Bhandara food distribution as charitable relief under Section 2(15) qualifies as application of trust income and is allowed

Distribution of food to the needy constitutes relief of the poor and qualifies as application of income for charitable purposes under Section 2(15) of the Income tax Act. The absence of express mention of such activity in the trust deed or its occurrence during religious or cultural gatherings does not prevent recognition of targeted food distribution as charitable relief where the beneficiaries are the needy. Consequently, the contested bhandara expenditure of Rs. 7,47,203 was held to be applied for charitable purposes and was allowed as application of income in favour of the trust.

---

---

Issues: Whether bhandara expenses of Rs. 7,47,203 constituted application of income for charitable purposes (relief of the poor) within the meaning of Section 2(15) of the Income-tax Act, 1961.

Analysis: The assessee is a trust registered under Section 12AA of the Income-tax Act, 1961. The amounts in dispute represent distribution of food (bhandara). Distribution of food to the needy falls within the scope of "relief of the poor" which is a recognised charitable purpose under Section 2(15) of the Income-tax Act, 1961. The lower authorities treated the bhandara as religious/cultural gatherings and not within the trust objects because the activity was not expressly detailed in the trust deed; however, the fact that food was distributed to the needy is not disputed. The activity of targeted relief by distribution of food is functionally within charitable relief even if conducted in the course of religious gatherings, and absence of express wording in the trust deed does not preclude treating such distributions as application of income for charitable purposes where the activity is shown to benefit the needy.

Conclusion: The bhandara expenses of Rs. 7,47,203 are to be treated as application of income for charitable purposes (relief of the poor) under Section 2(15) of the Income-tax Act, 1961; the assessee's grounds on this issue are allowed.

Ratio Decidendi: Distribution of food to the needy constitutes "relief of the poor" and therefore qualifies as application of income for charitable purposes under Section 2(15) of the Income-tax Act, 1961, even if the activity occurs in a religious or cultural setting and is not explicitly itemized in the trust deed.

---