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

All India Liquid Bulk Impoerters & Exporters Asssociation, Mumbai vs. ADIT(E)-II(2), Mumbai

In the result, the appeal filed by the assessee is allowed

ITA 1604/MUM/2020[2011-12]Status: DisposedITAT Mumbai03 Feb 2022AY 2011-12

Bench: Shri Om Prakash Kant & Shri Pavan Kumar Gadaleall India Liquid Bulk Vs. Adit(E)-Ii(2) Importers & Exporters Piramal Chambers, Association Lalbaug, Parel, 501- Mulratna, Mumbai – 400012. 334- Katha Bazar, Masjid, Mumbai – 400009. "थायी लेखा सं./जीआइआर सं./Pan/Gir No. : Aagca5018F Appellant .. Respondent Appellant By : Mr.Paresh Shaparia.C.A. Ar Respondent By : Mr.Kailash Mangal.Sr.Dr Date Of Hearing 08.02.2022 Date Of Pronouncement 14.02.2022 आदेश / O R D E R Per Pavan Kumar Gadale Jm: The Assessee Has Filed The Appeal Against The Order Of The Cit(A)-3, Mumbai Passed U/S 143(3) & 250 Of The Income Tax Act, 1961.The Assessee Has Raised The Fallowing Grounds Of Appeal: I. Confirmation Of Treatment Of The Non-Profit Organisation As A Mutual Concern & Denying Exemption U/S 11: 1. The Learned C1.T(A) Erred In Confirming Treatment Of The All Inida Liquid Bulk Importers & Exporters Association, Mumbai. Appellant As A Mutual Association Created Exclusively For The Benefit Of Its Members. 2. The Learned Cit(A) Failed To Appreciate The Fact That The Basic Conditions Of The Concept Of Mutuality Are Not Satisfied, Hence The Same Is Not Applicable To The Appellant.

For Appellant: Mr.Paresh Shaparia.C.A. ARFor Respondent: Mr.Kailash Mangal.Sr.DR
Section 11Section 12ASection 143(2)Section 143(3)Section 25

Sri Ponniah Ramajayathammal Educational & Charitable Trust, Thanjavur vs. ACIT, Exemptions, Coimbatore

In the result, the appeal of the assessee is allowed for statistical purpose

ITA 3360/CHNY/2019[2012-13]Status: DisposedITAT Chennai24 Jan 2022AY 2012-13

Bench: Shri Mahavir Singhand Shri G. Manjunathaआयकर अपील सं./Ita No.: 3360/Chny/2019 िनधा"रण वष" / Assessment Year: 2012-13 M/S. Sri Ponniah Vs The Acit (Exemptions), 2Nd Ramajayathammal Educational Floor, May Flower & Charitable Trust, Midcity Building, 33 & 34, Natarajapuram South 1510, Trichy Road, Colony Medical College Road, Coimbatore – 641 018 Thanjavur – 613 007. Pan: Aacts 0879H (अपीलाथ"/Appellant) (""यथ"/Respondent) अपीलाथ" क" ओर से/Appellant By : Shri K. Meenakshisundaram, Income Tax Practitioner ""यथ" क" ओर से/Respondent By : Shri K.N. Dhandapani, Addl. Cit सुनवाई क" तार"ख/Date Of Hearing : 09.12.2021 घोषणा क" तार"ख/Date Of Pronouncement : 24.01.2022 आदेश /O R D E R Per Mahavir Singh, Vp: This Appeal By The Assessee Is Arising Out Of The Order Of Commissioner Of Income Tax (Appeals)-16, Chennai In Ita No.104/Cit(A)-16/2015-16, Vide Order Dated 17.10.2019. The Assessment Was Framed By The Acit(Exemptions), Coimbatore For The Assessment Year 2012-13 Vide Order Dated 31.03.2015 U/S.143(3) Of The Income Tax Act, 1961 (Hereinafter The ‘Act’). 2. At The Outset The Ld.Ar For The Assessee Took Us Through The Order Of Cit(A) & Stated That The Cit(A) Finding Is Only One Liner In Regard To Addition On Sale Of Assets, Which Reads As Under:- “Consideration Received On Sale Of The Asset Is Real Income & Should Form Part Of The Total Income Of The Trust For The Purpose Of Section 11. Hence The Addition Of Rs.1,23,25,081/- Is Upheld.”

For Appellant: Shri K. MeenakshisundaramFor Respondent: Shri K.N. Dhandapani, Addl. CIT
Section 11Section 11(2)Section 143(3)