TaxTMI 
TaxTMI 
2015 (4) TMI 93
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....s of the applicant trust were not merely confined to the territories comprising in India but also extended to and encompass the whole world. He has therefore observed that any activities carried out by the applicant trust in pursuit of aforesaid objects would involve application of funds of the trust outside India which renders it ineligible for exemption. He has therefore held that the objects of the trust contravene the provisions of section 11 of the Act wherein it has been specifically provided that the application of income of the trust has to be within India, therefore, the applicant trust would not be entitled to registration under section 12AA of the Act. Secondly, he has observed that the applicant trust had made payments of salary to its trustees/persons covered under section 13(3) of the Act. He has noted that salary of Rs. 4,55,496/- had been paid to Mr. Ashok Sukumaran and salary amounting to Rs. 5,24,225/- to Ms. Shaina Anand. He has observed that the applicant trust had not furnished any details of services rendered by these two trustees nor any supporting evidence had been furnished justifying the payment of such a hefty amount. He has therefore held that the provis....
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....een praised for its dissemination of Indian art and aesthetics around the world as well as in India. The trust has received international recognition for its project 'pad.ma.' That the activities of the applicant trust fall within the definition of 'object of general public utility' as defined under section 2(15) of the Act and further that its activities promote international welfare in which India is interested. He has further invited our attention to para 5 of the trust deed to show that the trust has restricted itself to utilize the funds within India only for charitable activities. The words 'or outside India' had been deleted/struck down by the trustees from the trust deed before submission of trust deed with the Charity Commissioner for registration under BPT Act, 1950. The trust has already been granted registration by the Charity Commissioner. He, therefore, has submitted that the activities of the trust cannot be said to be non charitable in any manner. On the other hand, the Ld. D.R. has supported the findings of the Ld. DIT(E). 4. We have considered the rival submissions. Firstly, we would like to discuss the relevant provisions of the Act. Sections 11 to 13 of the Act....
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....hould be wholly for charitable or religious purposes. Secondly, income to the extent to which such income is applied to such purposes in India is to be excluded from the total income or if such an income is accumulated or set apart for application for such purposes in India subject to condition that the income so accumulated or set apart does not exceed 15% of the total income from such property. A careful reading of the above stated twin conditions reveals that these conditions can be differentiated on the point that the requirement of the first condition is that the property should be held under trust for charitable purposes and whether the property is held in India or outside India is not relevant. As per second condition, it is not restricted that the whole of the income should be applied to charitable purposes in India only. The second condition suggests that 'the income to the extent to which it is applied in India' for charitable purposes is not to be included in the total income. The interpretation that can be drawn from the above provision is that even if the income is applied for charitable purposes outside India, even then, it cannot be said that the purpose or activity ....
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....tility etc. as mentioned above, then it is to be treated as a charitable trust. 9. Now reverting to the provisions of section 11 of the Act, a perusal of clause (c) of section 11(1) reveals that even under certain cases the exemption from inclusion in the total income is also granted even in cases of application of such an income outside India for the purposes which 'tend to promote international welfare in which India is interested'. The condition as laid down by the proviso to the said clause is that in such a case, the Board (CBDT) by general or special order should have directed that it shall not be included in the total income. Hence, subject to the condition of approval by the Board, the income applied outside India for the purpose of promoting the international welfare in which India is interested is also exempt as per the above stated provision of clause (c) of section 11(1). 9.1 Now we take up an example. Suppose, there is an epidemic in any region or country outside the Indian boundaries and an institution based in India extends help and support in providing food, medical and other assistance to the affected people; would it not be called a charitable activity? Now supp....
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....vities of the trust fall in the definition of charitable purposes as defined under section 2(15) of the Act and the property is held under the trust wholly and exclusively for charitable and religious purposes as provided under section 11 of the Act, and the Commissioner is satisfied about the genuineness of such activities, the trust is to be granted registration. For the purpose of grant of registration, the application of income in India is not a pre-condition, if its activities otherwise fall in the definition of charitable activities as observed above. However, so far as the computation of the income is concerned, such an institution will get exemption of income to the extent it is applied in India and not in relation to the income, even if applied for charitable purposes, outside India. Further, as per the provisions of clause (c) of section 11(1), if the activities upon which the income is applied outside India are such that which tend to promote international welfare in which India is interested, such an income is also exempt but subject to approval of the Board. 11. Now coming to the facts of the present case. The objects of the trust suggest that the trust has been forme....