TaxTMI 
TaxTMI 
2025 (10) TMI 1478
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....dents for prosecuting studies in India or abroad in any specialized subject on such terms as may be thought fit", the assessee intends to apply funds outside of India and a show cause was issued to the assessee seeking necessary clarification. 3. In its submissions, the assessee-trust submitted that the trust vide the said clause meant to provide betterment and incentive/assistance to students for further studies either in India or abroad. It was submitted that such assistance is given in India or by assisting in Indian rupees within India whether the study is in India or abroad and nowhere it is mentioned in the Trust Deed that assistance will be paid in foreign currency. 4. Taking the submissions of the assessee into account, the Ld.CIT(E) stated that the assessee is accepting that the assistance to students for study in India or abroad is provided by the Trust and its claim that such assistance is given in India in Indian rupees whether the study is in India or abroad is not valid as the expenditure in India for study abroad effectively results in application of funds outside India. 5. It is also evident from the impugned order that the assessee filed further submission....
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....ons so laid down in clauses (i) to (v) of section 80G(5) of the Act. It was submitted that as evident from the impugned order, no adverse findings have been recorded by the Ld.CIT(E) in terms of the genuineness of the activities of the trust or non-fulfillment of any of the conditions so laid down in clauses (i) to (v) of Section 80G(5) the Act and merely stating that in absence of necessary and sufficient compliance in a summarily manner, the Ld.CIT(E) has rejected the application seeking grant of registration u/s. 80G(5) of the Act without highlighting or point out what specific non-compliances have been observed by him. 9. Further, in the context of the findings of the Ld.CIT(E) that there is a violation of section 11 of the Act, our reference was drawn to the provisions of section 11 which read as under: "11. (1) Subject to the provisions of sections 60 to 63, the following income shall not be included in the total income of the previous year of the person in receipt of the income- (a) income derived from property held under trust wholly for charitable or religious purposes, to the extent to which such income is applied to such purposes in India; and, where....
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....mitted that even such clause has no applicability as far as the facts of the instant case is concerned as the assessee-trust has not been created to promote any international welfare. 11. Further referring to section 11(1)(a), it was submitted that it relates to income derived from property held under trust wholly for charitable or relevant purposes to the extent to which such income is applied to such purposes in India. It was submitted that in the instant case as so submitted before the Ld.CIT(E), the assessee-trust intends to provide financial assistance to students for prosecuting studies in India or abroad and such assistance will be given in India by assisting in Indian rupees to Indian students and, therefore, as far as application of income is concerned, the same will happens for educational purposes in India. It was submitted that in any case, the assessee-trust has not remitted any donation in foreign currency since its inception and has no intention to remit any donation in foreign currency in future also and for removal of any doubts, the same was submitted before the Ld.CIT(E) by way of an affidavit and even resolution was passed by the trustees that the word "abroa....
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....egistering the Trust or institution. And if he is not satisfied, he can reject the same. This section does not refer to the activities in India or outside India. It refers to application of income for charitable or religious purposes in India as also with direction or order of the Board for application of income as aforesaid outside India. Reading the order dated 24-2-2004, it is very clear that there is non-application of mind. It was necessary for the Commissioner to examine the purpose for satisfying himself that the activities are genuine. It was open for him to make necessary enquiries in this behalf and to pass an order as per the procedure laid down under section 12AA of the said Act. So far as income which is applied outside India is concerned, is not a relevant criteria for rejecting the application. In absence of order under section 11(1)(a)(c), one cannot seek benefit for application of income for charitable or religious purposes, outside India. Therefore, the order dated 24-2-2004 made by the Director of Income-tax (Exemptions), Annexed at page 32 which is based on irrelevant criteria is quashed and set aside with a direction to consider the application strictly in acco....
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....ntioned hereinbefore the objects of the trust are there to carry out the activities outside India but no activity as such has been carried out, and therefore, no approval of the Board is required to be taken from the Board. There is no necessity to make the amendment of the main objects. Also none of the activities has been brought to our notice by the learned DR and no material placed before us to show that any expenditure outside India has been incurred by the assessee or any activity outside India has been carried out. In such circumstances and facts of the case, the learned DIT(E) is not justified in denying registration u/s.12AA r.w.s. 12A of the Act. The reliance is placed upon the decision of Hon'ble Delhi High Court in the case of M.K. Numbyar Saarf Law Charitable Trust (supra)." 14. Further, our reference was drawn to the Co-ordinate Bench of the Tribunal in the case of Sarbat The Bhala Gurmat Mission Charitable Trust vs. CIT (Exemptions), in ITA No. 297/Chd/2020, dt. 30-03-2021, wherein similar proposition has been laid down and the relevant findings read as under: "13. The Ld.Pr.CIT's order in the present case, therefore denying registration to the applic....
