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(a) The objects of the assessee leave room for any future potential endeavor that may result in incurring expenditure outside India, which is in violation of sec.11 of the Income tax Act.

(b) The activities claimed to have been done are not justified by the expenses incurred by the assessee.

5.3. We shall examine the validity of the first reason cited by the Ld CIT(E). We noticed earlier that the exemption of income of a charitable trust or institution is granted only "to the extent to which such income is applied to charitable purposes in India." Hence, if any portion of income of a charitable trust or institution is applied either for non- charitable purposes or applied outside India, then the assessee is not entitled to claim those expenses as exempt u/s 11 of the Act. The amount so spent for non-charitable purposes or outside India would become taxable. The question that arises is whether or not the Ld CIT(E) can take cognizance of object clauses of a charitable trust or institution, which according to him would enable it to apply income outside India, at the time of processing of application u/s 12AB of the Act ?

5.4. The objects of the trust may contain clauses, which may enable a charitable trust or institution to apply its income for activities carried outside India. Whether such objects, if any, would enable the Ld CIT(E) to deny registration u/s 12AB of the Act? We notice that this question has already been answered by co-ordinate bench of Chandigarh in the case of Sarbat The Bhala Gurmat Mission Charitable Trust v. CIT(E) [2021] 127 taxmann.com 816 (Chandigarh - Trib.) vis-a-vis the provisions of sec.12AA of the Act. For the sake of convenience, we ITA Nos. 743 & 744/Mum/2025 extract below the relevant portion of the decision rendered by the co- ordinate bench in the above cited case:-

(i) Clause (a) would be attracted only if any income derived from the property held for charitable purpose is applied other than for the objects of the charitable trust or institution. Hence, so long as any income is applied for the objects of the charitable trust or institution, the clause (a) would not get attracted. Thus, if the objects clause of a charitable Trust or Institution permits carrying on objects outside India and if any income is applied for such objects, then it cannot be considered as application of income "for objects other than the objects ITA Nos. 743 & 744/Mum/2025 of the charitable trust or institution" falling within the meaning of clause (a). Consequently, the clause (a) would not be attracted.

14. The foregoing discussions would show that the application of income of a charitable trust or institution outside India for carrying out its objects will not fall under any of the categories of "specified violation" as mentioned in the Explanation to sec.12AB(4) of the Act. Hence, the decision rendered by Hon‟ble Delhi High Court in the case of M.K. Nambyar Saarf Law Charitable Trust (supra) will apply to the provisions of sec.12AB of the Act also, since the provisions of sec.12AB also do not refer to the activities carried in India or outside India.