1989 (4) TMI 141

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..... rder of the Commissioner of Income-tax made u/s 263 of the Income-tax Act, 1961. 2. The assessee is a public charitable trust registered under section 12A of the Income-tax Act, 1961 by order of the Commissioner of Income-tax dated 4-8-1984. The main object of the trust is " to advance, propagate, encourage and promote all Indian classical and folk arts (of Bharata Natya Kathakali) and Indian mu .....

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..... on for the purposes of the trust in India and was, therefore, not eligible for exemption under section 11. 3. He therefore, directed the ITO to re-compute the income after treating this amount as not eligible for exemption. 4. In the appeal before us it was contended on behalf of the assessee that section 11 only required that the funds should be applied in India and since it was not in disput .....

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..... o organise and conduct tours within India. But this is only an enabling provision and does not prohibit any tour being undertaken outside India. In any event the facts of this case show that the tour was not organised or conducted by the assessee but the Government at the invitation of the foreign government. All that the assessee had to do was to participate in the project of the Government by se .....

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..... 52 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 10(16) which exempts scholarsh .....

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..... rmances do not constitute activities for profit as the collections are in the nature of donations received for the purposes of the trust. Hence this objection also cannot be sustained. It follows that the exemption granted by the Income-tax Officer was not erroneous and did not require to be reviewed by the Commissioner. Hence his order u/s 263 is cancelled. The appeal is allowed. - - TaxTMI - .....

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