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....uineness of the activities of the trust while granting registration with no restriction on the activities being carried out inside or outside India. The relevant findings of the Hon'ble High Court is as under: "The judgment of the court was delivered by B.C. Patel C.J. - M.K. Nambyar SAARC Law Charitable Trust has filed this petition against the order made by the Director of Income-tax (Exemptions) New Delhi, on February 24, 2004. The aforesaid trust submitted two applications in Form No. 10A for registration under section 12A and recognition under section 80G of the Income-tax Act, 1961 (hereinafter referred to as "the Act"). The application was rejected on the ground that the applicant itself has admitted that the scholarships can be paid to the members even outside India. It is in view of this admission that the activities will be extended outside India as per the objects laid down, it was held that the registration cannot be granted under section 12A of the Act and the approval of exemption under section 80G also cannot be granted. Section 11 of the Act refers to income from property held for charitable or religious purposes. The relevant provisions are reprod....
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....n or order of the Board for application of income as aforesaid outside India. Reading the order dated February 24, 2004, it is very clear that there is non-application of mind, it was necessary for the Commissioner to examine the purpose for satisfying himself that the activities are genuine. It was open for him to make necessary enquiries in this behalf and to pass an order as per the procedure laid down under section 12AAof the said Act. So far as income which is applied outside India is concerned, it is not a relevant criteria for rejecting the application. In the absence of an order under section 11(1)(a) and (c), one cannot seek benefit for application of income for charitable or religious purposes, outside India. Therefore, the order dated February 24, 2004 made by the Director of Income-tax (Exemptions), annexed at page 32, which is based on irrelevant criteria is quashed and set aside with a direction to consider the application strictly in accordance with law. It is made clear that even the application under section 80G is required to be considered afresh. It is directed that the applications shall be disposed of within a period of four weeks by the Commissioner." ....
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....para 6 as under- "6. The crucial question is only whether the conditions in section 11 are complied with. That section states that the income derived from property held under trust wholly for charitable purposes shall not be included in the total income to the extent to which such income is applied to such purposes in India. The question is whether this section requires the application of money in India or the carrying out of the purposes in India or both. The contention of the revenue is that apart from the money being spent in India even the purpose must be carried out in India. The section itself contradicts this contention. Section 11(1)(c)(ii) provides that income applied to such purposes outside India is exempt in the case of trust created before 1-4-1952 subject to the approval of the Board. This underlines the principle that Governments do not forego their revenue in favour of charges paid outside their countries and hence the relevant consideration is whether the situs of the application of the money and not the place in which the objects of the trust may become effective. It may be pertinent to refer to section 1 of 16 which exempts scholarships granted to meet t....
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....ing Talent vs. Dept. of Income Tax, in ITA Nos. 1489/Bang/2013 & 1329/Bang/2014, dt. 26-08-2016. 17. We have heard the rival contentions and perused the material available on record. For the purposes of grant of registration u/s 80G(5), the Ld.CIT(E) has to satisfy himself about the genuineness of the activities of the trust and the fulfillment of the conditions so laid down in clauses (i) to (v) of section 80G(5) of the Act. No adverse findings have been recorded by the Ld.CIT(E) in terms of the genuineness of the activities of the trust. 18. As far as non-fulfillment of the conditions so laid down in clauses (i) to (v) of Section 80G(5) the Act, Ld.CIT(E) held that the explanation submitted by the assessee against violation of section 11 of the Act is neither satisfactory nor conclusive and, therefore, in absence of necessary and sufficient compliance by the assessee, he is unable to arrive at a satisfactory conclusion on these parameters and in view of the same, the ld CIT(E) rejected the application of the assessee, seeking registration u/s. 80G of the Act. In effect, the ld CIT(E) has referred to the non-fulfillment of condition as so specified in 80G(5)(i) which provide....