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

Singhania Foundation Education Trust, Kolkata vs. DDIT (Exemptions)-1, Kolkata

In the result, the appeal filed by the assessee, is allowed for statistical purposes

ITA 1368/KOL/2016[2010-11]Status: DisposedITAT Kolkata29 Nov 2017AY 2010-11

Bench: Shri A. T Varkey, Jm &Dr. A.L.Saini, Am आयकरअपीलसं./Ita No.1368/Kol/2016 (िनधा"रणवष" / Assessment Year: 2010-11 Singhania Foundation Vs. Ddit(Exempt)-1, Kolkata Education Trust E-12, 1St Floor, 75C, Park Street, 71, 10B, Middleton Row, 5T H Kolkata – 700 016. Floor, Kolkata. "थायीलेखासं./जीआइआरसं./Pan/Gir No. : Aacts 6459 B (Appellant) .. (Respondent) Appellant By :Shri K. M. Roy & Anshuman Tiwari, Ar Respondent By :Shri Sallong Yaden, Addl. Cit सुनवाईक"तारीख/ Date Of Hearing : 01/09/2017 घोषणाक"तारीख/Date Of Pronouncement : 29/11/2017 आदेश / O R D E R Per Dr. Arjun Lal Saini, Am: The Captioned Appeal Filed By The Assessee, Pertaining To Assessment Year 2010-11, Is Directed Against The Order Passed By The Ld. Commissioner Of Income Tax (Appeals)–25, Kolkata, In Appeal No.143/2014-15, Dated 15.04.2016, Which In Turn Arises Out Of An Order Passed By The Assessing Officer Under Section 143(3)/11 Of The Income Tax Act 1961, (Hereinafter Referred To As The ‘Act’), Dated 11.01.2013. 2. The Assessee Has Raised The Revised Grounds Of Appeal As Under: “1.That Ld. Cit(A) Has Erred In Denying Benefit U/S 11 Of It Act By Applying Explanation To Section 11(2) Of The It Act, 1961 Without Appreciating The Fact That The Sum Of Rs.2283087/- Has Been Applied /Spent For Educational Purposes Out Of Current Year’S Income & There Was No Application For Accumulation. 2.That Ld. Ci(Ta) Could Not Appreciate The Precedents For Earlier Years Under Similar Facts & Circumstances & Has Dealt The Issue Which Was Not The Subject Matter Of Assessment In A Altogether Different Manner. 3.That Appellant Reserves The Right To Raise Additional Grounds At The Time Of Hearing.” 3. The Brief Facts Qua The Issue Are That Return Of Income For A.Y 2010-11 Was Filed By The Trust On 28.09.2010 Declaring Total Income Of Rs.Nil. The Assessee’S Return Of Income Was Processed U/S 143(1) On 20.03.2012. Later

For Appellant: Shri K. M. Roy & Anshuman Tiwari, ARFor Respondent: Shri Sallong Yaden, Addl. CIT
Section 11Section 11(2)Section 13(3)Section 143(1)Section 143(2)Section 143(3)