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

Income Tax Officer, Faridabad vs. Manav Sanskar Shiksha Sanstha, Faridabad

In the result, appeal of the Revenue is partly allowed

ITA 3190/DEL/2025[2020]Status: DisposedITAT Delhi17 Jun 2026

Bench: Shri Yogesh Kumar U.S & Shri Manish Agarwal[Assessment Year : 2020-21] Ito Vs Manav Sanskar Shiksha Aaykar Bhawan, Sanstha, 3 & 4, Ashoka Enclave, Faridabad Part-1, Sector-4, Faridabad, Haryana-121001 Haryana-201004 Pan-Aacam0915H Appellant Respondent Revenue By Shri Om Prakash, Sr. Dr Assessee By Shri Ajay Kumar Agarwal, Ca Date Of Hearing 24.03.2026 Date Of Pronouncement 17.06.2026 Order Per Manish Agarwal, Am : The Present Appeal Is Filed By The Revenue Against The Order Dated 21.03.2025 By Ld. Commissioner Of Income Tax (A), National Faceless Appeal Centre (“Nfac”), Delhi [“Ld. Cit(A)”] In Appeal No. Nfac/2019-20/10434387 Passed U/S 250 Of The Income Tax Act, 1961 [“The Act”] Arising From The Intimation Order Dated 24.12.2021 Passed U/S 143(1) Of The Act Pertaining To Assessment Year 2020-21. 2. Brief Facts Of The Case Are That The Assessee Is A Registered Society, Doing Charitable Activity Of Imparting Education & Registered U/S 12Aa Of The Act In Terms Of Approval Granted By Ld. Cit(A), Faridabad Dt 15.04.2013 & Subsequently, Renewed By Pcit Vide Order Dated 08.07.2024. The Return Of Income For The Year Under Appeal Was Filed In Form Itr 7 On 27.12.2020 Loss Of 13,76,228/- Being Excess Of Expenditure Over Income & Has Not Exemption U/S 12 Of The Act. The Cpc In Terms Of The Order U/S 143(1) Of The Act Denied The Exemption As The Assessee Has Not Filed Form 10B Alongwith The Return Of Income Filed & Create A Demand On Gross Receipts. Thereafter, The Assessee A Rectification Application However, As The Assessee Has Not Filed Form 10B Before The Filing Of Return Of Income & Power Of Condonation Of Delay In From 10B As Per Section 119(2)(B) Of The Act Is With The Concerned Pcit/Cit/Dit Therefore, The Cpc Has Rejected The Application Of The Assessee Filed U/S 154 Of The Act.

Section 11Section 119(2)(b)Section 12Section 12ASection 12A(1)(b)Section 143(1)Section 154Section 250