Trust Providing Financial Aid to Students Eligible for Section 80G Even if Students Study Abroad | ITAT

Case Details: R. Mangaldas Charitable Trust vs. Commissioner of Income-tax (Exemptions) [2025] 180 taxmann.com 190 (Mumbai-Trib.)

Judiciary and Counsel Details

• Rahul Chaudhary, Judicial Member & Vikram Singh Yadav, Accountant Member
• Niraj Seth for the Appellant.
• Umashankar Prasad, CIT-DR for the Respondent.

Facts of the Case

The assessee-trust moved an application in Form 10AB under section 80G(5)(iii), seeking approval under section 80G. The Commissioner (Exemptions) observed that, as per one of the objects of the Trust Deed, the assessee intended to provide financial assistance to students for prosecuting studies in India or abroad.

He thus held that the assessee intended to apply funds outside India and that such financial assistance for studies abroad would result in the application of income outside India. Thus, there would be a violation of the provisions of section 11, and such income would, in effect, be includible in total income. He accordingly rejected the assessee’s application for registration under section 80G.

ITAT Held

On appeal, the Tribunal held that the object clause in the trust deed referred to by the Commissioner (Exemptions) provided for financial assistance for studies in India or abroad. Thus, it didn’t specifically refer to studies abroad. The assessee submitted that such financial assistance would be given in India in Indian Rupees to Indian students for their studies in India or abroad. In the past, it had not provided any financial assistance in foreign currency, nor did it intend to remit any. The assessee also passed a resolution to this effect in the meeting of its trustees and submitted a certified copy thereof along with an affidavit.

Therefore, the assessee has sufficiently explained and substantiated that it intends to provide financial assistance to students for studies in India or abroad, whereby such financial assistance shall be provided in India in Indian rupees. In such a scenario, the application of income will be for educational purposes in India as soon as the assessee releases the funds, which will undoubtedly happen there. The fact that financial assistance so provided will be utilised by students for studies abroad cannot be read and understood as providing financial assistance outside of India.

Thus, there was no justifiable legal and factual basis to deny registration to the assessee-trust.

List of Cases Reviewed

• Jamsetji Tata Trust v. JDIT (Exemptions) [2014] 44 taxmann.com 447 (Mumbai)/[2014] 148 ITD 388 (Mumbai) [Para 19] Followed

List of Cases Referred to

• M.K. Nambyar Saarf Law Charitable Trust v. Union of India [2004] 140 Taxman 616 (Delhi)/[2004] 269 ITR 556 (Delhi) (para 10)
• Foundation for Indo-German Studies v. DIT (Exemptions) [2016] 74 taxmann.com 66 (Hyderabad – Trib.)/[2016] 161 ITD 226 (Hyderabad – Trib.) (para 11)
• National Informatics Centre Services Inc. v. DIT (Exemption) [2017] 88 taxmann.com 878 (Delhi – Trib.) (para 11)
• Sarbat The Bhala Gurmat Mission Charitable Trust v. CIT (Exemptions) Chandigarh [2021] 127 taxmann.com 816/189 ITD 353 (Chandigarh – Trib.) (para 12)
• Jamsetji Tata Trust v. Joint DIT (Exemption) Range -II [2014] 44 taxmann.com 447 (Mumbai)/[2014] 148 ITD 388 (Mumbai) (para 13)
• Sila for Change Foundation v. CIT (Exemption) [2025] 173 taxmann.com 694 (Mumbai – Trib.) (para 14)
• Dy,. DIT v. Foundation for Indian Sporting Talent [IT Appeal Nos. 1489(Bang) of 2013, dated 26-8-2016] (para 14).