Foreign travelling expenses - members of charitable institution

[Ramamohan achar]

Whether foreing travel expenses incurred by the working commitee members of charitable insitutions is allwowable as expenses/application.

[Rama Krishana]

The provisions of section 11 or section 12 are not making any restriction on incurring expenses on foreign travel. You need to ascertain first that whether these expenses are within the scope of objects of the charitable institutions. Whether these expenses are allowable as per the bye laws / AOA or other documents evidencing the charitable institutions. Whether Income Tax department has put any restriction or condition relating to this. In general, the foreign travel expenses should be allowed if incurred to meet the purpose of the institution as an expense or application as the case may be.

[DEV KUMAR KOTHARI]

Don't give blanket permit to your client, even foreign tour expenses incurred in course of business of assessee is doubted, and disallowed many times and involves litigation. In case of charitable institution, the expenses should be for the purposes of such institution, and should really serve the purpose of institution, mere piece of papers shwoing some discussions or possibility of charitable purposes being served will not justify allowability. In case the working committee members visti foreign countries really for such matters as help in achievng objective of institution like say obtaining funds for charitiy and institution, purchase of special type of equipments procured from abroad, study about special aspects of institution from other institutions abroad, training on related subjects and techniques, etc. can be considered as reasonable purpose to further the purpoe of institutions. Therefore, there should be result orientation for achieving purpsoe of institutions.

AI Summary

Allowability of foreign travel expenses hinges on genuine charitable purpose and documentary proof, else disallowance risk arises. Allowance of foreign travel expenses for working committee members requires the expenditure to genuinely serve the charitable institution's objects and be supported by governing documents; Sections 11 and 12 do not bar such expenses but claims must show result oriented purpose (fundraising, procurement, study, training, etc.), clear documentary evidence, and compliance with any tax authority conditions to avoid disallowance.