Critical Art and Media Practices v. Director of Income-tax (Exemption), Mumbai [2015] 153 ITD 664 (Mumbai - Trib.)
- In 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 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 assessee has
vehemently stressed that the projects, conferences and seminars had been carried
out by the trust to promote Indian culture and art at international level, further that
the activities such as to host artists-in-residence programmes for national as well as
international artists for the benefit of society are the objects that promote
international welfare in which India is interested. He has further stressed that the
trust has received permission from the Home Ministry, Government of India, to
carry out such activities outside India. Considering the overall discussion 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. Keeping in view the above submissions, the
second ground on which the registration is rejected needs to be relooked by the
DIT(E). If the activities otherwise are charitable and fall in the definition of
'charitable purposes' as defined under section 2(15) and property is held wholly and
exclusively under trust for charitable and religious purposes as provided under
section 11, then such a trust subject to the fulfilment of other conditions as laid
down by the different provision of the Act, will be entitled to registration and it
cannot be dined registration because of the fact that its activities are extended
outside India. However, while computing the income as per the provisions of
section 11, the income which is applied on such an activities in India only, will be
eligible for exemption and subject to the provisions of section 11(1)(c) wherein the
income applied outside India is also eligible for exemption, if the activities tend to
promote the international welfare in which India is interested and the approval has
been granted by the Board for such application of income. However, so far as the
second ground regarding the salary received by the trustees in excess of what may
be reasonably paid for such services is concerned, the matter is restored to the file
of the DIT(E) for decision afresh after granting proper opportunity to the assessee
trust to present its case and produce necessary evidences
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