Section 11(1)(a) of the Income Tax Act

Income-tax Act, 2025: ss.332–355

Section 11(1)(a) falls under section 11 of the Income-tax Act, 1961, which corresponds to sections 332 to 355 of the Income-tax Act, 2025, the provisions on registered non-profit organisations.

Read the 2025 provisions

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

The decision most relied on for Section 11(1)(a) is CIT v. Institute of Banking Personnel Selection (264 ITR 110), cited in 398 of the 553 judgments on BharatTax that turn on this section.

Leading authorities on Section 11(1)(a)

CIT v. Institute of Banking Personnel Selection
264 ITR 110 · 2003 · High Court
398
citing judgments

Depreciation is allowable on assets for which the cost has been fully allowed as an application of income under Section 11 in previous years, when computing the income of a charitable trust. Charitable trusts are also entitled to carry forward their deficit.

Sole Trustee, Loka Shikshana Trust v. CIT
101 ITR 234 · 1975 · Supreme Court
323
citing judgments

This case defines 'education' under Section 2(15) of the Income Tax Act as systematic instruction, schooling, or training given to the young for preparation for the work of life. It clarifies that 'education' in this context has a narrow meaning, not extending to every acquisition of further knowledge.

Escorts Ltd. v. UOI
199 ITR 43 · 1993 · Supreme Court
267
citing judgments

A statute should not be construed to permit double deduction for the same expenditure unless specifically provided by law.

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.

Munjal Sales Corporation v. CIT
298 ITR 298 · 2008 · Supreme Court
191
citing judgments

The Supreme Court approves the mixed fund theory, holding that no interest disallowance is warranted under section 36(1)(iii) if investments or advances are made from the assessee's own non-interest bearing funds, even when mixed funds are available. This presumption applies when non-interest bearing funds are sufficient to meet the investments.

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.

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.

Ahmedabad Urban Development Authority v. ACIT
396 ITR 323 · 2017 · High Court
108
citing judgments

Development authorities can continue to be regarded as existing for a 'Charitable Purpose' under Section 2(15) of the Income Tax Act, even after the introduction of the proviso to that section. The contention that such authorities automatically lose their charitable status due to the proviso is incorrect.

Khatau Junkar Ltd. v. K S Pathania
196 ITR 55 · 1992 · High Court
103
citing judgments

A claim made by an assessee which requires further inquiry cannot be disallowed under section 143(1)(a)(iii) without giving the assessee an opportunity to be heard and submit supporting proof. The phrase 'prima facie inadmissible' means the claim is not admissible on the face of it and does not require further inquiry for disallowance.

Asstt. CIT v. Thanthi Trust
247 ITR 785 · 2001 · Supreme Court
98
citing judgments

A charitable trust can earn income from business activities under Section 11(4A), including incidental businesses, and still claim exemption under Section 11, provided the income is applied towards its charitable objects. Generating a surplus from such activities does not automatically negate the charitable purpose.

Judgments on Section 11(1)(a)

M/S. Bellary Educational Services Trust, Bellary vs. The Deputy Commissioner of Income Tax (Exemptions), Circel-1, Mangalore

In the result, appeal by the assessee is allowed

ITA 104/BANG/2021[2014-15]Status: DisposedITAT Bangalore03 Sept 2021AY 2014-15

Bench: Shri N.V. Vasudevan & Shri Chandra Poojariassessment Year : 2014-15 M/S.Bellary Educational Services Trust, Vs. The Deputy Commissioner Of Income Tax T S Nos-823/B/2/23/C, Allipur Road, (Exemptions), Opp. Maruthi Showroom, Circle – 1, Mangalore. Bellary – 583 104. Pan : Aaatb 4649 N Appellant Respondent Appellant By : Shri. Shiva Prasad Reddy, Itp Respondent By : Shri. Elamurugu G, Jcit(Dr)(Itat), Bengaluru Date Of Hearing : 02.09.2021 Date Of Pronouncement : 03.09.2021 O R D E R Per N.V. Vasudevanthis An Appeal By The Assessee Against The Order Dated 21.01.2021 Passed By The Cit(A)-2, Panaji, Relating To Assessment Year 2014-15. 2. The Assessee Is A Trust Engaged In Providing Education In The District Of Bellary, State Of Karnataka. The Assessee Has Been Granted Registration U/S.12A Of The Income Tax Act, 1961 (Act) By The Cit(E), Bengaluru, W.E.F. 01.03.2002. For Assessment Year 2014-15, The Assessee Filed Return Of Income On 10.11.2015 Declaring A Total Income Of Rs.29,68,920/-. The Income Of The Assessee Before Application Of Income For Charitable Purpose As Per The Audited Books Of Account Was A Sum Of Rs.15,94,43,856/-. The Assessee Claimed A Sum Of Rs.2,39,16,578/- As Accumulation Of Income For Charitable Purpose In Future As Permitted Under Section 11(1)(A) Of The Page 2 Of 7 Income Tax Act, 1961(Hereinafter Called 'The Act'). The Said Provisions Permits Accumulation Of Income To The Extent Of 15% For Application For Charitable Purpose In Future. The Audit Report In Form 10B Was Also Filed Along With The Return Of Income.

