TaxTMI 
TaxTMI 
TaxTMI 
2022 (7) TMI 1215
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....el. The expense of staff travelling abroad amounts to the application of income in accordance with section ll(l)(a) towards main objects of the society as assessee is a charitable organization. The order passed is bad in law and on facts and circumstances of the case. The impugned illegal order needs to be quashed immediately. 3. That the Hon'ble Commissioner of Income Tax Appeals has wrongly applied the judgment of Hon'ble Delhi High Court in the case of Director of Income-Tax (Exemption! vs. National Association of Software Services Companies and the case of India Brand Equity Foundation vs. Assistant Commissioner of Income Tax (E) 1. Trust Ward II. New Delhi [(2012) 23 Taxman.com 323 (Del)] in the present case as facts of the case are very different, Rs.10,15,818/- is the amount reimbursed to the employees towards Boarding, Lodging, Conveyance etc.. The order passed is bad in law and on facts and circumstances of the case and needs to be quashed immediately. 4. The assessee craves leave to add / alter any of the grounds of appeal on or before the date of final hearing." 3. Brief facts of the case are that, the assessee was accorded Registration u/s 12A of the IT Act....
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....vant portions of the judgment are hereunder:- "The next question is whether the expenditure incurred by the assessee-trust on events/activities held in connection with the exhibition in Germany amounts to application of the income in accordance with section 11(1)(a). The argument put forward by the Revenue was that the expenditure, even if it is considered as application of the income, was outside India and the mandate of the section is that the income should be applied in India to charitable purposes and this condition not having been satisfied, the Tribunal was clearly wrong in holding that the expenditure should be considered as application of the income of the trust in India. The argument of the assessee is that there is no such mandate in the section to the effect that the income of the trust should be applied in India and that the only requirement is that the purposes should exist in India and if that is satisfied, the income can be applied for such purposes even outside India. According to the assessee, so long as the purposes are in India, it does not matter as to where the sites of the application is. [Para 13] A little historical background is necessary to be brought ....
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....ion created after the aforesaid date and the income there from is applied outside the taxable territories to charitable purposes as are done to promote international welfare in which India is interested. In these two cases the income of the trust could be applied or spent outside India without losing exemption, provided the CBR passes an appropriate order, [Para 17} It may be noticed that sub-clause (ii) of Clasue (c) of subsection (i) of section 11, in substance provides for the same condition which was imposed by sub-clause (I) of clause (a) of the proviso to section 4(3)(i) of the old Act. Sub-clause (i) of clause (c) of sub-section (1) of section 11 is in the same terms as sub-clause (ii) of clause (a) of the proviso to section 4(3)(i) of the old Act [Para 21]. The assessee's contention that the words 'to the extent to which such income is applied to such purposes in India' appearing to section ll (l)(a) only require that the charitable purposes should he confined to India and the application of the income of the trust to the execution of such purposes can be outside, India, appears to be opposed to the natural and grammatical meaning that can be ascribed to the....
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....s 'in India1 appearing in section 11(1)(a) and the words 'outside India' appearing in section ll(l)(c ) of the Act qualify the verb 'applied' appearing in these provisions and not the words 'such pur}}oses'. {Para 221] In view of the above, it is held that the amount of Rs. 38,29,535 spent by the assessee-trust in Hanover, Germany cannot be considered as application of the income of the trust in India for charitable purposes... [Para 31] 7. In the case of India Brand Equity Foundation vs. Assistant Commissioner of Income Tax (E), Trust, Ward-II, New Delhi [(2012) 23 taxman.com 323 (Del)] it was held that amount spent outside India for participating in a fare held outside India cannot be treated as application of income of trust for purpose of section 11(1 )(a). The Hon'ble 1TAT observed that if the income of die trust can be applied even outside India so long as the charitable purposes are in India, then there is no need for die trust which tends to promote international welfare in which India is interested and which was created after 04/01/1952 to apply to the CBDT for a general or special order directing dial the income to the extent to which it is ....