Section 11(1A) of the Income Tax Act
Income-tax Act, 2025: ss.332–355
Section 11(1A) 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.
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(1A) is Honda Siel Power Products Ltd. v. Deputy CIT (340 ITR 53), cited in 78 of the 71 judgments on BharatTax that turn on this section.
Leading authorities on Section 11(1A)
Failure to fully and truly disclose material facts, for the purpose of reassessment beyond four years, extends beyond the income tax return to omissions during assessment proceedings. Mere disclosure of a transaction does not constitute true and full disclosure if underlying material facts are withheld.
An assessee's failure to fully disclose material facts regarding expenses incurred for tax-free income during assessment proceedings can lead to the reopening of assessment, as it constitutes an omission and failure to disclose necessary information for completing the assessment.
Reassessment proceedings can be initiated based on an audit party's information pointing out the existence of a law, provided the statutory conditions for reassessment are met. The sufficiency or correctness of the material is not a factor at the stage of reopening.
Investments made by a trust in a nationalized bank are considered as application of income for charitable purposes, provided they align with the trust's objects. This applies even if the expenditure falls short of the 85% threshold stipulated by Section 11(1) of the Income Tax Act.
