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TMI Blog2015 (4) TMI 93X X X X Extracts X X X X X X X X Extracts X X X X ..... . Considering the overall discussion as made above, it is to be held that the activities of the trust would fall in the definition of charitable purposes. However, so far as the application of income outside India, as claimed to have been applied to promote international welfare in which India is interested is concerned, it is to be proved with necessary evidences and also subject to approval of the Board for entitlement of exemption from tax on such income. However, the registration cannot be refused on the ground that the income is applied for charitable purposes outside India. Applicant trust had made payments of salary to its trustees/persons covered under section 13(3) of the Act - Held that:- If the activities otherwise are charitable and fall in the definition of charitable purposes as defined under section 2(15) of the Act and further the property is held wholly and exclusively under trust for charitable and religious purposes as provided under section 11 of the Act, then such a trust subject to the fulfilment of other conditions as laid down by the different provisions of the Act, will be entitled to registration and it cannot be denied registration because of the fact ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he 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 ₹ 4,55,496/- had been paid to Mr. Ashok Sukumaran and salary amounting to ₹ 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 provisions of section13(2) and section13(3)(cc) would apply in this case as the trustees have been found to be deriving benefit from the applicant trust. He has therefore concluded that the objects of the trust as well as the genuineness of the charitable activities of the trust have not been established. He, accordingly, has rejected the application of the applicant trust for registration as a ch ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hich 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 deal with the issue under consideration. The relevant part of section 11, for the sake of convenience, is reproduced as under: Income from property held for charitable or religious purposes. 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) inc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ncome 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 of the trust is not charitable. However, the exemption from inclusion in the total income will not be given to such an expenditure incurred by the trust. The exemption as per the second condition has been restricted to the extent up to which such income is applied for charitable activities in India. Hence, if a charitable trust applies some of its income for charitable ac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s 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 suppose, there is a pandemic involving India and neighbouring countries; an institution based in India, irrespective of the boundries of the country, offers help and support to the people at large without considering whether they belong to India or any of the neighbouring country and in this way contributes for the welfare of the people at large; can it be said ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion. 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 formed to promote art and culture of India within India and globally which, in our view, fall in the definition of any other object of general public utility and hence included in the definition of charitable purposes. So far as the application of income outside India is concerned, the Ld. A.R. has vehemently stressed that the projects, conferences and seminars ..... X X X X Extracts X X X X X X X X Extracts X X X X
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