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

DCIT, CC-Xxiii, Kolkata vs. Narula Educational Trust, Kolkata

In the result, the appeal filed by the Revenue, is dismissed

ITA 1655/KOL/2014[2010-2011]Status: DisposedITAT Kolkata26 Apr 2017AY 2010-2011

Bench: Shri N.V.Vasudevan, Jm & Dr. A.L.Saini, Am आयकर अपील सं./Ita No.1655/Kol/2014 ("नधा"रण वष" / Assessment Year :2010-11) Dcit. Central Circle-Xxiii, Vs. Narula Educational Trust Aayakar Bhavan Poorva, 20,B.T.Road, 110,Santi Pally, 5Th Floor Kolkata-700002 Kolkata-700107 "थायी लेखा सं./जीआइआर सं./Pan/Gir No. : Aaatn4519P .. (अपीलाथ" /Appellant) (""यथ" / Respondent) "नधा"रती क" ओर से /Assessee By : Shri G Mallikaarjuna, Cit-Dr राज"व क" ओर से /Revenue By : Shri Anil Kochar सुनवाई क" तार"ख / Date Of Hearing : 05/04/2017 घोषणा क" तार"ख/Date Of Pronouncement 26/04/2017 आदेश / O R D E R Per Dr. Arjun Lal Saini, Am: The Captioned Appeal Filed By The Revenue, Is Directed Against An Order Passed By The Ld. Commissioner Of Income Tax (Appeals) Central-Iii Kolkata, In Appeal No.33/Cc-Xxiii/Cit(A)/C-Iii/2013-14/Kolkata, Dated 30.06.2014, Which In Turn Arises Out Of An Order Passed By The Assessing Officer Under Section 143(3) Of The Income Tax Act,1961 ( Hereinafter Referred To As The ‘Act’), Dated 25.03.2013. 2. Brief Facts Qua The Assessee Are That The Assessee Trust Filed Its Return Of Income On Dated 31.09.2010 Disclosing Total Income At Rs.Nil. The Return Of Income Of The Assessee Trust Was Processed Under Section 143(1) Of The Act On Dated 15.09.2011. Subsequently, The Assessee`S Case Was Selected For Scrutiny Under Section 143 (2) Of The Act & The Assessing Officer Had Assessed The Assessee Trust In The Status Of Aop & Benefit Of Exemption U/S 11 Is Denied. The Assessing Officer

For Appellant: Shri G Mallikaarjuna, CIT-DRFor Respondent: Shri Anil Kochar
Section 11Section 12ASection 143Section 143(1)Section 143(3)Section 260A

ITO (E), New Delhi vs. M/S. Indian Youth Centre Trust, New Delhi

In the result, the appeal of the assessee is dismissed

ITA 234/DEL/2017[2012-13]Status: DisposedITAT Delhi25 Apr 2017AY 2012-13

Bench: Shri B.P. Jainassessment Year 2012-13 Vs. M/S. Indian National Income Tax Officer (E), Ward-1(2), New Delhi. Theatre Trust, 4, Safdar Hasmi Marg, New Delhi. Pan: Aaati 1040E (Assessee) (Respondent) Assessee(S) By : Shri Anunav Kumar, Adv. Revenue By : Ms. Bedobani Chaudhuri, D.R. सुनवाई क" तार"ख/Date Of Hearing : 20/04/2017 घोषणा क" तार"ख /Date Of Pronouncement: 25/04/2017 Order This Appeal Of The Assessee Arises From The Order Of Learned Cit(A)- 40, Delhi, Vide Order Dated 03.10.2016 For The Assessment Year 2012-13. 2. The Assessee Has Raised The Following Grounds Of Appeal. “On The Facts & In The Circumstances Of The Case & In Law, The Ld. Cit(A) Has Erred In Ignoring The Fact That The Assessee Was Predominantly Engaged In The Activities Of Hiring Out Of Auditorium & Providing Space For Rent In Lieu Of Fee, Which Were Commercial In Nature & Hence, 1St Proviso To Section 2(15) Of The Income Tax Act, 1961 Is Applicable In This Case.” 3. The Brief Facts Of The Case Are That The Assessee Is A Trust Which Was Constituted By The Trust Deed/Memorandum Of Association Dated 15.02.1958 & Is Also Registered Under Section 12Aa(1) On 09.02.1977. The Main Activity Of The Assessee Is To Promote Artistic & Cultural Expression Through Dance & Drama Etc. The Assessee Owns An Auditorium At 4, Safdar Hashmi Marg, New Delhi Which Was Claimed To Have Been Used For Promoting The Objects Of The Trust. For This The Auditorium Is Also Rented Out To The Public. The Assessee Also Supports 2

For Respondent: Ms. Bedobani Chaudhuri
Section 11Section 12ASection 2(15)