Citation- ITO(E) v. JN Tata Endowment for the Higher Education of Indians
ITAT: Mumbai
ITA No: 3573 of 2024
Assessment Year: 2011-12
Date of Order- August 23, 2024
Brief Facts:
The main object of the assessee trust was to grant loan scholarship to Indian students in India for their higher education overseas and it filed a nil return of income for AY 2011-12 after claiming exemption under section 11
However, the AO denied the exemption on the ground that the activity of education was happening outside India and section 11 required income to be applied to charitable purpose in India, that is, education should happen within Indian territories.
The AO further contended that mere payment to Indian students or payment being made in India would not suffice, what was essential is that the charitable purpose and its execution had to be in India.
Observations of the Tribunal:
The Tribunal noted the following observations made by the CIT(E) in his order directing the AO to grant exemption under section 11 to the assessee:
The assessee had issued cheques to Indian students in India for the purpose of education of Indian students/persons, thus the charitable purpose was completed at the point when the assessee released the cheque, which took place in India.
The relevant consideration was the situs of the application of money and not the place in which the objects of the trust may become effective. Such a view was also held in Bharata Kalanji v. ITO [1989] 30 ITD 161 (Delhi)(Mad.), that was upheld by the Tribunal in the assessee’s own case for AY 2012-13.
The revenue had not brought any new cogent material or information on the disputed issues to take a different view.
Hence, it was held that the education loans and scholarships given to the Indian students in India for education/higher education abroad, satisfied the conditions of application of money for such purpose in India and the assessee was entitled to consider it as application of income in India.
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