Section 80G approval cannot be refused where trust funds are applied in India despite an object clause mentioning studies abroad.

Approval under section 80G could not be denied merely because a trust deed referred to financial assistance for students studying abroad. The material showed that the trust would disburse funds in India in Indian rupees, with no foreign remittance intended or made, and a trustees' resolution proposed deleting the word "abroad" from the object clause. Since the application of income would occur in India, the possibility that beneficiaries might use assistance for overseas studies did not by itself amount to application of income outside India. The objection based on section 11 was therefore not a valid ground to refuse approval under section 80G(5).

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Issues: Whether the assessee trust was entitled to approval under section 80G despite the Commissioner's objection that one object clause referring to financial assistance for studies abroad indicated possible application of income outside India and a resultant violation of section 11.

Analysis: The trust deed referred to financial assistance for students studying in India or abroad, but the assessee explained that disbursement would be made in India in Indian rupees and that no remittance in foreign currency had ever been made or intended. The trustees also passed a resolution indicating that the expression "abroad" could be deleted and that the necessary steps would be taken before the Charity Commissioner. The material showed that the application of funds would occur in India, and the fact that the beneficiaries might use the assistance for studies abroad did not by itself amount to application of income outside India. The objection based on section 11 was therefore not a valid basis to deny approval under section 80G(5).

Conclusion: The denial of approval was unsustainable, and the assessee was entitled to registration under section 80G(5).

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