Section 10(46) of the Income Tax Act

Income-tax Act, 2025: s.11

Section 10(46) falls under section 10 of the Income-tax Act, 1961, which corresponds to section 11 (Incomes not included in total income) of the Income-tax Act, 2025.

Read section 11 of the 2025 Act

Correspondence checked against the ICAI tabular mapping of the two Acts and the BharatTax.co section commentary.

The decision most relied on for Section 10(46) is CIT v. Gujarat Maritime Board (295 ITR 561), cited in 98 of the 104 judgments on BharatTax that turn on this section.

Leading authorities on Section 10(46)

CIT v. Gujarat Maritime Board
295 ITR 561 · 2007 · Supreme Court
98
citing judgments

A statutory corporation undertaking activities that generate income qualifies as a charitable entity under Section 2(15) if its dominant object is general public utility and it is legally obligated to apply its income solely for that purpose, even if the activities appear to be in the nature of trade or business. Such an entity is entitled to registration under Section 12A and exemptions under Section 11.

Pradeep Kumar Biswas v. Indian Institute of Chemical Biology
5 SCC 111 · 2002 · Reported
93
citing judgments

The legal form or ostensible autonomy of an entity does not prevent it from being classified as 'State' or 'authority' under Article 12 if it functions as an instrumentality of the Government, thereby attracting constitutional accountability under Part III.

Andhra Pradesh State Road Transport Corporation v. ITO
52 ITR 524 · 1964 · Supreme Court
69
citing judgments

A state road transport corporation, though state-owned, is a separate legal entity from the State. Its income is distinct from the income of the State and is not exempt from income tax under Article 289 of the Constitution of India.

CIT v. Rajesh Kumar Jalan
286 ITR 274 · 2006 · High Court
66
citing judgments

Section 139(4) of the Income-tax Act, which allows for filing a belated return, acts as a proviso to Section 139(1). Consequently, the time limit for depositing amounts or utilizing funds to claim exemptions, such as under Section 54, extends up to the due date for filing a return under Section 139(4).

CIT v. Ms. Jagriti Aggarwal
339 ITR 610 · 2011 · High Court
66
citing judgments

A return of income filed within the period allowed under Section 139(4) is valid for claiming exemptions and deductions, including those under Sections 54, 54F, and 80AC. However, depositing the unutilized capital gains in the Capital Gains Account Scheme is a statutory and mandatory requirement for claiming exemption under Section 54F.

CIT v. Mitsui & Company Ltd.
272 ITR 545 · 2005 · High Court
55
citing judgments

Penalty under Section 271C for failure to deduct tax at source is not leviable unless contumacious conduct on the part of the assessee is established. Where such conduct is not proven, the High Court upholds the deletion of the penalty.

CIT v. Bank of Nova Scotia
380 ITR 550 · 2016 · Supreme Court
55
citing judgments

Penalty under Section 271C for failure to deduct tax is not leviable if the assessee acted under a bona fide belief and without contumacious conduct.

(CIT v. Surat Art Silk Cloth Manufacturer's Association
2 SCC 31 · 1980 · Reported
35
citing judgments

For a trust to be considered charitable, its dominant intent must be charitable, even if it engages in non-charitable activities that generate incidental profits. These profits must be reinvested to further the dominant charitable object.

1 Income-tax Officer-Ward 5(1) v. Keval Construction
33 Taxmann.com 277 · 2013 · High Court
28
citing judgments

Profits eligible for deduction under Section 80-IB are calculated after adjusting for disallowances made under Section 40(a)(ia). Any disallowances under Section 40A(3) are added back to the profits for the purpose of determining the deduction under Section 80-IB.

Mond. Iqbal Madar Sheikh v. State of Maharashtra
1 SCC 722 · 1981 · Reported
27
citing judgments

A legal fiction created by a deeming clause requires courts to assume the fictional state of affairs as real, along with its natural consequences, unless otherwise prohibited by statute.

Judgments on Section 10(46)

ITO 23(2)(2), Mumbai vs. Maharashtra State Board of Technical Education, Mumbai

In the result, appeal is allowed in the terms indicated above

ITA 524/MUM/2020[2009-10]Status: DisposedITAT Mumbai19 Jul 2021AY 2009-10

Bench: Shri Rajesh Kumar () & Shri Ravish Sood () Ita Nos.524 & 525/Mum/2020 (Assessment Years: 2008-09 & 2009 – 10) Income Tax Officer -23(2)(2), Maharashtra State Board Of 111, Matru Mandir, Grant Road, Vs. Technical Education, Mumbai - 400007 49, Kherwadi, Aliyawar Jung Marg, Bandra (E), Mumbai 400 051 Pan No. Aaajm0988M (Revenue) (Assessee) Assessee By : Shri Girish Dave, A.R Revenue By : Shri Rahul Raman, D.R Date Of Hearing : 19/07/2021 Date Of Pronouncement : 19/07/2021 Order Per Bench: The Present Appeal Filed By The Revenue Is Directed Against The Order Passed By The Cit(A)-32, Mumbai, Dated 20.11.2019, Which In Turn Arises From The Respective Orders Passed By The A.O U/S 143(3) R.W.S 147 Of The Income Tax Act, 1961 (For Short „Act‟) For A.Y. 2008-09 & A.Y. 2009-10. As Common Issue Is Involved In The Captioned Appeals, Therefore, The Same Are Being Taken Up & Dispossed Off By Way Of A Consolidated Order. We Shall First Take Up The Appeal For A.Y. 2008-09. The Assessee Has Assailed The Impugned Order On The Following Grounds Before Us: “1. On The Facts & Circumstances Of The Case & In Law, The Ld.Cit(A) Has Erred In Considering The Assessee, Msbte, As State & Immune From Taxation As Provided Under Article 289(1) Of The Constitution.

For Appellant: Shri Girish Dave, A.RFor Respondent: Shri Rahul Raman, D.R
Section 10(46)Section 143(3)Section 147Section 2(31)Section 4