 12ASection 2Section 4ASection 70

case of charitable institution registered under section 12A, even though expenditure incurred for acquisition of capital assets was treated as application of income for charitable purposes under section 11(1)(a), yet depreciation would be allowed on assets so purchased. (B.2.2) In the case of DIT vs. Raghuvanshi Charitable Trust

ACIT, New Delhi vs. India Trade Promotion Organization, New Delhi

In the result, the appeal of the Revenue is dismissed

ITA 2110/DEL/2017[2012-13]Status: DisposedITAT Delhi22 Jan 2021AY 2012-13

Bench: Shri Amit Shukla & Shri B.R.R. Kumar

For Appellant: Shri Ved Prakash Mishra, Sr.D.RFor Respondent: None
Section 10(23)(iv)Section 11(1)Section 12ASection 143(3)Section 25Section 32(1)

modify the assessment determining the higher income and allow recomputation of depreciation written back for 5 I.T.A. No. 2110/DEL/2017 the purpose of application of income for charitable purposes in future or subsequent years. This may lead to its own difficulties and problems as suddenly the entire depreciation written off would