For Appellant: Shri. Shiva Prasad Reddy, ITPFor Respondent: Shri. Elamurugu G, JCIT(DR)(ITAT), Bengaluru
Section 11(1)(a)Section 12ASection 143(1)Section 154

Rustomjee Kerwalla Foudnation, Mumbai vs. DCIT (E) 2(1), Mumbai

In the result, the appeal of assessee is allowed

ITA 781/MUM/2019[2014-15]Status: DisposedITAT Mumbai31 Aug 2021AY 2014-15

Bench: Sri Mahavir Singh, Vp & Sri Manoj Kumar Aggarwal, Am Aayakr Apila Sam./ Ita No. 781/Mum/2019 (Inaqa-Arna Baya- / Assessment Year 2014-15) Rustomjee Kerawalla The Dy. Commissioner Of Foundation Income Tax, Circle-2(1) 3Rd 5Th Floor, Kerawalla Room No.519, Floor, Chambers, 25, P.J. Piramal Chambers, Vs. Ramchandani Marg, Colaba, Lalbaug, Parel, Appolo Bunder, Mumbai-400 012 Mumbai-400 039 .. (Apilaaqai- / Appellant) (P`%Yaqaai- / Respondent) स्थामी रेखा िं./Pan No. Aaatr3480R अऩीराथी की ओय े / Appellant By : Shri Satish Mody, Ar प्रत्मथी की ओय े / Respondent By : Shri Bharat Andhle, Dr स नवाई की तारीख / Date Of Hearing: 10.08.2021 घोषणा की तारीख / Date Of Pronouncement : 31.08.2021 Aadosa / O R D E R भहावीय स िंह, उऩाध्मक्ष के द्वाया / Per Mahavir Singh, Vp: This Appeal Of Assessee Is Arising Out Of The Order Of Commissioner Of Income Tax (Appeals)-1, Mumbai [In Short Cit(A)], In Appeal No. Cit(A)-1/176/Dcit(E)-2(1)/2016-17 Vide Order Dated 20.11.2018. The Assessment Was Framed By The Asst. Commissioner Of Income Tax (Exemption), Circle-2(1), Mumbai (In Short ‘Dcit/ Ao’) For The A.Y. 2014-15 Vide Order Dated 28.09.2016 Under Section 143(3) Of The Income Tax Act, 1961 (Hereinafter ‘The Act’).

For Appellant: Shri Satish Mody, ARFor Respondent: Shri Bharat Andhle, DR
Section 11Section 11(1)(a)Section 143(3)

Pal Gram Hindu Sarvajanik Trust, Surat vs. Income Tax Officer, Exemption Ward, Surat

In the result, appeal filed by the assessee is allowed

ITA 536/SRT/2018[2011-12 ]Status: DisposedITAT Surat29 Jul 2021

Bench: Shri Pawan Singh, Jm & Dr. A. L. Saini, Am आयकरअपीलसं./Ita No.536/Srt/2018 ("नधा"रणवष" / Assessment Year: (2011-12) (Virtual Court Hearing) Pal Gram Hindu Sarvajanik Trust, V The Income Tax Officer, At 7 Post : Pal, Tal. Choryasi, Exemption Ward, Surat. S. Dist – Surat – 395005. "थायीलेखासं./जीआइआरसं./Pan/Gir No.: Aaatp 2544 G (Assessee) (Respondent) Assessee By : Shri Hiren Vepari - Ca Respondent By : Ms.Anupama Singla – Sr.Dr सुनवाईक"तार"ख/ Date Of Hearing : 02/07/2021 घोषणाक"तार"ख/Date Of Pronouncement : 29/07/2021 आदेश / O R D E R Per Dr. A. L. Saini: Captioned Appeal Filed By Assessee Pertaining To Assessment Year 2011-12 Is Directed Against The Order Passed By The Ld.Commissioner Of Income Tax(Appeals)-3, Surat [Ld.Cit(A)] Dated 30.05.2018, Which In Turn Arises Out Of A Penalty Order Passed By The Assessing Officer Under Section 271(1)(C) Of 1The Income Tax Act, 1961 [Hereinafter Referred To As “The Act”], Dated 24.03.2017. 2. Grounds Of Appeal Raised By The Assessee Are As Follows: “[1] On The Facts & Circumstances Of The Case, The Learned Cit(A) Was Not Justified In Confirming Penalty U/S 271(1)(C) Of The Act. [2] With The Assessing Officer Failing To Specify In The Assessment Order As To Whether The Proceedings Were Initiated For Concealing Income Or Furnishing Inaccurate Particulars Of Income, The Penalty Order Was Required To Be Knocked Down In View Of The Decision Of The Gujarat High Court In Case Of Sorathia Engineering Co. Ltd. (282-Itr-642). [3] The Assessee Craves Leave To Add, Alter Or Vary Any Of The Grounds Of Appeal.”

For Appellant: Shri Hiren Vepari - CAFor Respondent: Ms.Anupama Singla – Sr.DR
Section 11Section 11(1)(a)Section 11(2)Section 142(1)Section 22Section 271Section 271(1)Section 271(1)(c)