Section 11(2) of the Income Tax Act

Income-tax Act, 2025: ss.332–355

Section 11(2) 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(2) is Escorts Ltd. v. UOI (199 ITR 43), cited in 267 of the 762 judgments on BharatTax that turn on this section.

Leading authorities on Section 11(2)

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.

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.

CIT v. Nagpur Hotel Owners Association
247 ITR 201 · 2001 · Supreme Court
112
citing judgments

While there is no statutory time limit for filing Form 10 to claim exemption for income accumulation under Section 11(2), it must be furnished before the completion of assessment proceedings for the Assessing Officer to grant the exemption.

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.

CIT v. Matriseva Trust
242 ITR 20 · 2000 · High Court
91
citing judgments

An excess of expenditure incurred by a charitable trust in previous years can be adjusted against the income of a subsequent year, and this adjustment is considered an application of income for charitable purposes under Section 11.

CIT v. Programme for Community Organisation
248 ITR 1 · 2001 · Supreme Court
90
citing judgments

The 15% exemption available to charitable trusts under Section 11(1)(a) is absolute and is not curtailed by the provisions of Section 11(2) regarding accumulation of income. Voluntary contributions received towards the corpus of a trust are excluded from the scope of income for Section 11(1)(a) exemption purposes.

Govindu Naicker Estate v. ADIT
248 ITR 368 · 2001 · High Court
89
citing judgments

A charitable trust may adjust expenditure incurred for religious or charitable purposes in an earlier year against the income of a subsequent year, which is considered an application of income for the subsequent year under Section 11. This principle is guided by commercial considerations and the benevolent intent of Section 11.

Judgments on Section 11(2)

Lala Gauri Mal Butail Trust, Palampur vs. Income Tax Officer (E), Solan

The appeal stand allowed

ITA 1102/CHANDI/2024[2016-17]Status: DisposedITAT Chandigarh18 Aug 2025AY 2016-17

Bench: Hon’Ble Shri Laliet Kumar, Jm & Hon’Ble Shri Manoj Kumar Aggarwal, Am आयकर अपील सं./ Ita No.1102/Chandi/2024 (िनधा"रण वष" / Assessment Year: 2016-17) Lala Gauri Mal Butail Trust Ito-Exemptions Ward बनाम/ Vs. C/O Bundla Tea State, Po Bundla Solan (Hp) Tehsil Palampur H.P. "थायीलेखासं./जीआइआरसं./Pan/Gir No. Aaatl-3208-R (अपीलाथ"/Appellant) (""थ" / Respondent) : अपीलाथ"कीओरसे/ Appellant By : Shri Sudhir Sehgal (Ca) – Ld. Ar ""थ"कीओरसे/Respondent By : Sh. Vivek Vardhan (Addl. Cit) – Ld. Sr. Dr सुनवाईकीतारीख/Date Of Hearing : 05-08-2025 घोषणाकीतारीख /Date Of Pronouncement : 18-08-2025 आदेश / O R D E R Manoj Kumar Aggarwal () 1. Aforesaid Appeal By Assessee For Assessment Year (Ay) 2016-17 Arises Out Of An Order Of Learned Commissioner Of Income Tax (Appeals), National Faceless Appeal Centre (Nfac), Delhi [Cit(A)] Dated 11-09-2024 In The Matter Of An Assessment Framed By Ld. Assessing Officer [Ao] U/S. 143(3) R.W.S. 254 R.W.S. 144B Of The Act On 11-01-2022. Having Heard Rival Submissions & Upon Perusal Of Case Records, The Appeal Is Disposed-Off As Under.

For Appellant: Shri Sudhir Sehgal (CA) – Ld. ARFor Respondent: Sh. Vivek Vardhan (Addl. CIT) – Ld. Sr. DR
Section 11(2)Section 143(3)

Silk Association of India, Kolkata vs. ITO, Ward 8(2), Kolkata

In the result, the appeal of the assessee is allowed

ITA 705/KOL/2025[2023-24]Status: DisposedITAT Kolkata30 Jul 2025AY 2023-24

Bench: Shri Sonjoy Sarma & Shri Rakesh Mishrai.T.A. No.705/Kol/2025 Assessment Year: 2023-24 Silk Association Of India……...……..…………………....Appellant C/O P K Himmatsinghka & Co. 41, B B Ganguly Street, 2Nd Floor, Kol-12. [Pan: Aaocs9213J] Vs. Ito, Ward-8(2), Kolkata…………………..………………….…..... Respondent Appearances By: Shri P. K. Himmatsinghka, Ar, Appeared On Behalf Of The Appellant. Shri Kallol Mistry, Jcit, Sr. Dr, Appeared On Behalf Of The Respondent. Date Of Concluding The Hearing : July 29, 2025 Date Of Pronouncing The Order : July 30, 2025 आदेश / Order Per Sonjoy Sarma: This Appeal By The Assessee Is Directed Against The Order Dated 31.01.2025 Passed By The Cit, Appeal Addl/Jcit(A)-7, Mumbhai [In Short Cit(A)] Under Section 250 Of The Income-Tax Act, 1961. 2. Brief Facts Of The Case Ate That The Assessee’S Accounts Were Duly Audited For The Financial Year Ending On 31.03.2023. The Audit Report In Form 10B Was Signed On 01.09.2023 & The Unique Document Identification Number (Udin) Was Generated On 20.10.2023. However, Due To Unforeseen Technical Glitches, The Assessee Was Unable To Upload Form 10B On The E-Filing Portal Within The Prescribed Due Date Of 31.10.2023. The Form Was Eventually Uploaded On 16.11.2023, Resulting In A Delay Of 16 Days. The Return Of Income Under Section 139 Read With Section 139(4A) Of The Act Was Filed On 18.11.2023, Which Was Within The Extended Due Date Of 30.11.2023. Additionally, Form 10

Section 11Section 11(2)Section 139Section 143(1)Section 250