Section 11 of the Income Tax Act

Income-tax Act, 2025: ss.332–355

Section 11 of the Income-tax Act, 1961 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 is Ashok Pai v. CIT (292 ITR 11), cited in 812 of the 7,190 judgments on BharatTax that turn on this section.

Leading authorities on Section 11

Ashok Pai v. CIT
292 ITR 11 · 2007 · Supreme Court
812
citing judgments

“Concealment of particulars of income” and “furnishing inaccurate particulars of income” are two distinct offences under Section 271(1)(c) of the Income Tax Act. A penalty cannot be levied under one limb if the show cause notice or basis for penalty specifies the other, as this constitutes a complete variance in the reasons for assuming jurisdiction.

CIT v. State Bank of Bikaner & Jaipur
43 Taxmann.com 411 · 2014 · High Court
524
citing judgments

Employee contributions to provident fund, ESI, and other welfare funds, if deposited by the due date for furnishing the return of income under Section 139(1), are allowable as a deduction and cannot be disallowed under Section 36(1)(va) read with Section 2(24)(x) or Section 43B, even if deposited after the due date prescribed by the respective welfare Acts.

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.

ACIT v. Ahmedabad Urban Development Authority
143 Taxmann.com 278 · 2022 · Supreme Court
390
citing judgments

If activities for the advancement of general public utility are carried on as a business, income from such activities is not exempt under Section 11, even if the profits are utilized for the main charitable object. The argument that profits from general public utility activities can be ploughed back to charity to maintain exemption is not a good law.

Addl. CIT v. Surat Art Silk Cloth Manufacturers Association
121 ITR 1 · 1980 · Supreme Court
328
citing judgments

A charitable institution, whose predominant object is general public utility, can engage in non-charitable activities yielding incidental profits, provided these profits are deployed to achieve the dominant charitable object. A subsidiary object, if ancillary to the primary charitable purpose, does not negate the institution's charitable character.

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.

Exide Industries Ltd. v. Union of India
292 ITR 470 · 2007 · High Court
320
citing judgments

The Calcutta High Court held that restricting deduction for leave encashment via Section 43B(f) was arbitrary and contrary to Supreme Court decisions. However, this judgment was later stayed by the Supreme Court.

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.

K.C. Builders & Anr. v. ACIT
265 ITR 562 · 2004 · Supreme Court
241
citing judgments

When the addition made in the assessment order, on the basis of which a penalty for concealment under section 271(1)(c) is levied, is subsequently deleted, the penalty has no basis and must be cancelled.

Indian Molasses Co. Pvt. Ltd. v. CIT
37 ITR 66 · 1959 · Supreme Court
206
citing judgments

Expenditure is defined as money paid out or away, which is gone irretrievably. To be deductible under Section 37(1), expenditure must be wholly and exclusively for business, not capital or personal, and not fall under specific provisions of Sections 30 to 36, often justifiable on grounds of commercial expediency.

Judgments on Section 11

Salt Lake Shiksha Sadan, Kolkata vs. ITO(Exemp.)Ward 1(3), Kolkata

In the result, the appeal of the assessee stands allowed

ITA 209/KOL/2021[2016-17]Status: DisposedITAT Kolkata12 Jun 2023AY 2016-17

Bench: Shri Sanjay Garg & Dr. Manish Boradi.T.A No.209/Kol/2021 Assessment Year: 2016-17 Salt Lake Shiksha Sadan.................................................................……Appellant Ca-49, Salt Lake, Sector-1, Kolkata-700064. [Pan: Aadts4747F] Vs. Ito, Ward-1(3), Kolkata...............................……........……...…..…..Respondent Appearances By: Shri S.M. Surana, Advocate, Appeared On Behalf Of The Appellant. Shri Sanjay Mukherjee, Cit-Dr, Appeared On Behalf Of The Respondent. Date Of Concluding The Hearing : April 03, 2023 Date Of Pronouncing The Order : June 12, 2023 आदेश / Order संजय गग", "या"यक सद"य "वारा / Per Sanjay Garg: The Present Appeal Has Been Preferred By The Assessee Against The Order Dated 22.03.2021 Of The Principal Commissioner Of Income Tax (Hereinafter Referred To As The ‘Pcit’) Exercising His Revision Jurisdiction U/S 263 Of The Income Tax Act (Hereinafter Referred To As The ‘Act’). 2. The Brief Facts Of The Case Are That The Assessee Society Is Involved In Educational Activity & Is Registered As A Charitable Institution U/S 12A Of The Act & Thus Entitled To The Deductions U/S 11 Of The Act. The Assessee Filed Its Return Of Income Declaring Nil Income For Claiming Deduction U/S 11 Of The Act Which Was Accepted By The Assessing Officer. Thereafter, The Ld. Pcit Exercising His Revision Jurisdiction U/S 263 Of The Act Observed From The Assessment Records That The Development Fund Of

Section 11Section 12ASection 263

DCIT(E), Circle-1(1), New Delhi vs. Delhi & District Circket Association, New Delhi

In the result, the appeal of the revenue is dismissed

ITA 3058/DEL/2019[2015-16]Status: DisposedITAT Delhi09 Jun 2023AY 2015-16

Bench: Shri Chandra Mohan Garg & Shri M. Balaganeshassessment Year: 2015-16 The Dcit 1(1), Exemption, New Delhi M/S. Delhi & District Cricket Association 110002 Ferozshah Kotla Ground, Bahadur Shah Vs. Zafar Marg, New Delhi 110002 Pan Aaatd 0828 P (Appellant) (Respondent) For Revenue : Ms. Maimun Alam, Sr. Dr For Assessee : Shri Ved Jain, Adv. Shri Aman Garg, Ca Date Of Hearing : 25.04.2023 Date Of Pronouncement : 09.06.2023 Order Per Chandra Mohan Garg, J.M. This Appeal Has Been Filed Against The Order Of Cit(A)-40, New Delhi Dated 15.01.2019 For Ay 2015-16. 2. The Grounds Raised By The Revenue Are As Follows:- (I) On The Facts & In The Circumstances Of The Case & In Law, Ld Cit (A) Has Erred In Directing The Ao To Allow Exemption Us. 11 Of The Act Particularly When The Assessee Has Shown Receipts From Sponsorship Income, Sale Of Liquor, Income From Corporate Boxes & Sale Of Tickets Which Are Purely Commercial In Nature. (Ii) On The Facts & In Circumstances Of The Case & In Law, Id Cit (A) Has Erred In Treating Prior Period Expenses, Provisions For Gratuity & Leave Encashment As Consequential To Allowing Exemption To The Assessee Ignoring The Fact That Such Expenses Are Not Incurred During The Year & Cannot Be Treated As Application Of Income. (Iii) On The Facts & In Circumstances Of The Case & In Law, Ld Cit(A) Has Erred In Deleting The Addition Made U/S 40(A) (3) Of The Income Tax Act, Such Addition Being Consequential In Nature To Disallowance Of Benefit Of Exemption To The Assessee.

For Appellant: Shri Ved Jain, AdvFor Respondent: Ms. Maimun Alam, Sr. DR
Section 11Section 12ASection 40