Charitable travel expenditure preserved tax exemption where no evidence showed personal benefit or departure from trust objects.

Travelling expenditure incurred in the names of a trustee and chairman did not trigger the prohibition on benefit to specified persons where no material showed that it was unrelated to the charitable objects. The expenditure was explained as necessary for the day-to-day functioning and development of the school operated by the trust. Mere payment in the names of specified persons, without evidence of non-charitable purpose or personal benefit, did not affect the genuineness of the expenditure. Accordingly, the trust remained eligible for exemption under Sections 11 and 12, while issues concerning development fund and capital expenditure were consequential.

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Issues: Whether travelling expenditure incurred for the day-to-day working and development of a charitable trust justified invocation of Section 13(1)(c)(ii) and denial of exemption under Sections 11 and 12 of the Income-tax Act, 1961.

Analysis: The factual findings established that no material demonstrated that the travelling expenditure incurred in the names of the trustee and chairman was unrelated to the objects of the trust. Such expenditure was explained as necessary for the functioning and development of the school operated by the trust. Mere incurrence in the names of specified persons did not, without evidence of non-charitable purpose or benefit, undermine the genuineness of the expenditure. The concurrent findings on this factual question warranted no interference, and the questions concerning development fund and capital expenditure were consequential.

Conclusion: Section 13(1)(c)(ii) was not attracted, and the trust remained entitled to exemption under Sections 11 and 12 of the Income-tax Act, 1961.

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